Discussing Supply Chain Opportunities For India | News18 Rising India Summit | CNBC-TV18

Summary

Boeing's significant deal with India involves supplying 220 planes and potentially 70 more, reflecting India's booming aviation market with an estimated 2200 planes needed in the next 20 years. Boeing is enhancing local support with logistics and customer centers. India's focus is on infrastructure growth and efficient airspace usage to accommodate this expansion. The discussion also covers India's potential to become a global manufacturing hub, with aspirations for Indian brands to go global, supported by a strong EMS sector and design-led manufacturing. Mercedes highlights India as its fastest-growing market with 10 launches planned and a commitment to electric vehicles.

Takeaways

• 🚀 Boeing secured a landmark deal to supply 220 planes to Air India with an option to supply 70 more aircraft in the future.
• 🌟 The Indian aviation market is projected to grow significantly, with an estimated need for 2200 airplanes over the next 20 years.
• 🛠 Boeing is focusing on enhancing customer support in India by establishing logistics and customer support centers to provide local assistance.
• 🏗️ Infrastructure development is crucial for the aviation industry in India, with plans to double the number of airports and aerodromes.
• 🔄 Optimizing airspace usage and integrating with new technologies like drones and UAVs is essential for handling increased air traffic.
• 💹 The vision for Dixon is to be among the top five EMS companies globally, focusing on large-scale manufacturing and Industry 4.0 processes.
• 🌐 Indian brands are expected to rise globally, following the pattern of South Korea and Japan, by first focusing on EMS and then on designing their own products.
• 🚗 Mercedes sees India as its fastest-growing market and plans to launch 10 new models, including four electric vehicles (EVs) in the next 12 to 18 months.
• 🌐 Boeing's sourcing from India is on an upward trajectory, with a focus on increasing capabilities rather than setting a specific numerical target.
• 🏭 The manufacturing sector in India is expected to grow, with a focus on smart mega-factories and leveraging domestic market strength for export opportunities.

Q & A

What is the significance of the Big Air, India deal for Boeing?

The Big Air, India deal is significant because it involves Boeing supplying 220 planes to Air India, with the potential to supply an additional 70 aircraft. This reflects the growing aviation market in India and Boeing's commitment to meeting the evolving needs of its customers.

How does Boeing plan to support Air India's future aviation needs?

Boeing plans to support Air India's future needs by offering flexibility to upsize their order as the market grows. They also aim to establish logistics and customer support centers in India to ensure timely technical support.

What is Boeing's forecast for the Indian aviation market over the next 20 years?

Boeing forecasts that the Indian aviation market will grow significantly, with an estimated 2200 airplanes needed over the next 20 years.

What infrastructure challenges does the Indian aviation market face?

The Indian aviation market faces challenges related to airport infrastructure, which needs to be expanded to handle the anticipated growth in air transport passengers. The government's initiative to double the number of airports and aerodromes is critical for this growth.

How does Boeing plan to enhance its presence in India?

Boeing aims to enhance its presence in India by setting up large capacities, world-class infrastructure, and focusing on efficiencies and Industry 4.0 processes. They also plan to skill the workforce and focus on diversity in their operations.

What is the vision for Dixon's growth in the EMS sector?

Dixon's vision is to be in the top five EMS companies globally, which involves setting up large capacities, focusing on efficiencies, and adopting Industry 4.0 processes.

How does Dixon plan to create Global Brands from India?

Dixon plans to create Global Brands by initially focusing on being the brand behind the brand, then designing their own products, and investing in the brand and ecosystem.

What is the current status of Mercedes in the Indian market?

Mercedes is the fastest-growing market for luxury vehicles in India, with double-digit growth expected in the coming years.

How many new launches does Mercedes plan for India in the near future?

Mercedes plans to launch 10 new models in India in the near future, with a focus on electric mobility.

What is the current sourcing value of India for Boeing globally?

The current sourcing value of India for Boeing globally is over 8000 crores, with a focus on increasing capabilities rather than setting a specific numerical target.

How does Sanjeev view the future of manufacturing in India?

Sanjeev sees a bright future for manufacturing in India, with a focus on smart mega factories and the potential to reach 300 billion dollars in manufacturing.

Outlines

00:00

🛫 Aviation Growth and Boeing's Deal with India

Boeing has secured a significant deal with India, supplying 220 planes and potentially an additional 70 aircrafts. The Indian aviation market is anticipated to grow exponentially, with an estimated need for 2200 airplanes over the next 20 years. Boeing aims to provide flexibility for customers to increase their orders as their requirements evolve. To support this growth, Boeing is establishing a logistics center in India for parts supply and a customer support center to ensure timely technical support. The company emphasizes the importance of infrastructure development and efficient airspace utilization to accommodate the anticipated influx of aircrafts. Boeing's vision is to be among the top five EMS companies globally, focusing on large-scale capacity, world-class infrastructure, and Industry 4.0 processes.

05:01

🚗 Mercedes' Growth and India's Manufacturing Potential

India is the fastest-growing market for Mercedes, with double-digit growth expected this year. Mercedes plans to launch 10 new models in 2020 and is committed to localizing electric vehicles (EVs) in India, launching four more EVs in the next 12 to 18 months. The conversation also touches on India's potential to become a global manufacturing hub, with a focus on smart mega-factories and the importance of skilling the workforce, including initiatives like a 100% women assembly line for electrical components. The panelists express optimism about India's manufacturing sector, highlighting the country's strengths in domestic market participation and export opportunities. They envision India becoming a hub for manufacturing on a global scale, drawing parallels to the growth trajectories of countries like South Korea and Japan.

Keywords

💡Big Air, India deal

The 'Big Air, India deal' refers to a significant agreement between Boeing and Air India, where Boeing will supply 220 planes to the airline. This deal is a landmark moment, highlighting the growing aviation market in India and Boeing's commitment to the region. The script mentions that there is potential for an additional 70 aircraft to be supplied, showcasing the flexibility and scalability of such agreements.

💡Airbus

Airbus is a European aerospace company mentioned in the script as a competitor to Boeing. The mention of Airbus in the context of the deal signifies the competitive landscape of the aviation industry and the importance of such deals in shaping market dynamics. The script implies that both Boeing and Airbus are vying for a larger share of the Indian aviation market.

💡Aviation

Aviation is the main theme of the video, focusing on the growth of the aviation market in India and the opportunities it presents for companies like Boeing. The script discusses the forecast of 2200 airplanes needed in the Indian market over the next 20 years, indicating the rapid expansion and development in this sector.

💡Logistics Center

A 'Logistics Center' is mentioned as a strategic initiative by Boeing to support its customers in India. It is intended to ensure the availability of parts and efficient service, which is crucial for the operation and maintenance of aircraft. This center exemplifies Boeing's commitment to enhancing its local presence and supporting the growth of the aviation sector in India.

💡Customer Support Center

The 'Customer Support Center' is another initiative mentioned in the script, aimed at providing technical support to customers in the region. This center is part of Boeing's strategy to localize services and reduce reliance on distant support, thereby improving response times and customer satisfaction.

💡EMS companies

EMS stands for Electronics Manufacturing Services, and the script discusses the ambition to be among the top five global EMS companies. This goal reflects the desire to scale up manufacturing capabilities, focus on efficiencies, and adopt Industry 4.0 processes. The script also mentions the importance of building a strong component ecosystem and design-led manufacturing.

💡Global Brands

The concept of 'Global Brands' is discussed in the context of Indian companies aspiring to become recognized on the world stage. The script suggests that Indian brands are at a stage where they are focusing on building scale and design capabilities, which are crucial for creating globally recognized brands. This ambition is seen as a natural progression from being a manufacturing service provider to a brand with global appeal.

💡Electric Mobility

Electric Mobility is a key area of focus for the automotive industry, as indicated in the script. The mention of launching luxury electric vehicles in India and the commitment to localize EV production signifies the shift towards sustainable transportation. This is in line with global trends and the need for cleaner, more environmentally friendly modes of transport.

💡Manufacturing in India

The script emphasizes the growth of manufacturing in India, with the aspiration to reach 300 billion dollars in manufacturing output. This reflects the country's potential as a manufacturing hub and the efforts to enhance its capabilities and infrastructure. The discussion highlights the importance of smart factories and the role of the domestic market in driving export opportunities.

💡Infrastructure

Infrastructure is a recurring theme in the script, particularly in relation to the aviation sector. The need to expand and optimize airport infrastructure to handle the projected growth in air transport passengers is highlighted. This includes not only physical structures but also airspace management and integration with new technologies like drones.

💡Diversity

Diversity is mentioned in the context of workforce composition, with an example of an assembly line for electrical components staffed entirely by women. This showcases a commitment to inclusivity and the potential for diverse workforces to contribute to manufacturing and other sectors. The script suggests that diversity is not just a social goal but can also be a strategic advantage.

Highlights

Boeing's landmark deal with Air India for 220 planes, with an additional 70 aircraft possible.

Boeing offers flexibility to customers to increase orders as their needs evolve.

Forecast predicts 2200 airplanes to enter the Indian market over the next 20 years.

Boeing's strategy includes establishing logistics and customer support centers in India.

Infrastructure growth is critical for the aviation market, with plans to double the number of airports.

Optimizing airspace usage is necessary to handle the projected growth in aviation.

Boeing's vision to be in the top five EMS companies globally.

Indian companies focusing on building scale and design-led manufacturing to create global brands.

Learning from past mistakes to invest in design and ecosystem for long-term brand success.

India is the fastest-growing market for Mercedes, with double-digit growth expected.

Mercedes committed to localizing electric vehicles in India, with four new EVs planned in the next 12-18 months.

Boeing's sourcing from India has been increasing, with a capability target for further growth.

Boeing focuses on skilling workers and promoting diversity in manufacturing.

Sanjeev believes India's strength lies in its ability to meet high-quality product demands.

Neil sees a future where India can manufacture goods worth 300 billion dollars.

The panelists express optimism about India's manufacturing movement and opportunities.

Transcripts

salil I I want to talk about the Big Air

India deal congratulations Boeing is

inch uh that Landmark deal along with

Airbus uh 220 planes is what Boeing will

be supplying to Air India but there's a

additional top up so you you are likely

to supply 70 more aircraft what are the

what's the deal with that well so we we

all when we have large airplane orders

we always give our customers flexibility

uh to to top that up as their needs

evolve over time look the Indian market

for Aviation is going to grow Leaps and

Bounds we forecast

2200 airplanes to come into the Indian

market over the next 20 years and so

with all of our customers we want to

give them a little bit additional

flexibility to upsize their order when

it's the right time for them to do so

and so that's what's what that's about

okay so on the aviation side Air India

220 planes that's a massive order that

that you've Inked and you said that 2

200 planes will be added on that's the

expert expectation and the estimate over

the next 20 years are any constraints

that require redressal at this point in

time to ensure that the opportunity in

the commercial space continues to hold

up yeah so I think the first thing that

we as as an airplane OEM do is we're

only successful when our customers are

successful right so what some of the

things that we've announced over the

past few weeks after the announcement of

that deal is of course the logistics

Center to make sure we have Parts here

in India the customer support center to

make sure our customers can see can

receive the technical support they need

from the region as opposed to having to

call you know Seattle or California all

the time you know those are the kinds of

things that we do to to further buttress

the world-class technical people that

we've had on the ground here for years

but from a standpoint of the overall

market growth I think everyone will say

it's maximizing the growth of

infrastructure here because what's going

to happen we had 140 million Air

transport passengers per year before

covid and now we're getting back to that

figure and surpassing that figure if you

look at airport infrastructure it's not

too far above that that number already

in terms of what it can handle and so

that's why the government's initiative

to double the number of airports and

aerodromes uh is critical to enabling

the delivery of those 2 200 airplanes

over the next 20 years

um and in addition to building the

physical infrastructure we have to build

we have to optimize how we use the

airspace how we integrated with defense

how we integrated with drones and uavs

the unmanned vehicles that are going to

be coming up and make the most of the

infrastructure we have it's only if we

do that that we will be able to actually

take those airplanes that we expect to

come in Sunil uh you know what's the

aspiration now uh or you know it's a

from from the last 20 years to where you

are today you've managed to build a 10

000 plus crore rupee company at this

point in time what's the Target that you

set for yourself over the next few years

Well normally I do not set Targets in

terms of numbers because I think you're

restricting yourself whenever you do

that uh but the vision is now that we

want to be in the top five uh EMS

companies globally uh which would mean

uh you know setting up large capacities

world-class infrastructure and focusing

on efficiencies and Industry 4.0

processes

and a huge scale over a period of time

uh and I'm confident uh the way India is

going the kind of policies that we have

in place uh I think is just a matter of

time that India becomes the next hub for

manufacturing and Dixon is there in the

top five companies globally we we wish

you the very best of luck with that

aspiration but what about Brands Made in

India for the world

how far are we from that yeah I think I

remember reading a article recently an

editorial that you know we do not still

have Brands which can be known as Global

Brands right where are those Brands and

how are they going to come about but I

think if you look at the history of

Brands which came out uh of let's say

countries like South Korea and Japan

these Brands initially focused on being

the brand behind the brand which is

being an electronic manufacturing as a

service right and I talk about large

Brands which you see now in India the

Korean Brands and the Japanese brands so

what they did was the first they focused

on building a large scale uh then they

focused on designing their own products

and then uh you know putting that money

behind the brand so I think we are at

that stage now that we see a lot of

companies now uh coming out on the EMS

space it's also encouraging that the

financial sector has taken note of that

last uh I think two years they've been

five IPOs which have come in our sector

so that scale has been created that

money is being spent on a component

ecosystem that money is being spent on a

design-led manufacturing so I'm very

confident that a few Indian brands are

going to rise in our sector which are

going to be Global in times to come and

I think we see uh some Brands already

have that aspirations but I think some

of the mistakes that were made if we

look at let's say 15 years back we had

great Brands but probably they did not

really invest too much uh into their own

design in the ecosystem which led to the

downfall but I'm sure now we've learned

from our mistakes those mistakes are not

going to be repeated and very soon we'll

have Indian Global Brands very soon

we'll have Indian Global Brands and and

hopefully cost correction that has been

made an investment in r d and IP will

have to be part of that Santosh India

today one of the fastest growing markets

or is in fact the fastest growing market

for Mercedes yeah it's the fastest

growing market for Mercedes last year

and this year again we expect double

digit close and how many launches do you

have lined up for 2020 10 launches this

year and how and on the Electric

Mobility side how big of that is going

to be a play here in India well we were

the first to launch a luxury even in

India locally produce it so we are fully

committed on the localization of EVS for

this Market uh we feel the consumers are

ready for electric vehicles it's about

uh what kind of suitable products we can

give to the market uh we are committed

to launch another four EVS in the next

uh 12 to 18 months in India okay so 10

launches expected salil uh I'm gonna get

wrap-up comments from each one of you

and let me start by asking you in terms

of sourcing from India for Boeing

globally that has been an upward

trajectory where do you see that over

the next five years so I think so we're

over 8 000 crores today we don't don't

have a number in Target what we have is

a capability Target right and that

capability is both

um what we're doing and how we're doing

it I've already talked about what we're

doing in terms of taking it up the value

curve but equally important is how we're

doing it and for example that means

continuing to skill the the folks that

are doing our work here and that

includes focusing on diversity we have a

factory in Pune with one of our partners

where we have an assembly line for

electrical components which is 100

percent women and it's just done to

prove the point that that is possible

and it's things like that that we'll

continue to do here well you know a

factory with a hundred percent women on

board that does deserve a round of

applause and I hope that we do see much

more of that and I think that is also

going to be uh that is going to be one

of the things that we need to focus on

as we build out the manufacturing story

Sanjeev where do you believe we will

find The Sweet Spot at this point in

time you've got your fingers across 20

different sectors uh 20 different

verticals where you believe that the one

thing where we really do have the

strongest advantage today

well in country as I said all the market

segments are expanding and since the

sophistication of demand in the market

is high and the consumers are asking for

a high quality products so that is

deepening the supply chains and with

that you know our operations are also

getting more sophisticated more

automated so that becomes kind of a

workplace operation by standards uh so

what happens is that automatically

becomes very attractive from the cost

Point as well as the operational

delivery point for the export market so

we see that the by participating in a

good way in the domestic Market it also

opens up a Gateway for the export so I

think that's a sweet spot as we see uh

going forward so Neil uh you know you

talked about Mega factories but are

these going to be smart Mega factories

is that going to be the aspiration no

absolutely and I think this journey has

just started there's a long long way to

go and we're looking forward to the time

that we can do at least about 300

billion dollars of manufacturing in

India and I'm reminded of that uh

Shahrukh Khan movie which said that you

know pictures

so this is just started and I remember

that uh saying you know this famous

poeter said that you know no power on

Earth can stop an idea whose time has

come and this is definitely our time and

this is the time to make in India well

as per the panel yes I'll give you the

final say on this panel so I I just

continue the Bollywood twist because

it's uh you know we have been growing up

to this entire thing that humongous

and it used to be dots I think now we

can do the full stop and now we are

there and we will go to the next level

ladies and gentlemen a big round of

applause uh it is India's manufacturing

movement and Manufacturing opportunity

and we've heard from some of the best uh

that India has today on what it will

take for us to be able to capitalize on

that opportunity thank you very much and

we wish you the very best of luck

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