Exclusive Interview with Mr. Parmeet Singh Sood – UDYOG RATTAN

The company has grown a 100 times in the last 15 years and have laid down a Target of making CMX a US$ 100 mn group by 2023 from what was an under US$ 200,000 company when he joined in 1999.

Mr. Sood is a Trainer and Public Speaker having shared at the same platform as the likes of Tony Robbins, Richard Branson, Brian Tracy, Jack Canfield to name a few as a three time speaker at the National Achievers Conference 2017, 2018 & 2019.

Mr. Sood is also the bestselling author of books like Blood, Heart & Soul, Struggles to Success and The Art & Science of Negotiation and has written over 100 Articles on various topics thus far. Mr. Sood was awarded the, “Udyog Rattan” award by Institute of Economic Studies as well as Outstanding Global Leadership Award by IES under the aegis of the Government of UAE and has also been featured on Zee Business’s No. 1 business talk show, “SELF MADE.”

Recently Mr. Sood, was also featured by FORBES India as a Globally recognised Indian Brands marquee edition.

Mr Parmeet Singh Sood is now on a mission to help other Small & Medium
Businesses to scale up and with this vision he has brought together domain
experts under CMX Consulting to hand hold Entrepreneurs and put them on a
growth path.

Apart from his business, he gives his time to social causes and actively
associated with YBLF, TSCC & MIWA among other Social organisations.

In recent interview with Mr Ravdeep Singh Chadha (Editor-In-Chief of Auto Insider) , Mr. Parmeet Singh Sood talked about his Mission, Vision, Big opportunities in Automobile Industry and some suggestions for entrepreneurs and Start-ups.

When did you start this business and what exactly motivated you to get into this business?

I am a second-generation entrepreneur and businessman started by my father back in 1974 and when I joined it in 1999, it was still at a nascent level however we were making world-class products and already exporting to the European and American markets. It took me two to three years to understand the manufacturing and other technical nuances before I go to start contributing my skills from the business management background and help to scale up the company.

My father was the motivation behind joining the business as he said that the education that I have got should be used for expanding power our family which today feeds 50 households which should be scaled to 500 from this business and by God’s grace today we have already achieve this goal and the next target is perhaps 5,000 direct as well as indirect employees making a living out of the CMX group globally.

Mr. Parmeet Singh Sood at his office.

What is the mission and vision of your company and how big it is spread in the world?

Our mission since Inception has been understanding the needs of our customers and developing our cells to meet those needs and expectations and that is how we started with investing in systems when we did not have adequate capital then moved on to investing in technology up-gradation and till date we spend majority of our profits both in technical up gradation as well as capacity enhancement.

Our vision is to be a market leader in the four niche segments that we operate it in namely; Truck & Trailer Components, Filter Gaskets, Passenger car suspension bushing, Sealings & Gaskets.

We are already the leading OEM exporter in two of these four market segments and we wish to complete the same for the other two to become a 100 million dollar company by 2023.

What is your take on the rising competition from the manufacturers of China?

China has been a competitive threat ever since we started exports and especially in the 90s and the earlier part of this century as well they were the focus factory of the world and hence overall businesses in India got a lesser portion of the global pie. However today we do not see China as much threat one due to the rising costs in China and two due to the focus of the American as well as the European buyers now tilting towards India and some of the other developing low cost countries for manufacturing viz a viz Turkey, Vietnam, Thailand, Philippines to name a few.

Automotive Industry is one of the most competitive industries as it operates on detailed cost-plus pricing and these costing are threadbare and the only way to survive or make profits is by constantly improving efficiencies and throughput in the organization at every level.

How good has GST been for the automobile industry in terms of export, are the steps taken by the government supportive to grow the business?

GST as a tax-free form feels good for the Indian economy, however, the implementation has been far from expected lines and that has hurt businesses across industries in the short term especially for exporters like us as under the earlier tax regime as an EOU we were exempt from paying any VAT/Excise/Custom Duty etc. However, under the GST regime, we need to pay 18% GST on all domestic purchases which then needs to be re-credited in our account for the refund. This impacts our already sluggish and long cash flows by another 18% does making it even much title and there are long delays in getting these refunds and after more than three years of GST implementation finally, we are now looking at some refunds being processed.

This has hurt our business as due to the unavailability of adequate cash flow we have not been able to grow even though we had profit on paper and additional business in hand.

First paying the GST and then applying for the refund which takes ages is not an efficient process and I strongly believe that as in the earlier tax regime all exporters especially EOU & SEZ units should be exempt from paying any GST in the first place. This will not only free up cash flows but also decrease the burden for massive paperwork both at the business level as well as the government level.

What future do you see in the components business by industry moving towards electric mobility?

Electric mobility for EV is a game-changer and major destruction and it would invent the industry completely as more than 60% of the auto component businesses will go out of business if they do not reinvent themselves and move to you either different parts or different industries.

Not only that in my opinion autonomous driving coupled with electric mobility and the prevalence of ride-hailing apps would shrink the entire automotive industry as more and more people would rather use ride-hailing service rather than own a car as insurances, parking, traffic scenarios, etc. are constantly becoming more of a headache and especially the millennial generation is moving away from such form of ownership. We are seeing this trend both in the car as well as the real estate industry already in countries like the US.

The position in the aftermarket would be much longer as the current internal combustion-based cars would still be on the roads for the next 10 to 15 years and aftermarket would thrive for that period.

As a business, we are also shifting our attention and focus more towards suspension and some other anti-vibration components and reducing our dependence on market expansion on anything which is engine related.

What is the next big opportunity you see in the Auto industry?

As an Indian auto component manufacturer, we as an industry are primarily focused on the domestic market whether it is OEM or the aftermarket and there is hardly any focus on becoming a global player.

Now that the entire world’s eyes are on India to become a global sourcing hub the next decade belongs to us as a lot of business has already started to shift out of China and it is coming to India as well as new opportunities are directly coming to our country.

we as an industry must be prepared to handle this opportunity and make the most of it not only from a cost-benefit perspective ever be able to meet the customer’s expectations and demands related to technology, testing, systems, product quality, new-age developments, research so on and so forth.