Introduction: Why are Indian companies acquiring Japanese companies?
In recent years, one notable trend in the automotive industry has been the phenomenon of major Indian auto parts companies successively acquiring and bringing Japanese companies under their umbrella.
It may seem like a story of unexpected turnaround, but behind it lies a clear "management philosophy" and "support system." Today, we introduce an Indian automotive parts manufacturer...Motherson (Samvardhana Motherson Group)In this exclusive interview with the founding family, we will delve into why they continue to acquire Japanese companies, as well as their post-acquisition management methods and corporate culture.
"Supporting independence from affiliated groups" is the essence of acquisition.
At the heart of Mother Sun's unique acquisition policy is a simple idea: "Support based on customer needs."
① The basis is "requests from customers," not voluntary acquisitions.
Mother Sun's CEO himself has stated this clearly:
"In reality, we often receive requests from our customers, to whom we supply parts, to acquire their company in order to solve their management challenges."
In other words, Mother Sun is not proactively looking for acquisition opportunities; rather, it is accepting requests for "self-support" from Japanese companies.
② Typical example: The acquisition of Yutaka Giken
Amidst the global trend toward electric vehicles (EVs), Japanese companies that have traditionally manufactured parts for internal combustion engine vehicles may see their competitiveness decline. It is necessary to separate these companies at the "appropriate stage" and transform them into businesses with a broader customer base.
Regarding Yutaka Giken, a Honda-affiliated parts manufacturer, the company stated, "We handle over 20,000 types of parts. If they wish, we will offer them opportunities to enter new product fields and support their efforts."
③ Expanding the customer base after the acquisition is key to growth.
By integrating them into the Mother Sun Group, Japanese companies gained the opportunity to expand their business with other automakers, including Suzuki. This "synergy" is the essential significance of the acquisition.
"Gloably Local" Management Mechanism and Specific Examples
A distinctive feature of Mother Sun is its policy of "maintaining the local management team" in the companies it acquires. This is a different approach from many other overseas M&A deals.
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- Point 1: Do not send people from India.
“"Mother Sun's management style is to entrust each company's operations to local professionals, with the presidents and chairmen handling them. We don't send people from India to the companies we acquire."”
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- Point 2: The concept of "globally local"
“"My son and I are owners as members of the founding family, but we do not hold positions as president or chairman of any of the group's subsidiary companies. We leave the operation of each company to the management professionals."”
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- Point 3: Differences from Japanese companies
Generally, many Japanese companies prefer to send their Japanese employees to overseas locations, but Mother Sun says it doesn't know why.
“"We place our complete trust in Japanese people. We also place our complete trust in American and German people who are running businesses locally. This is Mother Sun's management style."”
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- Point 4: All projects from 51 companies are progressing smoothly.
All 51 companies we've acquired, including those previously announced, have a track record of steady growth. This demonstrates the effectiveness of our post-acquisition management.
A management philosophy that puts employees first.
Mother Sun's most distinctive management philosophy is to put "people" first. They prioritize long-term trusting relationships over short-term profit-seeking.
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- We will continue to protect our employees.
“"We will not close any locations or cut staff. We will not relocate our operations in search of cheaper labor. This decision prioritizes our employees, our 'people'."”
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- Know-how is found in "people," not equipment.
“"Know-how is accumulated not by equipment, but by people. We believe that protecting the people who possess that knowledge and skill is paramount."”
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- We also ensure a minimum profit.
“"We are proud to say that we have maintained a delicate balance between continuing to employ our staff, keeping the factory running, satisfying our customers, and securing a minimum level of profit."”
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- The company does not have a policy of rehiring employees.
Mother Sun has stated that it will not rehire anyone who has left the company. This is based on the Hindu concept of "reincarnation."
Summary: The essential concept of corporate growth lies here.
Mother Sun's management philosophy can be summed up in one word: "trust and balance."
① What is the purpose of the acquisition?
Our true purpose is not profit-seeking, but "support that meets customer needs." Mother Sun's raison d'être is to support Japanese companies in growing independently.
② What is the right approach to overseas M&A?
Trusting local talent and maintaining a strong management team are key to success. We are achieving "cross-border synergy" through the diversity originating in India.
③ Balancing short-term profits with long-term growth
By prioritizing people, we protect our expertise and trust, and build a sustainable corporate culture. This is something that Japanese business leaders should learn from.
“"Sales figures are 'vanity,' while profit is 'sanity.' And even if large profits are recognized on the books, it's meaningless; the bank balance is what truly reflects a company's reality."”
This statement is profound. The perspective of valuing a company's strengths not just in numbers, but also in its "people" resources, is becoming increasingly important in modern business.
