India's automotive king When Hari Parshad Nanda, 65, started hawking tractors around the villages of the Punjab 40 years ago, his customers often filled water into the fuel tank and diesel in the radiator, arguing with facile logic that fuel should be poured into the inlet near the engine.
Nanda now laughs good humouredly, looking back on those days, conscious that as the farmers have got wiser he himself has grown from those small beginnings, and that he now heads the 10th largest company in the private sector. Escorts Ltd is now the leader in the country's biggest four wheeler industry tractors; it is also the biggest producer of motor cycles, the only supplier of some specialised equipment for the railways, and among the biggest producers of excavator dumpers. Future plans suggest steadily accelerating growth: tractor capacity is to go up from 20,000 to 34,000, two wheeler capacity from 60,000 to 200,000, piston rings capacity from 12 million to 20 million, and pistons from one million to two million. Railway equipment production is to double annually for the next three years, going from Rs 3 crore to Rs 24 crore by 1985. Investment has already been made in a Rs 22 crore floating dry dock, and major entries are louis vuitton purses for sale authentic planned into electronics, outboard motors and combine harvesters. Nanda now plans to cap it all by going into cars, in collaboration with Daihatsu of Japan. In the last nine years, Escorts sales have multiplied six fold, from Rs 42 crore to Rs 240 crore. This will quickly treble now to Rs 750 crore in 1985, a handsome compound annual growth rate of 33 per cent. Nanda's son and president of the company. The key to Escorts' rapid growth has been ancillarisation, which is good not only for public relations but also for profits and growth. The company buys 82 per cent of its tractor components from ancillary units, and therefore has to make only a small part of the investment required to expand capacity. Most of the investment is made louis vuitton neverfull pm review by ancillary units. "If I add to my tractor capacity by 2,000, I get back my investment in four months," says Rajan. Perfect Strategy: Ancillarisation has also been the perfect strategy for generating funds for investment: all sales are against cash, but the company gets 30 days' credit from suppliers. Result: most years the company does not need to go to a bank for working capital, and in fact has a credit balance. That saves crores in interest charges: money that can be invested for growth. The increase in tractor capacity from 20,000 to 34,000 will be financed entirely through the company's own funds. Nanda and son Rajan Nanda: Ready for new activity Attention to quality has been another investment in growth. When the company first turned out Rajdoot motor cycles, they were probably the poorest machines on the road. But while other motor cycle manufacturers have sat on their haunches, Escorts has constantly improved its product, adding a new Japanese carburettor for extra mileage and ironing out other technological wrinkles, so that the company now sells as many motor cycles as the other two manufacturers put together. This lead in both technology and sales will increase now, when Escorts rolls out its first Yamaha motorcycle, later this year. Growth has been easier louis vuitton bags 1998 for Escorts, says Rajan because the company has stuck to its area of specialisation. "For many of my products, I am trying to reach the same customer, using the same dealer network, and profiting from the existing staff expertise." Nanda also says the company's effort has been to grow technologically, not just in assets or sales. "Joint research effort is now! one of our priorities," he says, referring to programmes being worked out in the field of bio mass management and fresh applications for the basic power packs being manufactured currently. Another technological thrust is into windmills, and the proposed move into electronics is yet again indicative of an awareness of the importance of high technology areas. Nanda in fact strongly disapproves of growth purely for tax reasons, though he admits that his company has gone in for a Rs 22 crore floating dry dock essentially in order to avoid paying tax on profits. "But this is because the way the Government has shaped its tax policy," he argues.
Getting the organisation ready for the new scale of activity has been Nanda's major concern since he became president and his chosen vehicle is decentralised decision making: "We delegate powers to the extent that our managers feel lonely or ambitious. It makes them performance oriented." Now commanding substantial market shares in both tractors and two wheelers, and ready to move into developing areas like cars, harvesting combines, outboard motors and heavier lines of excavator dumpers, the Nanda father son duo louis vuitton shoes yahoo answers could well be crowned the country's automotive kings.
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