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Jun 03, 2023

Panasonic Ventures Into India Elevating Quality, Japanese

Domestic demand is surging in India, but good training programs are essential for strong local relations and assuring profitable, high-quality manufacturing. Published on By Japanese manufacturing

Domestic demand is surging in India, but good training programs are essential for strong local relations and assuring profitable, high-quality manufacturing.

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Japanese manufacturing companies are making successive strides into India, just as the country is experiencing significant economic growth and population increase. As geopolitical risks escalate in China, the demand for alternative production bases rises. This is adding further to the value of tapping into India's growth.

This two-part series delves into the essentials of capitalizing on India's development opportunities.

Part One: Panasonic Ventures Into India with Automation and Cutting-Edge Technology

Enhancing the quality of products manufactured in India is crucial to elevating it as a prominent export hub and consumer market. The key lies in whether the advanced techniques of Japanese-style manufacturing technology can be effectively integrated and established locally.

A prime example of success is Suzuki, the automobile manufacturer that entered India in 1983. By offering affordable small cars, they dominated with over 60% market share in the 1990s. While it has now slightly dipped below 50%, they still proudly hold the top market position.

Suzuki has been providing training programs since 1983 at its main facility, the Kosai plant in Kosai City, Shizuoka Prefecture. These programs last up to two years for local Indian employees. Focusing on meticulous Japanese-style production techniques and quality management, they emphasize following the manuals to eliminate variations in quality.

As a result of this approach, they are producing small cars that perfectly balance affordability, high performance, and durability. In return, they have gained immense popularity in India.

In a testament to their achievement, they began exporting the small hatchback BALENO, manufactured in India, back to Japan in 2016. Osamu Suzuki, the chairman at that time, proudly declared, "After over 30 years of being in India, the quality has reached the same level as what we produce in Japan."

In economies like India where domestic demand is surging, efficient automation of mass-produced goods leads to profitable outcomes. However, the training of skilled workers with advanced expertise becomes indispensable for India to serve as an export base.

Thus, training is essential for further business expansion. Unlike more affordable mass-produced for the domestic market, Panasonic wiring devices require highly skilled workers to enhance functionality and aesthetics for export.

Panasonic Holdings HD has been operating the Anchor Skill School in Haridwar, Uttarakhand since 2016 from this perspective. The school focuses on nurturing talent through skills training.

Inside the facility, women swiftly assemble products by selecting screws, metal fittings, and resin parts from over ten different boxes. Meanwhile, men use machining equipment to process metal components near the windows. The rooms remain quiet, with only the sounds of work echoing inside.The school offers four training courses. There is home appliance repair, mobile phone repair, parts molding, and assembly. Textbooks and tuition are provided for free. Within two to three months, students acquire the necessary skills to work in this specialty. The training enables them to secure jobs in nearby factories or start their own home appliance repair shops.

Some students even join Panasonic HD's factories. One of them, Abhishek Pal, a 23-year-old graduate, happily shared, "Previously, I couldn't find employment due to a lack of skills. But now I can do well in my job thanks to the training I received."

The school also fulfills a significant role in social support.

According to the Japan External Trade Organization, or JETRO, India has approximately 250 million children attending elementary and middle schools. But only around 25% proceed to higher education. The current reality is that many young people lack access to education and struggle to secure decent employment.

However, a majority of the 2,000+ graduates from this school have experienced improved livelihoods. Some have started repair shops, earning a monthly income of ₹30,000 INR (about ¥50,000 JPY). That contrasts favorably with the average monthly salary of ₹8,500 INR (about ¥14,000 JPY) in Haridwar.

By continuing these dedicated efforts to contribute to India, the school enhances the local community's familiarity and understanding of Panasonic HD. It also lays a foundation for embracing Japanese-style manufacturing.

Yet, unlike Panasonic and Suzuki, many Japanese enterprises tend to withdraw from India within one to two years. Their reasons have to do with the complexity of India's business practices and legal regulations.

Noboru Kajiura, the President of KAJI TECH, an apparel accessories company based in Osaka, explains that hiring local personnel for negotiations in India is a necessity. That is because the intricate business customs are challenging for Japanese individuals to comprehend.

To make the most of India's "Make in India" industrial promotion policy and the preferential measures offered to foreign companies by the Narendra Modi government, it is crucial to invest dedicated efforts in establishing a mutual understanding and fostering a strong relationship with the local community.

(Read the report in Japanese.)

Author: Hiroto Kuwajima

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