I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor
Vol. 13 No. 16
www. amonl ine. in
13 May 2013
INTERVIEW
Pg 12
24 Pages
INTERVIEW
Raring to go
NBC: R&D focus pays off
A. Ramasubramanian, President, AMW Motors Ltd.
Srini Dampur, VP – R&D, NBC
Smooth rolling Valvoline Cummins inaugurate their first manufacturing facility near Mumbai. Anand Mohan Mumbai
V
a lvoline Cu mmins Limited has opened its first company-owned manufacturing facility in Ambernath near Mumbai. Valvoline has had a presence in the Indian lubricant indus-
try since 1998, but up till now contract manufactured its lubricants for the local market. The Valvoline-Cummins joint venture (JV) is a 50-50 partnership between Ashland Inc and Cummins India, Valvoline being an Ashland brand. Samuel Mitchell Jr., president of Ashland Consumer Markets, a commer-
cial unit of Ashland Inc, said that this new plant will provide more growth opportunities and give a competitive advantage. The company has invested $30 million (approximately Rs 160 crores) in the new manufacturing and packaging plant. It will have an initial annual production capacity of 120 million
litres per year. Valvoline says that in the future, capacity can be bumped up to 150 million litres. It is a significant increase from the 4.3 million litres the company produced in its first year in India. Last year, Valvoline produced 77 million litres of its lubricants in the country. Now that the company’s manufacturing facility is operational the current contract manufacturing facility will continue to produce Valvoline lubricants, but in much smaller quantities and will serve as a backup. Current blend lines at the new plant include simultaneous measuring and blending as well as automated batch blending. Oil products include engine, gear,
Valvoline Cummins’ first manufacturing plant in India at Ambernath near Mumbai. It has a capacity of 120 million litres.
DATA MONITOR Top 5 CV Makers Company
Mar-12
Mar-13
Change
TML
51,803
46,660
-9.93%
M&M
12,313
14,627
18.79%
ALL
12,661
13,057
3.13%
VECV Eicher
5,786
4,760
-17.73%
FML
2,750
2,054
-25.31%
Top 5 CV Exporters Company
Mar-12
Mar-13
Change
TML
4,127
2,848
-30.99%
M&M
2,083
1,701
-18.34%
ALL
1,605
963
-40.00%
VECV Eicher
265
202
-23.77%
FML
11
80
627.27%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
`50
Pg 14 Scan this code on your smart phone to visit www.amonline.in
hydraulic, industrial and transmission oils. Valvoline has seen its biggest success in India with its diesel engine oils. Now the company sees high growth potential in motorcycle oils. Being an American company, Valvoline has developed expertise in oils for cars and commercial vehicles and large capacity engine motorcycles. In India though, where the commuter motorcycle segment rules the roost, Valvoline is hoping to add another dimension to its portfolio in collaboration w ith Cummins. The difference lies in the additive package that helps these oils perform better in small capacity motorcycles, says Sam Mitchell. Dr Fran Lockwood, Senior VP of R&D, Ashland Consumer Markets, works closely with the R&D team at Cummins on both local and international projects. Lockwood says, “Ashland and Cummins do vehicle testing and development around the world, at China, Brazil, and are currently working on a major project in Indonesia.” The JV does joint engine test development, specialized testing to evaluate critical component wear and corrosion, joint modelling work on future engine design, and proprietary testing methodology to demonstrate fuel economy. The two companies have an international JV in Argentina, Brazil and China in addition to India.
On the anvil Cooper launches three cylinder genset; SCV under development and may debut next year. Abhishek Parekh Mumbai
S
ata ra-based Cooper Corporation is seeking a presence in the automotive sector with the establishment of a vehicle and engine manufacturing facility at its Satara plant. The company had earlier chalked out plans for a 2.5-3 tonne small or light
commercial vehicle built with in-house engine manufacturing capability. The vehicles are under development and the company is looking for a market debut by end of next year. The company has already invested around `250 crore in its engine manufacturing line, to enable it to build around 48,000 units per annum. It is also in the process of investing another `300
(L-R) Rajesh Walke, GM (Engines) and Gordon D’souza, GM (Marketing) of Cooper Corporatom at the launch of the 3-cylinder engine.
to `350 crore in a vehicle manufacturing line. “We are not keen on launching a commercial vehicle in the
micro range of .75 to 1.5 tonne as that segment is extremely
Contd. on Pg 18
EDITORIAL Touch and Go
I
recently read an article that detailed an in depth analysis of CAP that says that vehicle historic data proves that vehicle life cycles have shortened substantially over the last three decades. Earlier when OEMs launched models, they were expected to run for at least 10 years or so. Now latest generation cars are launched within a span of three to four years. The article states several reasons for the shortening lifecycles. A main reason is the increasing number of Far East manufacturers that have entered the European market. Most of these manufacturers have come to these foreign markets bringing in new models to gain traction in a highly competitive market. At times it is probable that they launched the models in their own country and then quickly changed specs to launch to European or American customers. What makes it easier to change the look of a car is that most areas of the front and rear are made from plastics, and this enables the Far East OEMs to quickly change the look. This makes their work easier than what it was about 20 years ago. The new advancements in emissions reduction has also tightened some screws for manufacturers in terms of policies. Car manufacturers have increasingly come under the spotlight
with regards to carbon emissions. Especially in Europe, the government offers tax incentives to those who manage this well. And this is one of the main reasons for manufacturers to come out with newer models that adhere to these norms. Quite often the changes to reduce emissions involve changing the construction of the car along with the aerodynamics and therefore the car has to be redesigned into a new generation to accommodate the lower CO2 requirement. Coming to India, one wonders whether Indian OEMs will be as quick to apply to launching newer models as quickly. Most Indians are used to running their vehicles for five years and more, and considering how Far East manufacturers are looking at sales, one wonders at the figures they look for in India.
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QUOTES Brandon Yea, Kia Europe President
Luca Cordero di Montezemolo, Ferrari Chairman
Our goal is to approach our target carefully as if we were running in a marathon.
My focus this year and in the years to come is not to grow volume but to increase the exclusivity of Ferrari. This protects our margins and residual values for our customers.
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CONTENTS CORPORATE Mad over MPVs
Chevrolet’s Enjoy is the latest entrant in the MPV space that is far more developed than a few years ago and shows no signs of slowing down.
08
08
Cummins opens its second power generation plan
18
Cummins Group kicked off a new plant for manufacturing low horsepower generator sets in the Special Economic Zone at the Cummins Megasite in Phaltan.
Continental produces fuel pumps locally in India
18
Continental recently commenced delivery of a locally produced in-tank fuel pump for the compact car segment at its Pune facility, which was inaugurated in June 2012.
18 Maxi Truck Plus launched
09
Mahindra & Mahindra has launched its BS II & IV compliant ‘Bolero Maxi Truck Plus’ at `4.33 lakh (BS3) (ex-showroom Thane) and `4.43 lakh (BS4 ex-showroom Mumbai excluding octroi).
09
JLR awards £2.8 billion supplier contracts for new car
Jaguar F-Type has led to contracts worth £2.8 billion being placed with companies internationally, with more than £1.5 billion placed with companies in the UK.
Daimler Trucks Asian strategy set to roll
17
Having established the ‘BharatBenz’ brand in India, Daimler India Commercial Vehicle is now well on its way to realize its export potential.
17
THE OTHER SIDE
22
Dr Christof Krogmann, Vice President, Asia Pacific, High Performance Materials business unit, Lanxess
Oerlikon’s worldwide CEO to be based in India Heriberto Diarte, global CEO of Oerlikon Drive Systems’ move to operate out of New Delhi follows Oerlikon’s thrust on Asia as a key market for drive system.
18
18
Dr Krogmann began his career in 1989 as a chemist in the Chemical Research Centre of Shell in Louvain-la-Neuve, Belgium and has held a number of managerial positions at Shell Chemicals and Montell before joining Lanxess.
Auto Monitor
13 MAY 2013
NEWS
8
Mad over MPVs Chevrolet’s Enjoy is the latest entrant in the MPV space. The segment is far more developed than a few years ago and shows no signs of slowing down, says Anand Mohan.
I
t’s the year of the soccer mom. Not many in this part of the world have heard of soccer moms, it being a predominantly American phenomenon. Maybe that’s because multi-purpose vehicles (MPVs) aren’t very common here. After all a soccer mom needs a spacious car to drive her children (and sometimes even the neighbour’s children) to school, to soccer practice and other sporting events, carrying all those kids, their sports equipment, shopping bags and the like. SUVs are large but cumbersome, not quite to the liking of buyers in this segment. They prefer nimble MPVs, offering three rows of seating and good visibility from the driver’s seat. Chevrolet’s recently launched MPV, the Enjoy, is one such people mover targeted at the budding Indian soccer mom. But why the sudden influx of MPVs
in the Indian market, and is the market large enough for so many models? First, a little bit about the Enjoy. It comes from the GM-SAIC-Wuling partnership, sold in China successfully as the CN-100. Shunning its Chinese roots for obvious reasons, General Motors has updated and rigorously tested it to suit Indian conditions. The Enjoy comes with a choice of 7/8 seat configurations, a 1.4-litre 104PS petrol engine and a 1.3-litre 77.5PS diesel engine. The MPV weighs between 1260-1345 kg (depending on the variant), which is 300 kg lighter than the much smaller Mahindra Quanto – monocoque frames being lighter than ladder frames. The diesel Enjoy has an ARAIcertified mileage of 18.2 kmpl, impressive for a car of its size. It has what it takes to be successful in this segment. It’s light,
P Balendran, VP GM India (L) and Sastry Vempati, VP, Planning, product management and new business development, GM India at the Enjoy launch in Mumbai
frugal and spacious, not to mention the low price. Chevrolet has launched the Enjoy at a surpris-
ingly `5.49 lakh ex-showroom Delhi, going up to `7.99 lakh for the top-end diesel variant.
That’s a minimum of `40,000 cheaper than an equivalent Ertiga variant. GM has been able
to achieve a high level of localisation in the initial phase of production, with the 1.3L diesel engine produced locally at the Talegaon powertrain facility. A few years ago, there was the Innova in this segment. The Xylos and the Taveras came, but did not create much of a stir. Then came the Aria, but it went out of contention as soon as the prices were announced. Undeterred, Maruti, Nissan and Chevrolet kept their MPV plans going. Once the Ertiga was launched, manufacturers were buoyed by how well customers had taken to the segment, doubling the numbers and showing no signs of slowing. Light, medium-sized MPVs with a monocoque chassis were the way ahead. Nissan couldn’t do much with the Evalia, its oversized dimensions went against it. The large slab-sided MPV failed to excite car buyers. Mahindra, in a smart move, developed a sub-4 metre MPV, the Quanto. Benefiting from lighter weight, seven seat layout and lower excise duty, it allowed better utilisation of the Xylo platform giving Mahindra much needed numbers from the under-performing platform. And there’s room for more players, according to Chevrolet. Because in India, it isn’t soccer moms (if they exist here) who will buy MPVs. It’s tourist operators, large families and customers planning second cars for long distance trips who will plump for MPVs in India. The utility vehicle segment has become a favourite of carmakers, experiencing a huge growth of 50 percent in the concluding fiscal, backed by a number of new launches. However, since the announcement in the general budget of an additional 3 percent tax on SUVs, certain models in the segment have seen a slowdown. In its forecast for FY 13-14, Society of Indian Automobile Manufacturers (SIAM) projected moderate growth of 11-13 percent. The Innova sells about 7,000 units a month and the Ertiga sells a similar number, but both are considerably more expensive than the Enjoy. If there’s enough space for the Xylo and the Quanto, then why not the Enjoy? Indian car buyers distrust Chinese products, due to doubts about reliability. If GM can convince prospective customers of the “Indianness” of the Enjoy, there will be no stopping it. It may not set sales charts on fire at launch, but word of mouth may work in its favour later on. The MPV segment as a whole is growing fast, but it requires a good understanding of the specialised requirements of its customers. On the face of it, the Enjoy appears to have the right package of options. The American manufacturer expects to sell around 3,500 units a month. Considering Nissan Evalia’s average monthly sales of 232 units, GM’s expectations may be difficult to meet. In terms of design and structure, Enjoy is closer to the Evalia. The Chinese version of the Enjoy, though, has sold around seven lakh units since its launch in September 2010.
13 MAY 2013
Auto Monitor
NEWS
9
Maxi Truck Plus launched Will continue selling older Maxi Truck alongside the new vehicle to cater to varying power and load carriage needs. Our Bureau Mumbai
M
a hindra & Ma h i nd r a ha s launched its BS II & IV compliant ‘Bolero Maxi Truck Plus’ at `4.33 lakh (BS3) (ex-showroom Thane) and `4.43 lakh (BS4 exshowroom Mumbai excluding octroi). The Bolero Maxi Truck Plus has been developed on Mahindra’s Bolero pickup truck platform and is intended to cater to the urban goods transportation segment. It is powered by Mahindra’s proven 2523 cc common-rail engine, which delivers a mileage of 17.7 kmpl. “We are looking to grow our market share in the pick-up segment. The key ingredient in the effort is offering a vehicle with style, comfort, fuel efficiency and advanced features with power
and refinement,” said Pravin Shah, Chief Executive Officer, Automotive Division, Mahindra & Mahindra. He added that the Indian pickup market is growing more rapidly than ever before and Mahindra has been leading this category (2-3.5 tonne GVW LCV segment) with a 54 percent market share during FY 2012-13. According to the company’s assessment and survey, three distinct sub-segments have emerged within the small commercial vehicle segment over the last couple of years, even as the segment recorded double-digit growth during the period. The largest sub-segment within the small commercial vehicle is the mini-truck, which has a carrying capacity of 0.75 to 0.85 tonnes, costs between `3.3 to `3.6 lakh, and has a segment volume of around 2,05,000 units. The small pickup with an industry volume of around 99,000 units are avail-
Companies look at green manufacturing Our Bureau Mumbai
M
anufacturing companies are not only seeking and implementing environmental friendly technologies for their own sustainable growth but also enrolling their suppliers in a holistic manner. The effort made to make the supply chain partners and other stakeholders aware of the efforts and encourage their participation is gaining momentum across sectors and companies if the proceedings at the recent Green Manufacturing Summit organised by Frost & Sullivan in Mumbai is anything to go by. The summit, in its 4th edition, seeks to educate organisations about the need of ‘Sustainable Development’, to assist in their sustainability journey and motivate those who have inched ahead of others by recognising their efforts. It provided a platform for showcasing some of the best practices in sustainable manufacturing from diverse manufacturing industries that Frost & Sullivan assessed for Green Manufacturing Excellence Awards. The focus was on the strategic aspects related to sustainability as well as the mechanism for implementing the green strategy. “Finalising the boundary in the supply chain and understanding supply chain risks are the starting steps towards this journey. So far, companies have focused on improving supply chain efficiency and reliability with respect to cost, quality, and delivery. But, they now have to also focus on environmental and the social sustainability in Supply Chain,” Nitin Kalothia, Director, Manufacturing & Process Consulting Practice, Frost & Sullivan. Additionally sustainability reporting was also emphasised as an area that has taken front seat in recent years as companies focus on identifying and implementing meaningful sustainability projects use reporting as a means to communicate to stakeholders the progress made. Some of the best practices presented by representative from various industries, covered, ‘Hybrid’ energy solutions, innovative solar technologies, green factory, managing biodiversity risks, building a green supply chain, waste heat recovery systems, and the lean way to green. Ashok Leyland’s Pantnagar facility received the Challengers Award while the company’s Bhadara facilty bagged the Aspirants Award at the summit. The Chennai based commercial vehicle major also received Certificate of Merit for its Alwar and Hosur facilities. Rane (Madras) and Endurance Technologies were among the prominent auto component suppliers who bagged the Aspirants award with Certificate of Merit at the summit.
able in the price range of `4.5 lakh to 4.7 lakh, and have a load carrying capacity of one to 1.2 tonne. Large pick-ups are the third sub-segment. These have a load carrying capacity in the 1.2 to 1.3 tonne range, and cost around `5.3 to `6.3 lakh. They clocked industry volumes of 90-91,000 units last year. The company will continue selling the older Maxi Truck alongside the new Maxi Truck Plus to cater to varying power and load carriage needs. As per the company’s assessment, most customers in the small commercial vehicle segment want a vehicle that offers value (favourable price and load carrying capacity), comfort, style, pulling power and fuel efficiency. “The customers in this segment not only desire a vehicle that offers power and fuel efficiency, but also style as most of these vehicles ply within the city or densely
Pravin Shah at the launch of the Maxi truck plus.
populated areas and have an impact on the image of the owner,” said Vivek Nayer, Chief Marketing Officer, Automotive Sector, Mahindra & Mahindra. The Maxi Truck Plus is powered by a four cylinder common rail engine (63 BHP, 195 Nm), offering a fuel efficiency at 17.7 kmpl as per ARAI certification. It has a turning radius of 5.5
metres for better navigation in city traffic with power steering option, stylish exterior and interiors, 40.6 sq ft (3.7 sq m) cargo box and a payload capacity of around 1,150 kg. The company is offering a one-year unlimited km warranty with advanced features like digital immobilizer, 15 inch (38.1 cm) tyres and leafspring front suspension.
Auto Monitor
13 MAY 2013
COLUMN
10
Building morale Companies need to take proactive measures to cultivate and nurture its human resource, its biggest capital.
I
am only repeating an oftrepeated statement. And it’s worth stressing: the biggest asset a company can have is its human capital. It is this very human capital that can make or break the company. If the management of a company cannot keep its employees happy, then there are likely to be frequent discords between management and labour. This unholy relation with the labour is what has also contributed to the slump in the auto industry. In July last year, MSIL’s Manesar plant was hit as workers at one of its auto factories attacked supervisors and started a fire that killed a company’s senior HR official and injured 100 managers. That deplorable act of violence and the subsequent strike caused a loss of `1 crore to Maruti Suzuki India. Such incidents can escalate and affect any company in the automobile industry. Recently, Hero Motor Corp and Hyundai arrived at an agreement with their workers resolving pay scales demands, but this has cost them dearly.
Not at its brightest The current inactivity in the market is a great opportunity for the industry to introspect and take corrective measures to improve employee relations. The sluggish market scenario has forced many companies to substantially reduce produc-
Even in the worst cases, they should be more careful than when hiring. Losing one talented worked may not damage the quality of the workforce, but it can give the competition an edge. tion output and left idle capacity at their manufacturing units. And many of them have been forced to trim their workforce. According to my obser vations, this may not be the best response. Because once demand is back on track as expected, acquisition of right talent will take humongous effort. And the lack of skilled manpower might push them behind in the cutthroat competition. However, it is very important to be lean, so it is imperative that companies sift through their talent pool and nurture it. Even in the worst cases, where companies resort to retrenchment, they should be more careful than when hiring. Losing one talented worked may not damage the quality of the workforce, but it can give the competition an edge. The time is conducive to refresh relations with workers. Companies should take
initiatives to build strong ties with them and look at enhancing their skills. Identifying key skills and specializations of workers and working on improving their capabilities can pay rich dividends. Indian conditions are such that introduction of high cost automation will affect the balance sheet of companies. India’s USP has been availability of lowcost labour. No doubt labour is in abundance but finding skilled workers is crucial.
Relooking some needs The industry, being labour intensive, is also a major job prov ider. The government, under its Automotive Mission Plan, expects that by 2016 over 25 million people would find employment. It is well known that institutions are not capable of producing industry-ready talent so the industry joins hands with educational institutions, as well as investing in in-house talent training and nurturing programmes. According to the Indian Labour Report 2012 by TeamLease-IIJT, India’s higher education system is a bottleneck, as one million people, who don’t have adequate training, will join the labour force monthly for the next 20 years. About 80 per cent of India’s higher education system for 2030 is yet to be built and needs breaking the difficult trinity of cost, quality and scale — it needs massive
innovation, investment, deregulation and competition. A main concern raised by many consultants and worker representatives has been the unequal benefits and wages given to contractual and permanent employees. This creates an uneasy divide. Companies, in order to cut costs, give preference to contractual employees and in many cases the majority of the work force are contract workers. The industry has been citing strict government policy as reason for adopting such a policy. However, as expenditure on R&D and markets are always revealed in public no company has ever come out in the open and revealed their budgets for human resource development. This is an important point which companies need to be serious about. The government’s policy needs to be relooked and given some flexibility, in the sense that when there is a ramp up in production, the industry is in a position to hire more people and vice-versa. It seems a heartless thing to do, but what should be recommended is that there is some kind of insurance when they are out of a job so that they can sustain themselves during the time they are jobless. This is what happens in many countries globally. nabeel.khan@ network18publishing.com
Auto Monitor
12
13 MAY 2013
INTERVIEW
Raring to go Keeping its core DNA as manufacturer of robust heavy commercial vehicles intact, AMW has started ensuring that customer requirements are met too. Starting off as a niche player, the company now wants to gain a 10 percent market share and increase its customer base. Pradeb Biswas finds out more about the company’s plans to become the customer’s preferred CV maker in a conversation with A. Ramasubramanian, President, AMW Motors Ltd. How has the current slowdown affected your marketing and product development strategy? Our aim is continue being a commercial vehicle manufacturer and concentrate on the heavy commercial vehicle segment. It is the largest segment in terms of turnover. We were also keen to enter the whole market, but saw a significant downturn last year. The downturn started before the beginning of the last financial year but flared up in the last three quarters of 2012. Overall the industry saw a fall by 35-40 percent. The best time to develop products is when the market is down. This ensures that you are ready when the market rises. So we decided to accelerate all the development and make sure our addressable portfolio expands from 20-25 percent to nearly 100 percent. We are close to 90 percent currently and by June we should be close to 100 percent. Our R&D department has played a significant role last year in terms of expanding our product portfolio. We were addressing close to 40 percent of the tipper market which we expanded to 100 percent including 16 tonnes and 25 tonnes. Earlier, air conditioning and nine speed gearbox was compulsory for all of the 35,000 trucks we used to sell but now we have made that an option. We have also introduced cabins and cowls which meet all the frontal crash impact requirements as per the ECR 29 which is the authority of crash test norms for India. We are now creating a benchmark for fuel efficiency. Every one of our vehicles is now between five to 15 percent more fuel efficient. Today we have introduced around 15 vehicles and close to 22 variants in the whole of last year which is a phenomenal achievement for a company of our size. What are your current goals and challenges? Our goal is to gain market share across India. The real job now is to reach a customer base four to five times our existing base. We are now trying to move into specific applications and convince customers about the superiority of our products which lies in their ergonomics, performance and economy. These three are the DNA of our new range of products that we have. We have kept the core DNA intact by ensuring that robustness is not compromised. Our off highway performance gives us the client base and also ‘word-ofmouth’ publicity helps us. Earlier we were trying to be a niche player but now its time to take competition head on. What we are interested in is to establish our full range as the preferred truck maker and we believe the numbers will grow. Each year after year we have been achieving 100 percent growth. I believe we have the potential to double in a very short period of one or two years. The growth will be significant in terms of percentage. But what we are really looking forward to is 10 percent and then 15 percent growth in market share which will take us to making 45,000 trucks. At an optimistic level it might take three years for us to achieve this, and if the downturn continues then it will take five years. How have you incorporated customer feedback into your product strategy? We have listened to customer feedback and eliminated snags in our earlier range. Initially the definition of a better vehicle for us was an air-conditioned cabin, more powerful drivetrain, better gearbox (nine-speed) and a stronger chassis allowing greater ability to overload. We
changed that by focusing on better vehicles. We concluded that the customer knows best when it comes to the vehicle he wants. We started offering cowls as per customer feedback and not just a built-up cabin. We also started offering a six-speed transmission because we are here to sell good trucks and not good cabins. These are some of the new design criteria on the basis of which we introduced a lot of new products. So we have moved away from our basic DNA of offering fully built up vehicles and air conditioned cabins. How widespread is your after-sales network? Competitors have reduced their service turnaround time. What steps are you taking in this regard? We agree that as far as infrastructure is concerned we are a new player. My trucks cannot be serviced at every corner of the street unlike the competition. We have expanded our dealer network to 123 outlets which is not a small number. We have also established 1,500 touch points across India. Today we have a touch point across every 100 to 125 odd kilometres across peninsular India and around 200 odd kilometres in the north east region. In the worst case, we can reach any truck which has broken down in a period of two to three hours. We have developed a webbased application which shows customers the touch points on their route and the helpline number. The calls made to our helpline are addressed by our internal call centre and not outsourced unlike competitors. This builds customer confidence and convinces them towards our brand. What are the hurdles for the heavy commercial vehicle industry? That will be the poor infrastructure, specifically the quality of roads. Last year it was declared that 10,000 km of new roads would be built which was reduced to 7,000 km and then finally only 800 odd kilometres of new roads were built. They were supposed to build 22 km of new roads each day but ended up with two or three kilometres of road each day. This is hardly any addition to the existing road infrastructure for a country of our size. If we want to reach global trucking standards, where a 2,000 km journey can be covered in two days with three driver shifts, the condition of our roads have to improve. Do you have an in-house finance arm? Are you planning to enter the preowned business? We have just started it by taking over an independent finance company. It is an internal arrangement and we shall start financing our trucks very shortly. We are not getting into financing to replace other financers. The model is to make it look more attractive for others to come and finance the purchase. We are here to sell trucks and not finance options. Everything that involves selling a new truck, service and spare parts is a part of our business. Right now we are not entering into preowned business. But we are helping in liquidation of depository. Just to ensure that he market does not perceive this as a non-saleable second hand truck. Do you also extend support to your customers in terms of driver training? We train all the guys who drive our trucks. We also offer mechanic, logistics and workshop manager training to customers who have their own workshops. We have...
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Auto Monitor
13 MAY 2013
INTERVIEW
14
NBC: R&D focus pays off NBC has developed a low torque bearing technology that reduces friction and improves efficiency. The focus on R&D is increasing and the company is also ramping up production with its fourth plant slated for inauguration in November 2013, in Vadodara. Srini Dampur, Vice President – R&D, National Engineering Industries Ltd. (NBC Bearings) talks to Anand Mohan about their next generation of bearings and the company’s future plans. by up to 2 kmpl. Have you started supplying bearings incorporating this technology? Fuel-efficient bearings have been supplied to a leading motorcycle manufacturer. Will all future bearings from NBC be manufactured using this technology? NBC has engineered fuel-efficient bearings for transmission and wheel bearing applications in two wheelers. This type of bearing is under development for other automotive segments (cars, trucks, tractors, etc.) and will be made available soon. Considering it’s something you have recently developed, will manufacturing costs be higher than for bearings manufactured with previously existing technology? Introduction of a new technology obviously comes with an associated cost. We at NBC
Can you elaborate on the ‘low torque bearing’ technology that you have recently developed? One of the key challenges facing the automobile industry today is the conservation of natural resources. In any vehicle, only about 12.6 percent of the energy is used for moving the vehicle while 62 percent is lost to engine
friction, pumping losses and waste heat, 17 percent is lost in idling, 2 percent is lost in accessory operation, and 5.6 percent in the drivetrain due to friction and slippage. By understanding the various torque contributors to the bearing such as grease, seal and internal bearing geometry, our team has developed a
believe in offering “flexible solutions” to our customers, in tune with their requirements, and we are aware of the need to be costcompetitive in the market. How much do bearings contribute to a vehicle’s fuel efficiency? Bearings contribute to the tune of 6-8 percent of fuel efficiency. Towards the end of 2011, NBC had announced a `500 crore investment over a five year period in setting up a fourth plant, and capacity enhancements at existing plants. What is the status of this investment? At present we have three plants: in Jaipur, Newai and Manesar. Our fourth plant is being set up in Vadodara and will be ready for production by November 2013. Our installed capacity will reach 150 mtpa with the fourth plant in full operation. Given the strong focus on R&D, can you elaborate on your current projects under development, and a timeline on possible future developments? Our team of engineers is working on various challenges such as a one-way clutch for two-wheelers, carbonitride heat treatment, hub assembly for commercial vehicles, and Gen-3 wheel bearings for passenger cars – which is going to be an advanced technological product in India. We have plans to come up with two such products of this type every year.
low-torque bearing technology. The low-torque grease has been developed by various fundamentals on tribo-meter, along with the design of a low-torque seal and optimisation of internal geometry to improve fuel efficiency. Our low-torque bearings reduce friction by about 15-20 percent, which benefits customer by increasing fuel efficiency
Tata Motors launches FleetMan Will be an aftermarket solution even as the Telematics industry is beleaguered with poor solutions.
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elematics is enjoying an enormous buzz in the auto insurance marketplace in recent years. The goal is to capture and analyze data about customers’ actual driving to more effectively write usage-based (mileage) or pay-as-you-drive (mileage plus behavior) insurance. To accomplish this, telematics harnesses satellite and/or cellular technologies, along with a standalone device, the auto’s onboard computer and mechanics, or a mobile application Telematics based solutions have become a commonly used instrument with a wide range of applications in varying fields. In keeping with the demand, Tata Motors has launched Tata FleetMan Aftermarket Solution, a complete f leet Telematics solution available to customers through their CV dealerships. The company initially launched the product as an OEM fitment in select range of HCV vehicles including LPS 4018, LPS 3518 and LPS 4923 in Q3 2012. Post launch, Tata Motors saw
a huge demand from fleet operators to extend Tata FleetMan Services to their old vehicles and to all possible range of vehicle such as rigid cargo trucks, tippers and buses. Hence came in an aftermarket version of the Fleet Telematics solution. Sa njay Gupta, Head ( Telemat ic s a nd F leet Management), Tata Motors Ltd, says, “The hardware used in this solution can be purchased and installed at Tata dealerships, post which the activation process for the services will commence.” Tata FleetMan is an end-toend Fleet Telematics solution for deployment in its range of CVs. It uses state-of-the-art hardware from an international auto grade electronic supplier and maps from Google. The solution employs GPS tracking for location based services and GPRS for data transfer. The company uses cloud-based servers for high speed, greater security and increased reliability. Their telecom partner, Idea, has developed customized data
plans for use in the service. The company also provides blank SIM cards at the dealerships to facilitate a one-stop-shop kind of an arrangement for the product. Customers are however free to choose any service provider offering GPRS based data plans. Tata FleetMan provides services such as real time vehicle tracking, trip management, geo-fencing, SMS-based query facility and customized report and alerts for unusual events such as over-speeding, extended halts and crossing of geo-fences. The services help fleet owners increase their fleets’ up-time while enhancing profitability. In future, Tata Motors plans to add features such as driver assessment, fuel consumption and safety and security modules. Mr. Gupta says, “The service has several strengths. Principal among these are proper integration of the telematics hardware with the vehicular electrical and mechanical systems, commitment of automotive grade electronic hardware of the highest quality and a country-wide
support network. We are also working on advanced telematics modules such as Remote Diagnostics, driver behavior assessment, vehicle and cargo theft prevention and fuel theft notification and expect to launch them in the coming months.” These are complex applications requiring a deep level of vehicle integration, which are not offered in the Indian market today. The Telematics industry in India is being driven by four major groups: Transport operators and logistics companies - Fleet Telematics can contribute in the following ways: Reduction in the overall operational costs through decrease in fuel and maintenance costs; Better asset utilization through improvements in productivity. For instance significant improvement in trip times can be achieved through monitoring of stoppages, quicker loading and unloading and advance arrangement of return loads; and, improvement in safety and security leading to a drastic reduction in costs resulting from accidents and thefts, both of vehicle/cargo and fuel. The second category is large consignors or shippers. The
third category is radio taxis and fleet cabs. Apart from these Telematics is also being employed by several niche segments like school buses and ambulances. The government has mandated fitment of ITS or Intelligent transport systems, also a telematics solution, on all buses being procured under JnNURM. However, the Telematics industry has its own woes. The industry is riddled with a large unorganized sector and categorized by low priced vehicle tracking solutions, mostly as after-market fitments. Hundreds of small players provide services in small pockets in the country with no country wide network or reach. Besides this, the sector has been seeing a price war for both devices and services. Finally, it is up to the OEMs to put in investment and lead the industry in developing new technology. They benefit from CRM, vehicle relationship management, reduced warranty cost, lower maintenance cost, prevent collateral damage through predictive diagnosis, quick repairs through service/spare parts linkup, lower TCO for the customer and increased up-time of commercial vehicles.
Auto Monitor
13 MAY 2013
REPORT
16
“Weak demand a bigger concern” Report on the Indian auto components industry says weak demand is a bigger concern for manufacturers than rising costs.
Revenue growth trends and demand outlook The Indian auto and auto components industry is currently facing its most formidable challenge – that of slowing demand; and that too across the board. After a frenzied period of 2009-10 and 2010-11 when all automotive spots - domestic OEMs, exports and replacement market - shone bright, the year 2011-12 marked the commencement of a slowdown phase as volumes in the domestic Passenger Vehicle (PV) and Medium & Heavy Commercial Vehicle (M&HCV) segments began to stutter. If 2011-12 was bad, 2012-13 has turned out to be worse as other segments too including the domestic Two-Wheeler (2W) segment as also exports to overseas OEMs and tier-1 players have come in the grip of the slowdown. While the revenue growth of diversified auto component manufacturers had been steady till Q1 2012-13, across-the-board weakness in demand witnessed during the last two quarters has tended to neutralize this structural advantage otherwise enjoyed by such players. On the exports front, auto component supplies to Europe had already been witnessing sluggish growth over the last few years, but steady expansion in demand for Light Vehicles and
Commercial Vehicles (CVs) in North America was adequately offsetting the overall exports weakness. However, starting Q2 2012-13, auto parts exports to USA also have declined significantly, particularly related to parts meant for CV applications due to a sharp contraction in demand (partly due to inventory correction due to build-up during H1CY2012). Component suppliers to the domestic replacement market have also been experiencing moderation in growth, but this segment, as expected, has been relatively more resilient if not fully immune. As per our sample of 35 publically-listed auto component manufacturers, the average revenue growth of these select entities (during the last eight quarters) has been steadily declining with YoY growth being lower in each passing quarter since Q1 2011-12. Yet, the revenue growth of select auto component manufacturers has been much higher than the industry’s on the back of market share gains, favourable change in model mix, rise in content per vehicle, besides revenue accretion due to corporate actions such as acquisitions and amalgamations. Over the short term, we expect the auto component industry’s revenue growth to remain weak in the absence of immediate demand triggers for end-users across domestic automotive segments, besides an uncertain global economic environment resulting in slow automobile demand recovery and hence faltering export volumes.
Profitability Till 2011-12, auto component manufacturers were grappling with a rising cost structure arising from volatile currency movements, firm interest rates
and inflation in other overheads including employee costs and power costs. However, since the raw material cost environment was relatively benign, it allowed auto component manufacturers to have one less worrisome variable to contend with. While there has been no significant change in character of any of the above forces during 2012-13, the biggest worry for auto parts makers currently springs from tepid automobile demand, which is likely to remain weak even in the near term. Decline in revenues (on YoY basis) had significantly hurt both profits as well as margins of auto component manufacturers in Q2 and Q3 2012-13. We expect operating earnings growth of auto component manufacturers to be the weakest in Q4 2012-13 given the high base of the corresponding previous quarter, continued anaemic demand conditions and unyielding pressures stemming from various other cost overheads mentioned above. While auto OEMs face similar challenges, the profitability of auto component manufacturers may be hit harder due to their smaller scale of operations and limited operational and financial flexibility.
While the currency cycle supported the industry in short periods, like in Q4 2011-12, the USD/ INR rate has generally remained in the vicinity of 54-55 in 9m 2012-13. The balance sheets of several auto component manufacturers feature ECBs, FCCBs, Buyers’ Credit and other foreign currency borrowings that remain unhedged. This apart, while a large number of entities that import raw materials do generally get compensated by OEMs at the prevailing exchange rate (although compensation comes with a lag), and given the long payables cycle with overseas suppliers (30-90 day payment cycles), the importing entities do remain exposed to forex risk on unhedged payables (as also on exports receivables). In the current uncertain global environment, exchange rate volatility may be here to stay, making effective management of forex risk an imperative. While interest costs of most players have stayed high in the last several quarters, the possibility of further policy rate cuts and their eventual transmission to corporates may provide some relief to industry participants, going forward.
Net profits
The capacity expansion programme of auto component manufacturers generally tends to follow that of their key customer OEMs. With OEMs such as Maruti Suzuki, Hero MotoCorp and Ford planning to establish greenfield facilities in Gujarat; and Honda Motorcycles and Scooters being in the process of establishing a new plant near Bangalore, their respective suppliers of key components are also currently at various stages of making investments in close proximity to these
One of the primary reasons for the subdued net earnings growth of auto component manufacturers since Q2 2011-12 has been adverse currency movements. The net profits of auto component manufacturers with foreign currency loans has been weighed down by sharp appreciation of the USD against the INR since the second fortnight of September 2011, resulting in MTM losses on restatement of foreign currency loans and higher interest outgo.
Capital expenditure plans
new facilities or in the OEMs’ vendor parks. As per ICRA’s estimates, the above greenfield investments may entail total investments of Rs. 70 billion to be incurred by auto component manufacturers over the next three years. These investments apart, the quantum of capex otherwise planned to be incurred by auto component manufacturers over the near term remains conservative with several entities deciding to significantly scale-down the capex from the levels earlier budgeted. With the industry going slow on investments towards capacity expansion, we do not expect any major incremental term debt burden to ride on the balance sheet of auto component manufacturers over the near term. However, the large debt-funded capital expenditure executed by auto component manufacturers during the boom period of 2009-10 and 2010-11 means that repayment obligations of the term loans availed then will fall due now. In the absence of sufficient cash flow generation visibility, the industry, in our view, may be exposed to refinancing risks. The prevailing weak demand environment has had a more deleterious impact on lower-tier auto component manufacturers, who due to their smaller size suffer from lower bargaining power and weaker access to capital. In this context, initiatives such as the proposal to enhance the refinancing capability of SIDBI as well as the recent MoU signed between ACMA (the apex body of auto component makers) and SIDBI to provide easier credit access to the former’s members are likely to provide beneficial support to smaller entities in the automotive value chain.
Lanxess reports a Land Rover India celebrates subdued quarter 65th anniversary
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anxess posted lower earnings in the first quarter of 2013 due to a weak market environment. First-quarter sales were down by 12 percent YoY to EUR 2.1 billion, mainly due to lower volumes and fallen selling prices. EBITDA pre-exceptionals moved back by 53 percent against the prioryear period to EUR 174 million. Operating result was diminished by scheduled one-time effects of about EUR 30 million for the start-up of the new butyl rubber plant in Singapore and the conversion to Keltan ACE technology at the EPDM rubber plant in Geleen, Netherlands. The agrochemicals business as well as the company’s strong position in the growth region of Asia proved to be stabilizing factors in Q1. The Group’s EBITDA margin fell from 15.5 percent to 8.3 percent. “We are not immune to a sharp drop in demand, but we are
responding to it proactively as always,” said Lanxess’ Chairman of the Board of Management Axel C. Heitmann. At the start of the year, Lanxess initiated temporary facility shutdowns in the Performance Polymers segment in line with its policy of flexible asset and cost management. Now additional measures are being planned in the Performance Chemicals segment. “These measures are not merely designed to achieve short-term savings. We aim to raise the competitiveness of our international sites in this segment for the medium and long term,” said Heitmann.
Corrigendum In our issue dated April 15, 2013, the graphs in the Autopoint section contributed by CARE Ratings were erroneously attributed to ICRA. The error is regretted.
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o celebrate its 65th anniversary, Land Rover India launched the Land Rover Experience programme to give existing and prospective customers an opportunity to experience the all-terrain capability of its products. The programme was launched with an event near Mumbai where over 100 guests experienced a trail that involved driving Land Rover vehicles over terrain which included steep inclines, rock, mud, ruts and water. Talking about the event, Rohit Suri, Vice President, Jaguar Land Rover India said, “The aim of the Land Rover Experience events in India is to allow existing and potential customers to experience the breadth of capability of our vehicles. This trail was chosen for its wide range of challenging terrains, giving our guests an authentic offroad experience in ‘unmodified’ vehicles. The guests attending this event were overwhelmed with our vehicle capability and thoroughly enjoyed the experience.”
Sharing his experience at the event, Aditya Patel, a Mumbaibased Land Rover enthusiast, said, “The Land Rover experience was a very memorable one, but also a little daunting as I never imagined that a Land Rover was capable of getting through such conditions with so much ease”.
Another guest, Abhishek Mantri, said, “This experience was one of a kind – the track contained rock, gravel, mud, water and the Freelander just kept going and going without any problems.” The Land Rover Experience will now be extended to several cities throughout India.
13 MAY 2013
Auto Monitor
INDIA NEWS
17
Daimler’s Asian strategy gaining pace
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a im ler India Commercial Vehicles Pvt. Ltd. (DICV), a wholly-owned subsidiary of Daimler AG, Stuttgart, Germany, have announced that the “Asian Strategy” of Daimler Trucks, under its forward-looking programme named DT#1 (Daimler Trucks No. 1), is now operational. The first result of this programme is the upcoming launch of the new Fuso ‘Made in India’ truck portfolio from DICV. Having established the ‘BharatBenz’ brand in India, DICV is now well on its way to realize its export potential. The “Future Focus Markets“ are already a reality for Daimler’s Commercial Vehicles Division, and Daimler Trucks has set the course for further growth in the promising markets in Asia and Africa with its integrated business model “Asia Business Model.“ This model provides for stronger bundling and optimization of Daimler’s business operations and the associated systematic expansion of its presence, primarily in the Asia region. Daimler will profit concretely from the strategic positioning of its subsidiaries Daimler India Commercial Vehicles Pv t. Ltd. (DICV) headquartered in Chennai, India and Mitsubishi Fuso Truck and Bus Corporation (MFTBC) in Kawasaki, Japan. With synergies from both companies, from the second quarter of 2013 Daimler is readying to make trucks in India under the established Fuso brand for export to price-intensive markets in Asia and Africa. The extended commercial vehicles portfolio will be presented by Daimler shortly.
The Asia Business Model will secure Daimler‘s leadership role in the Future Focus Markets and pull in further unit sales increases in markets like Indonesia, Taiwan and Malaysia. Thus, the Asian business will make a decisive contribution to the sales target of over 500,000 units by the year 2015 and more than 700,000 trucks in the year 2020. “With the Asia Business Model we are bringing our operations to the next level in order to support our existing and new customers with the right products and the best service in Asia and Africa,” said Albert Kirchmann, President & CEO - MFTBC and Head of Daimler Trucks Asia. “With the united forces of MFTBC and DICV, we are effectively moving ahead of our competitors in terms of bringing concepts to reality. Daimler Trucks is already profiting from synergies between MFTBC and DICV in procurement and production, as well as in the product portfolio. I am excited to be able to offer our customers an extended Fuso product portfolio of modern, robust and economical trucks soon, based on the established Daimler Trucks technical product platform.” Marc Llistosella, Managing Director and CEO - DICV, said, “We recently demonstrated the viability of our ‘Daimler QualityMade in India’ product concept with our milestone of over 1,000 BharatBenz trucks sold within three months from its launch in September 2012. Now we are going another step forward. In our state-of-the-art plant in Chennai we have begun production of BharatBenz and are ready
Daimler is readying to make trucks in India under the Fuso brand for export to Asia and Africa. The extended commercial vehicles portfolio will be presented by Daimler shortly. to produce Fuso trucks under one roof. While we continue to focus on the Indian market with our BharatBenz vehicles, MFTBC will service the rising demand in the Asian and African regions with
its portfolio of robust Fuso trucks from Chennai.”
Strong positioning in Asia and Africa The global production network of Daimler Trucks facilitates efficient business operations and profitable growth. The integrated Asia Business Model draws on a multitude of synergies of the two Daimler subsidiaries DICV and MFTBC. The joint use of Daimler Trucks product platforms, innovation power from closely interrelated product development and capacity leveraging production networks enable the Japanese subsidiary to conquer promising future growth markets.
This is also supported by DICV’s newly acquired suppliers, based in India, who add a new dimension of force multiplication in Daimler Truck’s strategy. In terms of markets, Indonesia is already the largest export market for Fuso vehicles and MFTBC has posted a unit sales record for the third consecutive time. The year 2012 saw double-digit growth rate with unit sales of 68,000 units. The company continued to prove its momentum in the Middle East and in Africa with sales increasing 63 percent to 24,201 units and 88 percent to 8,046 units respectively. With the Asia Business Model Daimler Trucks will tap into further growth potential.
Auto Monitor
13 MAY 2013
NEWS
18
Cummins opens its second Oerlikon’s worldwide CEO to be based in India power generation plant New plant to enhance export capabilities.
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eriberto Diarte, global Chief Executive Officer (CEO) of O er l i kon Drive Systems is now based in and will operate from New Delhi, India. The move of the worldwide CEO follows Oerlikon’s thrust on Asia as a key market for drive systems. Heriberto Diarte (born 1967 with dual Mexican and French nationality) joined Oerlikon
in December, 2012. Diarte has held executive positions in Asia, Europe, the Middle East and Africa and brings with him global business experience. His last assignment was as Managing Director at Alstom Transport, a Paris-based high-tech industrial company in the power generation and distribution, and rail sectors. Heriberto holds a MBA from Stanford University and a MPA from Harvard. India is already a key market for the drive systems segment, and an important part of Oerlikon’s growth strategy and planned investments. Commenting on the move, Khurshed Thanawalla, Country Representative, Oerlikon India, said, “India is key to Oerlikon’s ambitious growth plans, and the relocation of one of Drive Systems’ CEO is reflective of this. India is important as a market as well as a manufacturing hub for drive systems and we would benefit from Heriberto Diarte being based out of India”.
New plant to enhance export capabilities.
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ummins Group has opened a new plant for manufacturing low horsepower generator sets in the SEZ at the Cummins Megasite in Phaltan. This new unit enhances the company’s ability to produce generators for international markets in Asia, China, Latin America, Africa and Eastern Europe. “Our businesses in India have been growing significantly over the last decade and we expect this positive trend to continue in the future. Demand for exports will increase substantially with our cost-competitive generators and as markets improve,” said Anant J. Talaulicar, Managing Director - Cummins Group in India. “The growing investment towards building capacities in India reinforces our confidence in the talent we have, our relatively low cost position and world class quality.” The new plant, built with an investment of $17.5 million, spans 36 acres, and will manufacture
Continental produces fuel pumps locally in India
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elivering on its commitment to localise its offerings for the market, Continental Automotive Systems India Ltd. have announced that its Business Unit Fuel Supply has started delivery of a locally produced in-tank fuel pump for the compact car segment at its Pune facility, which was inaugurated in June 2012. “We are constantly adapting to the growing market in India. Now the complete production of fuel delivery modules in India is possible, which should give us the competitive edge,” said Dr. Markus Distelhoff, Head of the global Business Unit. The pump has been assembled in a clean room environment, with rigorous pre-launch validation testing
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in Continental’s recently inaugurated test and validation lab in Bangalore. While a localised pump is ideal for the compact entry-level passenger car segment, further deployment for the two-wheeler market is being considered. Continental has invested approximately two million euros to bring this project to realization. The company has already delivered the first batch of fuel pumps to a customer and is currently in the process of expanding the scope of this localization program to other customer lines including both gasoline and diesel gerotor pumps. Anurag Garg, head of Continental’s Pune location, said, “In 2012, we inaugurated product lines for fuel rail assem-
The company has delivered the first batch of fuel pumps and is in the process of expanding the scope of this localization program. blies and fuel pumps at our Pune facility. Additionally, we set up a test and validation lab in Bangalore that ensures local testing infrastructure and competence. We are now ready with our first localised pump for the compact passenger car segment. We are committed to providing market specific, relevant offerings to our local customers in India and are making steady progress on this front.”
open and enclosed low kilowatt generator sets. The plant will also add the capacity to manufacture an additional 23,000 units per year, in the initial phase, to the company’s existing capacity of 38,000 units at its plant in Pirangut. The first plant of the Power Generation Business was commissioned in Pirangut in 2008 to manufacture generator sets of 7.5-160 kVA for both the domestic and overseas markets. Tony Satterthwaite, President, Power Generation Business and Vice President, Cummins Inc., who is responsible for Cummins’ global power generation operations added, “We are thrilled to expand our capabilities in India. Our growth in India allows us to meet future demands of our customers throughout the world. Just as importantly, as Cummins expands in India, it means we are providing good jobs for local families and making a positive investment in the community.”
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Raring to go a centralized training cell in Surat so dealer management is a fully trained and guided force. Through our driver training program we must have trained some 7,000 drivers till now. Every dealership of ours now has a driver trainer to correct bad driving habits. AMW made Indian motorsport history by participating in a desert rally. Will you continue to take part in such rallies? It was an opportunity to showcase the prowess of our vehicles in a cross-country rally. Fortunately, we completed the rally. There were initial doubts about putting our truck through the desert run, because if it got stuck in the sand we would have unnecessarily come under negative media glare. But luckily we got away. If there is an opportunity we would to take part in such events. But that will be on the sidelines as the bigger goal is to address a larger group of customers.
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On the anvil competitive. Even as we develop our commercial vehicle range, we are looking to have our complete range of two, three, four and six cylinder gensets in the market and it would be made available through our 65-odd dealers,” said Rajesh Warke, General Manager - Engine Business, Cooper Corporation. He added that the major share of engines would be made available for the company’s commercial vehicle range, even as the company is also in talks with commercial vehicle manufacturers for engine sourcing agreements. The company recently launched its three-cylinder 62.5 KVA and 82.5 KVA generators under the brand name ‘Cooper ECOPACK’ at the Power Gen Exhibition in Mumbai. The gensets have been developed in technical collaboration with Ricardo, UK, and meet US and European emission norms. The company officials pointed out that the cost of running gensets has been increasing in recent years as the government gradually reduces diesel subsidies. This would lead to demand for fuel efficient gensets that are environment-friendly and compact. The newly launched genset range is powered by a Cooper three cylinder engine with four valves per cylinder, a centrally placed injector with a peak firing pressure of up to 210 bar. It is equipped with built-in lube oil cooler, hydraulic tappets with roller follower, and cylinder head cast in compacted graphite iron (CGI). The new genset range is priced between `3.5-5 lakh depending on its configuration. Cooper has nine production lines in Satara, Maharashtra and employs over 2,000 people. It supplies engine components to all leading engine manufacturers in India and globally.
GM eyeing idea of selling ads for your infotainment system
esides older, established, and affluent, the other key demographic automakers are going after these days – with a vengeance – is young people. So what’s General Motors doing to change with the times, be down with the young folk, and make more money in the longrun? Focus on technology, namely its infotainment software. Starting for the 2015 model year, GM says it will have mobile internet in many of its vehicles, allowing passengers in the back seat to stream videos and generally keep themselves more connected. That should make all of the cool kids want a new Chevy Sonic. What’s more is GM’s ability to
use its mobile internet service, bundled with OnStar, to run advertising. “For example, what happens if when the logo shows on your screen, it says ‘brought to you by Allstate’?” GM CEO Dan Akerson said. As a guy in Generation Y, our own Jason Davis weighed in on the subject: “My line of thinking may be different than our audience, but I would in no way put up with ads on infotainment. It’s one reason why I don’t listen to FM. If the vehicle I was considering could not be optioned without the ads, then I would go to another brand. Without hesitation, without a test drive.” Akerson apparently hasn’t listened to the Facebook Generation
with much attention. We know GM hasn’t. Young people don’t want ads for insurance, credit cards, or medicines. The latest generation has thrived on a feeling of independence. Meanwhile, advertisers with any sense have created targeted marketing that milks those users for every last penny they have to buy something you know they already like. That’s why Facebook wants you to fill out as many statuses, cities you’ve visited, likes, and dislikes as possible. It sells that information to advertisers in what is the most targeted marketing of any company in the world.
We don’t want to be told what to like. GM says it will earn about $20
for each customer who has signed up for internet service. OnStar already generates $1.5 billion in annual revenue. Some analysts agree with us in saying that GM may alienate potential customers with advertising, but the risk may be outweighed by the reward. Everyone wants to be connected, and some estimates say that most cars will have mobile internet in them by the end of the decade,
allowing for faster infotainment software updates. “We do want to change [OnStar] from primarily a safety and security business to one that is much more feature-rich,” Akerson said. But is it worth losing a generation of shoppers again who GM is just starting to get back? Source: blogs.automotive.com
Auto Monitor
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13 MAY 2013
G L O B A L WAT C H
JLR awards £2.8 billion supplier contracts for new car
T
he first Jaguar F-Type customer cars leave Jaguar Land Rover’s Castle Bromw ich manufacturing facility soon. The all new sportscar has resulted in contracts worth £2.8 billion being placed with companies internationally, with more than £1.5 billion placed with companies in the UK. Contracts have been awarded to more than 270 companies globally following the completion of a global competitive tendering exercise on component sourcing for the vehicle. Of these, 116 are based in the UK and 50 per cent are from the Midlands. The contracts awarded to support the F-Type are expected to create thousands more new skilled jobs. Ian Harnett, Jag uar Land Rover’s Purchasing Director said, “As a leading investor in automotive R&D in the UK, JLR generates several billion pounds of economic activity here every year.” With sales in over 170 countries, Jaguar Land Rover generates export revenues approaching £11 billion each year, making it one of the UK’s largest exporters by value. Adrian Hallmark, Jaguar’s Global Brand Director said, “Since we unveiled the car last year, the level of customer interest in the F-Type has been unprecedented.” F-Type production has been incorporated into the manufacturing operation at Castle Bromwich to maximise capacity, technology and skills at the plant. Jaguar Land Rover has utilised and enhanced the manufacturing techniques and technologies employed for the Jaguar XK production, while introducing new equipment and processes specifically required for the F-Type. The all-aluminium construction of the F-Type is carried out in Castle Bromwich’s 14,000 square metre body shop which employs manufacturing techniques adapted from the aerospace industry.
Citroën scores LCV hat trick with new Relay stop & start vans
T
he new Citroën Relay 30 L1H1 e-HDi 130 and Relay 35 L3H2 e-HDi 130 Stop & Start 6-speed manual vans are now on sale after their CV Show debut last
month. With this launch, Citroën - one of Europe’s pioneers of this fuel-saving and CO2 reducing technology - now has three Stop & Start equipped LCV models on sale in the UK (Nemo, Berlingo and Relay). The new Relay 30 L1H1e-HDi 130 Stop & Start 6-speed manual van is priced at just £19,660 and the Relay 35 L3H2 e-HDi 130 Stop & Start 6-speed manual van is priced at £24,660 (Basic R.R.P.) At 32.5mpg (8.7l/100km) the Urban Cycle fuel economy of the Relay 30 L1H1 e-HDi 130 Stop & Start van is 9.2% more economical than the Relay 30 L1H1 HDi 110 6 speed manual van and its CO2 emissions are 10g/km lower, at 189g/ km. In addition to having the best Urban Cycle fuel economy in the Relay range the new Relay 30 L1H1 e-HDi 130 Stop & Start also boasts the Relay range’s best Combined Cycle fuel economy of 39.2mpg (7.2l/100km). The Relay 35 L3H2 e-HDi 130 Stop & Start 6-speed manual van’s 27.7mpg (10.2l/100km) Urban Cycle fuel economy is 5% better than its non-Stop & Start equivalent - and its CO2 emissions of 224g/km are 5g/km lower. Scott Michael, Citroën’s Head of Commercial Vehicles & Business Centre Programme, commented, “With the new Relay Stop & Start equipped vans, Citroën has further improved the fuel economy and reduced the CO2emissions of one of the sector’s most fuel-efficient and cleanest LCV ranges. The new Relay Stop & Start equipped vans will appeal to all operators, but particularly those working in urban environments, where they will deliver worthwhile financial, operational and environmental benefits.”
13 MAY 2013
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THE OTHER SIDE
Getting Personal with Dr Christof Krogmann, Vice President, Asia Pacific, High Performance Materials business unit, Lanxess AG. If not in the auto industry, where would you be? In the chemicals industry, in general, in any other application involving chemi cals. I find the chemicals industry fascinating. What car do you drive and what do you dream of driving? I drive an Audi A6 at the moment. If I had more time and a smaller family, I’d go for a Porsche 911. What was your most recent indulgence? I bought a nice watch recently. What are you currently reading? I read a lot of books about China. I live in Shanghai so I’m presently reading a German book called ‘The Red Telephone’. It talks about the impact of the Chinese communist party on life and society in China. What do you do when you’re not talking auto? I like sports and I read. I play tennis and spend time with my three kids, which is very time consuming but a lot of fun. Any activity you’d miss office for? I’d have to answer this question when I retire. I like the mountains so when I was in India, I spent a lot of time in the Himalayas whenever I had free time: in Ladakh, in Nepal and also Kashmir. I spent a lot of time there hiking and trekking. What is your advice for upcoming talent in the auto industry? Be innovative, alert, dynamic and energetic. This is what the automotive industry needs today.
Illustration: Sachin Pandit Compiled by: Anand Mohan
13 MAY 2013
In Real Life Dr. Christof Krogmann studied chemistry at the universities of Heidelberg and Hamburg, obtaining a scientific doctorate. He began his career in 1989 as a chemist in the Chemical Research Centre of Shell in Louvain-la-Neuve, Belgium. Subsequently he held a number of managerial positions at Shell Chemicals and Montell. Montell was acquired by the Basell Group in 2000, and shortly afterwards Krogmann was appointed Managing Director of Basell India, based in New Delhi. After the formation of LyondellBasell, he assumed the position of Global BU Head Healthcare Applications at LyondellBasell. He joined Lanxess in 2009. In August 2011 he was appointed Vice President Asia Pacific of the High Performance Materials unit, the position he holds today.
Regn. No. MH/MR/WEST/20/2012-2014. RNI No. MAHENG/2000/11414 Licenced to post at Mumbai patrika channel sorting office G.P.O. Mumbai 400 001. Date Of Mailing: 1st & 2nd Fortnightly Issue. Date Of Publication: 28th of Every Month
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