India key part of Merc’s global R&D map

When Eberhard Kern tells you that every Mercedes sold across the world has a part of India in it, he is not kidding.

The Managing Director & CEO of Mercedes-Benz India is only driving home the point that the country is the second largest R&D hub for the German automaker after its headquarters in Germany. Mercedes-Benz Research and Development India (MBRDI) operates out of Bangalore and Pune with over 1,500 engineers on board, and is still growing. And to think that this 100 per cent arm of Daimler AG had barely ten people on its rolls when it kicked off operations in 1996.

Professional environment As Kern says, MBRDI is part of the global development team which is interlinked with colleagues in Germany and other countries.

Its rapid evolution over the years as a vital R&D hub for Mercedes globally is a tribute to the cerebral skills of people working in the organisation.

“There is a robust education base in India which has created top-class professionals. This is particularly true for the Bangalore and Pune areas where our R&D hubs are located,” Kern adds.

According to the Mercedes chief, the youngsters working in these two centres (Bangalore has a lion’s share of the manpower) are highly motivated with good English skills. “This comes in handy when it involves dealing with people in Germany, Japan and the US where a common language like English helps,” Kern says. Today, there are hardly any foreigners in the India R&D hubs and most of them are locals who have comfortably integrated with the global R&D community at Mercedes. Overall, it is a “positive mindset” where these youngsters work on a host of global projects for Daimler.

“Besides Germany, India is the biggest R&D hub for Mercedes in the world. We are getting more international as a company and the best part is that we do a lot of local development with the team for the local market. We are quicker to market as a result,” Kern says.

And this is true not only for the car business but trucks and buses as well where Daimler has identified India as one of its biggest growth engines in the coming years.

Local demand Catering to local requirements quickly is particularly important as the traditional headquartered-centric business model does not offer too much space to cater to individual countries. As a result, some market opportunities could be missed but automakers can no longer afford this luxury. Their ‘once reliable’ markets in Europe are imploding and all the action is happening across Asia-Pacific, Latin America and, above all, China.

“You need headquarters, of course, but the world is changing. For R&D, you need an international approach and you don’t need to be together in one place,” Kern says. By having a host of centres around the world, people are on call 24x7 thanks to different time zones. The changing face of automobile markets around the world makes decentralisation of operations imperative and a pragmatic option going forward.

Yet, while there is reason to feel jubilant about the R&D skills in India, the truth remains that China has raced away to emerge the third largest market for Mercedes after the US and Germany. While the German carmaker sold 2.2 lakh cars in China last year, its Indian tally was not even 10,000 units.

These numbers do not really worry Kern since the luxury market in India is looking up and his company registered 32 per cent growth in 2013. This was particularly welcome news at a point when brand Mercedes was looking jaded but has since drawn youngsters into its fold all over again.

This becomes even more critical considering that India is today the youngest country in the world with two-thirds of its population under 35 years and, hence, a potential buyer base for Mercedes.

“From our viewpoint, India will soon become one of the most important markets for Mercedes. It is not there yet but we follow a Mercedes-Benz 2020 strategy and there is a chance that India will move into the top 10 markets by 2020 or perhaps later,” Kern says confidently.

There is enough and more support coming in from the Stuttgart headquarters and the India boss believes as the market throws up “convincing ideas”, it will only get decisions in its favour as regards new products. Clearly, the India roadmap for this decade looks promising for Mercedes.

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