Favouring continuation of trade with China, Bajaj Auto Managing Director Rajiv Bajaj on Saturday said goods should be procured from wherever they are most competitively available.
He was speaking at a session on ‘Building a reliable supply chain’ at the second day of the three-day virtual Asia Economic Dialogue 2021, jointly convened by the Ministry of External Affairs and Pune International Centre.
Mr. Bajaj also said that in terms of ease of doing business, operating something in one of the ASEAN countries was certainly easier than “what we encounter here in India. We like to believe that we are a global company, and therefore, this to my mind, from a cultural point of view, and an operational point of view, demands completeness or inclusiveness not just of employee gender, but also of having dealers, distributors and equally, suppliers from all over the world.”
“And that is why I believe that we must continue to trade with China. Because if we conduct our business at the exclusion of such a large country, such a large market, we will find ourselves incomplete over time, and we will be poorer for the loss of that experience,” he added.
‘Continuity is important’
Stating that in supply chains, commitment was important, he said that a sense of mutuality and reciprocity is indispensable to building at least the kind of very intricate supply chain that the auto industry needs to deliver the final product to the customer.
Emphasising the need for continuity in the supply chain, Mr. Bajaj said, “I say this in the context of what happened in around June or July, when our government, for whatever reasons, suddenly came down hard on imports, especially from China.”
“Now, to my mind, doing something like that is to cut your nose to spite your face. Because overnight, how can one source components that are simply not made in the domestic market, that you need to deliver products to domestic or export customers?” he said.
So, maintaining continuity is the second important aspect of the holistic view of supply chain, he added.
Noting that if it is cheaper to make something out of China or procure something from Thailand, Bajaj said, “We must always procure stuff from wherever it is most competitively available.”
He said as the automaker hoped to venture into Asia in a significant way in the future, it did an elaborate comparison of certain metrics.
Based on five metrics — land, labour, electricity, logistics and the legal system — “we did an exhaustive comparison of India, Vietnam, Indonesia, Thailand, and Malaysia.”“We were not very pleased with the conclusion we drew for India, basis this analysis, and I think we can put it all together and call it the ease of doing business. So, our experience so far has been that, however limited, operating something in one of the ASEAN countries is certainly easier than what we encounter here in India,” he said.
