Srinivas Reddy make plastic parts for the Kwid, "and I don't lose money."

(c) Bertel Schmitt Srinivas Reddy make plastic parts for the Kwid, “and I don’t lose money.”

Srinivas Reddy is Senior Vice President of Motherson Automotive & Engineering, one of the many companies of the Motherson conglomerate. It was founded in 1975 by a mother and son duo, with a capital of 1,000 rupees ($17 in today’s money). From a lowly start of winding tape by hand around wiring harnesses, Motherson has grown to, at last count, 42 companies all over the world, and “$7.2 billion in annual sales” a proud Reddy tells me. Motherson makes most plastic parts for the Renault Kwid, and the Datsun Redi Go. Reddy says he’s making money with the parts. “Not a lot,” he says with a wary eye on a Purchasing Manager constantly on the hunt for fat, “but we definitely don’t lose any money.”

Easwar Hariharan makes the digital dashboard instrument of the Kwid, "and money in line with industry standards."

(c) Bertel Schmitt Easwar Hariharan makes the digital dashboard instrument of the Kwid, “and money in line with industry standards.”

 Easwar Hariharan is General Manager of Visteon India. The company was created when Ford, just like many other large OEMs, spun off its parts business in 2005. Also like most, Visteon became a casualty of global carmageddon. Emerged from Chapter 11 in 2010, Visteon focused on automotive electronics, and is “now among the top 3 in that space,” Hariharan tells me. His company makes the all digital instrument cluster for the Kwid and Redi Go, and “yes, we make money in line with industry standards,” Hariharan confirms.
Cleanrooms are everywhere the Kwid is being made

(c) Bertel Schmitt Cleanrooms are everywhere the Kwid is made

At the plastic maker, at Visteon, and in the paint shop of the Kwid, we are put in white overalls, we are blown and vacuumed, and enter clean rooms at each site. Never was I in three cleanrooms on the same day. The south of India is very dusty.

Nikkitha Selvakumar owns a Kwid dealership, and she is making money.

(c) Bertel Schmitt Nikkitha Selvakumar owns a Kwid dealership, and she is making money.

From the suppliers to the sellers.
Nikkitha Selvakumar owns one of Renault’s 270 dealers in India, Renault Kattupakkam, 10 miles from Chennai’s airport. The lady is young, but not new to the business, she also owns a Hyundai dealership. Does a Kwid dealer make money? New car dealers the world over operate on slim margins, Ms. Selvakumar is no exception with only a 3.5% markup. Her true margin is much bigger. Her cash machine is a wide array of optional Kwid add-ons, from chrome accents around the lamps front and rear to a choice of body graphics. Normally, that would be done at the factory, but with the Kwid, the job goes to the dealer, and Ms. Selvakumar makes 20% on that.

Kwid dealers turn that chrome into gold

(c) Bertel Schmitt Kwid dealers turn that chrome into gold

Her store reflects the frugal Kwid philosophy: Good looking, but no money wasted on extravagant dealer standards. The showroom is clean and simple, some black and yellow bunting, and a sign outside must take care of the corporate identity, that’s it. Further down the road is a new Volkswagen dealership, right out of the Volkswagen dealer manual: Imposing, luxurious, and devoid of customers. Ms. Selvakumar’s six salesmen are busy. A peek in the back uncovers a full workshop, and an even fuller body shop, moneymaking central in any dealership.

Source: Forbes