In an exclusive interaction with Thiruamuthan, Correspondent at Finance Outlook India, Sachidanand M Pandit, Head of Finance and Control - India Tech Hub, Volvo Cars, discusses how automotive finance transformation is reshaping decision-making through data, AI and Global Capability Centers (GCCs). He highlights the importance of technology-led financial planning, profitability management and strategic investment in driving sustainable business value.

With over 22 years of experience in finance and business leadership, Sachidanand, a qualified Chartered Accountant and CMA from USA, has held key roles across Volvo Cars, Volvo Group Digital and IT and Volvo Construction Equipment. His expertise spans strategic finance, financial planning and analysis, business control, digital transformation, governance, risk management and performance management.

How has your experience across finance and business leadership shaped your approach to leading through complex industry and market shifts?

Over a period of more than 20 years in my career journey as a finance person, one very important experience I gained is that you need to bring clarity in the minds of leaders/people whom you are working with; it is beyond numbers and compliance. It does not mean to bring answers to everything, which is not possible given the environment we are living and growing up in. What I mean is to think about - what do we know, what are we assuming, what are the real trade-offs and what happens if we don’t decide? So, the main lesson learned through experience is to bring clarity by helping leaders to see what matters through the complexity by showing them facts, priorities, choices, ownership, and to make a decision, follow through and move forward together.

What leadership principles have remained consistent in your approach to building high-performing finance teams and supporting broader business priorities?

In one of the workshops back in 2010-11, which I have attended, I have read a line, which is so relevant in the past, present and in the future as well, i.e., “Employees stop caring about work when they feel their leaders don’t care about them.” So, people may work for a company, but they give their best when they feel they matter to the people leading it. I believe in setting clear expectations and holding people accountable, but equally in listening, supporting their development and giving them trust and ownership brings the best from them; they align more with the business road map. When people feel valued and understand how their work contributes to the bigger business purpose, then performance, engagement and accountability follow naturally.

How is finance changing in India’s automotive industry as companies move toward EVs, connected cars and software-defined vehicles?

The automotive industry is going through one of the biggest business model transformations in its history. Traditionally, finance focused on vehicle sales, manufacturing efficiency, working capital, and dealer profitability. Today, with EVs, connected cars, and software-defined vehicles, finance is becoming far more strategic. Shift in the product model and market demand, i.e., shifting to EVs, software-defined vehicles, connected vehicles, etc. This transition heavily influences the capital allocations, cost composition and risk and return. Meaning, the role of finance is moving from controlling the cost of transformation to ensuring that transformation actually creates economic value. Finance has to balance short-term profitability pressure with long-term strategic positioning.

What role can automotive GCCs play in improving finance efficiency, business planning and global decision-making?

Having spent over two decades in finance leadership, I believe the role of an automotive GCC must move well beyond finance efficiency. Efficiency is the foundation, but value creation must be the ambition. The foundation is efficiency (low cost, automation, etc.), then excellence (quality, ownership, etc.), from here to insights (scenario modeling, cash generation, etc.) and then to value creation (cash generation and involved in strategic business decisions). This is what any GCC should do.

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How can automotive companies use AI and data analytics to improve forecasting, cost management and financial decision-making?

The main intention of using technology should be to avoid the decision debt. Just because there is new technology in the market and everyone is using it, we should not use it unless it improves the quality and speed of the decision. Adoption of technology should add value to the vision and mission of the organization. Operationally, we need to use AI in forecasting the drivers of business, e.g., do not use AI for calculating EBIT directly, rather use AI to calculate each driver like product mix, pricing mix, direct cost, contractual fixed cost, market shift, etc. Then again, use the technology for consolidation cost management and predictive control. Also, use the AI in scenario simulation and capital allocation. This is one that gives a lot of thought to risk management very well. Means use very specifically – very cluster-wise, then make the big picture.

How can automotive finance leaders manage profitability while investing in EVs, software, R&D and new mobility technologies?

Every finance leader should have the core habit of forecasting the effect of change - shift in market due to technology, due to geo-political scenario or due to environmental, etc. Then bring the clarity within the organization leaders to take action and act fast so that the organization can operate sustainably. As the market shifts towards EVs, software-driven cars and connected vehicles, there is a requirement to have clear profitability and cash generation analysis showing causes like operations excellence, deliberate future investments in R&D or cost of human capital development, etc. Meaning, finance must track profitability or economics on a deeper level; traditional vehicle gross margin is no longer sufficient. We must understand battery economics, software monetization, subscription revenues, lifecycle profitability, and return on R&D investments. Future profitability will increasingly come from software and services, buy-back policy and not only from vehicle sales.

Looking ahead, which financial KPIs should automotive companies track to measure the business value of technology, R&D and digital transformation?

Any KPI and PI should always align with the organization's vision and mission. The priorities of the organization should tell each employee how to contribute to the organization's roadmap. This makes the alignment of each and every person in the company to its desired or wanted position. I would say, not to forget traditional finance measures, like operating margin, free cash flow, return on invested capital, etc., remain as important as the specific ones are, like margin per car, battery cost per vehicle, R&D efficiency, software revenue per vehicle, product development cost to revenue, which give more clarity on the financial health of the organization. The success of an automotive EV transformation is not only measured by the number of EVs sold. It is measured by whether the company can improve EV profitability, generate sustainable free cash flow and achieve an acceptable return on the billions invested in batteries, software, platforms and future mobility.

Which capabilities do you believe future finance leaders need to develop to navigate an increasingly complex business landscape?

I would say investing in understanding how the future evolves and what predictive actions are needed to manage the risk in the business environment will make or break the finance leader’s success. It is not about generating reports and analysis but about leading changes and bringing clarity, which is very critical.

So, if I highlight, the ability to bring clarity from complexity, strategic business knowledge, technology adoption, i.e., AI and data Literacy and very importantly, leadership and influence are the main capabilities one has to develop for future readiness. If I make a closing note, the most successful finance leaders will not be those who know the most about finance, tax and governance, but rather they will be those who can combine financial expertise, technology, business insight, and human judgment to help organizations make better decisions in an increasingly uncertain world.