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Saturday, Mar 25, 2006
Financial Daily from THE HINDU group of publications Saturday, Mar 25, 2006 |
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Cars Corporate - People Web Extras - Human Resources BVR Subbu to quit Hyundai
Neha Kaushik
Taking new route Credited to be architect of Hyundai Motor To step down at the end of his term
MR BVR SUBBU
New Delhi/Bangalore , March 24 In a surprise development, Mr B.V.R. Subbu, credited to be architect of Hyundai Motor India, has decided to quit as President of the company. Mr Subbu will step down at the end of his term on March 31. Though no official confirmations were forthcoming on Mr Subbu's future assignment, automotive industry sources pointed out that he might be taking up a role as `advisor' to major Indian companies operating in the manufacturing/infrastructure sphere. An industry observer said that: "Mahindra & Mahindra seems a likely option as the company is on expansion mode and would roll out its passenger car next year". Sources added that Mr Subbu has also been approached by a major venture capital firm, which is keen to invest in India, and may associate with the firm in an advisory capacity. In an interview to Business Line earlier, Mr Subbu had said that he "would like to take on a consultative role" in the future.
More resignations
Interestingly, Hyundai may be losing a few more key people. Mr Sanjeev Shukla, who is in charge of marketing, has put in his papers. The company's Senior Vice-President (Sales), Mr V.D. Bhasin, is also likely to step down soon. Meanwhile, Mr Subbu's abrupt resignation has set off the rumour mills with speculation of a spat with the Korean management. Sources said that the man who propelled Hyundai to the number two position among carmakers in India, was probably forced to resign days before his term came to an end because of a media leak. They added that trouble had been brewing between Mr Subbu and Hyundai Motor India Managing Director, Mr H.S. Lheem.
It is unusual for a carmaker to announce the phase out of a model nearly six months in advance. Sources said that within days of the announcement, Accent's sales fell by as much as 30 per cent.
Driving force
Mr Subbu has been the driving force behind Hyundai Motor India, which rolled out its millionth car recently, for the last nine years. He was earlier with the Tata Group for 18 years.
Our Chennai Bureau adds:
At a recent function to roll out the one-millionth car, Mr Subbu recalled the long journey the company had made since it started its operations here. He recalled that a "lot of doubting Thomases" had wondered whether its cars would sell and how long the company would last. Banks would lend to the company at 700 basis points over the inter-bank rate. "We have come a long way since," he said then.
Mr Subbu said the company had put in place the building blocks necessary to make high quality cars. "Ultimately we proved to ourselves and all that India could manufacture high-tech, globally accepted cars," Mr Subbu told a press conference held on the occasion of the roll-out at the company's plant.
Even a few months ago, there was talk, both within the company and outside, on whether Mr Subbu would accept a renewal of his contract. There was even some talk that he would continue to be on the board of Hyundai Motor India, without being its President, and play an advisory role to Hyundai Motor Company, the Korean parent of the Indian company.
At that time, Hyundai Motor Company was also looking at the possibility of setting up a plant to manufacture Kia cars — Kia Motors belongs to the Hyundai Kia Automotive Group — and so an advisory role seemed possible. However, it is reliably learnt that Kia does not intend to set up a plant in India. It was planning to use this plant as a manufacturing hub rather than launch its brand in the domestic market.
In recent interactions, Mr Subbu had talked of the efforts that went into building Hyundai Motor India and had described himself as a "landscape artist" rather than a "gardener". He now plans to paint a different canvas. Asked for his plans, all he would say was that he had not yet decided — it could be a venture capitalist or a strategy consultant for the manufacturing sector or even buy out a small company and build it or take up some large project in the infrastructure sector.
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