 "India to be third or fourth largest market for Siemens in next 3 years")
India will be among the top three or four markets for German engineering and technology conglomerate Siemens over the next three years, overtaking Germany and France.
At present India is its fifth-largest market and contributes 3.5-4 per cent of the firm’s revenue, said senior executives of the company.
“India is the fastest-growing market in the world. It depends on how other countries in our pecking order perform,” said Peter Korete, member of managing board, chief technology officer and chief strategy officer, Siemens AG.
He said the reason was the potential the country had as it built its infrastructure — across segments like locomotives, cement, and chemicals. The amount of infrastructure that is being built is probably second-highest, he added.
Koerte was talking to Business Standard on the sidelines of Transform-Innovation Day 2024 event in Mumbai.
Koerte is driving the firm’s move to become a more technology-focused firm rather than being just a manufacturing player. Part of this shift has been the acquisition of Altair Engineering for $10.6 billion. This will give a push to the company to increase revenue from software, which is just about 8 per cent of its total.
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When asked about the rationale for Altair, Koerte said: “At present over 80 per cent of our capability is in hardware. This is smart hardware and about 12 per cent comes from software. We want to increase this share. This will be organically and inorganically. Altair was acquired for their specific strengths.”
He added the shift towards building capabilities in software meant more hiring in India.
“We have continued to hire in Pune and Bengaluru and that headcount now stands at 10,000. More important, we are working with colleagues here on artificial intelligence (AI) and generative AI-related development,” added Koerte.
India is important because every device that is shipped today has some amount of software embedded in it, he added.
However, despite the focus on software, when the company talked about seeing India as its third-largest market, that will be driven by manufacturing and infrastructure expenditure.
Koerte expects the infrastructure sector to play a role in this growth. Siemens has multiple offers in India, grouped under the infrastructure, industrial, and mobility segments.
Sunil Mathur, managing director and chief executive officer, Siemens, said: “We see public capital expenditure driving this growth. Private capital expenditure is growing in areas like semiconductors and data centres, including power generation. There are pockets, like automotive, on which private capital expenditure is slow to grow. I think it is a temporary blip and it will pick up in the next six-10 months.”
Talking about expansion in India, Mathur said Siemens had 32 factories in India and was expanding these as well.
“Earlier this year the company announced another euro 100 million for capex expansion. Part of this will go in expansion of these factories,” he added.
At the Transform – Innovation Day 2024, the company showcased its latest innovations, solutions and partnerships.
The wide range of technology solutions on display at Transform – Innovation Day 2024 include digital twin, secure network planning through intent-based network (IBN) design, centrally managed connected devices that enable deploying applications at scale across enterprises, seamless integration from shop floor to cloud and predictive maintenance of systems using generative AI.