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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

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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 1-31 January 2012

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A special section on the captains of industry sharing their learnings during past slowdown

Auto Expo Previews, Special Reports, News, Views, Analysis & Interviews


A to Z product range as per Customer’s designs, applications, sizes and Internationals Standards


EDITORIAL Stepping Up!

T

he question, ‘Are we heading for a slowdown?’ has become the part of the greetings or compliments when one meets with peers of the industry. And though there is not going to be a concrete ‘yes’ or ‘no’ to the question, sharing of views will continue. Well, are we really heading for a slowdown? I would say we are not, especially when it comes to the auto industry, since the growth is only moderating and not showing alarming

signs yet. Now the situation is a ‘wait and watch’ and therefore the companies are taking cautions and measured steps when it comes to expanding ex capacities. The peoples’ sentiments are low due to several factors including inflation and higher cost of fi nances. The Auto Expo has come as manna for n the th vehicle manufacturers and their component counterparts to make an attempt to infuse posco itive iti sentiments by showcasing and launching new ne products. Though quite a few captains of the industry confi rmed that there is some trepidation in in their minds about the prospects in the immediate at future, they are trying to capitalise the Expo to kindle the sprit of the consumers, which will revive even the slow growing segments such as re passenger cars. Good show by the OEMs and compa ponent manufacturers! po The Expo is lined-up with a deluge of exciting in events! Gear up to catch over 50 new vehicle and an product launches, new business announcements, and joint ventures. And due to the coming m weekend immediately after the media days—5 w and an 6 January, the exhibitors have squeezed all media briefi ngs / exclusive interviews in the m fi rst r two days itself. There seems to be a mad rush ru with the PR agencies and the companies to accommodate time slots with journos’ and the ac visiting officials. vi Auto Monitor is stepping in to its twelfth year

of publication this month, and you are holding the 11th Anniversary Special issue. It is common to deploy best practises amongst different plants of a company or different companies in a group. However, Auto Monitor has gone the extra mile this year. We have requested the who’s who of the automotive industry to share their learnings during slowdown and how they have enabled themselves to face such occurrences in the future. We have a collection of thoughts from OEMs to Tier I to Tier III companies, where companies offer unique perspectives, pragmatic advice, and foresightful guidance. When we enter our 12th year of publication, we have a surprise for you. We have decided to give more to our readers in terms of news, views and analysis. One way to do it is to increase the number of pages, which is an easier option. The other way is to increase the periodicity—an uphill task—yet we have chosen this. Yes, Auto Monitor is all set to become a weekly soon. Wishing you much pleasure reading. Wishing you a wonderful New Year. Do send us your feedback.

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Contents

12

We will grow in all segments of the industry President, TVS Motor, KN Radhakrishnan said that the company will leverage existing portfolio and focus on growing in all areas of the two-wheeler industry

14

Our aim is to provide customers with VW’s quality experience Executive Director-Technical and Member of the Board, Volkswagen India, Holger Nestler traces his journey and experience of setting up the Chakan facility for the German car maker and his priorities going forward

CARVING COMPETENCE

21-116

“Add economic value to the system” Arvind Kapur President, ACMA ................................................................................................22

“One needs to have the right products” Reji Varghese President & MD, Delphi India ...........................................................................25

“Delivering high quality products and services is the key”

16 Plastic Omnium to enter thermoset products business Plastic Omnium Varroc is looking to supplying thermoset-based automotive products for the automotive sector in India

A Vishwanathan MD, Visteon India .............................................................................................. 27

“Analysing strengths and evaluating each risk pays” Adarsh Mahipal Gupta Director, Autolite ................................................................................................28

“Acquisition in last downturn helped expand product” VC Sehgal Chairman, Samvardhana Motherson Group .................................................30

“Be customer-centric and try to reduce costs” Jnaneswar Sen Senior Vice President, Sales, Honda Siel Cars India ......................................33

“Induce self confidence in people” S Muralidharan VP, Automotive Aftermarket, India & SAARC region, Bosch ........................36

18 Volkswagon to expand network; upgrade quality Volkswagen Group is looking for higher level of localisation for existing mass market models as well as newer models to be introduced in India

19 Renault Design to play major role in Indian journey Renault is looking at India as a major resource hub for talent and innovation in car designing


The styling of the Eon has appealed to the Indian customers well due to its efficient space management and storage space, according to Arvind Saxena of Hyundai

154-186 The Indian PV industry: Macro-economic factors and production disruptions put brakes on sales A passenger vehicle study from ICRA .........................................154

Indian steel industry: Highlights of the current scenario and future trends A study on steel industry from Frost & Sullivan ........................ 161

Long term prospects for auto sector remain bright A study on Indian automotive sector from CRISIL ................... 178

Future-proof paint-shop technology: Redefining flexibility in the paint process A study on latest paint shop technology from Eisenmann ......180

Gujarat to become most sought after automotive manufacturing hub A study on Gujarat automotive cluster from CARE...................184

GLOBAL WATCH

194-217

Kia introduces Korea’s first electric vehicle Kia Motors introduced zero emissions city car with lively performance and a range of up to 139 km on a single charge ..194

Mercedes bags major truck order in Brazil Mercedes-Benz do Brasil bagged a major order for 115 medium duty and heavy-duty trucks from Brazil’s Camargo Corrêa... 196

Marelli showcases first platform for ‘connected car’ Magneti Marelli presented open-source platform for in-vehicle infotainment devices complying with GENIVI specifications.201

Valeo acquires torque enhancement systems business Valeo has acquired the Variable Torque Enhancement System business of the British technology company, CPT ...................203

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Eon: Yet another car to prove Hyundai’s mettle

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Auto Expo Preview The upcoming Auto Expo promises to be action packed and fun fi lled event with slew of launches across vehicle segments

The Other Side Paul Harris, Regional Director, Asia Pacific, Rolls Royce Motor Cars


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We will grow in all segments of the industry Although TVS Motor Company has launched only a few variants of its existing models, the company is confident of achieving 15 percent growth in the current fiscal. The President of the company KN Radhakrishnan tells T Murrali that the company will leverage its existing portfolio and focus on growing in all the segments of the two-wheeler industry. Excerpts from the interview: What is your own outlook for the two-wheeler industry? Going forward, the two-wheeler industry in India is expected to increase at around 12 to 15 percent annually. Inflation and high interest rates will also have an impact, so we need to look out for macroeconomic changes. TVS Motor Company will harness incremental growth opportunities by leveraging pioneering technologies and a complete product portfolio. During this fiscal, TVS Motor Company is confident of achieving around 15 percent growth. Elaborate on your dealer development programme. We have a well-established network of close to 700 dealers spread across the country. We engage our dealer personnel in tailor-made developmental programmes so as to deliver high quality buying experience for our customers. Despite the two-wheeler segment growing at a healthy double-digit percentage, TVS has launched only one variant in 2011—Apache RTR 180 ABS. Could you tell us why there weren’t any new launches? While Apache RTR 180 ABS was the only new launch so far, this year, we had introduced variants across different models including refreshes of TVS StaR City, TVS Sport and TVS Scooty Streak. We are also consolidating gains of TVS Wego that was launched in the last quarter of 2010. You have two products— Scooty and Wego in the scooter segment that has been witnessing maximum growth. Would you be leveraging the opportunity to grow further? Yes, we will leverage strong portfolio and will grow ahead of the market. We have strong brands that resonate with customers. Is Wego available across India now? How is the response? Wego is across the country. High domestic demand from across the country has resulted in Wego becoming a much sought after scooter.

Which category of people prefer Wego and why? Wego is a unisex scooter. Wego has been appreciated for its sleek styling and features namely the external fuel cap, wider wheel base. Also, the body balance technology in this scooter makes riding very easy. In the three-wheeler segment, the passenger carriers continue to show negative trends, while the goods carrier witnesses 16-plus percent growth. However, you have been reporting 15-plus growth. Is it because of the low base in the previous year or due to market pull over competition? Please elaborate. TVS King has been well received in the respective markets in which it has been launched. Customer feedback for the product has been very encouraging and we have reported good growth in the three-wheeler segment. The domestic passenger carrier market is largely based on the availability of permits and the growth at times gets restricted because of the same. On the other hand, three-wheeler exports markets have opened up and we are able to record a healthy growth in the segment. Can you update us on your Indonesian operations—

TVS Motor Company will harness incremental growth opportunities by leveraging pioneering technologies and a complete product portfolio. During this fiscal, it is confident of achieving around 15 percent growth

market size, your market share—how it has grown over the last three years? Elaborate on your product strategy. Over the last three years, PT TVS Motor Company, Indonesia has sold over 50,000 t wowheelers. In 2010-11, new restyled versions of TVS Neo and TVS RockZ were launched besides a double disc version of Apache to boost sales. On the back of 32 percent growth in two-wheeler sales, PT TVS Motor Company increased its turnover from `68 crore 200910 to `85 crore in 2010-11. It sold around 20,000 units com-

pared to around 15,000 sold in the earlier year. In the first six months of the current financial year however, PT TVS Motor Company has sold over 15,000 two wheelers. PT TVS Motor Company currently has about 160 dealerships across 16 provinces in the country. Can you update us on the installed capacity, utilised capacity and plans for expansion for your manufacturing plants in Hosur, Mysore, Himachal and others? The installed capacity in all the plants put together is 2.8

lakh units. The current capacity is enough to cater to the demand at the moment and we will increase capacity at the right time. What is your product strategy for scooters? We will grow in all segments of the two-wheeler industry. What is in store for motorcycle segment from TVS? We will be launching an upgrade in the premium segment, towards the end of this quarter and a new motorcycle in the fi rst half of 2012.


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Our aim is to provide customers In an exclusive interaction with Auto Monitor, Executive Director-Technical and Member of the Board, Volkswagen India, Holger Nestler traces his journey and experience of setting up the Chakan facility for the German car maker and his priorities going forward.

How has your experience of setting up the Chakan facility been? I was on my way to Malaysia around five years ago to lay the groundwork for some upcoming project in that country but made a stopover in India on my way there, a little before the Indian facility was conceptualised. I have been here ever since and it has been an enriching process of discovery and learning for me. My background and understanding of India was very limited but I had support and backing from the VW Group to tap the global talent pool for setting up this facility. In hindsight, I feel it was a good decision on my part to have stayed on in India for this project as far as experience and

my contribution to Volkswagen Group is concerned. What were the challenges that you encountered then? When I visited this place for the fi rst time (Chakan plant location), there was no infrastructure to speak of. We spent more than seventeen to eighteen months developing supporting infrastructure and the plant itself and received due support from local authorities as well as our global and local suppliers. The biggest challenge was recruiting people for the facility as V W Group generally has a well structured process in place in most countries, but we had to put a structure in place here. Building up a competent supplier base was also a challenge. This facility is the exact

Photograph: Joshua Navalkar

Abhishek Parekh

replica of any of our global manufacturing facilities, with the only difference being the level of automation. We have certain quality and efficiency standards to meet at all our facilities and we can reach those standards with higher or lower than average level of automation like robots or other equipments. For instance, we adopt laser welding technology as a standard process in our cars across the globe to avoid rubber bonding to the side panels attached with the roof and that is the case here as well. Our capacity for flexible manufacturing process is our biggest strength and advantage. Any major process technology or process that you have been unable to adopt for this facility as yet?

We are looking to establish a water-based paint shop in the near future and are working in this direction. Our existing paint shop applies solvent-based paints but is capable of being switched to water-based paints whenever required. We are looking for a supplier to help us in making the shift to the waterbased paint shop as that is a more eco-friendly way to operate. As our volumes grow with higher sales across different brands, we will have to look at manufacturing powertrains locally. We have achieved around 70 percent localisation and when the engines are manufactured here, we would achieve 90 percent of localisation for our cars. What has been the experience in terms of localisation and enrolling the supplier base

here? T he major d i f ference between establishing a facility in a developed market and in an ‘emerging’ market like India is that suppliers have to be built up here whereas in developed countries they already have a presence and have been doing business for number of years with us. Most of these suppliers in developed countries are more or less established and are fully aware of our process and technolog y. Moreover, there are multiple suppliers who can be tapped for components and systems, which is not the case here. When it comes to India, we have approved and enrolled the supplier base in a lengthy painstaking process in India. If I have to compare the scenario to, say, Germany, there is a certain amount of job readiness in people who work with V W

A major priority is to take the localisation levels to more than 90 percent by establishing engine and gearbox manufacturing lines in our plant. Also, we are looking to have more models for the Indian market. We are witnessing a huge shift to diesel powered cars in recent months and that is having a positive impact on our growth, which was unexpected


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with VW’s quality experience

VW Vento

Group or with other car makers or even with our suppliers, but here most of the trainees we enrol have to be retrained to reach a certain basic minimum job worthiness level. Our cars define our approach to quality and to manufacturing process. I would say that getting quality suppliers and quality manpower were major challenges. We have imparted a special set of skills for handling precision machines at the facility for precision welding, surface cleaning minimising wastages. The internal training stretches for six to eight weeks before a person is capable of entering the shopf loor. We also provide training for project management, safety and team building. What are the other challenges that you are facing here? Infrastructure is a major constraint to growth here. For instance, we are continuing to transport our cars to our dealers by trucks, whereas our preferred mode of transportation is by railways. Rail transport is especially suitable for India given the diversity and ‘still-evolving’ infrastructure in the country. But with the current state of affairs, we cannot transport our cars by rail. The pace of road building is far from satisfactory. This is not only affecting our capability to get the cars to customers but also for customers to enjoy our products. We have to think and act on these bottlenecks and address them at the earliest. We are concerned with these issues as we are a stakeholder in the growth of the market here and have to play a constructive role in the process. We could have imported or assembled our cars through some or the other mode here if selling cars was our only objective of coming to India. As far as suppliers are concerned, we have made an effort to transfer our love for quality and detailing to the local suppliers and, in the process, help them become better manufacturers. What are the major priorities for you going forward? We have achieved most objectives and targets that we had set out to achieve when we set up the facility here. The market has grown faster than our expectations and, barring the current market uncertainty, the growth has been very

satisfactory for us. We are not looking for fast growth by flooding the market with our cars to gain marketshare or be the largest automobile maker. Our aim is to win and retain customers for life and provide them the V W’s quality experience that gets better and better. Through V W and other group brands, we can provide cars at every conceivable price point, specifications, needs and size. We are looking to leverage our position and provide this experience to Indian customers. Another major priority for me is to take the localisation levels to more than 90 percent by establishing engine and gearbox manufacturing lines in this plant. This will come with higher sales and more brands/model

introductions in the coming months. We are looking to have more models for the Indian market. The important thing to realise is that the potential of a market is very different from the reality of the market. We are witnessing this huge shift to diesel powered cars in recent months and that is having a positive impact on our growth which was unexpected. We are also looking to shape up this facility as a major export hub for the V W Group’s operations in t he neighbouring markets. Though our priority continues to be the Indian market and meeting the demand here, I would be happy to have at least 10 percent contribution from exports for this facility over the next few years.


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Plastic Omnium to enter thermoset products business Abhishek Parekh Pune

P

lastic Omnium Varroc (POV) is looking to supplying thermoset-based automotive products for the automotive sector and looking to grow its presence in thermoplastic-based products to existing customers in India. It is looking at organic and inorganic growth opportunities for faster market penetration. “Thermoset is a higher strength material compared to thermoplastics and we are looking to have a presence in both these segments. Thermoset is low volume and high strength technology while thermoplastics can enable production at very high volumes. Cost and other imperatives may imply that the adoption rate for our products would be faster for thermoplastics in India. Our key value addition or differentiator compared to other plast ic-based components suppliers is that we have the

“Our key value addition or differentiator is that we have the capability to design and develop suitable solutions and customise for local and global customers,” said CMO, Plastic Omnium Varroc, BP Shiv xxxxxxxxxxxxxxxxxxxxx

capability to design and develop suitable solutions and customise for local and global customers as opposed to being plastic mould-

ers,” said Chief Marketing Officer, Plastic Omnium Varroc, BP Shiv. Most of the company’s products are meant to replace the metal or alloy-based products in cars. Its fi rst customer was GM Beat acquired through its global relationship with GM. POV is currently working on six projects for multiple products in India including the compact SUV to be launched by M&M in the coming months. The technology for making thermoplastic- based parts is very critical and the company worked with M&M for around 16 months to develop plastic fenders for its newly launched Mahindra XUV 500. The component provides around two kg of weight saving per metre in case of plastics fenders as compared to the exiting component. More pertinently, the company is working on rear closure systems for customers in India, which can save up to nine kg of weight for any vehicle as compared to a current sheet metal based closure system. PO Group has supplied more than fi ve million plastic tailgates till date and manufactures around 600,000 rear closure or tailgates per annum globally. “It is beyond the capability of any average plastics moulding company to provide products which can be subjected

to extremely high and low temperatures and provide a rugged design like a metal,” added Shiv. The product design capability of POV allows the company to design and develop complete systems in close coordination with OEM. But the company has provided the design and integration of the system within the larger vehicle design as provided by the OEM customer. “We just need to know the styling aspect of the vehicle that the OEM is looking to introduce and we can provide suitable solutions based on that. A plastic moulding company would require inputs from OEMs for design on the components as well as other details,” said Shiv. Aurangabad-based Varroc Group has a 40 percent stake in Plastic Omnium Varroc with PO Group retaining a majority stake. Plastic Omnium Group, has global revenues of around Euro four billion with around 100 facilities in around 28 countries. It also has 14 research & development centres with around four percent of revenues invested in research and product development every year. The global revenues from the automotive sector stood at around Euro 3.5 billion including auto exteriors and plastic fuel tanks. It supplies close to 14 million sets of fascias or front bumpers per annum globally and

is a market leader for this assembly. Plastic Omnium Inergy has a facility in Chennai for supplying to Toyota and other South Indiabased customers and is also looking to establish a presence in Sanand, Gujarat. The company’s automotive business comprises exterior body parts & modules under Plastic Omnium while fuel systems business comprises Plastic Omnium Auto Inergy. Plastic Omnium Group also has a global joint venture with Hella and Behr with 33 percent stake, each christened ‘Hella Behr Plastic Omnium’ for designing, manufacturing and supplying integrated front end modules. “We are looking to explore opportunities for HBPO in India as we are global suppliers to VW’s Up for front end module and would be exploring to grow on the relationship in India when the model is introduced here,” said Shiv. The company global portfolio, which is being gradually introduced in India, comprises rear closure systems, fenders and fender modules, fascias, front end modules, structural parts and absorption systems and truck body panels and structure parts. Some of the major customers include Peugeot Citroen, Volkswagen, Mahindra, Bajaj Auto among others. “Many of our products have been driven by regulation and efforts at weight reduction. Some of them may not be suitable for Indian market at current juncture due to cost and other factors but we are looking to have most of the products from our global portfolio in the Indian market over a period of time,” said Shiv. The company has capability of crash testing fascias and other components at around 30 km per hour speed in order to meet European regulations. During the development of plastic fenders for M&M’s XUV 500 the prototype was flown to PO Group’s R&D facility in Lyon, France for crash testing as Automotive Research Association of India’s facility did not have the capability to test the fender assembly. The PO Group is currently in the process of developing various other parts and components for customers in the US and Europe mainly for weight reduction and CO2 norms. The stringent penalty for exceeding environmental norms is leading the OEMs to substitute more metal parts to plastics.


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Volkswagon to expand network; upgrade quality Abhishek Parekh Mumbai

Photographs: Joshua Navalkar

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olkswagen Group is looking for higher level of localisation for existing mass market models as well as newer models to be introduced in India including the Up and the Citigo. The company is also looking to have close to full manufacturing and higher localisation at the Aurangabad facility, while jointly localising components for both group brands V W and Skoda in the coming months. “Joint localisation and deeper manufacturing for achieving a competitive cost structure for both VW and Skoda are top priorities for us. We are looking to step up our manufacturing presence with locally sourced parts for both the group brands and are looking to enhance our vendor base here,” said Member of the Board, Volkswagen India, Mahesh Kodumudi. Currently, the German car

maker has around 115 vendors in the country and is looking to expand the vendor base to around 200 to 300 vendors to support manufacturing activity at the Chakan plant even as the group sales volumes are expect-

ed to double in the next two to three years. It is currently sourcing components and systems worth around Euro 50-60 million for cars meant to be sold locally. It has also set up a vendor base with few common local and global suppliers for meeting VW Group’s global requirements. VW Group sourced components worth around Euro 90 million from vendors in India last year and is looking to ramp up the supplies to around Euro 250 to 300 million over the next three to four years. Any average passenger vehicle in India could be fitted with

around 100-140 kg of plasticbased components within the total weight of the car. The company has achieved around 70 percent localisation at the Chakan facility, which manufactures the Polo and the Vento for Volkswagen and the Fabia and the Rapid for Skoda. “We faced major challenges in localisation efforts for our group brands as we decided that there would be no dilution of brand and quality of our cars in India. Moreover, we are looking to export significant proportion of cars manufactured at the Chakan facility in order to devel-

op the plant as a major export hub for the VW Group,” added Kodumudi. A major effort at localising components is to ensure that suppliers also procure raw materials from local sources including polymers, alloys and other plastics and rubber components, explained Kodumudi. He further elaborated that this ‘deeper localisation’ is important from the perspective of keeping overall cost structures competitive for the company and its suppliers and help raw material suppliers achieve global benchmarks in terms of quality and

Volkswagen India is looking to invest around Euro 300 to 500 million in supplying toolings and other support to its vendors

delivery. Many of the global suppliers to VW Group who have set up shop in India for catering to the VW requirements have continued to import raw materials for meeting the stringent quality standards of VW Group. This is leading to escalation of cost due to rupee depreciation and other factors. Volkswagen India is looking to invest around Euro 300 to 500 million in supplying toolings and other support to its vendors in India over the next three to four years even as the vendors help the company in its ambitious growth plans in India. The company is evaluating several models from its various group brands that can be suitable for India and help the group achieve its target of around 10 percent marketshare over the next couple of years. V W Group has around 20 models across various group brands that are being evaluated for introduction in the Indian market but there are various factors that are needed to be addressed before a new model is introduced in any market.


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Design to play key role in Renault’s Indian journey Abhishek Parekh Mumbai

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enault is looking at India as a major market as well as major resource hub for talent and innovation in car designing. Its design centre, located in suburban Mumbai, is playing a vital role in the company’s efforts at providing the right designs for the emerging markets. The key mandate for the design centre is to aid Renault in designing cars for emerging markets, including India, and in the process compete with other centres in order to arrive at most effective solutions. “The key priority is to offer a car in India with right mix of functionality and character at a quick pace. Our goal is also to ensure that we do not move too fast as market is evolving slowly but surely, and a car too far ahead of its time is bound to fail,” said Studio Chief Designer, Renault Design India, Jean-Philippe Salar. He added that Indians are optimistic people and have a very positive outlook towards life as opposed to a restraint and subdued culture in some of the former communist Eastern European countries, and these differing outlooks get reflected in the car designs for Indian market and say, those meant for Russia. Renault has established design centres for local needs across key markets around the world. The key locations of design centres in markets outside of France include Brazil, Romania (for Eastern Europe), Russia, Korea and India. Renault acquired Samsung Motors of Korea and has extensively tapped the local expertise of the Korean car manufacturer for creating local designs. The company has established the India design centre in Mumbai due to close proximity with its local joint venture partner M&M. “A design centre needs to assimilate the local culture and sensibilities while creating designs for any market. This design centre was established with the primary objective of providing our inputs to the model pipeline from Renault and proximity the centre has with the then joint venture partner M&M. Mumbai, being the fi nancial capital of the country, is the ideal place for understanding the culture and usage of our target customers in India,” said Salar. Pulse will be the fi rst car to be completely designed by the design centre in Mumbai, with inputs from Renault Samsung Design, Korea and Nissan’s design centre. “We need to have faster access to a growing car market in India and hence Pulse, which is based on the same platform and aggregates as Nissan Micra, carries Renault’s DNA and characteristics and yet defi nes Indian sensibilities in form and appeal.” The major challenge for any designer to offer a design or a product for India is to get all the different and often competing ingredients in the right place. The market is not too difficult to understand but offering a design which can suit wider group of people is a major challenge. “The biggest challenge for any designer is to build a car that can appeal to large number of people and that also has a character,” he adds.

Jean Philippe Salar, Studio Chief Designer, Renault Design India

One of the major frontiers for a designer is likely to be elec-

tric vehicles as such vehicles are in the process of develop-

ment and allow opportunities for conceptualisation and crea-

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Auto sector may be hit by GST regime Goods and Services Tax is expected to assume a uniquely Indian flavour with dual Central and State level taxation structure. CEO & Managing Partner, Chambers for World Trade Laws, Shrikant Kamat provides an overview of likely shape of the things to come and what GST could mean for automotive and transportation sector in an exclusive interaction with Auto Monitor. Abhishek Parekh What are the expectations from the upcoming GST regime? The GST structure, as we are witnessing now, is likely to involve levies by the central and the state government. Currently, goods are taxed at the state level and services are taxed by the central government. Under GST, both the central and the respective state government could levy taxes on both goods and services. In most countries (where a GST regime has been implemented), there is a single GST in operation. However, the fear of loss of revenues and authority has lead to a compromise between the centre and the state on levying taxes on both goods and services at the central and the state level with an adequate safety net to ensure that there is no double taxation or loopholes for slippage of any goods or services from taxation net, apart from certain predetermined items as mutually decided between respective governments. The implication of this structure would be that we are likely to witness the abolition of sales tax, service tax and excise duties as well as Countervailing Duty (CVD) and special additional customs duties as these taxes and levies are likely to get subsumed under the

GST structure. This will reduce the extent of cascading of taxes on goods and services and compliances (or paper work) that have to be done currently under these taxes and levies. What are the challenges under the GST regime? Problems could arise if there are numerous exemptions on goods or services in the GST regime. If, say a television set, is exempted from any GST for an educational institute or government body then the dealers or retailer supplying those television sets would be unable to recover the cost that he will incur while buying the sets from the television manufacturer as he would not be able to charge / pass on the GST related costs on his books to the consumer (ie the exempted party like educational institute). Hence if there are exemptions in the system then there will be scope for imbalance and discomfort among a section of population. What are the major concern areas? The major issue is that the ‘diluted’ form of GST that we are talking about would mean that there may not be significant reduction in compliance related efforts and costs as compared to the current regime. If a

business has operations in multiple states and is accounting for Value Added Tax (VAT), which is different for different states, we may face a similar scenario in case of different compliance related efforts for multiple state level GST. Currently, the industry is only concerned with preparedness for the upcoming GST regime and the attitude is—when the GST is implemented, ‘I should be ready for it’. But stakeholders and affected parties like the fi nancial or transportation sector and more importantly, common people like us, are not getting educated or sensitised on such critical reform measures. The end customers are not able to voice their concerns on the likely impact of the GST regime on the final prices of goods and services. Why call the GST a major indirect taxation reform in India when in the fi nal analysis, the end customers may not be significantly better off compared to the current scenario? I do not think that the numerous consumer education forums and consumer advocacy groups are making any efforts to understand and voice their concerns on the GST implications when it is being given shape. It would be quite unfortunate for the industry and the government to have put in the time and effort to give a form and structure to the GST only to face resistance from end customers for whose benefit it is supposedly getting implemented. What would be the impact on the automotive sector? The automotive sector is likely to be at the receiving end of the upcoming dual GST structure and

may be hard hit, as I feel that the cost will be passed on to the end customers in some manner. Given the fact that the industry operates with an outsourcing model whereby significant value of a vehicle is outsourced to external supplier or component manufacturers (different from the automobile manufacturing entity), the sector has high demand for logistics and other services. The implication for many of the vehicle and component makers could be that there may be additional burden of transportation or logistics related cost since fuel costs—which are outside the GST purview —would be passed on to vehicle makers without any setoff credit as can be done now with excise duty against the service tax within the logistics sector. The implication of this scenario (of keeping several goods or services out of GST regime in our example) would be that the end customer or the buyer of the vehicle would be footing the additional costs that may get built up during the course

of value additions happening along the supply chain, wherever goods and services are out of the GST ambit. Moreover, such additional costs will be passed on to the customers in some form or the other and may make the vehicle more expensive. Secondly, the likely scenario for higher costs of providing goods and services to the end customers, due to higher taxes and inability of setting these taxes off against any other taxes or levies, would mean higher working capital requirements for most manufacturers. This could have a negative impact for banks and financial institutions as their Non-Performing Assets (NPAs) may rise from current levels after the implementation of the GST regime. Hence, it is very critical that players in the transportation segment and the fi nancial sector express the difficulties that they are likely to face with the onset of the GST regime.


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Carving Competence Who’s who of the automotive industry share their views on how they could carve their competence during troubled times, and the way they are gearing up to face future eventualities

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Add

Photograph: Dileep Prakash

economic value to the system

Arvind Kapur President ACMA

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s the wheels of economy seem to be rolling slow, we see many challenges that are primarily driven by what is happening in Europe and America. Yet the Indian auto industry is dependent on the domestic market and the growth here will see us through the concern. However, the increasing interest rates and high fuel costs are the two issues that are primarily impacting the industry. It’s most

importantly the interest rates that are continuously going up and I think the central bank must look into the same because the stunting growth can be perilous. You need growth because employment will be possible only if there is a growth. Yet, I hope the interest rate is now peaked and we will see a downward trend, which will spread positive sentiments in the market. Now the people have

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stopped investing, which is not a good sign as the demand is there, the aspirations of the people are there and the penetration of automobile is pretty low. Low penetration will propel demand creation. The cost of ownership of vehicles is going to be affordable and that is crucial now. Personally, I don’t think the situation is as bad as 2008-09. We saw a growth of 30 percent last year, but that kind of growth might not be this year in the car industry in particular. The two-wheeler industry is doing well and that is good sign—people first buy two-wheelers before they graduate to cars. This indicates that the future will be very good. We were talking earlier also, that the demand will be there—the car industry will show two to three percent growth this year. In order to sustain the profitability, the industry should adopt low cost automation and lots of companies are successfully working on it. Fortunately, the growing volumes are encouraging people to invest in automation as the dependence on the component makers goes up. It becomes increasingly important to have two sources; two sources of suppliers means that, if one source’s lines shuts off or is unable to deliver efficiently, then you can procure it from the other source. We are under stress as the power cost is very expensive, even more than our neighbours and we are going to compete with such people, which does impact the bottom line. Thus members should consider the same. The top line will grow because the commercial vehicles, tractors and earth movers are doing very well. It’s

only the car industry, which is facing a bit of slack. The component makers will eventually be affected but we need to focus on the profit margins. In the long term, it is the R&D companies that make more profits than non-R&D companies. Members should get into R&D and we have had some courses with professors for this. We had our first course at the Massachusetts Institute of Technology (MIT), where we had taken about 30 CEOs to Boston for a one-week session. Presently, a renowned professor comes here and we hold a three to four-day session with our employees so that the mindsets change and people get into R&D. If we look at the total EBITA margin, the companies doing less than 13 percent of EBITA are not adding any value to our system because the cost of money is above this. I think it’s time that such organisations should rethink about being in the industry. We are requesting every company to look at this and add economic value to the system. Right now more than 65 percent people are below this EBITA level and majority of them are Tier I suppliers. For these companies, I would suggest they work seriously on increasing efficiency by producing more from the same machine and manpower. The combination of automation and labour would be critical. We need to increase our output more than ever before. I am sure everyone is on it because we want to make money without which, we won’t be able to expand. As the OEMs are expanding, we will have to expand and that requires

investments. If the balance sheets are not bankable then we will not be able to follow the growth that is happening in the automobile industry. The current situation is very good. In 2008 also, there was a debate about an impending doom in the industry. Even then, we were confident of recovery and I am sure we will bounce back soon. As long the bankers are releasing money for the industry, it’s going to be good. This is a blip and the inflation is a challenge. Also, this is not entirely an Indian inflation—it is also coming from the global markets. There is nothing we can do about it. Also, the RBI has increased the rate of interest 13 times. The central bank should now create confidence by either reducing or holding on the interest rates. The component industry has clocked a turnover of $40 billion in FY 11 and expected to be double by 2015. An E&Y study predicts the component industry size to be at $114 billion or 10 million cars a year by 2020. This will certainly create huge demand for the suppliers. As the Indian auto industry is not very old, starting from Maruti Suzuki (in the early 1980s), that is the time when the Indian auto industry revolution started. And from the beginning, the component makers have been developing products based on the preferences of the customers. However, now we need to start developing components because even the OEMs are not developing the components, rather getting it done from outside. I would strongly reiterate that our members should invest in R&D, dividing it into research, technology and development. We are known for frugal engineering and I am sure there will come a time when we will have affordable R&D to offer to the world. I think we do have the ability and we will be able to do it, although it may not be now but after ten years. The second important factor is that we should become more global. There are very few companies who are exporting to the OEs in the overseas market. Despite what is happening in Europe and America, we find that the exports are going up. I think we need to ride the wave and aggressively look at the exports market. I am sure we will return to better margins. The competition is fi ne; Maruti Suzuki is still successfully selling the 800 cc vehicle even after 30 years, even while the cost of components has gone up. While every six months, there are new models being introduced so there is an opportunity for the people to quote fresh and not go down the beaten path, I am sure we will be able make better margins in the future. -as told to Nabeel A Khan


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One needs to have the right

Reji Varghese President & MD, Delphi India

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t was a tough time for Delphi. When most companies were grappling with the effects of the economic slowdown in 2008, Delphi had another challenge to deal with, its own ‘downturn’—the bankruptcy

products

in the US, though the non-US Delphi units were not part of the bankruptcy. “We have been in the market for a very long time and have seen many ups and downs. The root cause of the turmoil might

be somewhere far away from us but affects all markets and all companies. And like others, we are also not insulated from the market situations,” President and Managing Director, Delphi India, Reji Varghese said.

He added, “Though we are not insulated from the market conditions we are resilient. Delphi is a global player and we have a vision to stay in the market for a long time. We do not study the market for six months or a year but for the

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long term.” According to him, the market might go through ups and downs now and then, but the automotive sector will keep witnessing growth in double digits for at least the next 10 years. And

Delphi is a global player and we have the vision to stay in the market for a long time. We do not study the market for six months or a year but for the long term— Reji Varghese, MD, Delphi India. Another key learning from the difficult times that Varghese lists is to have the right products

so will Delphi. Starting from bringing out new products to building growth capabilities and increasing saleability, it has a long term vision. Another key learning from the difficult times that Varghese lists is to have the right products. “When you don’t have the right products in the market, then the recession can affect you much more than what one would have thought of.” “When it was recession globally but a downturn for us, we realised that some of our products were not strategic. They were not in-line with the company’s portfolio, which is—safe, green, and connected. And we stopped producing them globally and in India.” The recession and its bankruptcy in the US helped Delphi to get a clearer picture of its own portfolio. Now its products evolve under three sub-heads—safe, green and connected. Though the company has learnt from tough times, it is positive about the current situation. “The current situation is not as bad. The Indian economy is resilient to a lot of changes that are taking place elsewhere in the world, especially the developed nations. There are minor ups and downs but we don’t see that as a big problem. Growth is assured, though the rate may vary from somewhere between seven to eight percent but times are good for manufacturing sector. Though like everyone else we are also cautious.” -as told to Shambhavi Anand


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Delivering high

quality products and A Vishwanathan,

services is the key

MD, Visteon India

T

here are and will always be economic cycles. These cycles impact every industry and the automotive industry is no exception. However, the long term outlook for India remains positive. The Indian economy will continue to grow rapidly and become more robust and the automotive industry is also expected to follow that trend. Difficult times, although not desirable, challenges companies to come up with new ways of thinking to become more effective at delivering on business commitments. First of all, we need to devise strategies to cope with the downturn without affecting the long-term direction and capabilities of the company. A company should always keep its focus on delivering high quality products and services; the customers should not be impacted and quality should not be compromised. We need to stay close to customers to understand their changing needs in order to better adapt our strategies. Commitment to our customers, to high quality and to flawless product launches must remain unchanged at all times. We should not let them be impacted by short term actions during the downturn. Also, the company must initiate appropriate actions to ensure it continues to attract, retain and develop the talent base to deliver in the short and long term. At all times, a company should strive to be agile, focusing on being lean and also flexible. In growing industriies like India, your organisation needs to be prepared for the times when the market picks up again. We should also keep our ear to the ground to understand changing market dynamics both, for the downturn as well as the upturn. From a fi nancial perspective, working capital management is very important during the downturn. You have to keep a close watch on funds getting locked up in the form of inventory and receivables. Investments need to be prioritised. Cutting down on discretionary expenses without affecting customers or employees is required. Also, we should show flexibility in planning. Companies should plan for multiple scenarios, understand impact under each scenario and craft appropriate strategies to deal with each scenario. You also need to monitor supplier financial health and their commitment to delivery and launches. Wherever possible, you should also look at enhancing your flexibility through outsourcing options. Communications is very important in times of crisis and downturns. We need to constantly keep open the channels of communications with employ-

ees, customers and suppliers. Continuous improvement by way of value analysis and value engineering, cost reduction, six sigma and kaizen are some of best practices to implement on a continuous basis in good times and bad times.

When the market picks up again, these practices will help ensure an improved competitiveness, which can be a key differentiating factor. The health of an automotive components business depends on the profitability of each of its pro-

grammes. Best business practices involves looking at profitability at all stages, from sourcing to launches and also post launches. With a presence in India of nearly two decades, Visteon has known its share of economic cycles. Our

approach has been to use our automotive intellect to deliver on quality, products and services, and market insights, driven by our sharp focus on our customer commitments at all times. - as told to T Murrali


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Adarsh Mahipal Gupta

Analysing strengths and evaluating eachh risk pays

Director, Autolite Shambhavi Anand New Delhi

D

i rector, Autol ite, Ada rsh Ma h ipa l Gupta, a lighting component manu-

facturer learnt to analyse his strengths and evaluate each risk minutely when the downturn hit in 2008. While a big company might have enough cash at its disposal to keep it competitive even through an economic

slowdown, Gupta suggests that becoming a Tier II supplier and having a strong presence in the aftermarket might help a medium or a smaller player to sail through in such situations. “A lot of multi-national com-

panies are looking at low cost countries for sourcing as the cost of production in a developed nation is extremely high. Hence there is great opportunity of small and medium companies to become Tier II

suppliers for them. We have that great advantage from this situation,” he revealed. Also Autolite has diversified its customer portfolio in order to cushion itself from major setbacks. “We have diversified

The machinery, which is usually very expensive, is significantly cheaper now. Also, the range can be obtained with attractive payment options that do not affect the cash flow significantly our customer portfolio in a very balanced manner. Apart from OEM customers we also have a strong presence in the aftermarket. So if the OE business takes a plunge due to interest rate hikes and rising fuel costs, the aftermarket is there to our rescue. Attractive offers and change of packages might also increase the sales in aftermerket,” he added. The company claims to have supplied 70 percent more lighting components to the aftermarket since the current uncertainties than earlier. Also, it has spread its business across geographies. The company exports to over 55 countries across various continents like Europe, America, Africa and Asia. Exports also help during difficult times as exchange rates make it profitable. The company also has incorporated lean manufacturing, kaizen and other cost cutting measures in its processes. It works on key performance indicators. It has also given due importance to technology upgradation. While the times are not so good and many believe in stalling their expansion plans, Autolite is adding capacity. “The machinery, which is usually very expensive, is significantly cheaper now. Also, the range can be obtained with attractive payment options that do not affect the cash flow significantly. So expansion during difficult times makes sense,” Gupta added. Another area which can increase efficiency is motivation of employees. The company encourages senior officials to visit the shopfl oor regularly and motivate the workers. It announced several performance based incentives in order to increase effi ciency which yielded positive results.


Avery Dennison Driving Groundbreaking Self-Adhesive Power for Automotive India has the most competitive automotive manufacturing industry in the world, with Indian automotive components being widely preferred by major automobile manufacturing companies. The auto component companies in India are contributing to the growth of this sector by providing genuine and reasonably priced automotive parts. According to a recent survey by J.D. Powers and Associates, India is expected to become one of the three largest automotive markets in the world by 2020, after surpassing France, the United Kingdom and Italy to rank as the world's sixth-largest automotive market in 2010. The Indian automotive components industry has actively and quickly transformed from a domestic market supplier to one of the world's essential auto parts suppliers. Automotive chassis, engine, exhaust systems and wet-cell batteries for all types of vehicles are now produced in India. Automotive labels carry the car's unique serial number and other information so that purchasers can verify that the vehicle carries its original parts, law enforcement agencies can identify stolen merchandise, manufacturers can manage inventory and track parts shipments, and regulatory authorities can check compliance with applicable laws. Ideal automotive labels should be durable under harsh temperatures, abrasion and chemical exposure conditions while being tamper resistant to deter theft and discourage the sale of counterfeit and stolen parts. “Keeping pace with global changes in vehicle manufacturing and design, Avery Dennison delivers reliable solutions for all automotive labelling needs,” Kapil Anand, Durables Market Manager of Label & Packaging Materials, Avery Dennison India said. “Our products are designed to handle weathering and perform under the most extreme conditions. Tested for high efficiency and reliability in print, conversion and application, our solutions are always up to date and comply with industry standards and environment conditions.” In India, Avery Dennison is working closely with manufacturers of wet-cell batteries, offering an exclusive and proven portfolio of labelling solutions that are resistant to acid, salt, fuel, water and high humidity. These products also afford high tack for quick adhesion on polypropylene castings, serviceability for multiple SKUs and the ability to incorporate superior graphics for retail shelf appeal. The company's latest addition to its India product line is its Fasson® S8049 self-adhesive, which has performed well in Europe and is now available in the Asia-Pacific region. The new Fasson® S8049 adhesive from Avery Dennison uses patented Rubber Hybridized Acrylic technology which has very high adhesion levels and are combined with excellent resistance to engine compartment challenges such as brake fluid, oil, heat and humidity extremes. Avery Dennison's label materials used under the hood and in powertrain environments can withstand temperatures up to 150 degree Celsius. In addition to its adhesives, Avery Dennison is also involved heavily in India with identification and tracking solutions, including work-inprogress labels, and high-performance applications for auto components. In addition, the company's locally manufactured polyesters have established a firm foothold in the general-applications market. “Whether in India or on the factory floors or R&D labs in our global network, we pride ourselves on being a company focused on solutions that drive our customers ahead,” Kapil Anand said. “Good solutions do more than meet your immediate needs. We anticipate the real worries you have about your brand's integrity and deliver the reassurance you require. And that's what we do every day at Avery Dennison.”


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Acquisition in last downturn helped expand product

VC Sehgal Chairman, Samvardhana Motherson Group

I

n 2008-2009, we saw a host factors that led to the global economic crises including a slowdown unprecedented in the recent history, increasing price levels and input costs. The effect in the global automobile industry during this period was deep and widespread. The industry faced probably the worst crisis in many decades with a number of major players struggling for survival.

As a global Tier I supplier with a global footprint, we too faced this slowdown but with a difference. We realigned our business with the market conditions. There were various initiatives we took as a group to counter the crisis.

Cost Reduction In such times, when sales was affected because of market conditions, we focused on conserving

our resources and controlling costs—spending only what is absolutely necessary, reducing wastages of any kind and analysing and removing inefficiencies in man, method and material. This was the motto followed across the group. The cost reduction measures increased efficiency by improving all the operations including production, distribution and delivery across the group. We extended the

We cannot control or forecast the macroeconomic environment. The key is how fast and how well we can adjust to the changes concept of value analysis, value engineering to our operations also. The slowdown in 2008-09 thus helped us to become a leaner and a more efficient organisation. This has also reflected in the improved performance of the organisation. We utilised this period and continued to invest in new technologies that provided us with a competitive edge for our customers after the recession ended and the business picked up. As a group, we have always consistently looked at adding value to our operations be that through consolidation or

through various forms of pruning. While this slowdown gripped the industry, we were very quick to react. We realigned our capacities to match the market wherever necessary, which has resulted in better efficiencies.

Building Capacities to meet future demands During the crisis we geared up ourselves for the time when the markets would stabilise and there would be a surge in demand for products. We focused on building our capacities for growth as well as making ourselves more competitive. We worked very closely with our customers and the capacities of the company are aligned to customer requirements. Even during the slowdown, we continued building capacities in line with our customers’ projections. As a result, when the crisis got over and the demand increased, we were able to support all the requirements of our customers. Consequently, we have grown well.

Opportunities We, as a company, had positive cash flows and a strong balance sheet. We seriously pursued acquisition opportunities but we scanned them selectively and very carefully. Finally, at the behest of our customers the group acquired “Visiocorp” which is one of the largest manufacturers of automotive rear view mirrors in the world. The acquisition provided a tremendous boost to Motherson’s global reach. For the fi rst time, the group had a product for which we had our own technology. The acqui-

sition in that downturn provided the group a worldwide customer base and a scope to expand our existing product ranges globally and in Indian markets. We cannot control or forecast the macroeconomic environment. The key is how fast and how well we can adjust to the changes. Though the macroeconomic situation may look grim, the customers that we serve in Europe have done very well, the German car manufacturers in particular. During the last quarter, which has been a tough period for the industry, the sales of SMR grew by 13.4 percent in Euro terms. In the last few quarters, the Indian auto industry has been impacted by increased interest rates, volatility in raw material prices, wide currency fluctuations, IR problems and floods in Thailand. Despite this, we registered a healthy growth in the domestic market. We have recently acquired Peguform GmbH, a leading manufacturer of plastic modules and assemblies for the automotive industry. The Peguform acquisition has provided us with new technologies and a strong customer base, especially in Europe. As of now, including Peguform we have over 110 manufacturing facilities with a presence in 25 countries across the world and are in the process of establishing new manufacturing facilities at various locations. Our major customers include almost all the major automotive OEM manufacturers in the world. The experience of over 25 years in the automotive business has enabled us to develop an understanding of the automotive market and related industries, while establishing internal policies and systems aimed at achieving production efficiencies. We continue to leverage our experience and the capabilities gained from our extensive operations in the automotive components sector to pursue potentially high growth opportunities in the sectors we serve. The depth of backward integration and the synergies achieved across the subsidiaries, joint ventures and other consolidated entities, coupled with their diversified product portfolio, provides us with significant quality control and cost control advantages, lesser reliance on third party sources and shorter delivery and development lead times. We have our goals and objectives clearly defi ned and like earlier instances, I am sure together, we will be able to achieve the targets we set for ourselves. - as told to Nabeel A Khan


Tab - AM Jan12 pg 210

Tab - AM Jan12 pg 31


Tab - AM Jan12 pg 209

Tab - AM Jan12 pg 32


Be

customer-centric

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customer centric

and try to Jnaneswar Sen, Sr Vice President, Sales, HSCI

F

or Honda Siel Cars India (HSCI) there is only one goal—to be customer centric be it an economic downturn or flourishing times. “That is how we have done in the past and that is what we will do in the future. Even in a declining market you have to plan and adopt strategies that keep you customercentric,” Sr Vice President, Sales, HSCI, Jnaneswar Sen said. When the economies are declining and sentiments are low, it impacts the entire organisation. Even then, one must continue to be customer-centric. As a vehicle manufacturer, one’s biggest challenge is to keep the costs competitive. And with the high expectations of quality that customers have from Honda, this is not very easy. The company had to adopt cost cutting measures to keep the prices low for the customers as well as maintain the high standard of quality. One of the biggest hurdles in cutting costs was the fluctuating interest rates. Since HSCI sourced several components from outside India, the fluctuations in the exchange rates were a major challenge. And so began the drive to increase localisation for HSCI. “As long as you buy parts locally you save yourself from the fluctuations in the exchange rates,” Director Marketing, HSCI, Seki Inaba said. By increasing the local content, the company could combat exchange rates and import duties. The next challenge for the company was to maintain high standards of quality from the new source. “Our Tapukara plant which commenced in 2008 was a part of the localisation strategy. The engine is the heart of a vehicle and since Honda is known for its engines, we decided to manufacture some engine parts ourselves,” Sen said. There are two ways in which the company has increased localisation and reduced costs—by increasing the local vendor base and by manufacturing certain components in-house. But when one is manufacturing several components in-house, assembling and painting, efficiencies have to be improved on the manufacturing side as well. “Again on the manufacturing side, one has to look for areas where one can reduce costs. It is not only manufacturing and assembling where quality had to be taken care of, painting is an important process,” Sen added. Supply chain efficiency is an area that can help in ensuring cost reduction. Honda incorporated several changes on this side to improve efficiency and trim expenses. After all, it believes in exceeding the expectations of quality and yet being competitively priced. Once sourcing, manufactur-

reduce costs

ing, assembling and production is taken care of, another area which a car manufacturer needs to pay attention to is marketing, sales and increasing their network for better customer reach. After all, what is the point of excelling in

production when you cannot reach out to the customers well. Stressing his mantra Sen said, “You must continue to be customer-centric even on the marketing and sales side. One has to have a good network in order to reach the

customers. And then, one should offer them good experience at the dealerships. Aftersales is also an important aspect that should be taken care of.” It is important to cut costs and increase efficiencies on this side of the business also.

It is during tough times that most companies get more competitive and so did Honda. Summing up Inaba said, “Challenging periods always encourages us to do something better. And we did it.” -as told to Shambhavi Anand


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Selective

automation helps enhance

capacity Srivats Ram, MD, Wheels India

T

he change of thinking as against what the industry has had in the past is primarily a combination of market growth and competition. These two act together. If there is significant market growth then it is possible to achieve a certain level of top line growth, which ensures that bottom line growth continues. However, the infl ation has been very high during the last

couple of years. This implies that it is not necessary to have 20 percent to 30 percent growth to be able to offset the cost. This is one angle. The other angle is that typically when growth has taken place in India, everyone looked at duplicating facilities. I think, increasingly people should see that because cost of capital has gone up substantially—they should see how they can get more from existing facilities. It

may require a certain amount of automation, but I would say that rather than creating new lines or new investments, if they work on existing lines, they would be able to squeeze out productivity out of that. Even with a fair degree of automation, it may be beneficial because the cost of the capital is significantly high. Coming to the cost of labour, I think two or three things are happening. One is that the availability of skilled labour is becoming a challenge because of faster growth and in relative

It takes time to acquire skills and getting skilled people is an issue. We need to actually deskill our operations to a great extent so that it becomes standardised. For instance, few other industries including electronics have deskilled the operations to a significant extent

sense, skills take time to acquire. Everyone will be increasing the headcount when there is 30 percent growth and it takes time to acquire skills. Getting skilled people is an issue. We need to actually deskill our operations to a great extent so that it becomes standardised. For instance, few other industries including electronics have deskilled the operations to a significant extent. In a typical Indian scenario, it is not necessary to have automation. However, it is necessary, at least in metropolitan locations, since the labour cost is higher— though not more than the western countries—than what it was about four years ago. Automation will justify if there is significant improvement in output and productivity rather than paying back on labour cost. For example, if there is a line that makes one million parts, and the demand is 1.4 million parts—typically one would look at adding one more line. However, by automating the existing line it is possible to increase the capacity to 1.4 million and the investment will not be as huge as doubling the capacity. It will also significantly reduce the footprint cost and those related to all other utilities. There is a lot of justification for automation, but I would say that this would be particularly valid for the metro-based manufacturing sector where the cost of labour is high while there are some infrastructural advantages. Typically, people look at automation as a costly affair but I would argue that it can be beneficial if the existing line is automated to tweak capaci-

ties. The other thing that one needs to bear in mind is labour cost, which keeps going up. We are a high inflation country and the youth demographic and the aspirations are high. Thus the labour costs will be increasing especially in the metropolitan areas. Therefore, it is necessary to understand the scenario that will be five years down the line from now. Also it is essential to understand the types of work that people would not want to take up like those that are strenuous and difficult in nature. Those areas call for automation. Secondly, it may not make sense to go for automation considering the current labour costs. It has to be viewed across a ten year horizon. Containing labour is a minor part as productivity gain is the major part of automation. I would call this strategy as ‘manufacturing in a metropolitan area’ because space is a constraint. If land availability is an issue in India, then it is something that needs to be considered. Also, there are few other challenges that we face in the country including logistics. If the OEMs move to new geographies and build up adequate scale, it is very difficult to avoid going there to stay competitive. We at Wheels India, would follow pretty much the same methodology. We have infrastructure advantages in some of our metropolitan plants. We would try to find ways to maximise the output from those facilities which have a limited footprint in the ways that I mentioned. However, if our customers move to new geographies we may need to service them better by being closer to them. Also there are enough countries that are reasonably close. We will continue to be a global supplier to large OEMs. I don’t think there is enough of exploration on neighbouring countries. Asia, on its own, has adequate component manufacturers. Going forward, Africa, ten years from now, may be a good market to establish ourselves and this is what Tatas and Leylands are doing. It is necessary to establish oneself when the market grows. We would be cautious in looking at the next year as we believe that in some segments like passenger cars, which are already affected, the growth will be better than what it is this year. However, in other segments, we expect to hold—I would not say we are very optimistic but we believe that with our product portfolio and the customers we have, it will allow us to go ahead in the market. - as told to T Murrali


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Induce self

confidence in

people

S Muralidharan, VP, Automotive Aftermarket, India & SAARC region, Bosch

T

he current situation is slightly uncertain due to high inflation, increasing fuel prices and other reasons. The lessons learnt then and what we implement continuously is rapid expansion of

distribution network and that of our product portfolio. The distribution process is not just from products through channel partners, but it goes up to the workshop. There is a tendency among

people to think that it is recession and so one should cut down on certain activities, but I think that this is the time when one should invest more. Let me also be very honest, when the so called markets are

down, a person might not buy new vehicles but that does not mean that he does not repair his existing or old vehicles. Thus it is not necessary that a drop in vehicle sales means a drop in the vehicle spare parts sales. When

the money market is low on sentiments, people want value for money but that does not mean cheap repairs (or use of counterfeit products). Use of spurious products is more concerned with lack of education than the

People think that if it is recession, one should cut down on certain activities, but I think that this is the time when one should invest more market conditions. Thus, if one has the capacity to make the investment and one should has the right strategies, they can win and that is what we did in 2008-09, and we hope to win again in2012. I was in Europe with the brakes division of Bosch during the 2008 slowdown; in a developed country like Europe, even the normal growth of one percent is considered phenomenal. In those tough times also, due to adoption of right strategies and by a lot by God’s grace we grew by double digits, which was a lot. When we produced a growth figure of 10, everyone thought that 10 meant 1.0. Even with that misunderstanding they thought we had done well. They did not think it was possible to achieve a figure as high as 10. Other divisions had achieved single digit growth. It was not very difficult. All we had to do was induce self confidence in our people that it is possible to grow. It is strange that an Indian can tell Europeans that growth is possible. But growth is in the mind. That is the unique strategy that we employed. If you say we can’t grow then you cannot. The figure you set for yourself for growth is purely in the mind. That is a lesson which I give to students when I teach in management institutes. The bigger challenge really is the composition of the market; the three generations of vehicles on the Indian roads. To train the entire value chain to accept this composition and cope with this change is a challenge. It is a bigger challenge to make a dealer who is used to selling 30-40 part numbers jump to 300-400 part numbers. It is a bigger challenge to make them get used to modern warehouse and computers rather than scaring them from the rising interest rates. To tell a mechanic that the carburetor cars, that you and your father have repaired all your lives will no longer exist. Now they have to learn to repair cars with electronic control units, which is a bigger challenge. -as told to Shambhavi Anand


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Slowdown is a in

boon

disguise

Vidhur Talwar, Jt MD, QH Talbros Shambhavi Anand New Delhi

T

he advantage of Talbros Group is that we supply to the entire automotive field, said Joint Managing

Director, QH Talbros, Vidhur Talwar. He continued, “We supply to mopeds, motorcycles, passenger vehicles, light commercial vehicles to heavy trucks, to earth moving machines and tractors. When the Lehman Brothers crash

happened we were still lucky that the two-wheeler industry was doing very well. We have a huge portfolio of gasket manufacturing in two-wheelers. We also have several partnerships with global players. There is a balance of sev-

eral OEMs in each vertical.” Apart from investing strategically in various segments, when the downturn came in 2008, the component manufacturer looked at cutting their costs. President, QH Talbros, Rajeev Mittal consid-

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ers the downturn as a boon to the Indian industries. “It made the companies look at every aspect that would help in cost cutting and make them competitive.” The Gurgaon-based company looked at even the smallest facet that would incur costs. Starting from the inventories to other costs under each overhead, such as labour and material, every expenditure was put under scrutiny. “That was the need of the hour. Today the industry can run with smaller inventories,” Mittal added. It also looked at reducing the material costs. There were two ways in which this was done. Firstly, by cutting down inventories, and secondly, by looking for alternative sources to procure material at a lesser cost. When in an upswing, people do not look for alternative sources for material supplies. However, when the downturn came, people explored all possibilities to develop sources which made them competitive, Mittal elaborated. Another major problem during 2008 was pressure on cash. A lot of it was stuck everywhere. “We needed money for paying our vendors. So we put in a payment process in place so as to ensure regular cash flow in order to pay to our suppliers. The credit limit and the exposures were defi ned. We stick to the payment cycle even today for right inventory management,” he added. The company also looked into its processes thoroughly, which were more or less in place. However, in Manesar, there was considerable pressure to reduce costs, the inventory and variable costs like labour, electricity, tooling and other overheads. Talbros group had two plants in Manesar—one of which was being built on a rented land area. In order to bring about a major cost cut, the management decided halted the plant construction. Instead, the machinery was transferred to the fi rst plant and production continued from there. Costs under all overheads reduced drastically and there was better use of ergonomics at the Manesar plant. Mittal believes that the slowdown in 2008 was a boon in disguise. “No industry will suffer even if there is another recession, because 2008 came as a surprise but today, people are on guard. The current blip is just a phobia. The industry is going to grow and I don’t think there is going to be any recession. India market is such that it will grow continuously because a lot of penetration is left and demand will be generated. There is nothing to fear. We are also looking to grow by 25 percent,” he signed off.


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Focus on markets can help during downturn

Rohit Saboo, President & CEO, NEI Industries

I

ndia was one of the least affected countries, during the downturn in 2008. The developed countries in America and Europe were affected more. That way, we in India were in a better position. Very frankly, apart from the last three months of 2008—October, November December, we were doing pretty well. In those three months, we saw a drastic dip, mainly because the sentiments were low. But

even in those tough times, the two-wheeler and the small car segments were doing pretty well. Our key learning in that quarter and subsequently, was that we realised we have to increasingly focus on exports. We constituted a separate team to explore new markets for exports. While in 2008 we only realised the importance of the same and began planning, the real exports started in 2010 only.

When the times were tough, a lot of global OEMs were looking at low cost countries (India, China, Vietnam) for sourcing components due to the cost advantage. And that was the time we were looking for customers in those countries. We took the advantage of the situation. That was the time we introduced ourselves to some of the renowned customers like Daimler, BMW among several others. In fact by next year, we are expecting to double our exports to some of these customers. We are currently exporting to almost 18 countries. Before 2008, our exports were less than `10 crore and this year we earned `70 crore from the foreign markets. By next year, we should be earning `10 crore from exports. Our target is that 10 percent of our revenue should be coming from exports eventually. It was during 2008 that we decided to look into exports and today, we think

We should be technologically so advanced that we can listen to the customers’ voices and foresee their needs and be prepared with new products. The development cycle has been squeezed tremendously

this is one of the most important lessons we learned from the downturn. During the recession, supply was on the higher side and so customers started demanding lower costs. Our second learning came from this phenomenon. We embarked on a journey to reduce the cost structure by five to seven percent. We are working with an international consulting fi rm to figure out ways to reduce cost. Hopefully, this year, we will be able to save less than two percent and by next year we will be able to save slightly less than five percent. So we attacked our cost base during the difficult times and are reaping the benefits even now. Another thing that we realised during 2008 was that for auto companies to survive and keep the interest of customers, they have to come up with newer models and variants much faster. This means that we should be technologically so advanced that we can listen to the customers’ voices and foresee their needs and be prepared with new products. The development cycle has been squeezed tremendously.

As a component supplier, we will have to spend a lot of money on research and development so that we are prepared with better products ahead of time. Since 2008 we have doubled the strength of our research and development team. Our R&D spend had also increased tremendously. We are trying to reduce our dependence on our collaborators and stand on our own feet. Earlier, we were totally dependent on our collaborators. We used to get designs from them and convert them to our working drawings and then work on them. We rea lised t hat w it h increased focus of our customers on technology, we also have to upgrade ourselves and stand on our feet eventually. If we have to go global; the requirements in terms of quality are much more stringent than earlier, when we did not do much of testing on our own. Now we have invested `five crore in testing equipment, test rigs, steel cleanliness machines, metallurg y labs, tribolog y labs among other equipment. We have got some new people (scientists) working for research in basic material and tribolgy. We are trying to understand our own products better so that we can make it better. The investment on R&D yields returns in very long time so we have to be patient. But it will remain the area of focus for us now. Next year, we will add another 50 percent engineers to the research team. We intend is to spend over 1.5 percent of our turnover on R&D. The current times are also slightly uncertain. The passenger car segment has been affected the most due to the hardening of interest rates. However, twowheelers are doing very well. Commercial vehicle segment is still growing at an excess of 10 percent and tractors are doing pretty well. Overall economy might be affected. But we are not sure. Like everyone else, we are slightly cautious. We are adjusting our shifts. Earlier we were doing three shifts, six days a week and one shift on Sunday. Today, we have closed the Sunday shift depending upon the requirements of the customers. - as told to Shambhavi Anand


Tab - AM Jan12 pg 200

Tab - AM Jan12 pg 41

TM

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Tab - AM Jan12 pg 199

Tab - AM Jan12 pg 42


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Innovative during

Crisis

Raj Singh Rathee, MD, Kuka Robotics India

I

t is when there is a crisis when one becomes innovative, beleives Raj Singh Rathee, the Managing Director of the Indian subsidiary of the German automation solution provider, Kuka Robotics India said, recollecting the memories of economic downturn in 2008.

We sold a considerable number of robots to the new arenas we had discovered. We did not only adopt diversification in the sectors we were operating in but also in the volume of our customers. Rather than

supplying mostly to big players, we also explored opportunities with the smaller ones. And there also we found good luck. We started supplying to companies which operate even at micro levels. The big lesson we learnt was not to

depend on some big customers or one big industry. Another factor that everyone should keep in mind is to rely in their judgment and not be influenced by others. There can be speculations about growth figures

for economies and industries in particular. But one should assess the situation themselves with respect to their own requirements rather than being carried away by other people’s forecasts. -as told to Shambhavi Anand

Perception & Focus “If you take a look at the numbers, we faired pretty well in 2008. It was the next year that was not good for us. We felt the effect of the crisis majorly in 2009,” he said. Elaborating, he added that Kuka works on two types of projects— planned and unplanned. Some customers plan their automation initiatives in advance and place orders likewise. There are others go by the need of the hours.

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The Unplanned Advantage He continued, it was because of planned projects that we did not see the effect of the slowdown immediately. We already had enough orders for that year and so it was not that bad. However, some orders were certainly cancelled or stalled and that did have an impact. But the unplanned projects of our customers kept us going. Secondly, robots are such a product that they can be customised to perform several tasks. Many people buy robots that can do standard functions and so such orders kept coming. Some companies also employ robots during the times of crisis to save on the manpower costs. They tend to reduce their expenditure on human resources and still keep up the production levels. Thus that too helped Kuka. But many projects were delayed, in India as well as globally. And in 2009, the numbers we achieved were low. But it was then that we got innovative.

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Broadening Horizons

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When crisis struck we started streamlining a lot of things. Till 2008, the majority of our business was inclined towards the automotive industry, especially in India. However, with automotive being hit so hard orders were being stalled and delayed. As a part of our efforts to sail through, we broadened our horizon and started looking for business in industries apart from automotive. We began exploring other industries which were slightly less affected. It was during the difficult times that we became a part of plastic industry and the casting industry. The welding industry is also a discovery of recession for us.

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(2 Wh ee ler )


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Que Sera Sera…….. AK Taneja MD & CEO, Shriram Pistons & Rings

I

was attending a vendor meet this early December, when one of the key auto component manufacturers asked me: Are we heading for a slowdown? And before I could answer, he asked the next question: Should we postpone our expansion plans? These questions must have been weighing heavily on his mind, because before I could even articulate any view, he had made another observation: With a weaker rupee, I think it is better and more profitable to export than to supply to domestic OEMs, who seem to only talk about Quality, Delivery, and Cost without a second look at what is happening to our costs due to inflation.

Are we heading for a slowdown? If you look at sales of commercial vehicles, production in the period April-November is higher by 20 percent, compared to the same period last year. In fact, in November’11, the last month for which, data is available, production is higher by 39 percent, compared to the same period last year! Different segments in commercial vehicles have recorded different growth rates, with light and small commercial vehicles growing at faster pace than heavy commercial vehicles. However, there is reasonable and consistent growth across the commercial vehicle segment. Similarly, tractor sales in the fi rst half of current year are high-

er by 20 percent, compared to last year. Two-wheeler sales are higher by 18 percent. Only passenger car sales are nearly stagnant, the reasons for which, are many. If vehicle sales up to November are good and December too, seems normal, why this talk of slowdown? The disconnect lies with the state of the economy. GDP growth rate has slowed down to six-seven percent against nine percent last year and the index for industrial production points towards an impending slowing down. Capex is on hold by some and being revisited by many, which means business has somewhat less confidence in the future. How come auto sales are following a different trajectory? The ground reality is: it takes the market some time to catch-up with the economic reality. Customer demand is not low, customer confidence is low. The latent demand for mobility is huge but whether this will convert to sales depends on customer sentiments, as much as on the state of the economy. Most news these days is bad news: high interest rates, high fuel costs, high inflation, Euro crisis, fiscal deficit, regulatory hurdles and so on. All this is taking a toll on the customer sentiment. Therefore, with some time lag the low customer confidence is likely to reflect in slower auto sales. There is one more reason for my friend worrying about his investment and capacity expansion plans. Almost all OEMs are forecasting sales in 2012-13 as if all is well with the world. They

are cajoling vendors to expand capacity, as if auto growth is a given! Slowing economy and postponement of capex across industries, but higher auto sales forecast, there is obviously a disconnect somewhere.

The key question: What should a vendor do? Dealing with volatility has to be an integral part of the business plan. Every company, big or small, needs to work on alternative scenarios. What if the demand grows by 15 percent and what if it is only five percent? What if the rupee weakens further and what if the rupee becomes stronger? How should this all be factored in exports, imports or foreign currency loans?

We are rewriting our contracts to ensure that small Tier II or Tier III enterprises will suffer the least in case of a slowdown, and we will take the bigger hit. Those with a strong foundation are left standing It is no longer good enough to make a business plan based on the current trend of production and sales, or even the forecast given by customers, because these forecasts are often a mix of today’s reality and tomorrow’s wish-list. The time to make a roof is when the sun is shining. The time to make backup plans is now and laying out the steps of what you would do in case demand is higher than or lower than the business plan, interest rates stay high or moderate and rupee strengthens or weakens. Exports cannot be a knee jerk reaction to the exchange rate as my friend was suggesting; exports has to be part of a long term business strategy, whether for derisking or a step-up in technology and quality. We had a sharp dip in demand

in 2008, in the middle of the investment cycle and capacity expansion. What are the lessons we learned? Perhaps the most important lesson was that you cannot invest based on continuous and guaranteed growth, because there will always be hiccups. Also, overdependence on a single market or a single customer can be disastrous, for majority of vendors. In 2008, when everyone scrambled to postpone expansion plans, and layoff of workmen, little did they realize that the demand could come back strongly and it is not possible to rehire skilled workmen at short notice. Even if larger companies have resources to attract or train skilled people, the Tier II and Tier III vendors need much more time to gear up. Analysis showed that shortage of some components in 2010-11 was as much due to postponement of investment and capex as the inability to rehire skilled personnel across the supply chain, mainly Tier II/III companies, when the demand revived.

How are we applying these lessons to our business today? Knowing the cyclicity of the automobile market, in our company we decided that we would service as many OEMs as we can, as long as the price makes business sense. Also, we will always export a minimum percentage of our production, to different customers in different markets, to ensure that any hiccup in the domestic market does not cause a heart stroke. We ensure that all our foreign exchange loans are fully hedged and exports and imports also hedged to the extent possible. These decisions can sometime appear wrong in hindsight, but in the medium to long term hedging, it allows you to concentrate on production, productivity and profits rather than fret and fume over forex volatility, over which you have no control anyway. Dealing with Tier II and Tier III enterprises needs very special mindset as we learned in the last slowdown. These enterprises tend

to be smaller, do not have strong balance sheets, have difficulty to attract and retain good talent and cannot survive major volatility in demand. Therefore, alongside derisking our enterprises by working with multiple customers in different markets, we are also derisking our supply base. This does not mean that we work with multiple vendors or ancillaries for the same component or same job, because this is neither adequate derisking nor cost effective. We are more closely studying the business architecture of our vendors and ancillaries, their capital structure, manpower etc. We are rewriting our contracts to ensure that small Tier II or Tier III enterprises will suffer the least in case of a slowdown, and we will take the bigger hit. We are building confidence with them by investing with them, to reflect that we have a shared destiny. Our supply base knows well that we will share the pains disproportionately and gains more equitably: this is encouraging them to invest in tandem with our plans. Finally, what was my reply to my friend who fears a slowdown? I told him: derisk your business by working with a large number of customers in India and abroad; have a separate strategy for Tier II and Tier III suppliers to ensure that they stay on their feet even in a slowdown; manage your liquidity ahead of profits and let liquidity defi ne your risk appetite in capex) and keep your ears and eyes clued in to what is happening in the market, so that you can see the wave coming before others do. A big part of success in business is timing and being ahead in noticing a slowdown or pickup in demand. When the tsunami comes and the wind blows hard, all businesses are affected. However, those with a strong foundation are left standing. This is as true with auto component business as with any other. And after you have done all you can with customers, suppliers and your team: Que sera sera! In the long term, the India growth story is intact. Despite a hiccup or two. - as told to T Murrali


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truly profitable for a sustainable model L Ganesh, Chairman, Rane Group

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he slowdown after Leh ma n n Brot hers shocking revelation in 2008, was fortunately for a short period. Later, we have not seen the kind of slowdown in India or in the rest of the world, except in some peculiar circumstances like the natural calamities in Japan and Thailand. Other than that, the auto industry and the economy has not slowed down drastically.

Fortunately, we did not have to test the experience but certain aspects have been helpful. For instance, we have fi ne-tuned our forex policy due to its volatility and it has helped us during the current situation. However, the challenges are changing. The policy that was fi ne-tuned has been helping those net exporting companies in the group. However, the net importing companies are hit due to weak-

ening of rupee against USD and Yen. Therefore, we are reviewing the policy for the net importing companies. Fortunately, this time the global slowdown is not that severe although there is lot of fear about Europe. Despite the concerns, there is no slowdown in Europe so far. There is some marginal off-take, however, it is nothing alarming so far. The inflation has to be managed, as the country cannot afford to manage when it is in double digits. To that extent, even if it means little pain for the industry slowing down, we should be willing to accept that. Inflation hurts the poor much more. The debate always goes on the right model and methodology to tackle the situation. The good news is that the inflation is being checked now and according to reports it should come down by June next year. If that happens, then the interest rates will also come down and the growth momentum that has moderated off late, can pick up.

View Of The Machining Line

Supply Chain As far as Tier II and Tier III companies are concerned—on one side there is continuous competitive pressure and customers, who are insisting for improved efficiencies and cost reduction, while on the other side, it is a fact that unless the supply chain is healthy and truly profitable, it will not be a sustainable model. What we are trying to do now, to the extent possible, is to share best practices. The companies that are highly material intensive—with large scale sourcing from outside, extend some of

Inside The Rane Facility

the TQM learnings to their suppliers. Last year Rane, Madras extended its kaizen culture to its vendors. We encourage our vendors to take up these activities. We have created kaizen competition and recognised the top three companies at our annual meet. Secondly, we created an intranet where all the vendor kaizens are banked. The vendors can come to Rane Madras and use the computers to go through the kaizens; we encourage this concept since we feel there is a

limit for price reduction. Also, ‘since we benefited from TQM, why not pass on those benefits to our vendors’, is the question we ask. We also recognise the external challenges—like bought out power, cost of oil etc, that they are facing. We try to be fair on price correction while also improve their efficiency. This will be a continuous challenge.

Human Resources On the operators’ side, the challenge for us after the slowdown was on how quickly we could train them. We have hired retired operators as consultants and they are hand-holding the new recruits. In terms of management, the challenge continues to be the high level of attrition especially more in junior management and moderate in middle management. We are not approaching this issue based on reward and compensation point of view; we strongly believe that while compensation is a hygiene factor, this alone does not drive people. We are now trying to engage young managers with more and more projects—to innovate, develop new markets and new products; how to engage them so that they get challenged, is the issue. The next five years, despite all challenges, will be good for the auto industry and this is because the challenges have been met in a better way. In addition, the sheer fact that the penetration level is very low and the GDP continues to grow at seven plus percent, both CVs and passenger cars will witness growth. We will do better. - as told to T Murrali


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We’ll adopt

strategies that make our

products and experiences Anoop Prakash

accessible to all

MD, Harley-Davidson India

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arley-Davidson’s foray into India was preceded by strong groundwork, where we met with hundreds of riders and enthusiasts across the country to understand the market conditions and preferences before making the decision to commence our operations in August 2009. Our research showed that the Harley-Davidson brand not only resonated well in India, but was exceptionally strong for a brand that had not been operating in the country.

Riding Into The Future Analysts predict that the premium segment could represent one-two percent of the total market in less than 10 years, which is roughly 120,000 bikes considering today’s market of 12 million two-wheelers. Furthermore, the mindset of Indian consumer has undergone a sea change. With nearly 50 percent of the population below the age of 35 years, the development of highend biking culture in the country offers strong growth opportunities. Biking is rapidly becoming an extension of the personality for the young at heart which is fuelling this growth. The motorcycle culture is strong here with riders and enthusiasts craving for global riding experiences. India’s rapidly growing economy, rising middle class and significant investment in construction of new roads and highways are quite literally paving the way for leisure motorcycle riding that Harley-Davidson is renowned for, world over.

Despite the economic downturn in 2008, we truly believed in the potential of the Indian market as it had created tremendous economic momentum through a number of well-planned reforms over the past few years. Our belief was further strengthened as we observed a rapidly growing demand for products, experiences and brands that expressed the increasingly confident spirit of 21st Century India—a demand that Harley-Davidson aspires to fulfil. Since the very beginning, we appreciated the importance of the Indian market in our longterm vision of being a truly global company and we were focused on striking the perfect balance between local knowledge and our global aspirations, in order to succeed here. The challenge for us was in quickly gaining an even deeper understanding of our customers and fi nding dealer partners who could fulfi l our customer requirements at the level we expect. We also understood that for us to build momentum in this

new market, an early investment in Complete Knocked Down (CKD) operations would make our motorcycles and customer experience more accessible, and we have been thrilled by the response to our commitment to developing the leisure riding segment in the country. This has given us great optimism about what HarleyDavidson could bring to riders in India. As an industry leader in cruising and touring motorcycles, we believe we are naturally suited to take a leading role in helping defi ne a new era of motorcycling in India. Ha rley-Dav idson doesn’t manage its business directed by revenue and profit margins. Since our foray into the Indian market, we have been committed to developing the leisure-riding segment in India and making our products accessible to our customers. The response we have received from riding enthusiasts across the country has been fantastic and we look

forward to building on this initial momentum. Since our foray into India in August 2009, we have been focusing on building a strong foundation for our business, leading the way in developing the leisure motorcycling segment and offering enthusiasts an opportunity to experience the Harley-Davidson life. In January 2011, we set-up a CKD assembly facility for select motorcycle models for the India market including the HarleyDavidson Superlow, Iron 883 and Forty-Eight—broadening our product portfolio. We also adopted a 360-degree marketing approach that included conducting Harley Owners Group (HOG) rides, Boot Camps, Founders’ Ride, strategic advertising, an interactive website etc. We initiated the Freedom Film Festival in order to leverage Harley-Davidson’s legendary association with classic Hollywood fi lms and broadened the reach of Harley Rock Riders—

our annual rock music property initiated in 2010. All these initiatives have garnered tremendous response from Harley owners and enthusiasts across the country and have brought them closer to the brand. We will continue to adopt and invest in strategies that make our products and experiences accessible to all our current and prospective customers. With presence in over 70 countries throughout the world, one of the most important things we have learned is the critical role that our dealers play in representing our core values and building relationships with customers. Having a strong network of dealers that share our passion and embody our values is important for our success in the long term and is the reason why one of our fi rst priorities has been to recruit the best possible group of dealers in six cities across India where we operate through our dealership network at present—including New Delhi, Mumbai, Bangalore, Chandigarh, Hyderabad and Ahmedabad. In addition, we have already begun the process of identifying dealers in Chennai and Kolkata and will be setting up dealerships in these cities within the next six months. Our dealers have been instrumental in introducing the H.O.G in India that encompasses the true spirit of brotherhood and camaraderie, something that Harley-Davidson is renowned for, world over. Local HOG rides are conducted at regular intervals, led by our dealers, for our customers to meet, ride and experience adventure, self-expression and freedom of open roads. We honestly believe our success in India in many ways has been shaped by the degree to which, our dealer network has been able to connect with our customers and build upon our core brand values in ways that are meaningful and relevant to that market. Having said that, we also invest heavily in training technicians from all Harley-Davidson dealerships in India so each of them is well-equipped to take care of the sales, services and spare parts requirements that we believe are critical to ensuring true customer satisfaction. Across the world, HarleyDavidson dealerships are havens for all who seek to experience and share the joys of leisure riding—offering enthusiasts a range of Harley-Davidson motorcycles, MotorClothes, merchandise and accessories to serve their needs. India has always had a strong biking culture and we are seeing the transformation of this culture from motorcycle as a way to get around town to motorcycling as a leisure pursuit and extension of the rider’s individuality. - as told to Shambhavi Anand


Tab - AM Jan12 pg 51 Tab - AM Jan12 pg 190


Tab - AM Jan12 pg 189

Tab - AM Jan12 pg 52


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We advocated

‘looking inwards’ Sat Mohan Gupta, Director and CFO, Comstar Automotive Technologies

T

he global economic situation faced by the automotive industry has meant weak demand in the markets due to low consumer confidence, pressures on profitability due to spiralling commodity and crude oil prices, and fi nally over capacity in developed markets. Moreover, specific to India are factors like unstable fuel prices, pressure to increase excise duties on diesel vehicles and infrastructure growth not in line with automotive industry growth. Most of the above factors are beyond the control of individual companies. Even the industry forums that urged the governments to relook at some of the issues, have had to face a certain amount of pushback. In light of this, what can companies do? First and foremost, is to accept reality ‘as it is’. Comstar has advocated the ‘looking inwards philosophy. Times, such as these, offer an opportunity to challenge internal processes, question assumptions and revisit strategies.

Challenges Faced Our journey of introspection began a couple of years ago and being an export-oriented company, we have the additional challenges of exchange rate f luctuations and sub-supplier sustainability. Comstar began the process by involving all the functions of the organisation to identify the key challenges to the company, key cost drivers and waste generators—many functions themselves came up by enlisting the challenges, putting forth ideas on cost savings and faster, better and simpler ways of doing things. That eventually led to satisfied customers, some of these ideas led to actions, which are in place even today and helped our company to sustain during the troubled times. The organisation of today cannot rest on the past actions; we have new challenges to face—a young workforce that needs to be constantly challenged, OEMs and suppliers that need to see us as fast and flexible, and other external stakeholders who need to see us as a responsible and value adding company.

New Strategies The need of the hour was to develop strategies around certain core values, which defi ne the organisation, act as a guide and that eventually becomes its DNA. It might sound like ‘old wine in a new bottle’. But for us, it became the new way of doing things. Rather than remain as statements, presentations and on notice boards, today, it drives our day-to-day actions. In the fast-paced world of today, most of the companies possess

philosophy

anything but speed—speed in decision-making, delivery and most importantly in execution. One of the baggages that a company carries is its legacy systems or processes— some of it is necessary, while a lot is ques-

tionable. By challenging status quo helps us to redefi ne processes best suited to our business and complement other core values. Comstar is working very closely on the development of technology that is economical

and faster. Each member of the organisation is charged and together, we are confident that the outcome will lead to a leaner, customer focused, passionate, technology driven company. Also, as a com-

pany that will be known for its speed—in response, decisionmaking and execution. In the end, it is not the beginning or the end, but the journey we take that matters the most. - as told to Akmal Rahman B


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Operational, investment efficiency key to

K Ajith Kumar Rai

surviving slowdown

MD & CEO, Suprajit Engineering Abhishek Parekh Bangalore

S

uprajit Engineering has positioned itself to take the lead among cable manufacturers and establish itself as among the top five cable manufacturers by value and volume globally by end of next year even as it expands its capacity to more than 150 million units per annum. The company is looking forward to end this fi scal with a consolidated turnover of around `460-470 crore. The company’s net sales stood at around `346 crore last fi scal and net profit

stood at around `33 crore. “We have made efforts to reduce our dependence on few customers for our business. We do not have any single customer catering to more than 10 to 11 percent of our total turnover from a particular business line,” said Chairman & Managing Director, Suprajit Engineering, K Ajith Kumar Rai. He added that the key aspect to achieving competitiveness in the current scenario in the auto component industry is to ensure that a company’s cost structure is better than that of its competitors. Rai elaborated that two key elements to making a company

Chakan Plant

competitive vis-a-vis the industry or its competitors is the operational and the investment costs. Operational cost comprises elements like employee costs and manufacturing costs that helps a company conduct its operations. If operational costs are lower compared to direct competitors or compared to the leading industry players, such a cost structure can help a company in pricing its products as well as gaining customer confidence regarding sustainability of a supplier. However, Rai also added that being an efficient player in operational terms is not sufficient. A company with global aspirations needs to have investment efficiency as well. The investment efficiency is largely derived from the difference between cost incurred in terms of interest paid on loans and depreciation benefits derived from building up assets. A well diversified customer base is the key ingredient in surviving any downturn. In order to emerge as a global player, Rai is looking at a sharp upturn in the international business. Ideally a global supplier in cables business

may have equal domestic and export revenues as compared to just five to eight percent share of exports for the company. Notably, the company is not very keen on becoming a major supplier to the aerospace segment as efforts required to get certification and passing quality parameters in the aerospace segment might be better spent in expanding domestic and international automotive segment, according to Rai. The cost competitiveness of a company can help a company in a scenario where the particular company does not enjoy any pricing power on its products. “Our efficient cost structure makes us comparable to a player with product pricing power derived from monopolistic existence or any other unique positioning in the market. Such a cost structure proves critical in a downturn,” Rai added. Though he may not have the pricing power in the same league as Bosch or SKF, Rai is of the opinion that design intensive products like clutch cable cannot be copied easily and offered to customers at a lower cost. In

most cases, there is a lead time of around 12 to 18 months before a cable is designed, approved and developed for the customers. Hence competition through cheaper imports has so far not worried players like Suprajit Engineering. Another source of competitiveness comes from having a business focus and backing up that focus with suitable production capacity. Most auto component suppliers have a tendency to build large scale capacities at single or few locations which caters to different OEMs, aftermarket as well as even exports. Such a strategy can be counterproductive for any player as there is a tendency to divert production to a particular market segment when the demand spikes occur. The company cuts down on supplies to other segments and risks losing marketshare and customer base to competition. Selective automation is also likely to gain importance as quality manpower shortages and rising wages plagues the industry competitiveness structure.


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Improve upon

Girish M Rakhe

cost, quality and delivery

Director & COO, Fiem Industries T Murrali/Shambhavi Anand New Delhi

F

or Fiem Industries, it was indepth understanding of the automotive industry that helped it formulate strategies to sail through the economic downturn in 2008. “There are three major requirements of the industry—quality, cost and delivery. In order to be competitive, one has to improve upon

these three aspects,” Director and COO, Fiem Industries, Girish M Rakhe said. To be competitive on all the three fronts, the lighting component manufacturer adopted the strategy of building facilities related to designing, development and manufacturing in-house. In order to be able to do so, the company set up facilities starting from design, development manufacturing and other proc-

esses up to tooling on their own. By doing so, Fiem could control costs, which is a crucial factor. Previously, the company was dependent upon vendors or third party agencies for several processes and the costs involved were significantly high. Also, setting up facilities in-house only helped them shorten their delivery time. Time is consumed not only during manufacturing processes

but also during the design and development stages. By developing processes within their own premises, the development cycle was also reduced significantly, thereby squeezing the delivery time. “Earlier we used to take one year for product development, but now we can do it in a short period of even 90 days,” Corporate Head, R&D, Fiem, GV George said. The overall re-scoping of the process cycles helps in meeting

the demand for high volumes. The company believes that the future of the Indian automotive industry lies in developing R&D facilities. The move has helped Fiem in achieving 40 percent growth rate last year. It has also helped the company pursuing its ambition to walk the global supply path. Apart from being a Tier II supplier to the global OEMs, Fiem has been supplying directly to Honda Japan.

To be competitive on all fronts, Fiem adopted the strategy of building facilities related to designing, development & manufacturing inhouse. For this, it has set-up facilities starting from design, development manufacturing & other processes upto tooling on their own

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The company claims that all its facilities are according to global standards. It has testing facilities, which are compliant with the regulations of countries including Australia, the USA, Europe and China among others. On the manufacturing side also, Fiem has set up facilities for processes like injection moulding to surface treatment capabilities reducing its dependence on vendors and suppliers. Another strategic decision that has helped in making Fiem highly competitive is the availability of surplus capacity. “At most times, we try to keep up to 40 percent of our capability idle across all plants to meet the high demands that may come up. The strategy helps us in catering to new projects,” Executive Director Marketing, Rajesh Sharma said. The company also plans for the future well in advance. Even before the capacities reach 70 to 80 percent utilisation, it plans for capacity expansion either within a plant or by creating another facility so as to accommodate new orders or projects. “Proper planning helps in smooth progress of project. Our experience of 40 years has taught us this lesson,” Head, Commercial & International Operations, S Narayanan said. Another strategic decision that helped in reducing losses during times is diversification. Fiem supplies to all segments— from two-wheelers and PVs to CVs. It is better not to lay all your eggs in one basket, he said.


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Optimising resources helps during downturn Shashi Singh, MD, AVL India

O

perating in two major areas of work—engine research and development and engine testing equipment manufacturing—keeps us at a “reverse status” in terms of the impact of a slowdown. On the engineering side we have noticed that whenever the downturn comes, that is the time when the OEMs start developing new products to be more competitive and future ready. However, in India, I will not call the current scenario a downturn. The dip in sales has been seen only in Maruti Suzuki (due to the labour issue and production constraints) and a few manufacturers. Other car makers are increasing their market share; although their growth percentage might have been moderated in the last few months. The Indian market dynamics is strong and the growth depends on the internal demands. As long as the Indian economy grows between five and eight percent, we will have a sustained demand for PVs. The other segments of the industry like CVs, off road vehicles, tractors, two-wheelers, three-

wheelers are already doing well. I don’t see any recession coming in; the sag is only in the car segment. Yet the weakening rupee will affect the cost of technically higher quality of products as they will become more expensive because they are imported. However, there is a bigger compensation for exporters. Yet, exports are not the moving force in Indian automotive sector, but inherent demand that will fuel the growth. We have been growing across the group. AVL Austria has grown by 34 percent, AVL China has grown by 60 percent, and AVL US has grown by around 20 percent last year. However in case of India, a change has been taking place in terms of manpower costs. The manpower cost increase in US and Europe are around three to four percent, while in India the general trend is in the range of 15 to 25 percent. Afew years ago, the cost of manpower in Europe was around seven times higher than India. Now it has shrunk to 5:1. This is an area of concern for us. One of the key steps towards strengthening our economics on

the engineering side is to push 10 percent of the turnover in R&D, and even use our capacity towards internal R&D. For example, during the downturn in 2008, AVL India, decided to develop a two-cylinder 800cc diesel engine of its own, which is ready. Now, we will offer this engine to the market and we are talking to five OEMs. On the production side, in India, we have a limited production capacity and are not affected by depression because we are more on emission testing, which is required. During these times, we use resources for training purposes. The biggest problem today is that lots of people sell expensive equipment but it will not be effective if the customer cannot use it fully. For this, we have a skill centre, where we arrange to fly in application engineers from Austria and all over the world—even outside AVL also, and organise training for the engineers of the OEMs. This enables them to understand the value of equipment and also helps us in promoting our products apart from helping in the bottom-line. AVL India is the only one to have

started this kind of programme in the whole group. We have been experiencing a decline in the bottom line because of the inflation and interest rates, but we are not worried about it. I would insist that if you offer a value product, the profitability will increase, but if you continue to flog what you have been doing for the last ten years then the margins will go down. Today, Indian buyers are very knowledgeable. For example take the Tata Nano. This product is not as good as expected, as compared to new models of GM and Hyundai, which are more expensive, but doing well. Thus, if you are able to come up with innovative products which are perceived to have value, people will pay for it. At this point of time, the AVL India’s strategy is to sustain the growth rate of 30 percent, which is quite phenomenal. We are not planning for any downturn right now but our main focus has been to get more heavily into EVs worldwide. India is unfortunately lacking in this but nearly 30 percent of our investments and growth are in electrification at

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the global level. In India also, we have signed up a major project with M&M for their new hybrid SUV, which we are developing. The company will launch the vehicle by 2013. Most of the group’s production was done in Austria but now the international OEMs like—GM, Bosch are forcing us to look at production to be more cost competitive and enter in countries like India and China. We have started to produce some of the products here for the global market. Fuel conditioning equipment is the fi rst to have been produced here, and the next in line would be the fuel meter. However, we will not change what is being developed in Austria and shift it in India; rather we would produce new products here, which will be required by the market. Also, we aim to reduce some of the unwanted functions from the equipment, to be more price competitive and maintain the quality, else we would not be able to supply to the world market. - as told to Nabeel A Khan


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Agility And Rigour: The Yin And Yang Of The Claude d’Gama Rose, Country Head, Continental Group, India & MD, Continental Automotive Components

I

n the last three years, we have seen it all in the Indian automotive market, the lows, the highs and the in-betweens. Fortunately, the duration of each segment of the business cycle was less damaging than was the case in developed markets. India, like China, saw a quick rebound from the bloodbath of the second half of 2008 already by the fi rst quarter of 2009. Now, after

Business Cycle

a dramatic 2010, the market seems to be holding its breath since the start of the second quarter of calendar 2011, waiting to exhale. While a lot of attention is given to the severity of the change, it is equally important to take note of the swiftness of the change and the short period of each segment. All three aspects coming together constitute a challenge to the best of companies.

It is difficult nowadays to refer to managerial challenges and responses without resorting to jargon! However, I cannot think of a better description of required organisational capability in such a situation than “agility”. This is one of the most critical takeaways from the past three years. Organisations need to have the alertness of mind to realise that change will happen shortly and dramatically. Especially when this happens after a period of success, there is a probability that some would think it possible to ride out the dow nturn w ith business as usual, in the hope or belief that it will be short. The bad news from the recent cycle is that, even if it is short, the gradient is so steep that even a short downsegment can over whelm the organisation. The leadership must therefore demonstrate the will to summon their organisations to change. This only works when you have prepared the organisation for what you must do, when you have the communication networks in place to reach through the organisation; or when you have built the stakeholders’ trust that the hard actions required are in the company’s interest. And of course it is important to have a plan drawn up in advance so that you can move quicker into implementation when change is necessary. This has been one of the major improvements in the global organisation of Continental during this traumatic time. While we in India are more of less at the periphery of the glo-

bal storm, we are mandated to learn this behaviour. When refocusing the organisation, speeding up, cutting down, there is a risk that one sacrifices rigour. W hen you have got it right one hundred times, it is so easy to assume that the hundred and first time will be right as usual. Faced with schedule pressure in the development process, it might appear reasonable based on past experience to cut down on process checks and test schedules. Rigour almost demands a superstitious belief that something sinister is always lurking just outside the boundaries of the process, an obsession that keeps you honest and safe, fixated on process discipline. This is what we have focused on doing worldwide in Continental; being agile without losing rigour, being lean, cutting waste but retaining value. Quality first, without compromise, demands this rigour. We in India tend to be more intuitive than others. This is our strength, but at the same time can be our undoing. Therefore the challenge for us in India is to trust and practice rigour without killing intuition. A key example for us is the need for a harmonious duet of agility and rigour. We were faced with this challenge during the 2008 downturn. The response to the dramatic drop in volumes was cutting off inventories, bleak forecasts and consequential reduction of capacities. The sudden uptrend caught most players all along the supply chain short on resources. On-time alloca-

tion of limited vendor supplies to several worldwide plants facing demanding customers unwilling to miss out on the volume opportunity challenged the core logistic processes of the company. In an industry as demanding as the automotive industry, where perceived quality problems will not even spare its most respected suppliers; in an environment in which the industry can lose 30 percent of its volume and recover much of it all within a period of two years; in such a situation, the winners will be those who can fi ne-tune their organisation’s balance between agility and rigour. For Continental in India, the recent past goes beyond the challenge of the business cycle to responding concurrently to the long-term growth opportunity of the Indian industry. In May 2011, we opened Phase III of our Tech Centre in Bengaluru and, moreover, our Rubber group has recently made a major strategic acquisition, of the Modi Tyre business, which will again increase our footprint in India considerably. Asia is a very important market for Continental. We are looking at substantial growth in Asia and are confident of achieving it too. We will continue to invest in both development and manufacturing to introduce future technologies to this market, and aim to retain our leading position. We intend to adhere to stateof-the-art, yet cost-effective technolog ies w it h sca lable product options to meet the future requirement at affordable cost and be a part of the technological innovation in the market. To reduce the development costs, we constantly reuse our learning in one market to develop products in other markets. Keeping the cost factor prime, we analyse and understand factors that add to the cost and work on arriv ing at affordable solutions, without compromising on the features. We focus on system integration at all levels to reduce costs; right from designing the basic architecture to software integration to reducing the weight/content of components. If today ’s happen i ngs are tomorrow’s histor y, the management t heories t hat were drafted in the last three years should be the curriculum of any premier B-School globa lly in t he years to come. Needless to say, it is an interesting time for management experiments, and I am happy to be a part of this experience. - as told to T Murrali


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Increased exports,

diversification will fight

gloom Prabhakar Kadapa, MD, Avtec

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n my observation, two vital things are happening in the current scenario. Firstly, the input material costs like steel, casting, rubber, copper, aluminium has gone up. Secondly the indirect costs like that of petrol, diesel and interest rates are moving northward. Another major concern is the weakening rupee. The weaker rupee is good for exports but bad for imports, and many companies like us engage in both exports and imports. The manufacturers are not able to pass on the pressure to the customers, the reason being that they are also impacted due to the rising interest rates. Consequently, the OEMs, vehicle manufacturers as well as the Tier I suppliers are under severe pressure. Having gauged the situation and weighing all the measures, we have started focusing on a three-point agenda to maintain the health of the company. It was in the early part of the year that we realised that the tough days lay ahead. We increased our exports; started focussing

on Value Analysis and Value Engineering (VAVE), productivity and diversifi cation as a way to de-risk the company’s profi ts. However, we did not shy away from investing in the expansion, but executed the same judiciously. We have increased capacity and are trying to increase the exports wherever possible. Our 15 percent turnover is coming from exports and we plan to raise it to 18 percent of the total sales revenue in the next three months’ time. The latest customer was Caterpillar in the US. The exports absorbed a supply of `40 crore this year. The opportunity of higher exports can help substantially so we have started exporting more volumes of products.

Productive Point In a way to increase productivity, the implementation of multiple machines handling— that is one man handling many machine—has played a critical role. Also we have additional focus on VAVE at the entire cost chain—be it material or

product design—keeping the quality levels intact. We keep analysing what can be done to a product in terms of an alternate way of manufacturing, or using modern tools and techniques thereby we can even-out the size of the product. Many a times, we remove the unwanted features. Being bulkier is not very important; rather maintaining strength is the key. We constantly debate on VAVE and decide on the capex required for the new technology implementation. This year, the investment on machining alone was about `80 crore. And this mostly went into putting up a forward integration, which we started doing since April. Distribution of manpower in right way is yet another important factor for the increased productivity. We don’t always recruit people; rather we redeploy them. For Daimler, when we are setting up a new assembly line in Pithampur (MP), we are using the same trained manpower, which will help us become more competitive. Daimaler has developed a

nine tonne LCV which will be launched in a couple of months in India. Avtec will be supplying a four-litre diesel engine for this. We will supply hub-reduction components for heavy duty trucks to the same OEM from a new facility being set up in Hosur. The new assembly lines have been established in Hosur (hub reduction) and Pithampur (for the engines) with an investment of `40 crore. The investment for some critical thing that is specific to the product will be funded by Daimler.

De-Risk Generator The company is launching genset for which it has already stated building a dealer network. Firstly, it will be launched in the eastern market, which includes West Bengal and Bihar. The genset can operate in multiple fuels like CNG, PNG, LPG and biogass while the second category is diesel genset. The genets capacity will be between 10 to 30 kilowatt and will be priced between `two to `three lakh. However, we will also launch a 60 kilowatt genset in the coming year.

In each state, we plan to have at least four dealers to sell the product. We will also export it to Bangladesh and Middle East. This is an area where we thought of de-risking. Our main target customer for the product would retail shop owners, villa owners, and offices. We are also looking at acquisitions. For acquiring a company, it is important to see the kind of intellectual property rights that the company has and how can we make the business sustainable in existing conditions or by bringing some improvements, or while making India a back office. It is important to create a synergy between the capabilities being offered by the two locations. Initially, there were talks of buying a foreign company, but today the same cannot be considered. It has to be managed in the host countr y. Indian manpower can offer analysis support at very low costs. Earlier, India was a manufacturer but today it is capable of providing solutions to all issues. - as told to Nabeel A Khan


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Outlook of

entrepreneures will determine C Siva Kumar Chief Executive, Prabha Engineers

T

he global market today is a dynamic yet an enigmatic environment. Organisations today, need to be extremely agile and adept to these changing environments and constantly adapting to different dynamics that the market comes up with. There are different aspects that impact the environment today. The external ones are the challenging ones, which an organisation does not have any control over—like the global fi nancial meltdown, interest rates, recessions etc. However, there are stronger aspects of business like HR practices, quality frameworks, lean practices and strategy that are internal parameters, well within our control, which, when addressed effectively, can change the way an organisation works. Successful and strong organisations are those that are nimble, embrace change and adapt to dynamic market conditions and those that don’t often fall by the wayside. As the saying goes,

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Fight

market pressures to stay

competitive Deepak Chopra CEO, Anand Group

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he steadily rising interest rates, government’s ineffectiveness to control inflation, and scams coupled with gloomy news and predictions are defi nitely raising concerns in the industry. The current environment has made people cautious and even those who were planning to start new projects are on wait-and-watch mode. This goes without saying that this is no exception at the Anand Group—we are also defi nitely more careful in initiating completely new projects. The fi rst impact of the current slack in the trade is reflected on the growth projections of our group that has been trimmed to 18 percent from previous projections of 27 percent for FY12. However, we feel the lull in the market is rather a blip and will rebound very soon. The current fi nancial year will still be better than the downturn of 2008-09 in terms of growth percentage. The reason for this is that the fall in demand is not across the entire segment but limited to passenger cars, while commercial vehicles, agriculture equipment and two-wheelers are still doing well. The Anand Group has the advantage of being fairly diversified across several segments of the automobile industry, which has in turn ena-

bles us to balance our business. Yet, I am concerned because of the impact of global market trends in India, as our country is now connected with the western economy. Despite all this, I feel that the automotive industry in India should grow at around 15 percent in the next four years. It is possible that in a few years it will grow as low as two percent while in some years it can touch a growth of over 18 percent. May be this fi nancial year, is one of those years, which will see a lower limit of growth. The demand of automobiles in India is not going to be down as the per capita car is still very less in the country. Looking at this opportunity, we are hopeful to touch a turnover of about `10,000 crore by 2015-16 from `5,500 crore in FY12 (projected). This growth will be coming from both the existing business and newly established business. Having spoken about the top line, it is equally important that we will try to balance our bottom line as well.

Calculated Expansion It is very important to be prepared to fight any pressure to be competitive in the market. We did take measures in 2008 to be competitive and preserve profit margins and similar strat-

egies are being implemented this year. Post-recession of 2008-09, the demand has increased very fast and we were short of capacity in 2010 including from our supply side, which had a negative impact. Thus this time we have to be much more cautious in terms of cutting down anything so drastically that it is difficult to come back. I think, 2012 may not be so good but we hope that 2013, 2014, 2015 will be better and that’s why we believe that as a group, we will be doing at least `10,000 crore by FY16. Yet we are taking a number of cost cutting measures. We would look at reducing all kinds of waste apart from taking other cost cutting measures that we try to implement by revisiting our own cost structure. We are not only focusing on the manufacturing side but also the softer sides like travel and other administration expenses. While we are careful with our capital expenditure in adding new capacities, we will not cut the expenditure mid-way in the running programmes. Six months ago, we were proactive in terms of looking at inorganic growth and searching for opportunities for new products and acquisitions, but now we are much more interested in doing things in India rather than

A Filter Manufacturing Unit Of Anand Group

A range of components from Anand

overseas. We are interested in introducing new products with our existing partners. The commercial vehicles are doing well and so we will try to strengthen our presence with new products in CVs and two-wheelers.

Stunting Poor Quality Initiating a programme to cut on the running costs of poor quality such as rejection from the customers, warranty costs, inhouse rejections and premium freight, has helped us significantly. At the same time, we are also working on making our suppliers more efficient because if they are indulging in wasteful habits or activities, then those will be recovered from us. We have been continuously trying to help out suppliers to cut down their waste. When we started this programme around four years ago, the cost of poor quality was in excess of 2.5 percent, which is now reduced to 1.4 percent in December, 2011. However, our target is to touch 0. 5 percent in less than three years. Some of our group companies are already at this level. In continuation of building

a strong fencing to deal with all kinds of pressure, among many majors we have adopted models of stablised production that is aimed at reducing the stoppages of the products. Attaining OEE (Overall Efficiency of Equipment) in the excess of 80 -85 percent will be ideal for our group but currently OEE at most of our plants are 60 to 65 percent; therefore there is room for improvement in this direction and we are focusing on it. Improving OEE will help us utilise the existing facilities better besides, reducing the need to invest in new facilities. We track the ratio of value addition to the total manpower cost. The most important pillar, which will build the roof against all kind of pressure, is innovation and research and development. We feel that in the coming days, in order to be ahead, it would be imperative to produce products that give higher value to the company. For this we must have capability to design product in-house for which we need a strong R&D. In the last three years we have decided to invest five percent of the total capital expenditure into R&D which will continue. - as told to Nabeel A Khan


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Presence in

aftermarket gave the S Ganesh MD, Liners India

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rom the beginning, our greatest concern was our capacity, which we were lagging behind in terms of the market demand. But we were able to manage the capacity only because of our strong pres-

ence in the aftermarket. During the global meltdown we did not lose much on domestic market, but we lost in the export market due to the sudden closing down of operations of our major customers. However, from 2009

onwards, the domestic OEMs market picked up, which helped us to grow along with them. When we lost in export market, we diverted the capacity to aftermarket. Earlier our company was meeting only about 60 per-

cent of the aftermarket business owing to our higher exposure to the export market. Now following the slowdown, the export market went dry and we started supplying to the domestic aftermarket and Indian OEMs, as it

was steady till 2009. After 2009, the export capacity that was diverted to aftermarket was again diverted to OEMs. At a point in time, we realised that there is no product to supply for aftermarket, so we started outsourcing for aftermarket business. While outsourcing was our business model earlier too, for aftermarket, after the slowdown, we adopted 100 percent outsourcing for the same. Suddenly, we saw that Indian OEMs doubling their off-take in 2010 over 2009 (trend still continues in 2011) This has really insulated us against the meltdown to a great extent. Of course, our balance sheet was hit for three months between October to December 2009. We started recovering from January and things started settling from April onwards. While almost all our production is directed towards the OEMs, we outsourced to cater to aftermarket and we have dedicated suppliers for this purpose. However, these suppliers are not adequately equipped with sophisticated infrastructure that could meet the demand of the OEMs. Still, they have the advantage on price. Hence, we have set up our own inspection systems and quality control systems to ensure that we supply only quality products. Today, the OEMs want sophisticated and better products for which, the cost of investment keeps going up. Our products sophistication demands not just higher production capacity, it involves a higher investment. This has a huge impact on the basic price of the product and this is one of the major reasons for us not to show much interest to expand very fast. Aftermarket gave us the strength and now all the companies are realising its potential. Earlier companies used to supply to aftermarket whenever there was a drop in OEMs’ consumption. But today all the companies are outsourcing and trying to remain in aftermarket. Our aftermarket is handled from Rudrapur facility, where we manufacture internally and also outsource. We have made it as a separate division, which is not connected to Liners India’s OEMs division in Vijayawada. Issues relating to sales strategies, brand, problems and compliant are being handled from Rudrapur for aftermarket business. We are developing effective processes to achieve BS IV norms. While some of them are under trial, some we have given to our customers. We are also developing engines for new generation vehicles for higher capacity like

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Focus on companies that give

returns and not incur too much risk

MK Puri Director, Global Auto Tech Shambhavi Anand New Delhi

I

t was a conscience decision for Global Auto Tech, to reduce its customer base. “Two years ago we reduced

some of our customers whose business was smaller. Too many customers can put too much pressure on the company,” Director, Global Auto Tech, MK Puri explained. Its current strategy is to increase business with the

existing customers. Earlier, the company depended heavily on exports. But in 2008, when the economic slowdown hit the industry, several export customers did not take the booked materials. The com-

pany experienced a setback for a period of eight to ten months. “We have become careful in choosing our customers since the downturn. The smaller companies are slightly risky. One should focus on companies which will

give us returns and not incur too much risk,” Puri suggested. Global Auto Tech is also trying to strike the right mix between domestic and export business. While the domestic market is growing and offers tremendous potential for the future, the export market is quite quality conscious and helps raise the quality standards, making one competitive. Puri elaborated that during recession, quality became a major issue for the international market. “The feedback from the international customers helped us in raising our own standards. Based on the feedback we brought certain small changes in our processes, which helped in improving the quality of our products,” Puri added. The changes brought about were small but made a big difference. For instance, the style of packaging the products that were meant for export via sea route was changed. This helped in preventing corrosion of the components. Exports also offer the advantages of the exchange rates. The company has several new business opportunities in its kitty for the next two years—it a mix of both domestic and export business. “We are getting more business from our biggest customers Maruti and Subros. With Maruti trying to brace up for the slack in the past few months, growth will be fast. With Maruti, the company has widened the range of products it was supplying earlier. With Subros entering into bus AC business, Global Auto Tech is also diversifying. It will supply a wider range of products to Pearsburg India and Pearsburg USA. It might increase its supply to TRW taking the current share of exports from around 22 percent to upto 30 percent. Eventually, the company plans to add around seven to eight die casting machines to the existing ten. These machines may be imported either from Japan or Taiwan depending on the value of Japanese Yen. The company is planning to get its raw material in liquid form. Earlier, it used to get solid ingots. “We will get the raw material from our supplier who will set up a shop within our premises. Though this system of obtaining raw material is popular in Japan, it has not been commercially tried in India. We might be the third company to try this on a reasonable scale,” Puri explained. This will help in providing better quality of raw materials and reducing the inventory. The process might commence in another eight to nine months. Inspite of the current blip, Puri expects a growth of up to 40 percent by next year with the new business that the company has obtained.


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Innovate to keep ahead of times Arvind Saxena, Director of Marketing and Sales, Hyundai Motor India

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s India has become the integral part of the global market, it is very difficult to be absolutely isolated from global fluctuations or events occurring around the world, be it within an organisation or outside the organisation, especially in the automobile industry. And this was proved during the 200809 meltdown. We felt the effects more at that point of time because we are major exporters (of automobiles) from India, and we had two bases in Europe, which were hit by the slowdown. What we have learnt actually from there is, clearly that we need to keep innovating to remain ahead in the times like these, because in such a state of affairs no one has control. As an organi-

sation, I cannot control the Indian economy or world economy but I can align myself to do better. Hyundai is an organisation that has been focusing on few areas— one is our product line-up, to keep creating excitement around our brand worldwide, which is by adopting the new design philosophies; a fluidic design in which, all the new cars are coming. Secondly in terms of technology, I think we have been able to procure state-of-the-art technologies, which includes the kind of features we are loading into it. Thirdly, and the most important is the quality of the cars. These are the few things that we are doing globally and getting fairly good results. If you look at the post-2008

The new launches have helped Hyundai keep the excitement around its brand

period, US is yet to recover, but Hyundai has come out very strong in that market. Even in Europe for that matter as HMC, we have done major improvement in terms of our spread in that market. Similarly in India, if you see 2008 onwards, we have several launches, major ones would be i20, Verna, and Eon, in addition to smaller model change with i20 and i10. It is our firm belief to keep creating excitement around the brand because as an organisation, I cannot do much to the interest rates, the costs of fuel, but we still see huge potential in this country by virtue of low penetration in terms of automobile ownership. We have been trying to reach this un-penetrated market through our new technology and new products. And that has been making a huge difference to us, because what we found the most difficult was how to reach to our potential customers. These new models create such an excitement in the market that we get huge number of enquiries and footfalls. Once people come to the showroom, I think they are considering new cars, be it our brand or others, but it gives us a good chance to interact with them with our product offerings and that’s what has been working for us. Even in the last six months, when the market has been very tough, we have been able to do better for ourselves.

As an organisation, what we are doing is to bring those products which are very relevant to the Indian market and that will excite Indian consumers enough to look at Hyundai. Some of the products which we are bringing here are adoption of our global product portfolio while few of them are specially created for India; this is because we believe that in some segment such as the small car segment, Indian needs are very different from those of the world; this is what we realised through our detailed research carried out to monitor the changing preferences of the Indian customers—in terms of design, features and life style. What we are addressing today will not be the market four years down the line. Because today’s demand of the customer is different, and after four years the demand will vary, thus we have to foresee the change. We do this research every year to keep the track of the changing priorities of the customers and based on our understandings from this, we can plan a product that will suit the requirements of the market after four years. Moreover, India is a very young country with increasing employment opportunities, thus more younger people are buying cars today . I bought my first car when I was thirty year old but my son will buy a car much earlier. His choice will be very different than mine when I bought the car. We are trying to understand this, and the more we are able to comprehend the better we will be able to do. If you look at the two of the recent launches–Eon and Verna, Eon has been specially designed for India so it has virtually everything that Indian consumers need today, which includes— fuel economy, styling, features, affordable price. While if you look at Verna, it is a part of our global product line-up which is being sold in many markets of the world. It is sold in the US—in the brand name of Accent; it’s sold in Russia and Korea but the one we are selling here is loaded with high-end features because the consumers who are buy-

ing it in India are very different. The people who buy it in the US and Korea are at an entry level while in India it’s a proper midsize sedan where it is a second or third car for the owner. Our understanding of the customer in this way has helped us evolve and create products which are more relevant for India. Like for instance, the overseas market small car is an individual car but in India even a small car is some times used as a family car. So if you see the Eon, there is enough space inside. The general perception is that an entry level car is a very simple car, but we believe that even this car could have styling and can be loaded with many features. This kind of understanding and coupled with, a very large number of localisation is helping us greatly. Whatever segment we are in, India is a price sensitive market and in times like this, our effort is always to localise as much as possible. Even four years ago, we launched i10 with about 92 percent localisation. I don’t think there will be many examples that you will fi nd in India where a car is launched with over 90 percent localisation. Then, Eon was launched with about 97 percent localised content. It allows us to keep the cost in check, and while doing this we cannot compromise with quality, fit and fi nish of a car. This is the challenge with which we always have to grapple. HMC, vendors and our R&D centre is playing a very vital role in making it localised without affected the quality. We hope to continue to introduce at least three products every year. However, the current market condition is still very short term. If you look at medium or long term forecasts, we are still in safe territory and we would be a growing market. In a situation where most markets may not grow substantially, I think our contribution to the total business of HMC will only increase and which would means our importance portfolio worldwide will also be boosted. – as told to Nabeel A Khan


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Fluctuations in

value chain needs to be Neeraj Kanwar Chairman, ATMA

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erhaps nothing reflects the macroeconomic indicators better than the performance of tyre industry in India. In the automobile industry, movement of goods, road infrastructure, commodity prices—fluctuations in the fortunes in each of these vital areas impinge directly upon the growth of tyre industry making it one of the most vulnerable to economic swings, be it up or down. The year 2011 began on a positive note for the industry but the early signs of an economic slowdown were visible as the economic growth slackened in the fi rst quarter of the calendar. From 9.4 percent growth in fi rst quarter of fi scal 2010-11, the growth slid to 8.3 percent in the last quarter ending March 2011. Unabated inflation, hike in fuel price, hardening of interest rates and rise in cost of fi nance have all impacted the economic growth and in turn tyre industry’s growth as well in the fi rst three quarters of current fi nancial year. In the first quarter while

From production of rubber to high-tech tyres fitted on new-gen vehicles and rolling out on village roads to highways, the tyre industry is the richest in the value chain. However, any weak link impacts the entire value chain gravely the sales were still up, the tight squeeze on profitability was clearly visible. The continued rise in raw material prices especially natural rubber that touched historic highs of more than `250 a kg put substantial pressure on bottom lines of the industry. While the tyre sales went up by 35 percent during the quarter, the net profit to net sales ratio came down from 2.7 percent to 0.6 percent when compared to

curbed the corresponding quarter in the previous fiscal. It was during the second quarter ended September 2011 that the tyre industry sales also started slackening before piercing down last year’s levels mirroring the scenario in automobile industry. Put together, in the fi rst two quarters while the passenger car production is up by six percent, that of truck and bus tyres, accounting for over 60 percent of the industry both in value and tonnage, is up only by three percent. The inability of the industry to pass on the rise in raw material costs in a slowing economy has dented the profitability, which has touched the lowest as seen in recent years. The story is no different in third quarter as well though officially the tyre production figures are yet to be compiled. No doubt the natural rubber prices have come down by 15-20 percent; they are still three times the prices operating two years ago. In fact the wide swings in automobiles production as well as commodity prices have put the planning process in tyre indus-

try in disarray. Taking cue from the dizzying rise in automobile production and the expected following, the tyre industry has lined up investments of over `12,000 crore towards additional capacities, in particular, the truck and bus radial tyres. Following the launch of new generation commercial vehicles and coming up of better expressways, the demand for radial T&B tyres has seen a fi llip. The radialisation in T&B tyres that was just about five to seven percent two years ago has reached 15 percent. Majority of the players in the industry are expanding capacity to be ahead of the demand curve. However, the economic slowdown has played spoiled sport. The demand for tyres has weakened at a time when the industry is in the midst of expanding capacity. The low off take will nullify any benefit that could have accrued to the industry in view of softening of natural rubber prices. Earlier the tyre industry could not reap the full benefits of boom in economy and vehicle produc-

tion as the unprecedented rise in natural rubber prices and inadequate availability pulled down the growth. Now that the natural rubber prices are sliding down, the cost of power and the other raw materials is fi rming up. The heralding of new year, therefore, does not augur a very rosy picture for the industry. From production of rubber as an agri-produce to high-tech tyres fitted on new generation vehicles and rolling out on village roads to highways, the tyre industry is amongst the richest in the value chain. However, any weak link impacts the entire value chain gravely. For industry to take its well deserved place under the sun, it is mandatory that the wide fluctuations in various components of the value chain be curbed. With support of the government, the industry is working towards the same. The economic volatility in the last few years has been a great learning experience for the industry to hedge its bets. Hopefully, the year 2012 will see the industry turn over a new leaf. - as told to Nabeel A Khan


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Photograph: Dileep Prakash

The most important factor tor for growth of the auto o industry will be

Praveen Agarwal,

Roads

Chairman, Vikas Group

A

s the automotive industry is at the front end, it is the fi rst to feel the pinch, and is amongst the last to get out of slowdown. We started feeling it as soon as the growth began to lull. However, we are not cutting our capex and remain very bullish in the market as we feel that there are no switch offs and switch ons. We have a definite plan for next five years, which include achieving the number one status as a compressor maker in the country. Whatever is happening right now is short term downsizing that needs to be managed. The impact of the previous slowdown was till 2010 and immediately after that, the market was booming. This year also, it is expected to get better because of the good rains that we had, the rural market is going to be very buoyant and that will add to the economy. Though there is pressure in the overseas markets due to the credit crunch, India is a self reliant economy, our problems are very internal. At the same time, I am sure that the growth pattern may not be very good but even if we achieve around seven percent, that would be excellent compared to world economy. Basically, whenever there is a lull in the growth, that’s the time for reconciliation and to see how you can do better and retrospect. While the aftermarket is also a good option, we will also look for new markets like Middle East, South America, South Africa. Going forward, the most important factor for the growth of the auto industry will be roads. We have enough people; and money power would automatically come in. Roads are going to be the one of most defining factors, which will in turn also define our economic factors. As long as the roads keep getting developed for the transport sector, the industry will continue to grow. Another strategic change is to increase the volumes of the products, rather than to diversify. We will also incorporate more of backward and forward integration into our processes. Mergers and acquisitions are very important as expansion will be in around our existing products. We are in the process of acquiring a company in Europe. We look towards a balanced growth. Balanced aspects of the customers, HR, investments and returns and harmony of these elements are the fundamental factors for success. Primarily, the group wants to achieve $one billion of total sales revenue by 2015 at the top line and achieve three to four percent of profit margins. In FY11 the group’s turnover stood at `1,200 crore and this year it is expected to touch `1,500 crore. This can be achieved by

employing all techniques of better manufacturing, leaner processes and improved productivity. The capex that we have been maintaining in the last two to three years was between `60 and `80 crore annually, which we might

increase to `80 to `100 crore. And 10 percent will go into R&D and innovation. We have the advantage of being integrated; for instance, for compressors we have our own pressure die casting and machining that provides us with

a lot of value within the company. Similarly, on other components we have our own foundry where we have the capacity of close to about 25,000 tonne annually and a large quantity of it is being machined in-house. For the heat exchangers,

we want to integrate by producing components that will go into our heat exchanger. The forward and backward integration plays key role in making us competitive in the tough times. -as told to Nabeel A Khan


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Downturn is the best time to Mahesh Ramamurthy

invest

Jt MD, Vibromech Engineers & Services

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uring times of downturn one of the most critica l t hings is cost; the company has to be very aggressive about the costs and obsessive about how to control it. They can even look out for how to convert most of the fixed costs into variable costs during the good times itself. It may vary in proportion to the sales or production and therefore, the first target that should be the streamlining the fixed costs.

Trimming Costs Reducing the fixed overheads as much as possible will help the companies not only during normal times, but help during troubled times. When it comes to cost such as in labours, companies can outsource, so that it becomes the variable cost and benefits the companies not to be stuck with the heavy investments. Another bigger part of the fixed costs are components like bank interest; companies have to be very careful about it. For avoiding interest costs, the

best way is to look carefully at what is essential expenditure and not to borrow unnecessarily. One of the vital areas of consideration would be to look at the opportunities of converting the fixed expenses into variable expenses. If it is capex, it can be converted into lease arrangement, where you lease out the machine instead of buying it and paying the interest. In Bangalore, we had an operation, where irrespective of whether we manufacture a part or not we had to incur a lot of fi xed costs like electricity, transport and labour. We consolidated our company during last recession, and it helped us to cut down our fi xed costs. If you have an ability to invest and wait, then the downturn is the best time to invest because you get fantastic deals.

Cash Flow Management The most important thing that companies have to watch is cash f low. It is always possible that companies may have good cash reser ves,

but cash f low management is ver y important to keep the system running in times of pressure. Watching carefully that the company gets the payments on time and take some steps to ensure the same. If the leadtime is long, companies have to be very careful about how to maintain the outf lows. During the downturn, most of the banks normally get nervous. Thus we should ensure that the cash f low is consistent, which will help to create an impact among the banks and a good degree of confidence in our ability to rise. Companies should also avoid blocking funds in unnecessary materials and inventories. If the cash f low is well managed, the companies can literally ride out of any troubled time. This was the lesson we learned during the last recession.

Alternative Products The big drop came in 2008, when the volume dropped in both domestic and exports market. But the domestic market

drop was only for two to three months. The export volume took a while to recover. We have taken a lot of effort to de-risk our company. We are into auto business but on a regular basis we make sure that we don’t expose ourselves to one particular sector. We try to level out our exposure to a particular sector, in such a way that if one sector is not doing well, another will help us to stay stable. Therefore, we also supply to stationary engines and marine engines.

Develping Bond With Customers During normal times, companies keep in touch with the customer, but it becomes more important to be in touch with them during downturn. This helps the companies to know how the customers have been forced to react in such situation and to get the long-term and short-term pictures clearly. The more you communicate with the supplier and the customer, the better they will help you to understand their expectations. When it is ful-

filled, companies can form a strong relationship w ith customers or suppliers. As companies exist because of customers, being close to them is very important. Even more important is communication with the people internally. More the company talks openly about the troubled times with the employees, the easier it can win their trust. Our HR team had put together a list of simple presentations on what people should do during the recession personally. Usua lly, I meet a ll my employees once in a month for the interaction, but during the bad times, we had a weekly meet with the entire staff. As I strongly feel that the more you communicate with the employees, the more you can make them understand. There are certain things that will help the companies to ride the recession much better than others. These a re cont i nuous i mprovement culture, qualit y and productivity improvement. - as told to Akmal Rahman B


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Thermal Engineering is the

way forward for us Ramesh Suri Chairman, Subros

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he market scenario is certainly not very encouraging as of now, as the industry and economy are going through a period of low demand due to inflations, high interest rates and slow growth across almost all the sectors of the economy. In such a scenario, the GDP projections and industrial productions indices are to be closely watched. Increase in the raw material

prices and unfavourable foreign exchanges, are big concerns for the industry. The whole economy suffered terribly because of these challenges during the year 2008. We are continuously taking steps for improving our operational efficiency including through VA/VE, yield improvement and localisation, for remaining competitive for our future growth. Our fi rst move is towards enhancing our technolog y

A view inside the plant

absorption and utilisation of the same to improve the competitiveness of our products, both in terms of performance and cost. Besides this, we are also working on strengthening ourselves into new product segments like buses and commercial vehicles and thermal products to provide complete solutions related to thermal engineering to the automobile sector or for related industrial users. Looking at the global business scenario, exports certainly do not seem to be a promising option. Thus, we are not inclined towards the same. We are expanding into a range of thermal products and also establishing manufacturing and product development capabilities in Gujarat (Sanand) and in Chennai. This is to gear ourselves to meet our OE customers’ demands to maintain our leadership position. The Gujarat plant will be spread across the 10-acre plot and phase one of the plant is operational with an investment of `nine crore. The demand for capital goods and investments in the industry

Work in progress at Subros plant

seems to be down. As far as our company is concerned, the turnover for the fi nancial year 2010-11 was `1,203 crore (gross) and we expect to achieve the turnover of `1,210 crore for the fiscal ending March 2012. In 2008, the business scenario did not affect the volumes for automobile sector so significantly. We took quick actions for mitigating the downturn through actions for consolidation including capacity utilisation, material

cost down by expediting our localisation/ VA/VE plans for our products and overheads control. All these actions worked well for us. We hope we will sail through this slowdown in the same manner. At the end, I would assert that human resource is one of the key drivers of the business. Having competent teams and sound leadership at all levels can only sustain. - as told to Nabeel A Khan


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Platform sharing to improve competitiveness ers from hiking vehicle prices, the need to launch more models will increase cost pressures.

Small Cars Sales & Market Share

Competition most intense in the small cars segment

Sridhar C Head, CRISIL Research

Hetal Gandhi Team Leader, CRISIL Research

C

RISIL Research expects the Indian automobile industry to more than double by 2015-16 from 2010-11 levels. More global automakers are setting up independent operations in India to capitalise on this growth. They are also driven by an underpenetrated vehicle market and relatively lower operating costs. Rising competition from these players has offered Indian consumers newer models at competitive prices. Consequently, this will pressure existing market leaders to launch products more frequently at better prices, thus pushing up their cost pressures. CRISIL Research believes that localisation and platform sharing will enable Indian automakers tackle rising competition in the coming years.

Competition intensifies across auto segments Competition is intensifying rapidly across key automobile segments in India, as more global automakers are establishing a direct presence. The key factors attracting foreign automakers are—an underpenetrated vehicle market, a large addressable population and relatively lower operating costs for players. In the past 5 years, competition has been most intense in categories across segments, which have reported faster growth rates. For instance, within the cars & UVs segment, more players entered the small cars category, which grew at a CAGR of 18.5 percent during 2005-06 to 2010-11. In the same period, overall car sales recorded a CAGR of 17 percent. The commercial vehicles segment has been more stable, with no new entrants. However, this scenario is likely to change, as Chinese and German truck manufacturers expand in India. As competition intensifies, automakers will have to launch more models at a faster pace. However, this would push up R&D, selling and distribution costs. Thus, while intensifying competition will prevent the play-

Currently, penetration of cars & UVs in India is currently nine per thousand people, less than in than most developed markets. This unaddressed potential has attracted more players to the cars & UVs segment, especially the small cars category. Five new players entered this category, during 2005-06 to 2010-11. Rising competition in segment has kept sales per model flat over the past fi ve years, even as total sales have grown by 18 percent. MSIL lost clout in this segment, with its share falling by 10 percentage points to 54 percent between 2005-06 and 2010-11. As competition intensifies, carmakers’ R&D costs as a percentage of total sales, will rise in the coming years from about four percent as of 2010-11. Moreover, as players look to expand their reach in smaller cities, selling and distribution costs, as a percentage of total sales will also rise from current levels of 2.5 percent. This will intensify cost pressures on players over the next five years.

CV Model Launches

End of technology tie-ups to heighten competition in two-wheelers space Over the past decade, all three major Indian two-wheeler players—Bajaj, Hero Motors and TVS —ended technological tie-ups with their global partners—Kawasaki, Honda and Suzuki, respectively. Driven by low penetration rates, especially in rural areas where it is as low as 32 per thousand, these global players have established a direct presence in India. Led by this intensifying competition, the market share of the top three two-wheeler manufacturers has declined by over five-10 percentage points over the past five years (2005-06 to 201011). Given the short shelf life of a two-wheeler model, Indian players are investing more on R&D to launch more fuel-efficient and low-maintenance cost to tackle competition. Consequently, average R&D costs for Indian players will increase from one-1.2 percent of sales to about four percent over the next three-five years.

Competition in commercial vehicles segment to intensify in the next five years In the commercial vehicles (CVs) segment, given the higher vehicle prices, demand is rela-

R&D Cost Per Unit For Two-Wheeler Players

Source: CRISIL Research

Source: CRISIL Research

Source: CRISIL Research

tively less sensitive to new model launches or the entry of new companies. Moreover, CV manufacturers relatively take longer to fi rm up their presence and establish a strong dealership and servicing network. Thus, though a host of players are expected to enter the domestic CV market in the next two-three years, the impact of competition on existing players will be less intense. Competition the LCV segment is usually more intense, as these vehicles are priced relatively lower than MHCVs. However, the LCV segment too has evolved only in the past two-three years with greater adoption of the hub and spoke model. Within LCVs, more players have launched models in the small-commercial vehicles (SCV) segment, which is expected to record a 17-20 percent CAGR over the next five years. Over the next two-three years, competition in the CV segment is expected to intensify, especially in the extreme segments—SCVs and HCVs—with players such as Daimler (Germany) and GM-SAIC (China) strengthening operations in India. Another Chinese CV manufacturer, Beiqi Foton, is also expected to enter the Indian

CV market in 2012-13, launching models mainly in the LCV segment. Daimler will launch models in the higher end of the LCV and MHCV segments, while GM SAIC is planning to enter the SCV segment. However, the market share of existing market leaders—Tata Motors and Ashok Leyland—is not likely to decline much entry of new players is not likely to affect shares of much over the next two-three years.

Localisation of parts, platform sharing to help players withstand long term competition Automakers are adopting various strategies to tackle rising competition. Sharing of production facilities and distribution networks is one approach. Fiat India has tied up with Tata Motors to use the latter’s service and distribution network. This has not only helped Fiat to reach the market faster but has also lowered its distribution costs, with higher volumes per dealer leading to lower payouts. Nissan India inked a deal with Maruti Suzuki for manufacturing and exporting the Nissan Pixo. This has helped the Japanese carmaker to leverage on Maruti’s large-scale production operations. To sustain competition in the long term, players will have to produce newer products at a faster pace and at lower costs. In CRISIL Research’s view, platform sharing and localisation of auto parts are two approaches that will enable automakers to do so. Platform sharing involves using a shared set of design, engineering and production capabilities, and major components for a range of models and even different types of automobiles. This helps OEMs reduce development costs per model. Platform sharing can be joint

ventures (JVs) between two or more players, or a single large carmaker may use the same platform across a range of models sold globally. Two recent platform sharing deals are—Tata and Fiat tie-up (2006) and the Volkswagen-Skoda engine-sharing deal (2009). Similarly in the CV segment Ashok Leyland launched its U-truck series platform in 2010. The company claims that this move will help it launch over 25 models (16 to 49 tonne trucks) within 18 months. Further, with commonality of parts across models, the company also targets inventory reductions and hence lower working capital costs by about `seven billion per annum. Localisation, on the other hand, involves the use of indigenous parts in automobile models, thus reducing costs of logistics, value addition and overseas labour. This will help OEMs price new models competitively. Regulations for the automobile sector in India mandate manufacturers to achieve 70 percent indigenisation by the fi fth year of manufacturing a model. Cars & UVs manufacturers have already crossed the mandated levels, sourcing almost 85 percent of parts indigenously in 2010-11. To quote a few instances, Skoda has been able to reduce price of its new generation Fabia by close to 11 percent by improving local part sourcing to 40 percent from 15 percent. Similar benefits have been claimed by Honda for its City and Jazz models. (Please note that the views expressed here are those of CRISIL Research and not of CRISIL’s Ratings division. CRISIL Research operates independently of and does not have access to information obtained by CRISIL’s Ratings Division.)


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Continuous training MR Srinivasan, Cluster Business Advisor, UNIDO

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n 2008-2009, the automotive component sector experienced an unforeseen global slowdown in demand, which was aggravated by the increasing price levels and input costs. As a result, the consequences also affected the SME sector engaged in auto component sub contracting and suppliers from Tier II and Tire III cities. The industry faced, what was probably the worst crisis, with a number of major players struggling for survival across all sectors. To help auto cluster units mitigate the various pressures, UNIDO-AIEMA had pragmatically taken the initiative to take them through a path of total change of courses. The initiatives included enterprise gap assessment, vision and strategy development, and periodic internal meets with the employees. Such initiatives helped the company to instil confidence in the employees and help boost job security and thus encouraged total involvement of the employees into the enhancement of business processes. The employee morale was pepped up through several development programmes.

helped companies overcome downturn

The modules had categorically enhanced the SME unit and paved the way for complete profitable running of the enterprise, and to preempt recession anxiety and loss Combating The Slowdown The cluster conducted a comprehensive training programme containing six modules, which were aimed at improving profitability and help to overcome the recession. Out of the six modules, the fi rst module was on creativity and involvement, under which kaizen, suggestion schemes, and safety aspects were dealt with, through small group activities. In the second module, the participants were taken through inspiring environments under which, 5S and work environment, visual display, and machine

maintenance by an operator (autonomous maintenance). The third module was about 100 ppm qualities under which, problem solving methodology by application of seven tools of quality, process mapping, process capability and mistake proofi ng were dealt with. The next module was on material and tool handling under which, tool change time, tool life monitoring, critical spares planning, FIFO, tools handling and preservation were dealt with. The fi fth module was on layout improvement under which, lay-out improvements, cellular manufacturing and single piece flow were covered. The fi nal and sixth module was on continual improvement under which the topics dealt were corrective action, preventive action, root cause analysis and failure mode. The modules had categorically helped enhance the entire SME unit and paved the way for complete profitable running of the enterprise, and to pre-empt recession anxiety and loss, due to various adverse conditions faced in the automotive sector

during the downturn.

Building Capacities To Meet Future Demands During the crisis, the units focused on capacity enhancement by way of upgradation of their tooling equipments and process f low and outsourcing priorities by off-loading minor operations. This capacity enhancement is for the surge and sudden demand that will follow later to the normalisation and improvement in the market .This has spread the fi rm understanding among the employees to forge more involvement to aim and achieve goals of the respective companies.

Opportunities As Tier II and Tier III component suppliers, the opportunities were more predictable to cater to the needs of new OEMs and Tier I companies connected to them in their respective region. The types of training provided the right approach to face the challenges posed by downturn and align with the expectations and requirements of the mar-

ket once the revival took place. Though the company could control or alter the macroeconomic environment, the key focus was to adjust and align with the changes and market dynamics. This was addressed and an improvement in new products, customers and enthusiasm for growth has been cohesively achieved to the respective size of operations. Despite the hike in prices of raw materials, labour shortage, attritions due to impatience in some section of working class, power supply related problems and the increased cost of alternate energy requirements have given a timely sustainability till the revival of the auto field. The sheer level of being SMEs and size of operations, their fi nancial limitations and liabilities the major burden of liquidity was not felt by the units. This has boosted the confidence of banks and customers on revival slowly things started looking up and solid practices gained are put in to operations. - as told to Bhargav TS


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Exploring new segments helped us grow R Sridhar Director, Globe Components

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stablished in 1996, Globe Components, which was a forward integration project of Globe Steels, is today engaged in the manufacturing of bright steel bars catering mainly to auto components industry. Right from the start, we wanted to cater to all segments of the auto sector, so as to cope up with market fluctuations in the different segments of the automotive field. The industry was affected in a

big way during the last recession, which was the worst of its kind. Of course, we were partially affected, though we were marginally ahead of the breakeven point. We knew that there would be light at the end of the tunnel and we were geared up to meet the anticipated boom at the end of the crisis. To be honest, the meltdown was expected to be a bit longer, but fortunately it was not so. In order to further improve upon our fi nances, we took action with the

The facility

objective of not only countering the crisis, but also gearing up for the boom, which we were sure about. Subsequent to the reduction of volumes in a particular segment, we looked at the customers in the other segments who were doing responsibly well. We took up new components for development from these customers, which were always available, as many companies were also looking for alternate suppliers to streamline costs. We have a pool of young and talented engineers with whose unstinted commitment and involvement, we were able to develop new components in record time. By seeing this, our customers were delighted and we were able to offer a cost reduction of ten percent. Based on this success, we looked upon to reduce the cost of the existing components as well. We carried out a lot of process and productivity improvement initiatives and value engineering. This exercise had not only helped us to reduce costs, but also to create additional capacities.

A range of components by Globe Components

Having regained the normal sales volume, we thought of expanding our capacity and as per our plans, we increased our capacity by adding imported CNC machine which have much higher speed as compared to the domestic machines. This further reduced the cycle time of running components. Meanwhile, we have also created an additional capacity over and above the new machines’ capacity. We had two options, one is to look for new components for install-

ing the imported CNC machines for the production, and the other is to sell the existing machines, which have a higher cycle time. As the saying goes, ‘fortune favours the brave’, the recession was over, and it was followed by a economic boom; all our additional capacities were fully booked and we had to expand further. Our sales turnover grew by 1.8 times over the last three years, even though the recession was at its peak. - as told to Bhargav TS


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Diversification is the mantra Raja Kochar MD, India, Eaton Corporation

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aton’s integrated diversification strategy has helped us, and is helping us to deliver good results during troubled times, which has paid off. Eaton has diversified across three key dimensions: product portfolio balance, geographic balance and balance through the economic cycle. As far as product portfolio is concerned, we have balanced our business portfolio by diversifying our products in the industrial and electrical sectors. This has enabled Eaton to have consistent performance. Eaton does business in more than 150 countries, and 55 percent of our revenues are driven by economies outside the United States. Emerging nations led to the global economic recovery, and 25 percent of our total revenues came from the developing economies of the world. We achieved balance in the economic cycle with approximately one-third of our business being early-cycle, one-third mid-cycle and one-third late-cycle. We are tremendously proud of the accomplishment, espe-

cially given the challenges of a business environ ment in which, fi nancial and economic volatility have become household words. Despite these hurdles, Eaton continued to deliver outstanding performance, demonstrating the effectiveness of our business model over the past few decades. As the world continues to change, t he i mpl ications are clear: business must become more nimble and have a broad base of diversification. Eaton’s diversification strategy and our positioning as a power management company along with the strategy to

Eaton in India

Eaton facility

outgrow our end markets organically and through acquisitions, has helped us through the chal-

Eaton Corporation’s footprint in India has been growing steadily since 1999. With the global acquisition of Aeroquip Vickers, Eaton had acquired two manufacturing plants in Mumbai and Pune under the name of Vickers Systems International (VSIL). The Mumbai plant was integrated into Pune operations in January 2002. Today, the facility is an Eaton Centre Of Excellence (COE) for gear pumps and is being expanded to commence manufacturing of steering control units and hitch valves. Eaton also has a medium and heavy-duty truck transmission and component manufacturing facility in Ranjangaon, India. The Ranjangaon plant helped the company enter truck business in India. In 2008, Eaton acquired engine valve business of Kirloskar Engine Oils,

which helped them to enter into automotive business in the country. With a clear view to expanding its presence in India, Eaton has established many new entities. The fi rst was an engineering centre at the Pune campus designed to do high end engineering work for all of Eaton’s business segments. Since then, Eaton has focused on enhancing its presence in India in all business segments and on tapping into the diverse opportunities that India offers, including critical manufacturing and engineering capabilities, product development, service centres and globally competitive sourcing. While India offers a huge market opportunity in itself, it also serves as a strategic location to enhance Eaton’s global competitiveness.

lenges. We run our enterprise as an integrated operating company, and we remain values-based enterprise producing Innovative

environment friendly products that are safe, efficient, reliable and sustainable. - as told to Bhargav TS


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Metro Tyres banks on

volume for

growth Rummy Chhabra, MD, Metro Tyres Nabeel A Khan New Delhi

T

he pressure is mounting on tyre manufacturers due to factors like the relentless increase in rubber prices and interest rates, but Metro Tyres is confident and in a state of ‘business as usual’.

The core mantra for the company to overcome stress has been increased volumes, high exports, efficient manufacturing and effective manpower. The company is planning to invest around `50 crore at its Manesar plant, to have a monthly additional capacity of three lakh tyres. This facility is expected to

be operational within 18 to 24 months. The tyre maker had earlier invested around `40 crore in Ludhiana to build an extra capacity of two lakh tyres a month for motorcycles. “If you are not in the volume game, then you are not in the business.” Managing Director, Metro Tyres, Rummy Chhabra announced. ‘High rubber price is an area of concern but somehow the industry is managing with the high growth and increased product iv it y a nd operational efficiencies. We are trying to pass on some cost to the market but not to the extent of the rubber price rise,’ he added. Chhabra feels that the increase in rubber price is due to the price at the international level and the way

ahead has to be a mix of increasing efficiency and passing on some cost to the customers. Metro Tyres that mainly produces for two-wheeler and HCV has a technical agreement with Continental Tyres which helps in innovation and maintaining technological demand from the customers. The company has recently launched tubeless tyres for motorcycles. The choice of the segment of business has also been lucky for the company as the CV and two-wheelers have been doing fairly well despite the slack. The company has no plans to diversify into passenger vehicle segment. By efficiency, it means the plant capacity should be utilised to the maximum while being lean in terms of labour and keeping the quality level high. The volume should be high and price competitiveness will bring the demand. “Automation has been an ongoing process, and our technology partner helps us keep improving. Our technicians keep in the touch with our partner and make improvement on day-today basis.” Chhabra said Today quality control is

important and the customers are very demanding. For OEM business, it needs to act very fast and for this, a strong R&D support is required. In the replacement market, products should perform but OEMs seek a lot of innovation. Apart from paying a substantial royalty to Continental, it has its own R&D. Export is a key factor now days, as the rupee is weakening and Metro Tyres keeps focus on it. Its contribution from exports in FY11 was `100 crore and this year, it is expected to touch `140 crore. Last year, it witnessed 22 percent growth at `525 crore and a profit margin of around three percent and this year it is expecting around `600 crore. In the next three to four years it will strike a top line of `1,000 crore. The company has two types of arrangement for exports—one in countries like US and Europe, where its sells the products in association with its technical collaborator Continental; secondly, it goes independently in some of the countries. The other ...

Contd. on page 116


nx

Expanding Capacity Productivity Reliability Horizontal Machining Center

a51nx Beyond The Realm of Traditional 40 Taper HMC’s Enhanced Material Removal Capability & Extended Work Envelope Constructional Features - Enhanced rigidity with optimized & strengthened bed construction - Roller guides for improved load capacity ,stiffness & life - Variety of spindle options for different applications ~ High Acceleration spindle (15K) ~ High Speed Spindle (20K / 30K) ~ High Torque Spindle (240 Nm / 302 Nm)

- High reliability & maintainability with ~ Servo ATC shuttle ~ Steel drum filter ~ Single piece way cover on X & Z axis

a61nx

~ Host of coolant & chip management feature

- “Eco mode” for reduced energy consumption - Enhanced spindle construction with larger & additional bearings - DD rotary table (optional) for fast acceleration & deceleration - Intelligent IAC ( Inertia Adaptive Control) function for optimized acc & dec - 1G axis acceleration with high performance motors - Host of thermal control features for maintaining accuracies Machine Specifications Travel Pallet

Spindle

a51nx

a61nx

X x Y x Z Axes

560 x 640 x 640 mm

560 x 640 x 640 mm

Distance from pallet surface to spindle center

80 ~ 720 mm

80 ~ 730 mm (80~810mm)

Pallet working area (WxD)

400 x 400 mm

400 x 500 mm

Spindle speed range

50 ~ 14000 min~1

Spindle taper hole

7/24 No.40 taper (HSK A63)

Rapid traverse Feedrates Automatic Tool Changer

60000 mm/min

Cutting feed

1 - 50000 mm/min

Tool storage capacity

40 (60, 134, 219, 313 tools

Bangalore

Chennai

Delhi

Pune

Makino India Pvt. Ltd, # 11, Export Promotion Industrial Park, Whitefield Road, Bangalore - 560 066 Tel : +91 - 80 - 6741 9500 / 0747 - 51 Fax : +91 - 80 - 6741 9523 www.makinoindia.co.in

Makino India Pvt. Ltd, Unit 4, 4th Floor, 107 Harrington Road, Salzburg Square, Chetpet, Chennai - 600 031 Tel : +91 - 44 - 2836 1883 / 2039 / 3640 Fax : +91 - 44 - 2836 1883 www.makinoindia.co.in

Makino India Pvt. Ltd, 192-B, Sector 4, IMT, Manesar, (NCR Delhi) Gurgaon - 122 050 Tel : +91 - 124 - 4652 200 / 216 Fax : +91 - 124 - 4652 230 www.makinoindia.co.in

Makino India Pvt. Ltd, Plot No. 25/26, F - Block, MIDC, Ranjangaon Industrial Area, Shirur Taluk, Pune - 412 210 Tel : +91 - 2138 - 673600 Fax : +91 - 2138 - 673623 www.makinoindia.co.in


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will, there is a way

If there is a

R Ravi, Technical Advisor, EAPL

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lectromags Automotive Products, subsidiar y of Bombay Burmah Trading Corporation (BBTC) stated that during the ’70s and ’80s, people were unaware of the term recession. It was due to

the fact that supply was far below the demand in the market. There were days when people boasted of the time taken for delivery, which even took months and years. According to Technical Advisor, EAPL, R Ravi, several

companies were operating without any specific department in the area of marketing. People were very cautious in terms of investments and also expected to get returns on investments within a period of five years.

Diesel Fuel Injection Pump Test Bench

Whenever a special investment has to be made for a specific customer, the companies even sought the customer to contribute for the investment. Further he said that, all these concepts were changed with the

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entry of Maruti Suzuki in the year 1984. The mindset of the auto industry has changed over the last two decades; the companies are now ready to leap beyond expectations. As the volume of automotive product started increasing in

EAPL has increased its capacity through productivity improvements & low cost automation. It has increased its capacity according to the customer requirements and thus continues to be the single source for its major customers the market, the shares of Indian auto business has also increased around the world. “During the 1970s, the auto industry had three months lead time for supplying the components to the customer. However, now the industry has started working on switch-on and switch-off schedule for supplying the same,” he added. E APL has implemented Japanese concepts such as lean management, single flow and multi-use of machines. During the downturn, the company improved its ITR (Inventory Turn Ratio), which is a measure of the number of times an inventory is sold or used in a time period. The company, which was formed 31 years ago by fi rst generation entrepreneurs, has also improved its OEE (Overall Equipment Efficiency) of the machines. OEE helps in maintaining the machines in ship-shape condition, thereby reducing cost of production. Over the last few years, EAPL has increased its capacity through productiv it y improvements and low cost automation. It has increased its capacity according to the customer requirements, and that is the reason it continues to be the single source for its major customers. According to Ravi, generally the domestic recessionary trend brings down the top and bottom line of the company, if that particular industry is dependent on domestic sales. However, if an industry has exports, then it is possible to buck the trend. Electromags has registered a growth during Indian auto industry recession. “What we believe is, if there is a will, there is a way,” he concluded. - as told to Akmal Rahman B


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Diversification enables us to enhance our market share S Muralidharan, CTO, Castwel Autoparts

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n 2008-09, the growth of auto industry dipped as the vehicle and component manufacturers in India had been hit due to the global fi nancial crisis. The production and sales in the passenger car segment went down drastically, which affected our operations and revenue to a considerable extent. The major challenge for a component manufacturer to that of a system or product supplier is the flexibility to focus on the commodity rather than the industry segment.

To face the downturn, we have decided to diversify our products to increase our market share of our business and enhance our value addition in terms of increasing sub-assemblies and operations. We also plan to acquire more business opportunities in areas where the business trends have no peaks and valleys. This initiative of diversifying into other industries is done by conducting a detailed analysis of the situation at hand and

Anticorrosive Equipment Pvt. Ltd. Foundry Division

arrive at a strategy based on the past experience and looking into the future. The strategy would be developd in a way so as not to upset the ongoing operations or performance of the company. At the same time, it will give the company various opportunities to overcome the impact of the industry during the slowdown. We have drawn out a modus operandi to implement our strategy and focus on business expansion. The reduction in percent-

age doesn’t necessarily mean the revenue from such industry segment has been reduced. We shall maintain the revenue to a considerable level, and certainly more than what we are realising presently. However, our business expansion shall focuss on other segments, sub-assemblies and value additions.

Process & Layout Optimisation When the economy was better, we had utilised the relaxed time

triveni RUBBER

Achieving Excellence Through Technical Innovation

towards optimisation of processes. This enables us to optimise our production and directly increase our efficiency. Simultaneously, we had also undertaken important layout upgrades by bringing in the cell concept, single piece flow and set-up reduction. This has given us additional space for machines, reduction in manpower and eliminating the handling issues. The major outcome of this is also reduction in shopfloor rejections and improved productivity.

We have decided to diversify our products to increase our market share and enhance our value addition in terms of increasing sub-assemblies and operations. We also plan to acquire more business opportunities in areas where the business trends have no peaks and valleys Value Addition

Capabilities Machine Molding Sand Core Shooter Green Sand Molding No Bake Process 200kg/hr melting Mechanized Pouring 6ton/hr sand plant Mold Box - custom size Parts weight 2kg-135kg Fettling Facility Vibro Finish CNC Machining VMC Machining Pattern Making Carbon Silicon Analyzer Spectro Analysis

Materials Cast Iron S.G. Iron

Quality Sand Casting Parts

We specialize in manufacturing 2kg-135kg sand cast parts as per requirement. Our highly mechanized plant is best suited for low weight high quantity parts to meet growing need of Indian Auto Industry.

Anticorrosive Equipment Pvt. Ltd. Foundry Division 730/731, G.I.D.C. Phase II, Gundlav-396 035, Dist: Valsad, Gujarat, India. Ph: +91 99099 19155 www.anticofoundry.co.in info@anticofoundry.co.in

We have developed t he capability in the value chain assembly / sub-assembly services to our existing customers and also successfully implemented the concept to our prospective customers. A nd we are in the process of getting sizeable business w ith the increased value addition. This has been possible by the strategic capability acquired by introducing the complete quality lab (with CNC CMM, X-Ray test i ng equ ipment, UTM, spectrometer, millipore apparatus, contour, roundness testers and other test methods). Also, we have introduced capability to use technologies like squeeze, jet cool and will soon be implementing vacuum assisted die casting. This has given Castwel an edge over the competitors and improved its consistency in operations and delivery.

Flat Trend Business Segment Castwel started supporting the tractor and farm equipment, heav y vehicle segment and telecom industry where the fluctuations are much on the lower side. This gives the organisation a stable business avenue and the impact on other business shall easily be sailed through. - as told to Bhargav TS


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Intensive training boosted growth during the downturn Anand Sundaresan MD, Schwing Stetter

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he Indian construction industry and the equipment manufacturers had been on a high growth trajectory for more than a decade, led by buoyancy in sectors such as real estate and infrastructure. The industry has witnessed continuous modernisation and adoption of new technologies in recent years. During recession, the manufacturing industry has experienced a sudden slowdown due to the global economic slowdown. Though the infrastructure

projects under the public sector were on the move, the projects being implemented by private players felt the heat. However, the worst is over and the industry is gradually pickingup. Backed by the huge emphasis in public and private sector infrastructure developments in India, the construction equipment segment is determined to grow at a much rapid pace. The government has increased investments in urban infrastructure development, national highways,

Total Solutions Provider of Quality Metal Injection Molded (MIM) Components

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Markets Automobile Defense Fiber Optics Consumer Hardware Medical / Surgical Devices

Materials AISI/ASTM/ASA/EN Series Steels Stainless Steels Others On Request

KNS Material Technologies 119, G.I.D.C. Phase II, Gundlav-396 035, Dist: Valsad, Gujarat, India. Ph: +91 99099 28822 www.kmt.co.in info@kmt.co.in

railways expansion, airports and ports. The encouraging PPP (Public Private Partnership) model together with all these initiatives is a big boost to the industry. To incorporate this expertise, Schwing Stetter has a dedicated training centre to impart primary and advanced training. The challenge of skilled manpower is something that the entire sector is facing, as a whole. As in other sectors, it is imperative for us to identify the right tal-

Schwing Stetter has a dedicated training centre to impart primary & advanced training. The challenge of skilled manpower is something that the entire sector is facing, as a whole. It is imperative to identify the right talent & retain them ent and also retain them. Having realised this earlier, we set up an exclusive training centre with lecture halls that have the capacity to train up to 125 persons at a time. The facility can also provide computer-based training programmes with audio-visual aids, and is equipped with a fullfledged technical library, a cut model display area, a cafeteria and locker facilities for the trainees. The training centre imparts primary and advanced courses on operation and maintenance, safety and others. These help the owners derive the best benefits from our equipment, from the operators, maintenance personnel, supervisors and managers of the customers. We conduct regular shortterm training courses for customer’s operators and also for our own service engineers by inviting faculties from our major component suppliers. SSI, along with CII, also offers operator training courses for operation of batching plants and concrete pumps. Most of the candidates enrolling for these courses get employment offers even before completion of the courses. This shows the construction industry is the major backbone for the economic growth of the country. We were one of the major victims of the global recession but survived it with great fl air and fortitude. - as told to Bhargav TS


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Lack of information affects

MSMEs

Sivagnanam Director, MSME Development Institute Akmal Rahman B Chennai

T

he main drawback of Micro, Small and Medium Enterprises (MSME) sector is the lack of information flow within the sector, which hampers the segments prospects. And the MSME Development Institute plays a vital role in addressing the issue. In a recent interaction with Auto Monitor, the Director of MSME Development Institute, Sivagnanam said that the Government of India had identified some of the important sectors, which were affected during the downturn. Since the government has always been concerned about the auto industry, it had announced many packages to help overcome the troubled times. According to him, many offers and opportunities are provided by the government that are not being utilised by MSME sector appropriately. As a part of its services, the MSME Development Institute organised awareness programmes for

clusters, about the schemes provided by the RBI. The institute even asked the entrepreneurs to contact their respective banks to avail the offers. “During the downturn, additional working capital loans were provided by the banks, which have benefited the large players to a great extent. However, the MSMEs were not aware of such schemes. Thus we, as a promotional organisation, took initiatives and created awareness among all the MSME clusters,” he added. The institute established a tie-up with large corporates to create new opportunities. It has tied-up with BHEL, Ranipet and conducted a programme for SMEs to form vendor enlistment. “We made arrangements for alternative ways to make the business. Because of recession, the auto industry was almost down. However, there was another opportunity knocking at the door for the companies to supply and manufacture products for other sector” he said. During troubled times, it was difficult for the companies to work in isolation. So the

government brought the companies together by building a common capacity. It created a chance for the small-scale industry to join and work together for supplying the components to large industries. Taking further about the clusters, he stated that since an individual unit couldn’t meet the volume demanded by the large industry, we pooled all the companies together to meet the huge demand. For clusters, the government has granted up to `15 crore for setting up a common facility centre. This exercise was continuously done during the last downturn so that the business operations were carried out uninterruptedly. The MSME had also organised several management development programmes on specific themes that dealt with recession and how companies could handle and manage recession. The MSME sector has taken stock of the impacts of the earlier recessions and this has helped them acquire some learning from the recent recession in the year 2008-09. Based on its past experience, it had

identified some areas of concern, which were not addressed during the earlier downturn. It has also taken note of the suggestions and complaints from the entrepreneurs. “Learning from the past, we can defi ne the course of action for all the stakeholders like RBI, bankers, government, and promotional agencies like us. Thus, we will be in a better position to help and face the future rescission,” he added. The bottom line for the companies is to remain competitive in the business and to sustain both in local and global market. The company should have a complete knowledge about the fi nancial aspects pertaining to business. It should have a clear accounting system that would help to secure finance from the financial institutions, he indicated. He stated that the companies have to manage the resources in the most optimal manner, particularly the fi nancial aspects. The companies should equip themselves to manage against the financial crunch during the recession. Getting the business and

orders are secondary, but managing the financial resources is more important to sustain. He urged the companies to take advantage of all the government schemes since it provides funds for the implementation of tools and techniques like lean manufacturing, six sigma, TQM and TPM. It offers funding support up to 75 percent for execution of tools and techniques. Talking further about the responsibilities, he said that MSMEs should work together as a cluster. It not only helps in sharing of the information, resources and bulk purchases, but also helps in common branding and utilising of funds. According to him, to remain competitive, the companies have to get business and for that, it has to be strong as the buyer will demand competitive prices, just-in-time and quality product. “Quality, delivery and cost concepts will be the mantra, whatever be the period. I strongly feel that the customer is willing to pay for your product and for your profits, but not for your waste,” he concluded.


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Quick response se to the changing ng business scenario rio

Anurag Kashyap

helped Survival

MD, Moog India, SAARC & Middle-East

T

he biggest learning for us during the downturn was to be a little skeptical during the good times. It was all good— customers’ orders coming in, good forecast from the key customers, meticulous operations plan, aggressive hiring to meet the demands among others. It is also like waking up from a nice dream, the business situation changed. Customers felt the pinch and dropped their forecasts significantly.

Initially, there was a period of uncertainty but we realised that strong measures are needed to keep the company profitable and as a team, we worked on optimising our operations. We were quick to respond to the changing business scenario and that’s the reason we survived the recession without much damage. So the key message is—‘History can repeat itself and hence we need to be little skeptical of rosy situations’.

We need to always remain prepared for a possible downturn and hence always keep a track of our customers, keep a track of our suppliers’ suppliers and monitor forecasts with a hawk’s eye. At the same time, we should go back to the basics of business management like competitive advantage, better cost control, closer ties with customers, and most importantly, better cash management. There is one more lesson that

we learnt and that is to avoid knee-jerk reactions. A lot of organisations look at short term goals and take steps that might harm them in the longer run. We had our share of mistakes as well, but we were quick to correct them. Investors judge you by your quarter-on-quarter performance and I fully understand the need to show better quarterly results for any business leader. However, in this process, one should not neglect the larger vision of the

Moong Facility

company. It might be an easy way out to put a hold on the capital expenditure or to reduce headcount and calculate the positive impact of these actions using excel sheets. What’s difficult to judge is the negative impact on the organisation on account of these measures. I am not saying that these measures should not be taken, but we should not be ‘Penny wise and Pound foolish’. I think we are a lot more mature now in handling such situations. We are going one step further in analysing any business opportunity that comes our way. Our processes have become rigorous and help in smoother execution of projects. We also plan to analyse our key customers’ business to make sure that any change in their business is known to us at an early stage. That way we can not only plan better, but also suggest optimal solutions to help our customers in tackling their business concerns. For example, we can be proactive in offering expedited lead times or flexible deliveries if the customers’ business situation demands that. The other focus area is a better and redefi ned SOP plan. We are becoming more sensitive to small fluctuations in demand and interpret their impact on the whole operations process. I should also mention the human resource aspect during tough times in business. Our colleagues who are willing to adapt to the changing business situations should be retrained or cross-trained. Having a multi-skilled workforce will help in tough situations. Each and every function of our operations should focus on efficient ways of working, whether we talk of manpower planning, equipment, facilities or something as simple as electricity usage. We have started putting KPIs to measure efficiency in all these areas and that helps us set some key objectives and benchmarks. Last but not the least, is customer focus. We have to align all our processes to add value to our customers. And that applies to both internal and external customers. Each function has to keep in mind the interests of our customers and provide the best possible services. I understand that it is easier said than done, but this has been our key learning from the business slowdown. Only those customers who felt that we were adding value to their businesses alone came back to us. We became their ‘business partners’ and not just a ‘supplier’. We need to see how our high-end products and solutions can become the differentiator for our customers and how we can help them win business from their key end-users. - as told to Bhargav TS


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Photograph: Dileep Prakash

Achieve price reduction by

Rattan Kapur

increasing efficiency

CMD, Rattan Kapur & Associates

G

rowth is absolutely crucial. If you don’t grow, then you are bound to stagnate. Challenge is to grow during tough times. You cannot grow by default; the customers are doubling their turnover in the next three years. There was a time when we were product-hungry, we were just looking for business and whatever came our way, we used to grab without worrying much about the bottom-line. Today, the time has come when the profit margin has to become very-very important. It’s not necessary, that we go after everything that comes our way; the company has to be selective in what it is going to produce. It doesn’t mean that you can refuse your existing customers. I am manufacturing catalytic converters and exhaust systems. For instance, if I get another business in the same segment but with reduced costs—I have to look inside my company and chalk out a strategy about how to produce at a more competitive price. In our case, raw material costs may vary from 70 to 80 percent. If I have to supply these parts and my volumes are increasing, then I will have to talk to our global raw material suppliers. Luckily for us in India, Europe is not expanding in manufacturing so the suppliers are looking at India,

China and other Asian markets for selling their products. In India, the quality of the product has reached the global standards if not better. Companies like Volkswagen, Mercedes have set up assembly plants here, not because there is a market but because there is a good possibility of localisation. Our quality is good, our volumes are going up. We understand systems and global qualities therefore the raw material suppliers are open to discussion—it all depends on how much you can push them. Now you have the luxury to have alternate suppliers, you have alternate sources; let them bid against each other. You must fi rst get some kind of price reduction.

Target 20-20-20 We are following 20-20-20 programme, under which we must increase our production by 20 percent without increasing labour—we must decrease rejections and wasteful expenses by 20 percent and fi nally we must increase the business by at least 20 percent. I am glad that in the last six months we have been able to achieve 15-15-15. However, due to our main customer, Maruti Suzuki India, experiencing the slowdown, we have not been able to meet our target of 20 percent. Also, as we have been able

We have decided to add a new range of products. We are going to start manufacturing shock absorbers. So far, we have been able to offer our products at a price that is about six to seven percent lower, to the customer Rattan Kapur & Associates Facility

to cut costs by 15 percent, we have offered a price reduction of somewhere in the range of six percent on our annual price terms. The customer does appreciate the company that passes on price reduction. We have now decided to add a new range of products. We are going to start manufacturing shock absorbers. We cannot sell this product at a price higher than what is already being offered, rather it has to be cheaper. We are looking at various aspects as to how to beat the current suppliers and for this, we require the technical support from our collaborator. Our collaborator is pro-active in supporting us and we have been able to offer it at a price that is about six to seven percent lower

(than the market price), to the customer. As far as our older products like door sash for Maruti Alto, which we have been making for the past 12 years, our volumes that had earlier gone up to 1,600 cars a day, have now come down to 1,000 cars a day. Even at this level for us, its 5,000 doors a day at least. With this product, we have got a great experience in terms of VAVE on reduction of scrap and reduction in re-work and saving in power and human resource. This was not attained single-handedly, but with the help of Maruti. Now we are training other factories based on this experience. We never forget our bottom line and have been maintain-

The Company Office And Facility

ing a healthy bottom line in last ten years and have not increased our equity. Our current EBITA (Earning Before Interest Tax Ammortisation) is at eight percent and we hope that we achieve 10 percent by March’12. We have been funding our projects with our own sources, which is a major cost saver. Imagine if today, we have to borrow then we have to pay a 15 percent interest. Factors like a healthy profit margin and right selection of products are very important. Lean is way forward. The labour problem is the biggest hitch at this point of time. The industry can expand much faster had there been clarity on the labour policy. The government has to look at the labour policy; doesn’t matter if we have to pay a bit higher but there has to be an agreement and in that agreement period we should quietly work to achieve our target. The workers should listen to us but they are insisting that we should listen to them instead. They will produce the numbers arbitrarily, as they have back-up and the government is ineffective in handling such a situation. Other factors like fi nance, marketability and acceptance are not a problem, while entrepreneurship is fantastic. The industry has almost done its job, but now it’s the government’s turn to bring in infrastructure and policy to support the growth trends. - as told to Nabeel A Khan


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Investments towards new plant facilitated us during

downturn

Aditya Arora Chief Operating Officer, Base Batteries

T

he changes in the market did not drastically affect us in terms of our operations. The fluctuations in the import prices hit us in a major way. Since we import on a large scale, owing to the volatility in the currency values, the import of batteries became unviable, more so when the local market was quite competitive and the import prices were going up. During the recession, we thought of expanding our capacity and all our investors supported us for the expansion. This helped us to bring our second new plant in Hosur. Even though the financial markets were in bad shape, the fi nancial institutions kept faith in us and gave us the working capital of `272 crore to set-up our new plant. We also liquefied all our assets and bought another `160 crore. The Hosur plant, where we are making strategic investments keeping future requirements in mind, will have an initial installed capacity of 250,000 units a month that will be expanded to 325,000 units. The new plant will roll out the entire range of batteries such as automotive, inverters, UPS and generators. I would like to say that one of the key learnings from the recession is that, importing of batteries is not viable due to fluctuations in the currency rate. We realised that we should setup our own manufacturing facility. Especially for an industry like ours where the demand is somehow always greater than the supply, setting up indigenous production plants would defi nitely help us fight the crisis. We are also look-

Base Batteries in India Established in 1987, Base Batteries began operations by supplying UPS batteries to software developers. After a decade, the company tied with Panasonic batteries for Base to be its trade partner in India. Later in 2006, Base Batteries began its manufacturing operations of its own at Solan. The fi rm has already established its own R&D back in 2002 and even introduced Base Terminal brand of batteries and expanded its operations across the country. All along, the fi rm was focusing on aftermarket business and now it is aiming at automotive OEM business, besides the telecom industry. Today, Base Terminal is an established brand in the country with patent rights. Currently the company employs more than 400 staff operating from 23 branches located all over India and have a network of more than 7,000 dealers.

ing at selling our products in Africa and the Middle East after the Hosur facility commences producing batteries. When we started our unit the capacity was about 40,000 units. Currently, we are running about

110,000 batteries, which is three times more. After inaugurating our new facility, the capacity will be doubled when the plant runs in full capacity. We have also invested more on our quality systems by bringing more con-

sultants on board to help us in reassessment of our cost and our systems in order to suggest ways of being more efficient. In the future, if the industry faces any eventualities, our current systems are very efficient to

meet such challenges. We have also acquired two to three manufacturing facilities in Northern India to support them externally, which are strong in battery manufacturing technology. - as told to Bhargav TS


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Entering into aftermarket business and exports helped us

grow

MK Unnithan CMD, Sankar Sealings Systems

I

n 2008-2009, we were primarily supplying our products to the commercial vehicle segment and during the recession, the CV segment was the worst hit. We understood that we are depending more on OEMs accounting for 75 percent, 20 percent of exports and five percent of rest of all business. When the OEMs took a hit, it automatically affected us since we were supplying majorly to them. Thus we immediately decided that we should have much larger spectrum of customer base or the segments and our presence should be divided in such a way that we should not be hit by a particular segment so that even if one segment gets a hit we could manage with the other segments.

Eyeing The Export Market Export is the other area, which we were majorly focusing on during recession time. We developed lot of niche products like heav y duty diesel engine products, heavy duty off highway applications that require

more technical advancements. Exports gave us a very big boost during those recessions and it grew by 15 percent comparing to previous years. Mainly, we concentrated on reputed engines made in US and Europe. We also predicted the customer requirement and we started on new product development and this helped us to grow further. The other segment which was growing during the down turn was light commercial vehicle (LCV) and companies like Tata and few others were driven by LCVs. Since we are the major supplier for LCVs, we had a market share of about 80 percent and this helped us to grow in that segment. We also spread our customer base in such a way that we were able to minimise the risk. In 2010 we took a conscious decision of entering into t he a f ter ma rket business and currently our aftermarket business accounts for five percent. So our main focus area for the next five years is on aftermarket.

Product Development The company has also majorly focused on R&D during the downturn to create technologies and products, which we were not catering at that point of time. Wherever we found that there is a technology pocket that we are not addressing or a product that we are not addressing within our sealing industry, we decided to develop the same. We also decided that we have to partner in some cases with companies who are on the forefront of these technologies to address Euro V and beyond the emission norms.

New Investments To bring in new technology, we decided to form a joint venture with a Japanese company which is a world leader in gaskets. As a result of this JV, we are setting up a manufacturing facility in Sriperumbudur near Chennai. This JV will address certain technology pockets, which had not been addressed by Sankar Sealings for the new generation engines. The JV company, SSJP Sealing

The Sankar Sealings Systems Facility

Technologies will manufacture multi-layered steel cylinder head gaskets addressing Euro V emission norms and will have a capacity of ten million gaskets per annum. So these are the decisions which we took during the down turn and we did not stop in increasing the capacity during the recession. Since we knew that it was going to be a temporary phase, we built up

our capacity in Uttaranchal and we started a new plant in Pune, which is expected to start production by the end of 2012. To diversificate our product portfolio, we started manufacturing NVH products. We entered into NVH segment with a highly innovative products, which helped us to sail during the troubled times. - as told to Bhargav TS


Leading by Technology Shriram Pistons & Rings (SPR) is one of the largest integrated manufacturers of Pistons, Pins, Piston Rings and Engine Valves. The Company has access to world-class technology from global leaders at its state-of-the-art manufacturing facilities in the NCR, at Ghaziabad (30 km from Delhi) and Pathredi (50 km from Delhi). This is supplemented with comprehensive design and development facilities including advanced 3D modeling, FEA analysis, Simulation and Diagnostic software, Rig Testing, Engine Testing facilities, Advanced Analysis Laboratory etc. This enables SPR to offer end-to-end solutions and new designs of Pistons, Rings and Engine Valves for improvement in fuel efficiency, lower oil consumption and meeting the latest emission norms. SPR has provided several innovative cost effective solutions to OEMs in India and abroad that have won the Company more recognition and rewards for Excellence in Technology, Quality and Overall Performance than any of its competitors.


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Slowdown helps make

higher profit Mohan R, MD, SAPL Akmal Rahman B Chennai

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athya Auto (SAPL), manufacturer of auto parts like jack, tool kit, sheet metal components and forged parts, believes that troubled times has been an eye opener for certain issues faced by the company. It has given a chance for the company to adopt new strategies such as looking inwards for opportunities, focusing on under-utilised resources and adopting effective waste management techniques. The company has adopted many measures like waste elimination by reducing the in-house rejections to less than 300 ppm from over 800 ppm earlier. It has also reduced its customer rejections from 50 ppm to 20 ppm. SAPL has also created a cost effective operational module. “We have created industry benchmark figures for raw materials, employee costs, power, fuel costs, manufacturing costs, interest and took measures to match it,” said Managing Director, SAPL, Mohan R.

It has taken initiatives to optimise the manufacturing cost by redefi ning the bill of materials and by improving the layout to reduce the raw material costs by one percent. It has also reduced cycle time by organising the machine layout for easy movement of the materials. SAPL’s key learning is to look at the recession as a period of consolidation. The company has created capacity by an additional facility to save costs of investment and line balancing. During the downturn, the company expanded it product portfolio in forging. It also constructed a new plant with an investment of `35 crore. “We added forging as an additional product and created a capacity with lesser cost as we made use of the downturn period. The cost of expansion was lower compared to normal times as we save around 15 to 20 percent of our investment,” he said. The company has appointed an energy consultant to save the energy across its plants. “We have created awareness among our employees to save the energy by which, we have reduced

1.2 percent of our manufacturing costs. We have improved our cash flow by reducing inventories and work in progress processes. Previously we were operating with two to three weeks’ inventories and to improve the cash flow we have reduced to one week,” he added. The company, which is aiming a turnover of `150 crore by 2014, felt that the fi nancial numbers, which looked easily achievable, became hard to achieve in times of downturn. This adversity has helped the company to create certain awareness. The company has standardised the policies and systems by fi ne-tuning HR policies, travel policies and implemented ERP (Enterprise Resource Planning) to fi ne tune the system and monitoring across the entire organisation. “Learning and actions taken during the recession has helped our organisation to make better profit during nonrecession period” he added. It believes that the system and policies created during the troubled times will help any eventuality in the future.

Meet us at the AUTOEXPO 2012 Pragathi Maidan, New Delhi

in Hall 1E, Stall no.2

Products From Sathya Auto


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Develop

in-house technology

for productivity NK Minda Chairman, NK Minda Group

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here is no denying that the increasing interest rates and high input costs are creating pressure on the economic situation in the country, but we have been lucky to counter it with measures like productivity increase through proper kaizen and focus on the right segment of business. We have reduced overhead costs like that of travelling, and boosted the utilisation of web access, apart from freezing recruitment for the time being. We keep the people motivated to implement the kaizen, while creating awareness that there is a pressure on the company. However, our group has not been impacted much and we are able to sustain the growth and profit; this also due to our Indonesia business doing better thereby the consolidated business is profitable. The overall exports have given us good benefits because of the weakening rupee. And we are continuously upgrading our overseas business. Last year, the earning from exports were 17 percent of the total turnover,

which we have planned to reach 22 percent of our projected total revenue of `2,200 crore this year. We have a Special Purpose Machine (SPM) division, where we have expertise in manufacturing machines w it h automation, which we supply to all our group companies. Through this initiative, we have brought down the manufacturing cost by 10 to 15 percent over the years. We invest in SPM and the return in terms of pay back in one to two years. We pay special attention towards increasing the skills of the operator by organising vocational and hands on training. India will be defi nitely growing and this is temporary phase of one or two years. China has produced more than 14 million cars, being number one in the world, so India will certainly not be behind because populationwise we are not far behind. NK Minda Group’s business is predominately in the OEMs sector, and in the aftermarket we face stiff competition from China, but we are trying to improve our situation. We envisage that there

will not be much volume growth; therefore, focus on increasing the productivity and profit margin to be competitive. The aftermarket can certainly act as a derisking option when the OEM business is down. In this sector, we have been growing with a CAGR of around 30 percent in the last three years. This year also, we expect about 30 percent growth from the replacement business on our existing product line and in the future we will be adding new products like alloy wheels and fi ltres, which have a very good demand. We have a network of dealers for products in the replacement market and are also enhancing the work in this direction. The company expects to make around `200 crore, that is eight percent of total revenue from replacement business in FY12, while in the next two to three years, it will touch a `500 crore turnover. We have also recently introduced aftermarket products in Indonesia and we are looking at Bangladesh and Sri Lanka because the car sold there suits our

product line. In terms of expansion, we have been add i ng joint ventures aggressively—in the last one year, we had four big JVs and continuously looking at the opportunity wherever we see some kind of gap in the market. Now-adays, there is a trend of global cars—cars that are being manufactured in Brazil, China, Russia, India and South Africa— thus, we are making an offer for global models for the opportunity to export according to global requirements. Coming back to our concerns, of course there was a shortfall in the demand in our company, which is close to 15 percent compared to a normal situation, fi rstly because of the Maruti Suzuki event and also some of the OEMs had stock and they are trying to utilise them fi rst. In the last two quarters, there

has been a kind of feeling from the industry to not proceed with the expansion plans. Because earlier, the whole industry was expecting close to 15 percent growth in the car segment while 20 percent in motorcycles, which has been ruled out. The situation is more like wait and watch to see what is going to happen. Some people opine that India was not affected in 2008-09, but this time it is going to be impacted but honestly speaking, I can neither vouch for this or deny it because, all the predictions have gone haywire. - as told to Nabeel A Khan


 

   




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Diversification & product development boosts

growth

Mohit Mathur, GM Business Development, Exa Thermometrics Bhargav TS Chennai

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xa T her momet r ics, the manufacturer and the designer of thermistors for advanced temperature sensing, feels that by offering niche products and expanding their customer base has helped the company during the rough times. Genera l M a n a ge r, Business Development, Exa Thermometrics, Mohit Mathur said, “During the tough times our learnings have been wide and varied. We have realised that we should not be dependent on a few OEMs to expand our business. We need to get more and more OEMs into our fold so that even if a few of them shut shop, we have our business up and running with the others. We have learnt that we need to stand out in the market by offering niche products to the customers rather than giving them what our competitors are already offering.” The company also feels that the time that has taken to get through its customer’s door was immense. Even after the company is engaged with its customer, it takes long time to get the products designed into the customer’s scheme of things. Mathur said, “Once your product is designed in and has undergone the requisite validation, then the entry barrier for the competition is very high. It is then a perennial business for almost four to fi ve years.” According to him, the Indian market conditions are not well defi ned and there are wide variations in demand and supply. One moment the company may be bullish about the market but the very next moment the market sentiment is pulled down due to macro economic conditions in India and abroad. The customers have the tendency to ask for supplies on a “yesterday basis” without providing any long term visibility of their future requirements. Hence the companies have to be always on their toes to handle any pressure situations. The customer’s expectation on the responsiveness has increased many folds over the couple of years. Exa Thermometrics is looking to diversify customer base to face any eventualities. It is also carving a niche for itself by offering product at competitive prices. The company designs the product along with its customer. This helps both the stakeholders in chipping in with their domain knowledge. The manufacturer is proactively interacting with the customers in terms of its product offering, product quality and supply chain, which keeps itself abreast with the mar-

ket dynamics on a real time basis to meet any demand or supply exigencies. The company is servicing different verticals across the globe. This helps them in absorbing any tremors that may be felt in one

vertical at any moment of time. Fiscal discipline is observed in all areas of its operations to stay competitive in the market. “Our emphasis is on providing a solution to the customer rather than providing a product to

the customer. So we approach our customers with a “solution” rather than a “product” per se. We are constantly striving hard to improve our response time to our customers by having cross-functional teams address-

ing customer concerns and queries. We have also identified our supply chain partners in unrepresented areas for garnering more business and effective customer servicing,” Mathur said.


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Reduce dependance on

single customer or

industry

Raj Kumar CEO, SVPC Akmal Rahman B Chennai

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ccord i ng to Sr i Venkateswara Precision Components (SVPC), troubled times are an acid test for the resilience of every company; the need of the hour is to fi nd innovative solutions to fight against the troubled times. SVPC, the Chennai-based automotive and electrical components manufacturer did not take much time to survive the situation, as to some extent it was not badly hit. “We realised that the situation would not remain the same and the market would turn around. There are industries other than the auto, which are managing their show. To survive during downturn, we need to utilise our resources in terms of

any type of component for the auto industry and feels that the only challenge is to fi nd the right customer. To be on safer side, the company started manufacturing parts for wind power generation as an alternative business.

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SVPC has started working on strategies to balance the revenue from different industries with a limit of 30 percent from every sector. “This doesn’t mean we are reducing our sales with existing customers; we achieve

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this by selecting new customers based on the industry they serve and increase our exposure in that industry and develop new products for them,” the CEO said. He also added that the key activities that the company would

undertake in case of an adverse situation are training the employees to become multi-skilled, upgrading the infrastructure without any major investments and recruiting talented and capable candidates.

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manpower and machines, which involve a large amount capital investment,” said CEO of SVPC, Raj Kumar. Yet another company of the SVPC group that is into manufacturing of switchgears for the electrical industry, which was not affected while the auto industry was down. The company took advantage of this and begun manufacturing electrical components. This way, the resources were utilised effectively to a large extent. A valuable lesson that the company learnt from the past is, “Don’t depend on single customer or industry,” he said. The company adopted a unique strategy in which, it will only entertain business from a single customer for the value not more than 30 percent of its total sales. “During trouble, most of the customers delay the payment stating recession as a reason and playing safe, to protect their liquid funds and this eventually created a huge cash crunch for SVPC. We need to address this issue and need to know the answer for the same from OEMs,” he added. The company claims to have adequate technology and machinery for manufacturing

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Expansion during

downturn can be

unpredictable Kumar Narayanan MD, Texcel International Akmal Rahman B Chennai

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hennai-based Texcel International, manufacturer of auto components and material-handling equipment, feels that expansion during the last downturn was a mistake. The company was trying to establish itself in Delhi and Pune cluster for manufacturing of auto components and material handling equipment. It had made an investment of around `five crore for the same. The Managing Director, Texcel International, Kumar Narayanan said, “We built a couple of factories in both the places for manufacturing auto components and material handling equipments, but the companies which promised us for positive business went quiet. During recession orders were not the problem, but the real problem was getting payment on time”. While Texcel was getting orders during trouble times, it faced problem with receipt of timely payments. This led to a

tighter cash f low consequent to this issue; the company had decided to become very selective on the customers who were capable of making the payments on time. The company was maintaining a specific production line for a well renowned OEM and was making a business of `1.2 crore a month. However, it lasted only for two months and then the company did not have production for the next eight months. “During this time, we faced the huge idling cost of the workers for nearly six months, which became a dead end and that the inventory took us almost two years to clear out. We are going to be very conservative on forecasts from the companies in future,” he added. Texcel has eight plants across the country, which caters around 70 percent of its business in the automotive industry and 30 percent in engineering and plant constructions segment. In the future, the company wants to expand its business portfolio in power sectors and it will have only few selective customers in

The Texcel Facility

these three verticals to be on the safer side. The company, which was planning to invest around `60 crore for setting up a manufacturing facility in Bhuj, Gujarat, has put the project on hold. This facility was intended to cater to the needs of its existing customers for supplying sheet metal component.

Texcel was also prepared to invest around `100 crore to add two more manufacturing lines to increase its foundry capacity at its existing plant in Coimbatore. This investment, which was to be made with the help of US-based Clear Water, a private equity investor will be delayed for one more year. According to Kumar, companies that are tracking the proper

risk demand management can ride over the downturn better. He also recommends that the companies should maintain their fixed-cost very low; reducing lends will also help the companies to reduce the fixed cost. Companies should also ensure that they effectively utilise up to 75 percent of their total capacity.

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Maintain the

momentum by manufacturing new products Gajraj CEO, Devendra Exports Akmal Rahman B Chennai

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evendra E x por ts, ma nu fact u rer of high precision diesel fuel injection parts, cast iron and aluminium-machined castings, said that being an Indian component manufacturer implies major demand in the domestic market. The company also feels that it has taken substantial initiatives to moving forward given that recession is a cycle, which happens, maybe once in five years or once in seven

years in general. The company was supplying more than 70 percent of its product to the exports market during the last downturn. Earlier, the company used to take a four to six month lead time for exports, which has been reduced to 75 days. It has increased the product range so that it can also increase the value wise turnover with the customer. It had a lead-time of around six months for delivering the product hence it had backup order. “Because of the lead time, we started giving new products to

the customers in addition to our existing line. We are lucky that none of our pending orders were cancelled. Therefore some of the products helped us to meet the turnover and face the trouble times,” said the Chief Executive Officer, Devendra Exports, Gajraj. Reducing the lead-time in its existing setup has given enormous improvement for the company’s costing. The company has efficiently utilised the resources by closely monitoring the system and with strategic implementation of techniques. It was able to meet its fi xed costs comfortably without any setbacks during the downturn.

The company has taken advantage of developing new products during the last downturn Devendra Exports Facility

After the downturn, the company decided to focus more share of its business with the domestic OEMs. “We decided to put whatever infrastructure we had developed in our company for the past six decades to quickly respond to the occasion and to get the OEMs in the nutshell” he added. The company, which has recorded a growth rate of about 25 percent last year, has taken the advantage of developing new products during the last downturn. The products that were developed for OEMs were parallel going with initiatives taken by the company. Even though the company supplies most of its products to commercial vehicle manufacturers, it faced the slowdown, because of a new innovative product developed for the OEMs, which could not compete with other suppliers. After the downturn, the company has maintained the momentum by effective recruitment process and investment on new product development. As regards its turnover, the

company could maintain its turnover. This year it is aiming to have a growth of about 25 to 30 percent comfortably. According to Gajraj, large companies, contrar y to the SMEs, could sustain with their deep pockets, the SMEs do not have this advantage. The SMEs have to depend on external financing for its needs. The companies should maintain their borrowing as low as possible rather than going for major expansion. They can even take a development process on a sustainable ways rather than continuous investment. The companies should have a product combination and customer from different segments that will give f lexibility for the companies; if one goes wrong another can help the company to sustain. The companies have to focus continuously on innovations so that in addition to existing line, it gets exposure in new areas where it can explore for the next five to seven years. This will help the companies to sustain even during the downturn.


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Outlook of entrepreneures will determine performance Contd. from page 65 a ship is as good as it’s captain, so with the business environment. The vision, strategy and initiatives of those at the helm of affairs, actually determines the operational excellence of the rest of the organisation. Senior management executives, who exhibit dynamism in their vision, strategies and innovation, not only ensure they stay ahead of the competition, but ensure the entire organisation rallies around the vision and strategies to exhibit excellence and ensure growth. Market conditions are dynamic and the effects during a downturn could be substan-

tial. With a good management at the helm, this is often weathered by better operational efficiencies and product strategies to negate the downturn. Lean practices, optimisation of resources and diligent measures to increase productivity, would actually provide an edge during tumultuous times. Every dark cloud has a silver lining and this is true for business environments as well. The downturn comes with its own set of positives like providing ample time to roll out innovative and effective HR practices, training initiatives, quality policies and TQM measures, where the recessionary trends actually

Metro Tyres banks on volume for growth Contd. from page 88 countries where it sees the potential are Latin America, Middle East and African countries. The company has few agreements with Continental and it is the largest outsourcing partner mainly for bicycle tyres. It makes all the high-end tyres for the consumption of European and US market. This is not the fi rst time the industry is facing a volatile situation, earlier also it faced the similar situation. Hopefully this time also, the industry will come back on track, felt Chhabra. The current annually capacity of company from its seven plants is three crore bicycle tyres, four crore bicycle tubes, 24 lakh automobile tyres and 2,400 tonne of automobile tubes—from motorcycles to HCVs. All the seven plants are being utilised up to

enhance absorption and learning attitudes in individuals. This actually prepares them for the tough times and ensures they put in that extra effort required to tide over difficult market conditions. This in turn improves efficiency levels, productivity norms and optimisation measures, which has a direct impact on the growth of the organisation even during recessionary market conditions. No two products behave the same way under normal or recessionary conditions. They have dramatically different impacts on the business environments. Needless to say, this is an extremely dynamic situation

ensure every change is converted into an opportunity, which is effectively communicated across the organisation, getting them involved and efficiently run the organisation as a well knit, lean and professional unit.

Presence in aftermarket gave the strength Contd. from page 68

90 percent. It has tremendous demand from the OEMs. All the leading OEMs are its customers; however, the company is committed to few only because of the capacity constraints. “The tyre industry is a combination of both, aftermarket and OEM. As there is a lot of pressure on the OEM business, it’s important to have the right mix of the aftermarket; only then can you survive. Something like 60 percent in aftermarket and 40 percent in OEMs is a good mix. Our ratio is 80 percent aftermarket and 20 percent OEMs.” Chhabra opined.

and the management needs to be highly knowledgeable to foresee and predict market dynamics. In addition, they need to ensure that there are different strategies and initiatives for different products and environments. Successful are those organisations that pick products for different segments, scenarios and environments. Change, the experts say, are the only constant and it is for the CEO’s and top management to not just embrace change, but to

A shok L e y l a nd a nd Tata Motor. We invested in latest machineries even though the return on investment was bad. But the investment that we have made is to ensure that parameters are achieved consistently, which has stood with us in the long run. All the OEMs have been with us because we are able to develop the products faster compared to others. In fact we are growing with our customers and they are very happy with most of the new products that have developed for them. As against the Indian market, the pricing for engine liners are attractive in other countries and this may be because of the fact that the customers have realised the vital role of the liners in

the engine performance. Now in India too, the trend is changing with the customers’ perspective and the prices are expected to move upwards in future. We also supply to t wo- wheeler manufacturers like Royal Enfield and Triumph Motorcycles. We are the single source for most of our customers; the major customers are tractor and SUVs manufacturers. We have lot of demand for export for this product and we have invested a lot in the aftermarket. We always believe that Indian aftermarket is different; it is a matured market in its own way.

But still it is not an organised market even though attempts are being made for transforming it into an organised one. This is because our conditions are different from other countries and our needs are different for commercial vehicles and tractors. There is no looking back from 2009 the production keeps on increasing. - as told to T. Murrali


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India car sales story: Deloitte Our Bureau New Delhi

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he slowdown observed in the passenger car segment in 2011 is just a reflection of the weakness of macroeconomic parameters and cannot be interpreted as a trend that will sustain said a report published by Deloitte Touché Tohmatsu’ s (DTTL) Ma nufacturing Industry Group. The report, which is titled ‘Driving Through BRIC markets—Lessons for Indian car manufacturers’, analyses the impact of macro-economic conditions in BRIC countries through the last decade and attempts to apply the key fi ndings from the Brazilian, Russian and Chinese auto markets to understand the future direction of the Indian passenger car sector. As per the report, the weak macro-economic conditions in 2011, in Brazil and India resulted in the slowdown of car sales. While China continued to exhibit attractive macro-economic conditions but sales were impacted by government measures. Russia sustained its growth momentum as government incentives continued for most of 2011. “The current slowdown is not here to stay as the fundamentals of car sales growth namely, urbansiation and car density are still very attractive” said Senior Director, Deloitte in India, Kumar Kandaswami. The report observed that the slowdown was not just applicable to India as even China

and Brazil slowed down owing to varied reasons such as poor macroeconomic conditions and targeted government measures that impacted car sales. According to the report , the Per Capita Disposable Income (PCDI), urbanisation and car density have been the top three indicators of car sales growth in India. “While the latter two have remained attractive, ‘real’ PCDI growth has slowed down in 2011 in context of persistently high inflation. If inflation were to be curbed or disposable income were to grow faster, India holds a higher chance than most of its BRIC counterparts to witness accelerated growth in car sale,” said Kandaswami. The report also points out that the increasing migration from $3,000-$5,000 household income group to higher ($5,000 and above) household income categories (that is growing at a CAGR of 35 percent) will result in sustained, if not increased demand for the higher-end products, in addition to the demand for hatchbacks. Also, India and Brazil have the highest player concentration with four and five players contributing to around 80 percent of market share respectively, which will change to accommodate more players. The average age of population as a growth driver of car sales in India is less prominent a factor as compared to other macro-economic parameters such as disposable income, urbanisation, and car density. The sheer magnitude of first time car buyers subdues the impact of average age on car sales.

Slowdown is a chance to improve

Our Bureau Chennai

V

Akmal Rahman B Chennai

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K Autocomponents, manufacturer and exporter of starter motor parts, brake components and transmission parts believes that riding through the rough times was a good experience. “Initially like all other companies we were confused and puzzled. The schedules were hitting rock bottom, steel prices were rising and there was no immediate sign of relief from the government,” said the Senior General Manager, MK Autocomponents, Suvrendu Saha. The company realised that the solution for the troubled times lies within itself and only a professional approach can help them. As there was not much demand, the company had lot of time to look back into its business and identified ‘MUDA’ (Japanese terminology for waste) in its operations. “While positioning our efforts together we were surprised to see that with the combined effort we are able to save up to 30 percent of our fi xed expenses. MK Autocomponents, which manufactures over 11 lakh components a year from its Ambattur plant used to subcontract machining operations. However, during the critical time, it utilised its in-house resources for machining operations to reduce the subcontracting, which saved around 30 percent of its expenses. It also helped the company to save the logistics cost.“We have taken this opportunity to sal-

Vipin Dang joins Endurance group

Suvrendu Saha, Sr GM, MK Autocomponents

vage our non-moving stocks due to lack of time and attention. We called our top executives to brainstorm and come out with innovations and they came out with wonderful ideas to save resources in almost all areas of operations. It starts from tapping air leakages to using single side papers,” he said. The company that supplies around 60 percent of its products for commercial vehicles feels that it is only a question of improving the bottom line, while there was no immediate chance of improving the top line like new business. It is only the bottom line that can save the company. “We did exactly the same to focus on the bottom line of our business,” he added. This made the company to get more confident to face any future downturn and also helped to reduce flab in operations to make it more efficient and dynamic. “In turn, we used recession as an opportunity to improve our operational efficiency and save our day” he added. Currently the company is expecting to grow by 200 percent with the inception of new plant in Chennai.

ipin Dang has joined Endurance Group, as a Chief Executive Officer of its casting business unit in India. Dang comes on Board of Endurance with more than three decades of experience with Maruti Suzuki and Suzuki Powertrain. Endurance has been a full service provider for the auto industry—it designs, develops, tests and manufacturers auto components based on the specific requirements of its customers. The company is a leading player in aluminium pressure die casting business segment with more than 55K MT production during the last fiscal. It is present in aluminium casting (including alloy wheels), suspension, transmission and braking products with annual sales revenue of `2,483 crore from domestic operations and `727 crore from overseas operations in 2010-11. Endurance group has 19 plants across India, Italy and Germany.

GNA Duraparts, Mehtiana wins quality award

J

CB has conferred the award of Best Quality to GNA Duraparts, one of the units of GNA Group, for its product and services in the automobile ancillary sector. The award was presented to MD, GNA Group, Gursaran Singh and Director and CEO, GNA Group, Gurdeep Sihra, in a meet held by JCB in New Delhi recently.


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Lean practices are the

key Jagadish Kulkarni VP, Sales and Marketing, Disa India Bhargav TS Chennai

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angalore-based foundry machinery and surface preparation technolog y prov ider, Disa India has adopted lean practices to sustain in the market during the downturn. The practices adopted by the company had helped avert eventualities during the down turn. Vice President, Sales and Marketing, Disa India, Jagadish Kulkarni said, “We adopted lean practices through value engineering of our products, optimisation of costs, strengthening of operations and improving customer services. We also focused on working capital and steps needed to ensure that we have good visibility on it.” The company, involved in providing solutions in moulding, sand preparation, foundry technology and fi lter solutions, was acquired by Mid Europa Partners in 2008 and got merged with Wheelabrator group in 2009. Wheelabrator Group is the world-leading surface preparation company, and the Disa surface preparation division is rebranded as Wheelabrator. Disa (moulding and foundry solutions) retains its brand. Using the experience gained from a large and varied installed base of core machines, the company has provided customised core solutions for specific needs. While specialising in high-volume, high-quality, complex cores, it also delivers machines to jobbing foundries and with multiple parting lines. Talking about the key learnings garnered during the bad times, Kulkarni said, “During the year 2008-2009, we addressed those issues with a ‘bracing for impact’ approach and applied various parameters on the cost control majors. The steps also included parameters like internal strengthening of operations —value engineering, further standardisation of processes, developing alternate solutions, cost optimisation and improving the operational efficiency. We are re-visiting this and in addition, we are now focusing on more internal testing, further optimisation of installation time and deployment of service teams in each region.” Disa foundry projects are based on the fundamental knowledge of manufacturing foundry equipment from sand preparation to casting cleaning. It has executed more than 400 projects with many different types of foundry solutions. It provides customised foundry project solutions for new foundries as also moderni-

sation of existing plants. The manufacturer will also provide components and integrate them perfectly, for obtaining best results of the entire project on time and on specification. Disa is also capable of

supplying additional peripheral equipment related to the core making process. Prime features are f lexibility, productivity, quality, high process reliability and environmental sustainability. All plant compo-

nents are carefully harmonised and are tailor-made solutions —from individual items to integrated systems. In the shot blasting technology, equipment and parts & services are provided under the

Wheelabrator brand. Since the merger of Disa and Wheelabrator in 2009, the shot blast technologies of Disa have been rebranded under W heelabrator. The designs, people and solutions remain unchanged.


Auto Monitor

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INTERVIEW

INTERVIEW

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Eon: Yet another car to prove The latest sensation from Hyundai Motor India—the Eon has been clocked more than 20,000 units since it was launched about three months ago. This is due to several attributes—the prime among them being its small exterior and spacious interiors. The styling of the car has appealed to the Indian customers well due to its efficient space management and storage space. Arvind Saxena and T Sarangarajan speak to T Murrali on the making of Eon. Excerpts from the interview... varied conditions and special requirements of its customers in the Indian market. It took four years of extensive research to develop Eon to match to the needs of Indian market.

Can you elaborate the need for Hyundai to have a car positioned below your flagship, Santro and how you went about the process? AS: Eon is an entry level car for the compact segment customer. While Santro is targeted at customers higher in the compact segment. Both these cars serve different needs, meet different aspirations. Both cars attract different customers both will expand our market share.

How did the fluidic sculpture help in designing Eon? TS: The f luidic Sculpture is Hyundai’s new global design philosophy. The fluidic sculpture design gives Eon a complete new identity.

What was the inspiration for the design and how did you articulate it? AS: Eon is conceptualised and designed keeping in mind the

How was the entire process orchestrated—right from the concept / idea till the launch? TS: With unique segment features, the aim of launching Eon

Hyundai’s mettle Service technicians also fi nd it easy to conduct routine checks. For more intensive services, regular servicing items are arranged in the front so that he can service the vehicle without dismantling too many items (like belts). The life-long items like exhaust manifold is behind, beneath the cowl top, providing ample servicing room to the engine.

was to provide an affordable car for its Indian consumer. Eon was designed to incorporate the unique culture and design preference of the Indian customer. What helped you to design a car according to preference of the Indian customer? AS: Our designers travelled across the country to discover the unique styling element for Eon. This was done by visiting museums, design schools, ancient architectural sites, etc. It took four years of extensive research to come up with the design for Eon. Did you conduct a consumer survey and what was the result? TS: A consumer survey that was conducted before the launch of Eon indicated that many Indian consumers welcomed the launch of an affordably priced car from Hyundai giving the Hyundai brand a stronger sense of accessibility. Developed with

Arvind Saxena, Director, Marketing, Hyundai Motors

unyielding standards of quality, fuel efficiency and style, Eon is presenting a real challenge to competitors in the market. How did you improve on torque, while maintaining the engine cubic capacity? TS: In Eon, we have used high

strength material in the body, which has lowered the weight of the car compared to those in similar category. The higher strength of material ensures that all safety regulations are met and also increases torque for the same cubic capacity of engine. Using the tried-and-tested engine from

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T Sarangarajan, VP, Production Sub-Division,Hyundai

the state-of-the-art Epsilon family, has further contributed to the powerful torque. Tell us about the packaging of the entire shell—the outer looks small but the inner defies notion? TS: Hyundai has followed a

A closer look at the Eon

tradition of offering the latest features and models for their Indian customers. Eon has been conceptualised from scratch and the design is original, not an adaptation from any existing model. A new model sets the designer free to design the product best suited to market conditions, unfettered by limitations imposed by an existing model as opposed to adapting from an existing design, which tends to constrain the designer. This has contributed to a very efficient design, which is not only compact but also not crowded or confused in it’s layout. Has the compact engine compartment been designed for better serviceability? TS: All regular service points of the engine like plugs, radiator coolant and oil level checks are easily accessible to customers so that they can carry out routine and simple checks themselves.

Optimising resources has been the key in vehicle designing and manufacturing. Could you tell us about the contribution by your design centre in Hyderabad? TS: Hyundai Hyderabad R&D centre has played a crucial role for the development of Eon. The Hyderabad R&D centre has worked closely with Hyundai Motor Company (HMC) Korea for Indian market research. Hyundai’s design and development centre focuses on the fluidic design for Eon, which is fresh, appealing and exceeds the expectations of the entry-level segment customer. Eon is completely designed on Hyundai’s new signature philosophy of ‘fluidic design’ and its main emphasis has been laid on adequate occupant space, impeccable style and premium interiors, a rarity in the category.

press, body and assembly shops. Our shop floors work on global line, which means that it offers flexibility to make four different models in the same line without much modifications. All the body carriers in body shop are designed to accept different body floors, side assembly etc through flexible fi xtures. This is possible due to cohesive engineering. For the Eon, we made some changes like body seating pads in the hanger and changing the coolant fi lling nozzles in the assembly line. Tell us about the aftersales service? AS: We anticipated a large number of customers at our showroom to buy our products. We have applied two-pronged strategy. We have increased the servicing capacity at our dealerships in Tier I cities to provide hassle free after sales service to customers. Further, we have also enhanced our focus on the rural market to provide better services to

customers. We have started the concept of quick service at our dealerships in Tier II /III cities. As a part of customer convenience process we have increased the working days of aftersales service and working hours for our customers. We will also conduct customer contact programs such as ‘Hyundai Always Around’ in rural areas along with Eon display for better sales and service experience. Standardisation plays an important role in optimising costs. Tell us about the initiatives on these lines while developing Eon? TS: The optimisation is done through using common components. About 20 percent of the components of the car and 70 percent of the engine components are common with other existing models, which has helped in containing costs.

What are the initiatives taken at your plant to optimise assembly of Eon? TS: We make the Eon, Santro, i20 and others using common facilities across,

MOTORUM 2548

MOTORUM 2048ST

MOTORUM 2044EZ


Auto Monitor

1 - 31 JANUARY 2012

INTERVIEW

INTERVIEW

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Eon: Yet another car to prove The latest sensation from Hyundai Motor India—the Eon has been clocked more than 20,000 units since it was launched about three months ago. This is due to several attributes—the prime among them being its small exterior and spacious interiors. The styling of the car has appealed to the Indian customers well due to its efficient space management and storage space. Arvind Saxena and T Sarangarajan speak to T Murrali on the making of Eon. Excerpts from the interview... varied conditions and special requirements of its customers in the Indian market. It took four years of extensive research to develop Eon to match to the needs of Indian market.

Can you elaborate the need for Hyundai to have a car positioned below your flagship, Santro and how you went about the process? AS: Eon is an entry level car for the compact segment customer. While Santro is targeted at customers higher in the compact segment. Both these cars serve different needs, meet different aspirations. Both cars attract different customers both will expand our market share.

How did the fluidic sculpture help in designing Eon? TS: The f luidic Sculpture is Hyundai’s new global design philosophy. The fluidic sculpture design gives Eon a complete new identity.

What was the inspiration for the design and how did you articulate it? AS: Eon is conceptualised and designed keeping in mind the

How was the entire process orchestrated—right from the concept / idea till the launch? TS: With unique segment features, the aim of launching Eon

Hyundai’s mettle Service technicians also fi nd it easy to conduct routine checks. For more intensive services, regular servicing items are arranged in the front so that he can service the vehicle without dismantling too many items (like belts). The life-long items like exhaust manifold is behind, beneath the cowl top, providing ample servicing room to the engine.

was to provide an affordable car for its Indian consumer. Eon was designed to incorporate the unique culture and design preference of the Indian customer. What helped you to design a car according to preference of the Indian customer? AS: Our designers travelled across the country to discover the unique styling element for Eon. This was done by visiting museums, design schools, ancient architectural sites, etc. It took four years of extensive research to come up with the design for Eon. Did you conduct a consumer survey and what was the result? TS: A consumer survey that was conducted before the launch of Eon indicated that many Indian consumers welcomed the launch of an affordably priced car from Hyundai giving the Hyundai brand a stronger sense of accessibility. Developed with

Arvind Saxena, Director, Marketing, Hyundai Motors

unyielding standards of quality, fuel efficiency and style, Eon is presenting a real challenge to competitors in the market. How did you improve on torque, while maintaining the engine cubic capacity? TS: In Eon, we have used high

strength material in the body, which has lowered the weight of the car compared to those in similar category. The higher strength of material ensures that all safety regulations are met and also increases torque for the same cubic capacity of engine. Using the tried-and-tested engine from

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T Sarangarajan, VP, Production Sub-Division,Hyundai

the state-of-the-art Epsilon family, has further contributed to the powerful torque. Tell us about the packaging of the entire shell—the outer looks small but the inner defies notion? TS: Hyundai has followed a

A closer look at the Eon

tradition of offering the latest features and models for their Indian customers. Eon has been conceptualised from scratch and the design is original, not an adaptation from any existing model. A new model sets the designer free to design the product best suited to market conditions, unfettered by limitations imposed by an existing model as opposed to adapting from an existing design, which tends to constrain the designer. This has contributed to a very efficient design, which is not only compact but also not crowded or confused in it’s layout. Has the compact engine compartment been designed for better serviceability? TS: All regular service points of the engine like plugs, radiator coolant and oil level checks are easily accessible to customers so that they can carry out routine and simple checks themselves.

Optimising resources has been the key in vehicle designing and manufacturing. Could you tell us about the contribution by your design centre in Hyderabad? TS: Hyundai Hyderabad R&D centre has played a crucial role for the development of Eon. The Hyderabad R&D centre has worked closely with Hyundai Motor Company (HMC) Korea for Indian market research. Hyundai’s design and development centre focuses on the fluidic design for Eon, which is fresh, appealing and exceeds the expectations of the entry-level segment customer. Eon is completely designed on Hyundai’s new signature philosophy of ‘fluidic design’ and its main emphasis has been laid on adequate occupant space, impeccable style and premium interiors, a rarity in the category.

press, body and assembly shops. Our shop floors work on global line, which means that it offers flexibility to make four different models in the same line without much modifications. All the body carriers in body shop are designed to accept different body floors, side assembly etc through flexible fi xtures. This is possible due to cohesive engineering. For the Eon, we made some changes like body seating pads in the hanger and changing the coolant fi lling nozzles in the assembly line. Tell us about the aftersales service? AS: We anticipated a large number of customers at our showroom to buy our products. We have applied two-pronged strategy. We have increased the servicing capacity at our dealerships in Tier I cities to provide hassle free after sales service to customers. Further, we have also enhanced our focus on the rural market to provide better services to

customers. We have started the concept of quick service at our dealerships in Tier II /III cities. As a part of customer convenience process we have increased the working days of aftersales service and working hours for our customers. We will also conduct customer contact programs such as ‘Hyundai Always Around’ in rural areas along with Eon display for better sales and service experience. Standardisation plays an important role in optimising costs. Tell us about the initiatives on these lines while developing Eon? TS: The optimisation is done through using common components. About 20 percent of the components of the car and 70 percent of the engine components are common with other existing models, which has helped in containing costs.

What are the initiatives taken at your plant to optimise assembly of Eon? TS: We make the Eon, Santro, i20 and others using common facilities across,

MOTORUM 2548

MOTORUM 2048ST

MOTORUM 2044EZ


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Visteon to display new technologies T Murrali Chennai

V

isteon India will be displaying a variety of innovative products for two-wheelers at the Auto Expo. The company has redefi ned biking by introducing several ideas that emerge out of its mega trends such as sustainability, connectivity and user trends. The company has specially designed a motorcycle, for demonstration purpose only, incorporating all the innovations. In an exclusive demonstration to Auto Monitor, the Managing Director of Visteon India, A Vishwanathan said the new technologies to be demonstrated were fully developed in India. Called the Growth Market Bike (GMB) the demonstration

The GMB instrument cluster

motorcycle shows how technologies can be integrated to meet the preferences of drivers and the

cost and packaging requirements of two-wheeler manufacturers in India and in other growing mar-

kets in Asia, Eastern Europe and South America. The Director of Visteon

India (customer group) Murali Vaidyanathan said the innovative products and technologies conceived specifi cally for the Indian market were well received by customers. “We expect to partner with two-wheeler manufacturers and introduce some of these contemporary products in India and other growth markets,” he said. Elaborating the technological features, the Industrial Designer, Corporate Innovation of Visteon Engineering Centre India, Harsha Raju said though the innovations revolve around the bike, it was focussing on key areas such as Engine Control Unit (ECU) , front lighting, fuel charge assembly, fuel delivery module, instrument cluster with body electronics, mechanical throttle body and rear lighting. The demonstration motorcycle is part of a wider collaboration between Visteon and 3M, which combines Visteon’s automotive intellect with 3M’s advanced materials to bring to market innovative technologies at an accelerated pace. V i s t e o n ’s Engine Management System (EMS) for

A Vishwanathan MD, Visteon India

What was the inspiration for Visteon to develop a host of technologies for two wheelers? We see some synergies between two-wheelers and fourwheelers. As we continue to grow in the market, we see huge potential in the two-wheeler business. That’s basically the idea of tapping the segment.

How have you leveraged your presence in varied segments while developing the GMB? Visteon is present in climate, electronics, interiors and lighting systems and all the divisions were involved in developing the motorcycle. These technologies are aligned with the megatrends as it helps the end consumer save fuel besides, being environment friendly due to better material used, reducing weight and pro-


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for two-wheeler sectors motorcycles designed specifically to provide value-priced electronic fuel Injection to one-cylinder and tw in-cylinder engine growth market customers meeting emissions regulations. The compact ECU with integrated sensors can be located onto the throttle body, which reduces wiring harness complexity and costs. The reduced weight and manufacturing / assembly costs through innovative material selection and assembly design and reduced wiring harness complexity, helps in containing costs while achieving five to seven percent fuel efficiency. With space becoming premium in the head console, the t wo-wheeler manufacturers are working on several ideas to optimise space without compromising on functionality and aesthetics. Visteon uses a halogen projector for a low beam function and a halogen ref lector for a high beam function. It also incorporates two incandescent front position lamps with light blue filters providing a cost-effective and attractive solution for projection front lighting. The instrument cluster with body electronics features benefits from the company’s expertise in driver information systems (instrument clusters) and body control modules. This instrument cluster integrates body electronics features to provide a compelling value proposition for all vehicle classes including growth markets. The company also offers an array of rear lighting solutions for all vehicle classes by deploying LED light sources with 3M’s light management lens technology. This creates energy efficiency by using fewer LEDs in a thin profile.

viding better value.

Is this the first time Visteon is getting in to twowheelers in a big way? We do some amount of components for two-wheelers in China. We also do few components for Honda in Thailand and in India.

What has been the response from the twowheeler manufacturers for the technologies that you developed? The response has been good. The idea was more to demonstrate technology. These technologies can be commercialised as and when the OEMs see the requirements.

Is GMB for India market alone? While it is focussed on the Indian market, certainly there are lot of relevance for the Chinese and other markets also. That is why we call it as ‘growth market bike.’

Going forward, will you have a separate manufacturing unit for two wheeler components considering the sheer volumes? It is not necessary that two wheeler and four wheeler products have to be manufactured in different plants. The fi ner details will be worked out when we get in to commercialisation.

Views of the GMB


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1 - 31 JANUARY 2012

Mercedes-Benz India to launch its new range of cars Our Bureau Mumbai

M

ercedes-Benz India is all set to further unveil the sporty and dynamic attributes of the three pointed star, at the 11th Auto Expo. Mercedes-Benz India will be introducing its new design language that invokes excitement and reflects dynamism of the brand. The company will set the pulse of the new generation racing by showcasing the concept A-Class, which is globally acclaimed for its expressive design and technology. Among the main highlights for Auto Expo 2012, Mercedes-Benz India will also be showcasing its new generation compact cars, future technology like the FuelCell, and also an array of exciting

Delphi India at Auto Expo Our Bureau New Delhi

D

elphi India showcased the products , classified under three categories—safe, green and connected for the Auto Expo. These products have been developed keeping in mind the three mega trends observed by the company. Some of the products that will be launched under the category is ‘Green’ are aluminum cables to provide weight reductions of up to 48 percent over traditional copper core cable without sacrificing performance, electrical centres for lightweight and compact optimised electrical architecture solutions, five cylinder compact variable compressor engineered to be lightweight yet high-strength that has a die-cast aluminum shell, and provides improved comfort, fuel economy and dehumidification. Some ot her products under this category are High Performance Front and Rear Combination HVAC module to eliminating the need for both front and rear HVAC units, 12mm folded tube condenser, GDi fuel system for gas engines, which can bring about substantial gains in combustion efficiency and result in cleaner engine-out emissions requiring less aftertreatment, evaporative emission control systems to help limit the amount of gasoline vapours released into the environment by reducing evaporative emissions that occur from fuel storage and delivery in a vehicle’s fuel system. Variable Valve Timing technology to help vehicle manufacturers enhance engine efficiency. Under the category of ‘Connected’, the company will launch products like MyFi offer innovative implementation of features including India navigation, bluetooth, wifi, cellular connectivity, natural voice recognition, hands-free system operation and audio streaming. The Body Control Modules (BCMs) which will also be showcased at the Expo will provide flexible architecture with minimised packaging. For safety, Delphi will showcase parking guidance system and ultrasonic intrusion protection.

product range that is hallmark of the state-of-the-art innovations in automobile manufacturing, synonymous with the company. Mercedes-Benz India stall at the 11th Auto Expo will be largest among luxury car manufacturers spreading over 3,600 sq metres. The stall will see the presence of more than 10 cars that includes stunning cars like the SLS GT3 and the DTM car, and also a range of performance cars from the AMG stable. The auto expo will also provide the motorsports enthusiasts of the country, the opportunity of enrolling for the soon to be launched Mercedes-Benz- JPSI Performance Driving Academy, a first of its kind platform for nurturing racing talent in India. “Our showcase at the AutoExpo this year will be impressive both in terms of presentation and

display vehicles. The MercedesBenz Arena located exclusively at Hall 15 will feature the company’s new design language; it will also showcase the pulse of a new generation, the concept A-Class and the equally acclaimed Fuel Cell technology. There will be a lounge area to offer an exclusive experience, special accessory

outlets besides opportunities to offer networking possibilities for patrons and representatives. There will be several show-stoppers including the launch of the stunning SLS AMG Roadster. Besides these there will be technology demonstrators as well as an array of exotic MercedesBenz cars that represents

automotive design and technology at its best,” said Managing Director& CEO, MercedesBenz India, Peter Honegg. Mercedes-Benz India has had very successful 2011 with a growth of 31 percent (January – November 2011- 6,698 units sold as compared to 5,110 units for January-November 2010).


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ALL to showcase Janbus, plus five more T Murrali Chennai

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hennai headquartered com mercia l veh icle and construction equipment manufacturer, Ashok Leyland is all set to change the landscape of intracity transport with its new offering— Janbus that it plans to showcase at the Auto Expo along with five other products. In addition to Janbus, the company will also showcase Optare bus (manufactured by Optare plc) and a truck under the brand Ashok Leyland. Besides, it will also exhibit three new offering from Ashok LeylandNissan joint venture such as CNG and passenger version of the LCVDost and a six-tonne refrigerator truck. Recently, Ashok Leyland announced that it is in the process of enhancing its stake to 75.1

percent from the current 26 percent in Optaret. While the body of the Optare bus is manufactured at the UK, the engine and transmission are from the Indian company. Speaking to Auto Monitor, the Managing Director of Ashok Leyland, Vinod Dasari said coinciding with the theme of Auto Expo, which is ‘Mobility for all,’ the company is launching Janbus—signifying intracity commuting at ease. The company has gone many steps ahead to reduce couple of entry steps in to the bus. According to him, this is the fi rst bus in the world to have single step entry, front engine and fully flat floor. This will help passengers in terms of ingress and egress besides, helping the conductor to move at ease within the bus while on duty. The comfort is further enhanced with its full air-suspension coupled with

kneeling and double acting telescopic type shock absorbers at front and the rear. When asked about the inspi-

ration to develop Janbus, Dasari said the cost of acquisition and operations are prohibitively high for the ultra low flow bus, which has different floor levels and engine at the rear. This is almost the same case with rear engine semi-low floor bus having entry plus one step. Janbus is economical in terms of acquisition as well as maintenance since it has front engine, entry plus one step and flat floor across. Enough thought has gone in to designing the bus even for daily cleaning as the passenger seats are mounted on the sidewalls using cantilevers and space is managed with seatmounted stanchions. Still it is a bus having the option for customers to build the body on chassis as per their choice and not a fullybuilt option. “We have registered 11 patents for the frame structure and five patents for the drivetrain,” Dasari said. Powered by Ashok Leyland’s H-series six-cylinder CNG MPFI

engine meeting BS4 norms with a power of 235 HP @ 2,400 RPM, the Janbus has six-speed synchromesh with ‘Leymatic automated manual transmission’ for improved driveability thereby reducing driver fatigue. In addition to CNG (with cylinders mounted on roof ), the bus comes with diesel engines compatible to BS III and BS IV norms. It has tubeless tyres and is suitable for city bus, BRTS and airport tarmac bus. The vehicle has an option to have a maximum of five door configurations. Besides, it has options to take direct drive from the engine for HVAC system. In addition to Janbus the company will also display U 3723 H truck suitable for construction, boom pump and stone marble applications. The truck is powered by H-series six-cylinder engine mated with ZF 1110 gearbox with nine forward and one reverse gears.


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Ford to preview all-new global vehicle Our Bureau Mumbai

F

ord is planning to provide fi rst glimpse of an all-new vehicle planned for introduction in India and other global markets in the soon at the 11th Auto Expo 2012 in New Delhi this month. With expected attendance of 1.4 million visitors, Auto Expo 2012 is an ideal location to showcase the newest Ford product stand at the 11th Auto Expo 2012. This next-generation vehicle will take centrestage on Ford’s high-tech and interactive stand, which will cover roughly 1,400 sq metres. Highlights planned for Auto Expo 2012 include comprehensive safety and quality displays, a 3D theatre, live shows and a crowd-sourced, interactive driving game. The new vehicle will be the latest Ford global product, a vehicle designed to help expand Ford’s footprint in the world’s fastest-growing auto markets, including India. It will be the second of eight products Ford plans to bring to India by middecade. Also on the Ford stand will be the Ford Figo, the AllNew Fiesta, the Ford Classic and the Ford Endeavour. The Figo has already sold around 130,000 units since its launch in March 2010. While the Figo has only been in the Indian market for a short time, it has become the country’s most awarded car ever, and has garnered industry-wide recognition as a great value-for-money vehicle, which is exported to close to 30 international markets. The Ford Classic, as it is known today, has established a strong foothold in the Indian market by winning more than 120,000 customers with its onroad dynamics and best-in-class fuel efficiency, while the Ford Endeavour is a popular all-action SUV. The All-New Ford Fiesta fourdoor sedan, soon to be available with the new best-in-class powershift automatic transmission, also will be on display. A premium offering in the B-car segment, it is another positive step in Ford’s strategy to bring the latest technology to customers in India. Compared to traditional four-speed automatics, the PowerShift transmission can improve fuel economy by up to nine percent, depending on the vehicle.

The Ford stand will take advantage of the latest technology to deliver a lively and interactive experience for customers. A major highlight will be allowing the audience to take control of a vehicle on a large LED screen—virtually. Using a motion-sensing camera, the crowd will collectively be able to control the vehicle as it rolls along the road, and unlock information at each bend. The display will prompt the crowd to lean left and right during a short drive as it shows highlights of the route. Visitors will be able to access the company from the social media sites, Facebook, view event images and tag themselves during each game. Ford also will have a Figo Theatre that allows customers to sit inside

the car and watch a film played on a plasma television in front of the windscreen. The video will explain the Figo’s Smart technologies. Another theatre, in 3D, will showcase the technologies Ford takes advantage of in designing, developing and engineering its vehicles. Guests will navigate a virtual car interior under the guidance of a Ford engineer. A Quality Touch Table will provide guests with a hands-on opportunity to feel the quality of the materials used in Ford vehicles, while a Green Touch Table will demonstrate the long-term value of Ford’s green technology, delivering on Ford’s commitment to provide customers with low total cost of ownership. A Fiesta body shell also will

be on display, giving visitors an opportunity to discover the engineering features that make

the Fiesta safe, sturdy and secure on the road. Guests will be entertained by a local magi-

cian who will perform on the stand, telling Ford’s safety stories in a fun way.

We supply manufacturers of trucks, buses and trailers around the world with leading technologies for braking, stability and transmission automation systems. Our innovations help make commercial vehicles more efficient and environmentally friendly. We lower power consumption. We use lighter materials to reduce vehicle weight. We optimize energy recovery. Our passion is to increase fuel economy and reduce Co2 emissions by 20% by 2020.

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Website : www.kremlinrexson-sames.com


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Mahindra to showcase Ssangyong, EVs Our Bureau Mumbai

M

ahindra & Mahindra (M&M) is gearing up to make a mark at the upcoming Auto Expo 2012. It is looking to unveil Ssangyong vehicles for the fi rst time in India. In addition, Mahindra will also showcase vehicles of the future through its electric vehicles. “The Delhi Auto Expo is the perfect platform to showcase Mahindra’s commitment to technological advancements and innovative automotive solutions that are showcased in our gamut of vehicles from two wheelers to heavy trucks. Our eco-friendly vehicles are proof of our commitment to a cleaner environment, fuel efficiency and

Mahindra will showcase both the Rexton and Korando E, which are slated to be launched in India shortly emphasis on customer satisfaction. Mahindra’s Sustainable Mobility Solutions illustrate our commitment to the research, product development and advancement of the most cutting-edge technologies to bring about a cleaner and greener tomorrow,” said President, Automotive & Farm Equipment Sectors, Mahindra & Mahindra, Pawan Goenka. Post the acquisition of Ssangyong Motors, there has been a lot of interest within Indian consumers to see these products. Thus, Mahindra will showcase among other vehicles, both the Rexton and Korando E which are slated to be launched in India shortly. The Rexton encompasses all of SsangYong’s off road knowledge and experience into one package, providing an all weather, all terrain transport and towing capabilities. Developed on an all new monocoque platform, Korando E is a contemporary, advanced and capable compact crossover blending SsangYong’s engineering strengths with modern European design. In addition to the above, Mahindra will showcase the future of mobility - electric vehicles by displaying the Mahindra Reva NXR. The NXR is a technological delight and is sure to attract the attention of auto enthusiast as well as technology masters. Mahindra will also display for the fi rst time the electric version of its highly popular sedan, the Verito. The sedan which has been registering sizeable growth in volumes will be seen in its new electric avatar. The Verito Sedan and the Reva NXR will encompass inherent qualities that are inimitable to Mahindra & Mahindra and are fundamental to the popularity of its vehicles with customers in India and around the world. In addition the company will also display its highly popular XUV5OO along with the Scorpio, Bolero, Genio Double Cabin and Thar. Mahindra along with its subsidiaries will also display the two wheeler and M&HCV range of products.


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Hydraulic Engine Mounts

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For further details, contact sales@svilindia.com or visit www.svilindia.com


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New Tata tipper with Allison transmission Our Bureau Mumbai

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ata Motors ha s launched the new Tata Prima 3138.K 8X4 tipper equipped with an Allison 4430R transmission at the recent Excon 2011 in Bengaluru and is likely to showcase the same at the upcoming Auto Expo 2012. Tata’s Prima 3138.K is a fouraxle, 31-tonne GVW tipper with an Allison 4430R automatic transmission. Powered by Cummins ISLe (CRDi) engine, the tipper has a maximum of 370HP and features new generation brakes, ABS and hub reduction axle, specially designed for off-road applications. The tipper also comes with a 19 cubic metres rock body for better payload vol-

Comfort & safety are important and the new Tata tipper includes a spacious, AC cabin with a pneumaticsuspension driver’s seat & adjustable steering wheel. These amenities afford drivers the comfort necessary to achieve long hours of daily operation ume and faster tipping time. Customers will also benefit from the many proven characteristics of the Allison 4430R transmission, including outstanding reliability and durability. Allison fully automatics allow faster acceleration resulting in shorter trip times and provide more torque to the wheels. Built in prognostics extend oil change intervals, and with two hands on the wheel, safety is increased. Comfort as well as safety are important and the new Tata tipper includes a spacious, air-conditioned cabin with a pneumatic-suspension driver’s seat and adjustable steering wheel. These amenities, along with the smooth shifting of the Allison fully automatic transmission, afford drivers the level of comfort necessary to achieve long hours of daily operation, also increasing productivity. Head, Sales and Marketing, M&HCV Trucks, Tata Motors, Vinod Sahay said “Prima 3138.K tippers come with powerful and reliable Allison Automatic transmission optimised for maximum performance and improved efficiency.” The Tata Prima 3138.K tipper is ideal for carrying overburden in coal, iron, limestone and other applications involved in the heavy mining industry as well as similar off-road applications. Allison transmissions are offered by over 300 OEMs around the world, and are chosen by customers when reliability, durability, performance and efficiency are essential. Allison Transmission is the world’s largest manufacturer of fully-automatic transmissions for medium and heavy-duty commercial vehicles, medium

and heavy tactical US military vehicles and hybrid-propulsion systems for transit buses. Allison transmissions are used in a variety of applications including on-highway trucks (distribution, refuse, construction, fi re and emergency), buses (primarily school and transit), motor homes, off-highway vehicles and equipment (primarily energy and mining) and military vehicles (wheeled and tracked). Founded in 1915, the Allison business is headquartered in Indianapolis, Indiana and employs approximately 2,750 people. Regional headquarters with dedicated support staff are located in China, the Netherlands, Brazil, India and Japan. With a global presence in 80 countries, Allison has over 1,500 independent dis-

tributor and dealer locations. Tata Motors has a consolidated revenues of `123,133 crore ($ 27 billion) in 2010-11. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, Spain and South Africa. Among them is Jaguar Land Rover, the business comprising the two British brands. Tata Motors is the country’s market leader in commercial vehicles and among the top three in passenger vehicles. It is also the world’s fourth largest truck manufacturer and the third largest bus manufacturer. Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America.


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Manatec to launch newer version of Fox 3D Our Bureau Chennai

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ondicherry-based garage equipment manufacturer, Manatec will be launching its fi rst ever indigenous vision based 3D wheel aligner branded “Fox 3D” in India. According to the company’s Joint Managing Director, M Kalaiichelvan, “Fox3D is a sustainable alternative to the imported brands of 3D aligners in the market. This new generation aligner increases productivity by double compared to conventional CCD aligners. For example, if an alignment on a car takes 10 minutes with a CCD aligner, it only takes five minutes in Fox 3D.” Fox 3D uses image processing technology to detect the align-

Kalaiichelvan, Jt MD, Manatec

ment angles using customised high defi nition cameras and target plates. These cameras detect any movement on the target plates fitted on to the wheels and process the results as wheel alignment angles. These angles can then be corrected to the vehicle manufacturer’s specification by the technician live on screen. Fox 3D comes in three different models suitable for pits, lifts and with an automatic height adjustment model. The software is designed by Manatec’s R&D engineers, keeping in mind the requirements of technicians using the machine. Kalaiichelvan says, “We have brought in our 25 years of expertise in alignment technology to design the software that is user friendly even for a semi-skilled technician. Simple, easy-tounderstand visual icons break language barriers and guide the technicians step-by-step on an alignment programme. The data manager facility will help the workshop owner to analyse his alignment history for any period, date-wise and yearwise and vehicle registration number-wise. Even videos on the vehicle adjustment points have been included to assist the alignment technician”. For saving substantial time and to increase productivity, Manatec has designed Push and Pull run out compensation software that involves a 30 degrees movement of the car from its centre. Further time is saved through its customised Quick wheel alignment programme through which the technician can pre-set vehicles to be aligned (OE program), skip regular screens and select Runout / Caster swing programmes. Explaining about the benefits Fox 3D, Kalaiichelvan said, “Being an indigenous product, the unique advantages for a customer with Fox 3D is the

immediate spare parts availability, economical cost for spares and total control on service issues. This gives customers enormous confidence since compared to imported makes, with Fox 3D they save on the cost of equipment, cost of spares and cost of machine downtime, yet they get a world class product. These savings are critical for any workshop”. The target plates in a 3D aligner are virtually maintenance-free, whereas in a CCD aligner the sensor arms are service prone. This offers further cost savings to a customer. Manatec’s Fox3D is already recognised and approved by Renault, Tata Motors, JK tyres and Apollo Tyres. Further approvals are on its way. The company participates in 2012 Auto Expo in Delhi, where it will show-

Fox 3D Aligner

case Fox3D along with its allied products. Later in 2012, Manatec

will display its 3D aligners in overseas expos in China, U.S.,

South Africa, Russia, Germany, Argentina and Mexico.


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TVS & Sons plans slew of announcements at Expo T Murrali Chennai

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t’s going to be a slew of announcements by TV Sundram Iyengar & Sons (TVS & Sons), the holding company of the TVS Group and is also in dealership, parts distribution business. With the intent to double its distribution business by 2015, the company is currently at its drawing board to formulate plans to achieve this objective. Speaking to Auto Monitor, the Joint Managing Director of TVS & Sons, R Dinesh said to accomplish this target the company will be present all over India, which is now predominantly present in south. “A big portion of the new ventures will come

from other areas than south India. We will be showcasing this intent at the Auto Expo. In addition, we will announce joint ventures with three to four companies,” he said. As part of its intent, the company will be expanding this business beyond geographical boundaries of India. Already it has its presence in few countries including Bangladesh and Sri Lanka with about 15 percent of the revenue coming from these two countries. The company will expand the distribu-

R Dinesh, Jt Managing Director, TVS & Sons

A big portion of the new ventures will come from other areas than south India. We will be showcasing this intent at the Auto Expo. In addition, we will announce joint ventures with three to four companies —R Dinesh, Joint Managing Director, TVS & Sons tion business to more markets, he said.

Projects In Pipeline Speaking on the aftersales service business that operates under the division—TVS Automobile Solutions, he said the company will have similar approach—expanding its base in places other than south India, where it has strong presence. Since availability of requisite manpower and skill development is challenging, the company hopes to strive hard to make the service business as a lucrative one so that it can attract investments from different quarters. The company is planning to establish a couple of partnerships with organisations to impart skills on general as well as specific to TVS. It will be looking at Madhya Pradesh and western India for skill development. The exhibits will showcase the company’s plans at the Auto Expo, he said.

Logistics With regard to TVS Logistics he said, “In this line of business we will showcase TVS as an ideal partner for any Indian company going global and vice versa.” The company is likely to get another fresh round of funding and an announcement will be made towards at the expo, he said. Utilising this opportunity it will project the need to get industry status for logistics and service segments, he concluded.


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TVS Motor’s new technology to consolidate engines Our Bureau Chennai

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n a bid to offer unique riding experience as well as to enhance fuel efficiency for its entry level and midsegment two-wheelers, TVS Motor Company has developed a new technology, which will be deployed in its vehicles starting from 2013. The fi rst vehicle will be a scooter and it will give at least 20 percent more fuel economy than its counterpart with the conventional engine, without compromising on the ride comfort. For the fi rst time the engine will be common for scooters and motorcycles that are usually ways apart in terms of fuel efficiency, design, weight, driving characteris-

tics and even the sheer looks. Though not quantified, the company will benefi t out of economies of scale significantly, said President, New Product Development, TVS Motor, Harne Vinay Chandrakant. The objective of this technology development is to deliver a compact engine layout that will deliver enhanced fuel efficiency. Besides, it is usable across product forms like scooter, motorcycles and step-thru vehicles. “This technology also delivers the lowest CO2 in scooters while providing for low floor board and space for luggage,” he said. Yet another innovation is the deployment of the new technologies in the existing range of engine itself. Chandrakant

said the R&D team has incorporated all the new add-ons to the engine cover so that these can alone be changed or modified. The remaining portion of the engine and the gearbox remains intact. This helps the company in optimising the cost of manufacturing due to standardisation of parts besides, transformation of new technology, he said. T he ne w t e c h nolo g y, termed ‘T VS Automatic Transmission”, developed by the company employs an automatic transmission in place of conventional Continuously Variable Transmission (CV T) technolog y. The automatic transmission changes gears effortlessly through electronic control – like a selector switch in the handlebar automati-

Harne Vinay Chandrakant, President, New Product Development

cally selecting the gear ratios for a particular riding condition. This enables the engine to run at its most efficient RPM (Revolutions Per Minute) for a range of vehicle operating conditions, thereby maximising the engine performance to achieve peak efficiency, besides, overriding the requirement of a clutch. While the new engine or the technology helped the company to reduce the weight of scooters by 15 percent, it has increased the weight of motorcycles by around five percent. This is primarily because there were lot of avenues for weight reduction in scooters, he said. In the case of scooters, the fuel efficiency is partly enhanced by doing away with the cooling fan and instead incorporating an electric fan that operates based on the actual requirement of the engine temperature dissipation. “By this way we could optimise the engine’s thermal efficiency and get improved mileage,” he said. “We have developed this technology on a highly innovative vehicle layout with compact packaging and light weight construction presently with a 110 cc four-stroke engine with two independent, high precision actuators for the clutch and gear shift operations, mounted directly on the engine itself. The characteristics of the actuators are specifi cally optimised for low power consumption and frequent gear changes while driving in dense traffi c conditions,” he said. The company has tested this technology in up to 350 cc engines as, according to him, this technology can be deployed in any engine confi guration. However, it hopes to induct it in the entry level and executive motorcycles and scooters due to higher fuel economy expectations. The company has added an innovative ECU (Electronic Control Unit) which enhances the performance and fuel economy, giving greater convenience of riding. The improvement in engine efficiency is derived through friction reduction and multi-map electronic ignition control, while transmission efficiency is boosted through the automatic transmission technology” he said. The company has been working on this project for the last seven years along with several universities. It has fi led several patents in India and abroad, he added.


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SKF to introduce third gen bearings technology Our Bureau Mumbai

Domenico Bosco, Application Engineering Manager, SKF Automotive Division

Abhishek Parekh Mumbai What are the key areas where you have gained from aerospace segment? Aerospace segment is at the forefront of research and application for weight reduction and new materials research. However, all the applications cannot be feasible for automotive sector due to cost and volume imperatives in the automotive sector. Bearings or any other component/systems failure is not acceptable on an aircraft or even windmills and hence reliability takes precedence over all other consideration for these industries. That may not be the case with automotive sector. What is the direction of usage of new materials in bearings? New materials are a constant process in the automotive sector. Rear closures in many of the vehicle models in Europe are already manufactured using plastics. We are already working on advanced materials technology including carbon fibres for aerospace and other segment and we are evaluating possibility for using it in the automotive sector as well. However, it will take more time for adoption due to cost of material itself, as well as the manufacturing process. What is the scope of asymmetric bearings concept from SKF? The concept of asymmetrical design can be applied to various kinds of bearing applications. It imparts necessary weight and thrust to the areas where it is needed implying better performance and rigidity. The design of the asymmetrical bearings is patented by SKF. We have been selling bearings with asymmetrical design for around six years and the flexibility of application of the concept continues to surprise us. The product was developed for racing application to tackle some performance issues in tight cornering conditions while driving on a race track. The application that we were able to develop as per customers’ specifications far exceeded the required minimum performance parameters that the customer had specified (a GM’s Cadillac series race car in this case). The aim of the design is to reduce friction for achieving higher performance parameters at same or even lower costs.

What are the constraints while designing or developing products for Indian market? We are constantly trying to achieve the best ‘compro-

mise’ between performance, cost and reliability across all segments. More specifi cally, we are looking to have a much higher emphasis on cost and reliability while developing products or applications for compact cars in India. In India, we have a huge customer base of two wheelers and this segment is always looking for cost effective solutions. It is critical to have right ‘value for money’ preposition for any solutions developed for passenger car segment. Compact cars need to be much more comfortable compared to motorcycles as well as offer good value for money in terms of fuel economy. It also should provide a level

of prestige to the buyer. Hence an OEM needs to improve on the manufacturing process to deliver such a package and that is difficult to achieve under most circumstances. Any new product developments in the pipeline? We have been introducing one new product every month in the automotive division over the last 24 months. I cannot give you more details, but we are looking at more integrated solutions for the Indian market. The Indian market is consuming mainly generation one and two type of bearings and it is likely to move to the third generation bearings with twin flanges.

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KF is looking to address emerging needs in the areas of hybridisation and electrification of vehicles and working on the next generation of bearing products. Some of these products would also fi nd their way to Indian OEMs. “The automotive industry has already gained a lot and continues to learn from the aerospace sector mainly from the perspective of weight reduction. Application of aluminium-based components started with aerospace and is currently adopted in automotive space and there are

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012 could well be the year that the industry demonstrates its ability to lead and shape skill development initiatives in India. The opportunity provided by the new framework under the Prime Minister’s council for skill development has given industry and entrepreneurs the framework and the ecosystem to determine what type of, the number of, and the quality of skill development and training would happen in 2012 and beyond. Skill development has to continue to be a CEO agenda, as well as a corporate and collaborative agenda. The auto industry is uniquely poised to provide leadership and should lead this industry effort. Training and the hiring of skilled workers cannot be allowed to fall casualty to the downturn as it is only a skilled workforce that can ensure that companies can withstand the shock of a tough business environment. The buy-in for this aspect should happen at the board and CEO level, and decision on this issue should not be just left to the HR department or line managers where the pressure of achieving immediate targets may prevent them from taking a long-term view. There are three distinct opportunities for leadership by industry in this framework. First, the setting up of large scale training facilities by the private sector including the option to avail of funding from the National Skill Development Corporation (NSDC), second to work with the training partners in the NSDC system and partnering with them to get trained persons for industry including

your fi rms or the supply and service chain, and third to determine the outcomes that industry and entrepreneurs would like the training establishments across the country to adhere to by leading work in the Sector Skill Council (SSC). The Automotive Sector Skill Council promoted by ACMA, FADA and SIAM is perhaps the best opportunity for fi rms in the auto sector to align the skill development efforts with the needs of industry. The Automotive Skill Development Council (ASDC) was the fi rst SSC to be approved and funded by NSDC. The ASDC now needs continued industry support and participation to be able to demonstrate the ability of industry to provide leadership in this key task. The auto industry in India has led efforts to set up training establishments and facilities either by companies themselves or in partnership with an educational or training establishments, partnering the ministry of labour and state governments in the ITI Public Private Partnership mode, setting up driving schools, etc. These have been mostly individual company-led initiatives, perhaps in 2012 this has to move most defi nitely to the collaborative mode and an industry wide effort. The scale and scope of past efforts need to be enhanced dramatically and rapidly. There has to be a sense of urgency determination and surefootedness as we go into the New Year. The National Skill Policy 2009 calls for industry led action to formulate the skill development plans for each sector. The auto sector would need to do so as well. The ASDC provides a

Dilip Chinoy, MD, National Skill Development Corporation

unique platform to do this. All stake holders are keenly watching the roll out and progress of the ASDC. The leadership provided by the auto industry for example in the pilot role-out of skill development in schools of Haryana, would in a large measure determine the acceptance of the SSC led model of skill development and certification. This cannot be a success unless industry supports this effort and provides the best in their fi rms to work with the team in ASDC. It is clear that if we continue to focus within our own fi rms, we would not be able to solve the demand supply problem and fishing for talent would only result in wage increases. Members of industry bodies have to bring their members together to farm skills. Agreed that ACMA, FADA and SIAM have come together to form ASDC. However, while ASDC goes about its work, there is more that could be done and should be done.

The sector requires a database of skill sets required at different levels in the industry, right across the supply, manufacturing, sales and service chain. Firms in the sector need to communicate this to the ASDC. The ASDC has to develop National Occupational Standards (NOS). For each NOS, a set of competency standards need to be put in place for training organisations to train persons. Further the need for persons at different skill levels in different parts of the country should be prepared and shared, this could be for different time horizons, so that there is enough information available for both job seekers and training establishments to know what the opportunities are. While individual fi rms are doing so it is important to do this on an industry wide basis. The key is not to only identify current skill sets but also for future ones. The objective should be bench mark against

global standards. One of the key New Year resolutions could be to hire only trained and certified persons. One is aware of the shortage of people, but hiring untrained persons and training them in house may solve the immediate problem but definitely not medium or long term problems. Most importantly it would not create the ecosystem for an industry-led initiative for skill development. Another consequence of this step would be that the industry would not employ over-qualified persons. In many cases, an HR head may ask for a graduate although the job may not require that level of qualification. Sometimes the demand is for an MBA or an engineer again perhaps a level or two higher that what is required. The mismatch of qualification, jobs and salaries is creating another kind of issue the registrations for MBA and engineering courses is declining. Firms should work with the ASDC to prioritise the list of trades/ jobs that could serve as the leaders for the certification programmes. All organisations employing persons in those trades / jobs should agree to encourage not only new entrants but also existing workers to obtain a certification within an agreed time-frame and also reward employees who obtain certification, at the same time assisting those that may not have succeeded to up skill themselves and get certified. This is a small step but a key one in ensuring the availability of people with right type of skills and productivity set. Such certification is

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SKF to introduce...

2012: Auto Industry...

many other examples as well,” said Application Engineering Manager-Europe & Asia Pacific, SKF, Domenico Bosco. He added that the company is increasingly adopting asymmetrical designs for various applications in the automotive for higher performance through friction reduction. The company is looking to introduce a family of hub bearing units with new design and outer ring seals. The company also introduced the StopGo sensor-bearing solution, an automatic stop-start system for motorcycles and scooters. This solution lowers CO2 emissions, and improves fuel economy by an estimated six-10 percent, depending on driving conditions. The concept allows it to be customised as a ready-to-fit unit, which can be assembled quite easily for both OEMs and as a retrofit for a wide

required for many trades and job roles in different countries and now is perhaps the time for fi rms in India to do so. While in some cases in countries this is mandated by law, perhaps India can lead the way by demonstrating what could be done collaboratively and voluntarily. Simultaneously, if a database could be created with ASDC that could list out all the training institutions that the industry hires from, this list could form the basis for collective industry-led intervention to work with these institutions to align their outcomes with what industry needs. While in the short term it may not be possible to alter teaching curriculum, add on courses and other means to improve the outcomes could be initiated. The ASDC should also jointly certify people coming out

range of makes of two-wheelers already on the road. The system can be applied to a wide variety of motorcycles, independent of engine size. Bosco added that most efforts at SKF are directed at incremental improvements to the existing range of products and simultaneous development of new products for emerging needs. The Swedish bearings supplier recently inaugurated its Global Technical Centre in India (GTCI) in Bangalore for advanced research on bearings, seals, mechatronics, lubrication systems and services. The company has invested around `50 crore in the GTCI. It will employ approximately 400 engineers working in the areas of product engineering, development and testing, as well as a global laboratory for metallurgy, chemistry and bearing performance analysis. It will focus on serving customers in India and South East Asia, as well as global projects for SKF. The new Global Technical Centre is the second development phase and will incorporate the existing Global Testing Centre, opened in 2009 and the Automotive Development Centre, opened in 2004, both of which are located in Bangalore. “India is an important market for SKF and we are committed to support the unique needs of customers in growing economies,” said President and Chief Executive Officer, SKF, Tom Johnstone in a company statement.

of these institutions. NSDC is already linking those partners who are training people in the auto sector with ASDC. While it is always attractive for individual firms to do so with chosen institutions, this may not be possible to replicate and scale and therefore in many countries the Sector Skill Council plays this role for all most all positions. This approach would also help in determining the current capacity of training available in the country. It would also help in arriving at what capacity in specified areas is required and also in identifying surplus capacity if any. Creating capacity would also form a part of this exercise. The option could be to either promote entrepreneurs to do so or set-up a separate entrepreneurial venture. NSDC would be happy to support. It could also connect to its partner network. Many auto companies are already collaborating and this could easily

th become an industry effort. While there is a lot that could be done together, there are also steps we need to be careful about. No matter what the provocation or the pressure, it is advisable not to fragment this approach; international experience has clearly demonstrated that wherever there is a combined and collective effort, the results have been dramatic and industry has benefitted. A key aspect of the training infrastructure is good trainers. There are many institutions that are either seeking trainers or are looking for help to train the trainers. Ironically some of the best trainers are in the firms themselves or in our partners overseas. A collective sharing of person’s names and competencies and rewarding them when they facilitate trainees or trainers could address a significant gap in this sector. A collaborative approach would lead to far greater results

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than individual efforts. Again while many workmen retire at age 58, trainers as a rule, go for another five-seven years: your supervisor could be the next great trainer. The opportunities for industry to lead the skill development efforts through ASDC are huge. The advantages include the flexibility to continuously adapt as industry changes. The challenge is to quickly put in place the system and process that collectively enables industry to provide this leadership. As mentioned, it is a CEO led industry agenda. This opportunity comes perhaps once in the life time, the future would depend on what industry makes of it now. The agenda for 2012 is clear—lead and collaborate to develop a new industry-led skill initiative in India. It is only this leadership and engagement that will ensure the availability of skilled and productive youth that could lead growth in industry in a sustainable manner.


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SMIPL exports GS150R to Nepal, Columbia Nabeel A Khan New Delhi

young and the young-at-heart bike enthusiasts wish to spend on contemporary bikes which make a bold style statement. SMIPL’s high-end cruisers like the Hayabusa and Intruder fi nd their markets in similar niche profi les.

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uzuki Motorcycle India (SMIPL) aims to achieve a growth rate of more than 30 percent in 2012 and establish itself amongst the top three players in the Indian twowheeler motor bike market. The Japanese two-wheeler maker is also venturing into export of its selected models like GS150R. “We have been exporting to neighbouring countries like Nepal and have recently begun exports even to far off markets like Colombia. We are looking at other prospective export markets as well, but it would be too early to elaborate on that,” Vice President, Sales and Marketing, SMIPL, Atul Gupta told Auto Monitor. Apart from just increasing the market share, the motorcycle manufacturer wants to lay tremendous emphasis on capturing the after sales market. Talking about the aftersales services Gupta said that customer satisfaction and delight is the collateral for company’s sustained growth momentum. Obviously, customer satisfaction based on brand proposition is SMIPL’s primary motto. The company believes in establishing a long-term relationship with all its patrons. Customers look for trouble free state-of-art product experience over the life cycle of the motor bike and it will strive to provide the best to them on all levels. SMIPL reaches out to its clients through a base of 300 outlets spanning across the country. It claims to have notched commendable growth in the outgoing year 2011, with almost all the months taking a leap in the sales compared to the sales figures from the previous year. This is despite the growth rate of motorbike segment falling by almost a half after the sustained growth of 25 percent over the last few years. The company feels that the two-wheeler industry is likely to retain the sluggish growth pattern for the next two to three years. The overall industry mood today is a reflection of the crest and troughs of the existing market economy. However, SMIPL is confident of sustaining the growth momentum based on its strong fundamentals. “We intend to establish ourselves amongst the top three players in the Indian two-wheeler motor bike market. Our endeavor in the coming year would be to provide ‘my way of life’ to customer delight to over four lakh new bike owners. Overall sales and market performance has always been a strong motivating factor and we at SMIPL look towards that,” Gupta added. Presently, the two-wheeler market in India is mainly skewed towards the rural customers. The rural segment has witnessed an increased demand for motorbikes, thereby offering ample growth opportunities not only for SMIPL, but also for the motorbike segment as a whole. Suited to the requirements and the prevalent conditions of the rural sector, the standard motorbike appeals to the audience. Owing to the existing socio economic pattern and the available infrastructure in rural context, the demand is increasingly high

Of innovation Atul Gupta, VP, Sales Marketing, SMIPL

for bikes that offer “Value for Money”—a combination of cost efficiency, high mileage, deliverables and durability. On the contrary, the urban market works on a different bandwidth. The urban customer wishes to spend on luxury to announce their arrival. The

Being part of the larger Suzuki Group, customer expectations from the company are always on the upper end. It is persistently working on improving its innovations to live up to the larger brand promise. Technology happens to be of prime importance for it. SMIPL harps on innovative technology and customisation, to design an array of products crafted specially for the passion-

D4

ate Indian bikers. Its focus on last mile servicing and consistency with its brand promise that hopes to bring to Indian customers biking experience, which they have never had before, the company claimed. The Japanese manufacturer expects and hopes to create new benchmarks in customer acquisition and satisfaction in the 2012.

Fundamental Strength SIMPL will be holding strong in all the conditions based on the impeccable market fundamentals, which also helped it keep even the recessionary influence of 2008 at bay. Contrary to the then prevailing scenario, SMIPL claims that its sales for 2008 had actually shot up and were growing every month. Interestingly,

it was also the year it unveiled cruiser bikes, Intruder M1800R as well as the Hayabusa in India, both of which were priced over `12.5 lakh. The launch of the cruiser models marked its entry into the superbike segment in the Indian market and helped carve a niche market space. Riding the crest of Suzuki brand strength, the simplicity of customised technological innovations coupled with last mile customer servicing has always paved a path of success, feels the company. “Today, the market is of cut throat competition but not without tremendous opportunities that are yet to be explored. Challenge and competition are part of the game and SMIPL is up for it.” Gupta maintained.


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urgaon-based Rattan Kapur & Associates, the parent company of Mark Exhaust, involved in manufacturing of door sash and sheet metal components is looking at massive expansion to achieve a turnover of `2,000 crore by 2015. The component manufacturer will achieve this target with increased volume and diversification. It has struck a deal with HMSI to supply sheet metal components estimated to be worth `600 crore annually. The company has also successfully delivered door sashes to Mahindra XUV500 and hopes to grow with Indian utility

vehicle major. “We have been given the opportunity to manufacture door sashes for Mahindra XUV500. The vehicle manufacturer has now given us business for sheet metal components and we will be putting up press shop ranging from 63 tonne to 1,000 tonne capacity at our Chakan (Pune) plant.” CMD of the company, Rattan Kapur told Auto Monitor. The new press shop costing around `30 crore will be operational by April 2012. From the new press shop being setup in Pune plant, the component maker is expecting to add V W, Tata Motors, Ford Motor and GM among its new customers. Mark Exhaust is already 100 percent supplier for

Photograph: Dileep Prakash

Rattan opens doors to new customers

Rattan Kapur, CMD, Rattan Kapur & Associates

The company is setting up a new plant near Bangalore with an investment of around `100 crore and is expected to be operational by October 2012. It will generate a turnover of `600 crore in FY14. The Bangalore plant will also be used to cater to the customers in the Chennai area HMSI. As Honda is also expanding in a big way the component maker will have larger volume. Right now, HMSI produces about 1.5 million motorcycles and it is putting up a new plant in Bangalore having a capacity of 1.8 million bikes. Mark Exhaust has bagged the order to supply most of the sheet metal components for the Japanese two-wheeler major. To meet this demand, the company is setting up a new plant near Bangalore at an investment of around `100 crore, which is expected to be operational by October 2012. It will generate a turnover of `600 crore in FY14. The Bangalore plant will also be used to cater to the customers in Chennai area. In the current year, the company has achieved about `700 crore. Kapur said that the target to achieve `2,000 crore by 2015 is in line with the industry. According a report by E&Y, the industry would hit five million vehicles by 2015. “We have used light weighting in shock absorbers, while at the same time the material is superior so that the leakages and rejections are very few, and we can preserve the profit margin”, Kapur said. It will also put up a plant in Gujarat once Maruti Suzuki establishes its facility in this western part of the country. Kapur expects to have a plant operation in Gujarat by 2015, which will help cater to the customers moving to this new emerging automobile hub.


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The passenger car segment fell by 3.53 percent during the April-November period this fiscal, while the utility vehicles grew by 11.05 percent and the multi-purpose vehicles grew by 10.26 percent in this fiscal. Toyota led the passenger car segment with a growth of around 643.43 percent from 7,012 units to touch 52,129 units this fiscal, as compared to the previous period. Hyundai Motors notched up highest percentage growth in UV segment to touch 1,131 units compared to 108 units in the same period in the previous year, marking a growth of 947.22 percent. Passenger Cars OEMs

2010-11

2011-12

BMW

3,171

3,442

Fiat

14,956

10,351

Ford

62,415

58,620

GM

57,009

58,095

Two-Wheelers

Commercial Vehicles

Passenger Vehicles

8.55%

The overall commercial vehicles segment registered a growth of 19.95 percent in April-November, 2011 as compared to the same period last fiscal to touch 499,965 units. M&HCVs sales grew by 9.39 percent to touch 213,645 units compared to 195,299 units in the same period in the previous year. The LCV segment grew by 29.26 percent to touch 286,320 units in this fiscal, compared to 221,501 units in the same period last fiscal. Three-wheeler sales rose to touch 340,882 units in AprilNovember period compared to 339,640 units in same period last year. Passenger carriers fell by 2.95 percent in April-November 2011 and goods carriers registered growth of 15.34 percent. Ashok Leyland registered the highest growth in the LCV segment to touch 1,645 units. Mahindra Navistar notched up a growth of 198.53 percent to touch 1,627 units this fiscal as compared to 545 units in the same period last fiscal in M&HCV.

-30.79%

LCVs (PC+GC) -6.08%

OEMs 1.90

ALL

2010-11

2011-12

447

1,645

13,440

15,830

268.01%

-63.92% HM

5,285

1,907

HSCI

39,180

31,504

HMIL

238,333

248,305

5,824

11,652

Force

-19.59%

MR

HM 4.18%

621,271

505,148

Merc

2,731

3,098

Nissan

5,572

15,085

Renault

-

988

Skoda

11,717

17,483

Tata

163,401

147,350

TKM

7,012

52,129

Audi

1,205

2,319

VW

25,060

52,033

138

M&M

63,755

80,791

MNAL

6,874

6,830

Piaggio

6,045

7,965

Swaraj

2,642

2,987

123,329

163,939

26.72%

100.07% -18.69%

MSIL

266

17.78% -48.12%

13.44% 170.73%

-0.64% 31.76%

Scooter/Scooterettees

13.06%

OEMs

32.93% Tata VECV - Eicher

4,703

Total

221,501

2010-11

2011-12 -100%

31.72%

BAL

27

-

HML

204,118

263,596

HMSI

588,744

744,875

M&M 2W

103,286

100,197

SMIL

142,080

171,718

TVS

277,525

343,305

23.70%

1,315,780

1,623,691

23.40%

6,195

49.21% -9.82%

29.26%

286,320

643.43%

Total 1,264,142 1,219,509

Domestic two-wheelers sales witnessed a growth of 16.11 percent in this fiscal registering 8,902,049 units against 7,667,148 units during the same period in the previous fiscal. Mopeds, motorcycles and scooters grew by 10.99 percent, 14.87 percent and 23.4 percent respectively. The motorcycle sales grew to 6,773,534 units in AprilNovember period as compared to 5,896,528 units in corresponding period in the previous fiscal. In the Motorcycles segment, Royal Enfield sales were up by 53.27 percent in April-November period this fiscal while Bajaj Auto’s sales grew by around 9.12 percent to touch 1,780,756 units in April-November compared to 1,631,881 units in same period last fiscal. In the scooters segment, the sales of Hero MotoCorp grew by 29.14 percent while TVS Motor sales grew by 23.7 percent. Honda Motorcycles reported its best sales for November at 189,970 units, registering a jump of 59.04 percent over the same month last year. Bajaj Auto witnessed 18.24 percent growth in its November sales at 228,407 units against the same month in the previous fiscal. TVS Motor Company reported total domestic two-wheeler sales of 150,406 units in November, 2011 registering a growth of 7.79 percent. Suzuki Motorcycles India registered a growth of 19.5 percent in domestic two-wheelers sales for November this year to touch 30,400 units.

92.45%

29.14% 26.52% -2.99% 20.86%

M&HCVs (PC+GC) 107.63% -3.53%

OEMs

2010-11

2011-12

ALL

49,765

47,647

AMW

4,035

6,736

JCBL

-

1

Total

-4.26% 66.94%

UV OEMs

2010-11

2011-12

BMW

256

2,453

Force

2,074

2,770

Ford

2,017

1,868

GM

13,165

15,351

858.20% 33.56%

-

Motorcycles/StepThroughs

-17.48% Daimler*

103

85

M&M

0

0

MNAL

545

1,627

Swaraj

4,529

4,836

Tata

117,242

129,122

VECV - Eicher

18,123

22,780

VECV - Volvo

627

387

OEMs - 0.00%

BAL

2010-11

2011-12

1,631,881

1,780,756

0

373

HML

3,151,607

3,750,098

HMSI

444,298

484,112

IYM

179,837

239,038

198.53%

-7.39% 16.60%

HDMC 6.78%

9.12% 18.99%

-19.29% HM

1,778

1,435

HSCI

371

195

HMIL ICML

108 521

-47.44%

1,131 338

-35.12%

M&M

107,822

125,554

MSIL

4,428

4,296

Merc

197

403

Nissan

312

173

Renault

-

223

-

291

974

-

Tata

25,683

26,476

TKM

42,495

Audi

687

1,062

VW

3

4

Skoda

Total

39,852

947.22%

-

16.45% -2.98%

-38.28%

Volvo Buses

330

424

Total

195,299

213,645

M&M 2W 28.48% 9.39%

32.92%

53.27%

RE

33,132

50,782

SMIL

29,011

34,387

TVS

426,762

433,988

18.53% 1.69% 14.87%

3-Wheelers (PC+GC) 234.71%

OEMs

2010-11

2011-12

Atul

11,602

16,979

Bajaj

134,558

133,245

46.35%

3.09% -6.22%

Force

137

9

M&M

38,543

45,370

Piaggio

130,371

125,656

Scooters

8,445

10,849

2010-11

2011-12 10.99%

-0.98 TVS

-93.43%

54.59%

Mopeds/Electric OEMs

33.33%

17.71%

454,840

Electrotherm*

504,824

NA

- 0.00%

11.05%

10.99% -3.62%

Total

454,840

504,824

28.47% -45.11%

2011-12

TVS

15,984

8,774

Total

339,640

340,882

33.33% Force

102

136

-

M&M

56

16182

-

Maruti

105,182

97,973

Tata

33,075

38,326

138,415

152,617

Total

8.96%

-_

Total 5,896,528 6,773,534

-44.55%

202,208 224,558

2010-11

25.70%

104.57%

MPV OEMs

10.13%

-6.85% 15.88% 10.26%

* Data not available since August 2008 onwards 0.37%


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ALL increases Optare stake Our Bureau Mumbai

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shok Leyland together with its associate companies, is looking to increase its stake in the British bus maker, Optare, to 75.1 percent subject to approval by the shareholders of Optare. The company had initially acquired 26 percent stake in Optare in July 2010 as part of a long-term strategic partnership. This move fully integrates Optare into Ashok Leyland’s global strategy for buses. The re-fi nancing has been achieved by Ashok Leyland facilitating a credit-line to support Optare’s re-banking options and providing a substantially improved working capital facility for the business. Alongside, Ashok Leyland will reach 75.1

percent of the company’s share capital through placing of shares raising new equity. “We see this as an important element in realising our vision of being among the top five bus manufacturers globally. By leveraging the synergies of the two companies, we are confident that going forward we will be able to accelerate technology sharing, develop future-ready products and substantially and quickly increase our global footprint,” said Managing Director, Ashok Leyland Vinod Dasari. Optare is Britain’s leading maker of advanced low-f loor integral buses and employs around 500 people across the group, principally at its new assembly facility in Sherburn in Elmet, Yorkshire. The company produces a wide range of fuel

efficient buses of its own integral design. In addition Optare has pioneered its ‘EcoDrive’ programme across all of its products which deliver a wide range of low carbon power options, including hybrid, full electric and dual fuel models. Ashok Leyland is the fl agship of the Hinduja Group and a leading manufacturer of commercial vehicles in India with a turnover of US $2.5 billion. With seven manufacturing locations at Chennai, Hosur (three plants), Alwar, Bhandara and Pantnagar (Uttarakhand), the company has a production capacity of 150,000 vehicles. Ashok Leyland has associate companies in the Czech Republic, the UAE and a joint venture in Sri Lanka, besides exports to over 20 countries worldwide.

Productivity at forefront: manufacturing summit Our Bureau Mumbai

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roductivity drive and manufacturing process that could surpass industry benchmarks occupied centrestage at the recent Frost & Sullivan’s Manufacturing Summit held in Mumbai. “Understanding and identifying this need and aligning the company’s initiatives along these areas, which provide room for innovation is important to reap the real benefit of these projects,” said Deputy Director, Manufacturing & Process Consulting, Frost & Sullivan, South Asia and Middle East, Nitin Kalothia. While companies presented

best practices in various areas, one takeaway that evolved was—involvement of the top management is the key to sustenance of these initiatives in the organisation. The best practices presentations identified by Frost & Sullivan were presented by Diebold India, implications of lean for a commodity product by Nilkamal, Sinnar; Effective Implementation Of Daily Work Management Principles by Spicer; Project Timeline Management and Internal Quality Matrix by Alstom Projects; Quality Assurance Through ‘Customer Satisfaction Officer’ by Laguna Clothing; Leveraging IT in Warehousing by Doom Dooma Factory; WCM Systems at Fiat by Fiat; Effective CBM In A Process Industry by Shree Cement; Effective Deployment Of Warehouse Management System by United Phosphorus; Total Process Management by IP Rings; KGD6-Built World Class! by Reliance Industries, KGD6; SFMC: Focused System to Identify And Improve Bottlenecks In Production—Its Structure And Implementation by Bosch; Building Management System by Wyeth ; Advanced Automation And Materials Handling For Strategic Advantage by Tata Cummins and Facility Designed Lean for a Lean Product by Tata Motors.

Xilinx to deepen penetration Our Bureau Mumbai

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ilinx, the US-based provider of platforms and solutions for programmable devices market, is looking to have a larger presence in the automotive sector in India and the Asian region. It is looking at a sustained growth in the incar electronics market and higher penetration of infotainment related devices and software. “We are also treading cautiously as our effort is to have an entry in market with well defi ned industry standards in terms of communication infrastructure,” said Senior Manager, Worldwide Automotive Marketing & Product Planning, Xilinx, Kevin Tanaka in a telephonic interview with Auto Monitor. Xilinx provides design platforms for surround view, hybrid cluster with heads up display and infotainment companion chip. The company has around 47 percent marketshare in PLD segment and around 48 percent share in FPGA market globally. The combined programmable device market stood at around $16 billion. Around 35 percent of company revenues come from Asia Pacific business, 30 percent from North America, 26 percent from Europe and remaining from Japanese market. Around 45 percent of the revenues emanate from in-vehicle communications business, 34 percent from industrial segment, 14 percent from consumer related businesses and remaining from data processing related products. Automotive semiconductor content per vehicle is likely to grow from $337 to $438 in the developed markets up to 2015.


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The Indian PV industry Macro-economic factors and production disruptions put brakes on sales

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he Indian passenger vehicle (PV) industry has experienced a period of strong volume growth in the last five years riding on strong economic growth, rising disposable incomes, favourable demographics and relatively low penetration levels. Frequent introduction of new models by Original Equipment Manufacturers (OEMs), incumbents as well as new entrants, and adequate fi nancing availability also contributed to the growth momentum. As demand and supply tangoed, the industry’s volumes grew at 16.3 percent CAGR during 2007-11, with growth being particularly strong in the last two years. However, since the beginning of 2011-12, the industry has been witnessing a slowdown in volume growth marred by rising inflation, hardening interest rates and increasing fuel prices that have in a combined way, dented consumer sentiments. Even the festive season failed to stoke domestic demand despite new model launches, aggressive discounts and promotional schemes offered by OEMs. Apart from macro-economic headwinds dampening demand, events such as production disruption at India’s largest PV OEM, Maruti Suzuki, the tsunami in Japan and the recent floods in Thailand also created supply chain stresses, further aggravating the weak performance of the PV industry. The above demand-supply pressures effectively translated into a decline in domestic volumes by 0.5percent YoY in 8M FY12. Within segments, the small car and executive car segments have been the worst impacted so far, even as volume growth in the mid-size car segment and utility vehicles (UVs) segment remained in the positive zone. With steady increase in fuel prices since January 2009 (with 63.5percent increase till date, diesel is cheaper by ~`24 per litre, also offers better mileage), there has been a decisive shift in customer preference in favour of diesel-powered cars, reflected in the 24 percent growth in sales volumes of diesel vehicles in H1 FY12 against an 11 percent decline in sales volumes of petrol vehicles during the same period. In fact, in segments where both petrol and diesel options are available, diesel vehicle sales far outnumber that of petrol variants by an overwhelming factor of 4:1. However, the preference for diesel vehicles fostered by a distorted fuel price regime could get altered in the event of any increase in excise duty on diesel

Comparison Between Emerging markets

Source: ICRA Research; Industry Data * Source: International organization of Motor Vehicle Manufacturers (2010)

vehicles that is currently being mulled by the government.

Growth Enters Negative Territory After reporting strong volume growth over the last two fi scal years, the domestic PV industry started witnessing a slowdown since the beginning of FY12. Macro-economic headwinds and depressed consumer sentiments have plagued the domestic PV industry resulting in volume decline of 4.3 percent YoY in Q2 FY12; that followed a relatively modest volume growth of 8.8percent YoY in Q1 FY12. Overall, the domestic PV volumes have declined by 0.5percent YoY in FY12. The monthly volume growth of the domestic PV industry has seen a sharp decline since July 2011; although November month was an exception with regularising of production at Maruti Suzuki. In Sep 2011 YoY sales de-growth was prevented by build-up of dealer inventory prompted by an early festival season (by about ten days) coupled with new model launches and aggressive discounts and promotional schemes offered by OEMs. Retail sales, however, failed to pickup in Oct 2011 with market sentiments running low, resulting in deferment of purchase by dealers. The strike at Maruti Suzuki’s plants owing to labour issues also effected production during October.

UV Sales Speed Up In Q2 FY12 Domestic UV segment has been one of the most resilient PV segments, registering a YoY growth of 14.5 percent in Q2 FY12. While growth in Q1 FY12 was lower (5.2 percent) partly due to shortage of component supplies from Japan, the situation improved during the last quarter, in which volumes were also supported by an early festival season. While sales in October were subdued due to inventory clearing by dealers and maintenance shutdown at M&M, wholesale numbers shotup in November. Lower MoM sale in Oct 2011 and Nov 2011 was due to exclusion of sales numbers of Mercedes, BMW and Audi from SIAM data.

Low base And Diversification Efforts Enable Healthy Export Growth India’s PV exports reported healthy 29.9 percent YoY volume growth in Q2 FY12. Apart from the low base of Ford Figo and Nissan Micra, export volumes were supported by greater focus of Hyundai towards the export market, given the weak demand situation on the domestic front. However, Maruti Suzuki, the second largest car exporter from India, saw dwindling of its export numbers in Q2 FY12 and Oct 2011 because of production disruption at its Manesar factory where A-Star is produced. Fluctuations

in YoY export volumes have largely mirrored the domestic/export sales mix adopted by Hyundai. The OEM had diverted production towards the domestic market in Oct 2011 in lieu of the festive season, but resumed focus on overseas sale in Nov 2011. While sales to Europe have remained subdued, much of the export growth has been on account of OEMs exploring new markets. The demand outlook in Europe (India’s largest car export destination) is expected to remain weak post discontinuation of scrappage incentive schemes, besides macro-economic weakness plaguing many European nations. This has prompted OEMs like Maruti Suzuki and Hyundai to diversify geographically by adding new non-European markets. Also, Nissan, which was earlier exporting Micra mainly to Europe, is expected to start exports to West Asian and African countries.

More OEMs Expected To Jump On The Export Bandwagon A lt houg h compet it ion from other exporting nations like Thailand, China, Mexico, Argentina and Brazil is high, competition amongst exporters from India is limited, given the few market participants. This is expected to change with multinational OEMs exploring opportunities to develop India as their global low cost manufacturing hub.

The current distribution of petrol-based PV models across various price points shows that vehicle clutter in the lower and upper price bands is the highest with the middle price band being the leanest. The hatchback and mid-size car segments, which together account for over 90percent of the PV demand in India, have attracted the maximum attention from OEMs who offer multiple models at close price points. Most of the players in the entry level PV segment have set-up full-fledged manufacturing setup in India and rely on domestic component sourcing to control costs. On the other hand, most of the models on offer in the upper-end of the price bracket are imported either in Semi-Knocked-Down (SKD) form or as Completely-Built-Units (CBUs). Since overall investment required for import/partial assembly is limited, foreign OEMs have flooded the luxury and premium car and UV segments with their global model range. This is reflected in the fact that out of a total of 162 PV models on offer in the domestic market at present, 61 vehicles have a price-tag of over `50 lakh.

OEMs Focus On Network Expansion With dealership density in metros and Tier I cities nearing saturation, much of the future growth is expected to come from Tier II and Tier III cities. In place


of operating full-fledged dealerships in these cities, OEMs have resorted to opening extension counters that act as satellites to main dealers in cities. The larger players in the domestic market— Maruti Suzuki, Tata Motors and Hyundai—currently have over 50 percent of their outlets in semiurban and rural locations, and thereby have a natural head start on this aspect. Nevertheless, network expansion plans of new entrants too remain aggressive with their eye on Tier II and Tier III cities. Retail outlets of luxury car makers are also on the rise with new brands like Aston Martin, Ferrari, Maserati and Bugatti making their presence felt in metros and existing players like Mercedes, BMW and Audi expanding to Tier I cities. While demand for new dealers is high, heavy overhead costs and pricing pressures from OEMs has stalled the influx of many new entrepreneurs in the dealership business. Supply-demand gap has resulted in churn in dealership networks, with few instances of dealer poaching by relatively new entrants. In a bid to keep the network franchisees interested and ensure dealer viability, margins offered by foreign OEMs to their dealers is relatively higher, given the low initial volumes. Also, absence of service load and spare sales (contributing over 40 percent to gross margins of a typical dealer) in the initial start-up period, has prompted new OEMs to shore up dealer profitability by other ways like providing working capital support.

Automotive Manufacturing Clusters: New Ones In The Making The benefits available to the automotive industry arising from agglomeration of manufacturing facilities in concentrated spatial hubs are undeniable. These benefits, the outcome of commonalities and complementarities in the clusters of interconnected companies, include improvement in supply chain management, greater investment economies and lower logistics costs all combining to generate improved productivity and competitiveness for companies constituting the cluster. India’s automotive industry is concentrated across three major regions—the National Capital Region (NCR) and Uttaranchal, with OEMs such as Maruti Suzuki, Honda Siel, Hero MotoCorp and Bajaj Auto; the Chennai-Hosur-Bangalore region, with OEMs such as Hyundai, Toyota, Ford, Ashok Leyland and TVS; and the PuneNashik-Aurangabad region, with OEMs such as Tata Motors, Bajaj Auto, Mahindra & Mahindra and Volkswagen. Each of the above hubs contributes over 30 percent to the total automotive revenues, indicating existence of a well-balanced eco-system of automobile companies dotting these regions. In addition, there are two other relatively smaller hubs located in and around Pithampur in Central India and Jamshedpur-Kolkata in Eastern India, whose contribution to automotive industry revenues remains moderate. Typically, to set-up an integrated car manufacturing facility encompassing press shop, weld shop, paint shop, machine shop and assembly shop with 200,000 vehicle manufacturing capacity, an investment outlay of around `4,000 crore is required. Due to such large investment involved, choosing an appropriate manufacturing loca-

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Automotive Hubs In india And Key OEMs Present

Source: ICRA’s Research; Company names indicated in Blue font represent greenfield investments made over last five years

tion is a vital decision element for any OEM as it could influence the payback period1. Factors which generally go into such decision making for OEMs include ease and price of land available, strength of infrastructure facilities (including road, rail, port connectivity;

power availability), availability of manpower, existence of an established vendor base, besides extent of fiscal incentives offered by the state in terms of excise and income tax holiday. Over the last five years, the bulk of the greenfield investments by PV OEMs in India have

occurred in the Southern and Western regions with the five PV OEMs viz Renault Nissan, BMW, Audi, Volkswagen and Mercedes Benz incurring an aggregate capex of around `9,000 crore within existing clusters in Tamil Nadu and Maharashtra.

While cluster-based growth has its merits, the existing clusters are bound to hit a ceiling over time in terms of their ability to make available to the industry factors of production (including land and labour) in adequate measure. Already, there are signs of


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new automotive clusters emerging in India. Since the year 2007, Uttaranchal has emerged as an alternate manufacturing hub in North India becoming home to various 2W and CV manufacturers. Gujarat too, which already had names such as General Motors (at Halol) and Asia Motor Works (at Bhuj), has added Tata Motors (at Sanand) over the last one year, besides evincing interest from other players such as Ford, Peugeot and Maruti Suzuki for greenfield investments. Although not necessarily a trigger in itself, the fact that automotive demand is increasingly tending towards becoming panIndia (as opposed to being largely concentrated in urban centres in the past), is an added enabler to the process of geographical dispersion of automobile clusters. From an OEM’s standpoint, having a presence in multiple clusters allows it to partially hedge its risks from possible loss in production due to external events such as

labour strike, social agitations or natural calamities that may inflict a particular region. Overall, ICRA expects India’s progress towards becoming a global automotive hub to encourage the emergence of new automotive clusters, due to eventual capacity constraints in existing ones; however, the ability of state governments to create investor-friendly environment will be a necessary condition for the above trend to sustain.

Distribution Network: OEMs’ attention rising towards network expansion

Supply Chain: Force Majeure Events Causing Supply-Side Stress The current flood situation in Thailand is a second reminder this year of the susceptibility of world supply chains to natural calamities, close on heels of the earthquake and tsunami that hit Japan in March 2011. As if demand-side stress was not enough, these force majeure events have made matters worse for the Indian PV industry, par-

Source: Company Releases, Media Articles, ICRA Research

ticularly for Japanese OEMs like Toyota Kirloskar and Honda Siel who had launched new models

recently, some of whose components were being imported from Japan/ Thailand. Honda

Siel had recently returned to full production after the catastrophe in Japan had forced its plant to shut down. Now with floods in Thailand, Honda Siel has stopped taking bookings for some of its models due to unavailability of parts. Toyota Kirloskar too has started to have production issues owing to the floods. The production at Tata Motor’s plant at Thailand which makes pick-up truck Xenon in partnership with a local company has also got disrupted due to floods. Thailand had become a hub for Japanese PV OEMs in the 1980s and 1990s, partly due to yen appreciation during that period which hampered export competitiveness of Japanese OEMs influencing them to invest outside of Japan towards building production facilities in consumer markets. Today, as a measure of Thailand’s importance to the global automotive supply chain, the flooding there has forced Toyota globally to reduce output in factories in Indonesia, Japan, Malaysia, North America, Pakistan, the Philippines, South Africa and Vietnam. Honda, the OEM most affected by Thai f loods, has also slowed production at factories in several countries. Although foreign companies affected by floods are not expected to leave Thailand en masse given its well-developed ecosystem of manufacturing industry and relatively lower cost of manufacturing, PV OEMs may try to balance their future expansion so that they do not have supply chain dependence on a single market. However, such decision making may not be easy with multiple forces pulling in different directions—on one hand, there is the consideration of reducing supply chain dependence on select markets; on the other, there is the conf licting objective of pushing up scale economies which inev itably requires investment congregation. This apart, OEMs may also need to re-evaluate the ‘just-intime’ and lean manufacturing principles whose associated risks show-up during such acts of nature. In ICRA’s view, in case OEMs that have suffered damage due to f looding in Thailand do eventually decide to augment their supply chain and develop alternate suppliers in new locations, countries such as India, Indonesia and Vietnam2 could be strong contenders for these fresh investments by virtue of their large market size and low cost characteristics. (Courtesy: ICRA)


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Innovating for tomorrow

T

he Semi-Cr ystalline Products business unit of Lanxess is one of the leading global suppliers of engineering plastics based on PolyAmides (PA) and polyButylene Terephthalates (PBT). Its polyamides, namely PA 6 and PA 6.6, are marketed under the name Durethan; and its PBT polyesters, under the name Pocan. Durethan and Pocan are widely recognised as intelligent system solutions that are used to manufacture technically demanding components that comply with the highest specifications in terms of load resistance, functional reliability, and long-term performance. They are widely used in the electronics, domestic appliance, and automotive industries, among which the automotive industry is the most important customer segment. The global demand for hightech plastics is expected to increase by roughly seven percent per year through 2020. On the Asian market alone, we expect volume sales of high-tech plastics to grow annually by around ten percent, even reaching some 15 percent in China.

Lightweight Construction: A Market With Promising Future The automotive industry is the largest customer for the Semi-Crystalline Products (SCP) business unit, which produces Durethan and Pocan. These highly innovative products allow for the design of lighter-weight plastic parts to replace metal parts in automobiles, contributing to fuel efficiency and reduced emissions. In addition, Durethan and Pocan enable carmakers and car parts suppliers to achieve considerable savings through cheaper production and easier assembly. Using hybrid technology—a plastic/metal composite technology that combines the strengths of sheet steel and polyamide— the Semi-Crystalline Products business unit has for more than 20 years been developing innovative solutions that can be used to reduce the weight of vehicles and thus their fuel consumption without compromising on design and safety. Thanks to this know-how, Lanxess is the preferred partner to many major automotive manufacturers. Additionally, with an investment of more than Euros 10 million, Lanxess is building a new compounding facility for Durethan and Pocan in Jhagadia, India. At the end of 2011, the plant will begin production trials so that it can start supplying to the Indian market the beginning of 2012. The initial capacity of the compounding line will be 20,000 tonne per year. The compounding facilities in Wuxi and Jhagadia will form the new Semi-Crystalline Products production network for the AsiaPacific market, providing the production capacities to enable further growth for Durethan and Pocan in Asia.

Innovation Highlight: Automotive Industry In 2010, Lanxess supported the promising lightweight construction market with the introduction of many innovative solutions based on the outstanding properties of our high-tech plastic Durethan.

Lanxess at the inauguration of a new compounding facility for Durethan and Pocan in Jhagadia, India

The fi rst front-end reinforced with both organic plastic and aluminum sheets represents a milestone in hybrid technology. This component is a beam in the engine compartment to which parts such as radiators and headlights can be attached. Organic plastic sheets are continuous fiber-reinforced

thermoplastics combining high stiffness and strength with low density, making them excellent materials for lightweight construction. Compared to aluminum sheets, they can reduce the weight of components by an average of 10 percent. Another advantage for automakers is that,

High-tech plastics like PBT will play a vital role in making‚ a ‘zero-emissions vehicle’ a reality

unlike traditional metal materials, organic plastic sheets can be formed into virtually any shape by heating. One car featuring this component is the A8, Audi’s new flagship model. Pocan is used for applications like headlamp bezels, interior and exterior mirrors, and connectors to name a few. Other

t ha n automobiles, Lan xess enjoys a good customer base for high-tech plastics in industries like electronics and electrical components, domestic appliances, IT and construction industry, all of which are currently growing at a healthy rate in India. (Courtesy: Lanxess)


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Indian steel industry: Highlights of the current scenario and future trends

T

he Steel Sector, one of the core sectors of the Indian economy, has been on an upswing since early 2000. The steel production capacity in the country currently stands at 78 million tonne. India produced 66.8 million tonne of steel in 2009-2010. India is ranked fi fth among the global steel producing countries. With the current growth, India is expected to become the second-largest steel producer by 2015-2016. Indian crude steel production has grown from 26.9 million tonne in 2000, to 67.1 million tonne in 2010, registering a Compound Annual Growth Rate (CAGR) of 9.6 percent, outperforming the global steel industry which grew at 3.7 percent during this period.

Perspective of the Complex Business Universe Technology Impact The Indian steel industry has been constantly innovating and adopting new technologies to improve productivity and move up the value chain. Some of the key technology trends in the industry are listed below: • Stamp Charging and Partial Briqueting of Coal Charge (PBCC) for metallurgical coke production • Usage of energy recovery coke ovens to reduce power consumption and emissions • Use of non-coking coal in iron making • Use of Direct Reduced Iron

(DRI)/Sponge iron in steel making • Adoption of Continuous Casting • Increasing size/volume of blast furnace—largest furnace is 4,013 cu.m (JSW) • Reducing coke consumption in blast furnaces—from 800 kg/MT to less than 500 kg/ MT • Efforts to reduce energy consumption and emissions The Indian steel market is maturing as there has been a shift from production of basic steel commodities to valueadded steel production. Major steel companies like Tata Steel, SAIL, and POSCO have plans to start manufacturing Cold Rolled Grain Oriented (CRGO) steel to cater to the electrical equipment industry requirement.

The Indian steel producers have been actively involved in capacity expansion to meet the anticipated steel demand in the country. Production capacity is expected to reach 200 million tonne by 2020

Steel End-User Segment Performance 600 500 400 300 200 100 0 Nov-10

Dec-10

Fabric ated Metal Products

Jan-11

Feb-11

Elec tric al Machinery

Mar-11

Apr-11

General Engineering

Source: IIP, Frost & Sullivan

Global Opportunities The economic recover y underway has presented opportunities in the form of market expansion through acquisitions. Globally, the acquisitions and deals in metals sector have increased from 18 in Q1 of 2009, to 26 in Q1 of 2011. • Essar Group has signed an agreement for a $750-million deal for the takeover of Zimbabwe Iron and Steel Corporation (ZISCO). Essar would acquire 54 percent share in ZISCO. This investment is being made through the Mauritius-based Essar Africa Holdings • ZISCO was Africa’s secondbiggest iron and steel plant, which had turned sick due to mismanagement and had been shut down since 2008.

After refurbishment, ZISCO is estimated to add one-million tonne to Essar Steel’s production capacity Essar Steel also acquired ‘Servosteel’, a major independent steel processing centre in Europe, for $100 million, to cater to its growing European customer base Jindal Steel & Power acquired Shaheed Iron and Steel Co LLC for $464 million to expand its presence in the Middle East and North Africa China Steel Corporation (CSC), one of the largest integrated steel makers in Taiwan, together with its co-investors, will invest $178 million in a new plant to produce electrical steel in Bharuch district of Gujarat In addition to the above, Indian steel manufacturers

are actively looking for fi rming up global coal and iron ore mining assets to feed their ever-increasing steel production

End-User Perspective The chart above, illustrates the performance of a few enduser segments in recent months. Most end users did not witness growth during Q4 2010, but in Q1 2011, they had higher growth. This trend is expected to continue during the remaining year. The automotive sector, especially the passenger vehicle segment has had robust growth from 2003 onwards. Passenger Vehicles and Sports Utility Vehicle (SUV) production in the country has reached 2.4 mil-

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Production Capacity of Indian Steel Producers Producer

Current Capacity (MTPA)

Future Capacity (2015-2016)

14.0

24

SAIL

13.0

20

RINL

3

7

Tata Steel

7

33.5

Essar Steel

8.6

27

POSCO

-

12

Arcelor Mittal

-

12

JSW Steel (including Ispat)

Source: Inter Ministerial Group, Planning Commission of India, Annual Report 2010-11 (Ministry of Steel)

Contd. from Page 161 lion in the last fiscal, clocking a growth rate of 25 percent YOY. This has given rise to higher demand for steel.

Economic Impact • Though the demand and prices of steel have increased in 2011, the bottom lines of steel companies have come under pressure due to higher costs of

raw materials and overall high inflation in the economy • Many of the steel majors have reported lower profit in the fi rst half of 2011 • Moreover, due to high input

enterprise, undertook the e-auction through its portal • The GDP growth rate is expected to be in the range of about eight percent in 2011. The steel sector is strongly correlated to the GDP, and hence would continue its growth in the second half of the year

cost and non-availability of raw materials (a blanket ban on iron ore mining in Karnataka by the Supreme Court for fear of large-scale environmental degradation via illegal mining is one of the key contributors), few major steel producers in the Southern region of the country have been either forced to shut down their operations or decrease their capacity utilisation • In this circumstance, a Monitoring Committee constituted by the Supreme Court has started an auction for iron ore from September 14, 2011, to clear the stockpile lying at various mines in Karnataka with the expectation to ease the pressure on steel companies to some extent with the availability of raw materials. Metal Scrap Trade Corporation (MSTC), a Central Government

Competitive Analysis The Indian steel producers have been actively involved in capacity expansion to meet the anticipated steel demand in the country. Production capacity is expected to reach 200 million tonne by 2020. • JSW Steel has acquired 49 percent stake in Ispat for $528 million heralding the consolidation phase in the Indian steel sector • JSW, with the acquisition of Ispat, is poised to become the largest crude steel producer in India overtaking SAIL and Tata Steel (India) • JFE Steel, Japan, has invested about $1.2 billion in JSW Steel for 14.99 percent equity stake. This deal is one of the largest FDIs in the Indian metals and mining sector and shows the interest among global steel companies in the Indian market • Arcelor Mittal recently increased its stake in Uttam Galva to 29 percent through additional investment

Producer Current Capacity • Major steel and mining projects, such as POSCO Steel Mill, continue to face delays in form of the environ ment a l clea ra nces, opposition from native people for land acquisition and higher compensation

Market Future Outlook/ Conclusion • Strategic Outlook for 2012 The increase in public and private investments in the country in infrastructure, core, and allied industries will help in sustaining the steel sector growth in the near future. Most Indian steel producers would continue to pursue both organic and inorganic capacity expansion opportunities to cater to the anticipated demand. However, due to the impact of the mining ban in Karnataka, the manufacturers in the southern region such as Jindal Steel (JSW) have been affected due to the sudden disruption of iron ore supplies; hence, high raw material cost (though e-auction has been started, but price seems higher than the market). The effect of the e-auction system would reflect in lower profitability during Q3 and Q4 of FY 2012, which would have a significant impact on the industry volumes. Moreover, specific companies would even face challenges in their diversification plans. •

Strategic Outlook for 2020 The Indian steel sector is in its golden phase as it rediscovers itself to align to India’s growth story. The alongside chart is the per capita steel consumption growth that Frost & Sullivan expects to witness in the steel sector in the new decade. The automotive and consumer durables sectors would be the key end-user segments that would drive steel growth, as penetration rates of these items improve from its current levels. (Courtesy: Frost & Sullivan. Views expressed are personal)


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Auto components sector: Mixed performance so far; future looks uncertain

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acro-economic concerns in the domestic market and base effect impede revenue growth in Q2 FY12. The Indian auto components industry witnessed a moderation in revenue growth in Q2, FY12 (based on our sample of 36 select listed entities), with growth being flat on QoQ basis; although revenue growth continued to be in double digits on YoY basis. Within our sample universe, however, there was a wide variance in the performance of individual companies with revenue growth being relatively higher for companies dependent on the domestic two-wheeler (2W)

and Light Commercial Vehicle (LCV) segments; and growth being lower/ negative for companies dependent on the Medium & Heavy Commercial Vehicle (M&HCV) and Passenger vehicle (PV) segments. This broadly mirrors the trend in sales volumes seen in the respective automobile segments in Q2, FY12 . Further, despite macro-economic challenges currently being faced by the automotive industry— PV and M&HCV segments in particular—due to inflation, hardening interest rates and rising fuel prices, many of the auto component manufacturers continued to reported strong double digit revenue growth in Q2 FY12 supported by (i) com-

ponent exports to Europe for CV applications and (ii) rising share of revenues from the non-automotive segment. Also, several entities in our sample have been displaying significantly higher revenue growth than average over the last several quarters by virtue of their success in improving market share, expanding product portfolio and changing product mix in favour of higher realisation components. The above initiatives sailed such companies through in Q2 FY12, like they did in earlier quarters, allowing them to report healthy topline growth, overall demand side pressures notwithstanding. In the past, component suppliers whose business has been concentrated on a few customers, geographies or automotive segments have been able to maintain a rather healthy fi nancial profi le, while the performance of their more diversified peers has experienced stress. This peculiarity is not unusual in the Indian context as a relatively small set of OEMs enjoy a significantly high market share in each of the automotive segments; plus, most Indian ancillaries lack adequate scale to enjoy the full benefits of geographical or product diversity as compared to their global counterparts. Thus, while the revenue growth of auto component manufacturers dependent entirely on the 2W segment remained healthy in H1 FY12 due to continued resilience shown by this segment, the performance of companies dependent on the PV segment was in stark contrast as volumes suffered due to both demand side as well as supply side concerns. Notwithstanding the above, adequacy of diversification—in terms of customer base, segment mix, product portfolio and geographical footprint—remains a desirable metric as it enhances a company’s ability to overcome cash flow variability across business cycles and makes it better equipped to endure cyclical shocks. In our sample too, entities which score high on the diversification parameter, have been able to demonstrate steady revenue growth in H1 FY12 and in prior periods. While our short term outlook on the auto component industry’s revenue growth as a whole is sombre, the performance of individual companies may continue to vary depending on their revenue mix (OEMs/ Replacement Market), segment leaning (PV/ CV/2W) and geographical diversification (domestic/ exports). Overall, auto component manufacturers who have (a) stronger presence in the replacement market, (b) lower dependence on interest rate sensitive automobile segments, and (c) geographically dispersed customer base, are likely to be better equipped to offset the expected moderation in business with domestic OEMs in FY12. However, as these short term pressures recede, the auto and auto components industry is expected to revert to a healthy growth trajectory supported by the several structural positives associated with the Indian economy including low automobile penetration, growing

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Contd. from page 164 replacement demand, rising disposable incomes and demographic advantage. Although commodity price cycle turned favourable, margin erosion continued in Q2 FY12 due to lower production and forex losses. The prices of key raw materials including steel, aluminium, copper, plastic and rubber used in automobiles had risen sharply in the beginning of CY2009. However, considering that average raw material prices in 2009-10 were lower than those prevailing in 2008-09, the profit margins of the auto and auto components industry had witnessed a healthy expansion in 2009-10, supported also by strong surge in sales volumes resulting in operating leverage benefits. Although the buoyancy in automotive demand persisted in 2010-11, the profit margins of the industry could not hold up to the 2009-10 levels in the wake of con-

tinued fi rming up of raw material prices. Consequently, profit margins of both auto OEMs as well as auto component manufacturers had generally declined during each quarter of 2010-11 on both YoY as well as QoQ basis. Since the beginning of this fiscal, however, the prices of key commodities have softened to a certain extent, providing partial relief to the industry participants. Yet, profitability pressures from other sources surfaced in Q2 FY12: (i) higher overheads on lower than budgeted sales (ii) forex losses (on both imports as well as restatement of foreign currency loans) due to sharp appreciation of USD against INR and (iii) rising competition in select product categories impairing pricing power. While companies whose profit margins contracted in Q2 FY12 due to the first two reasons could still expect their P&L to return to its usual colour as the business cycle and currency cycle correct; companies whose margins declined due to the third reason, may experience greater difficulty in maintaining their historical margins. Also, several auto component manufacturers had incurred sizeable investments over the last several quarters to meet the rising production schedules of OEMs and towards establishing production infrastructure to supply parts for new models launched by OEMs. With slowdown in sales, particularly in the PV segment, and relatively lower volume growth of new models (Honda’s Brio and Toyota’s Liva and Etios are currently facing production issues due to the recent floods in Thailand; production ramp-up of Maruti Suzuki’s new Swift had got caught-up in labour issues till October 2011), the utilisation of vendors’ capacities has been suboptimal. Further, since a part of the above capex was debt-funded, the rising interest rates and declining profits have created pressure on the interest coverage ratio of several companies. In the likely scenario of further moderation in revenue growth in 2011-12, companies having the following characteristics may feel greater stress on their fi nancials: • Companies engaged in capital intensive business and having an asset-heavy business model with limited proportion of outsourced manufacturing • Companies having high fi nancial leverage and large debt repayment obligations which may face refinancing difficulties in the current environment. The higher interest burden on such companies may also pull down net profits • Companies holding large short term unhedged foreign currency loans; or FCCBs due for redemption soon • Companies having high import dependence, with payables not covered through forward contracts The rising scepticism amongst auto ancillaries about the ongoing down cycle, is also forcing them to reconsider their capex plans over the near term. In any case, in the current scenario, companies that have cash balances and do eventually decide to invest for organic or inorganic growth, may find the same more valuable, not because of liquidity concerns in the banking system, but due to their effectively lower cost of funds. (Courtesy: ICRA. Views expressed are personal)


N O M E S T H G I L


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Evolution in preferences of Indian car owners Redefining flexibility in the paint process

I

nnovation has become a necessity and is one of the most important success factors to maintain an edge in a strong competitive environment, especially in the automotive industry. The changing preferences of customers for advanced technology and features in cars drive vehicle manufacturers to innovate. With increasing awareness, customers are now looking for more fuel-efficient cars that encompass a series of features including safety, security, comfort, and infotainment, with enhanced value for money. However, the cost of ownership of the car remains the most important purchase factor for

an Indian customer, which in turn becomes a limiting factor for the vehicle manufacturers’

Trends in Domestic Demand for Fuel Variants in Passenger Vehicles

innovations.

Changing Preferences Towards Alternate Fuels Recently, there has been a paradigm shift in customer preferences towards diesel cars. Prices of diesel cars have remained quite high due to the heavy government subsidies and infl ation. Even so, customers are not hesitating to opt for the more expensive diesel variant against petrol. Customers are willing to wait for around eight to 10 months when it comes to buying a diesel car since the ratio of petrol vs.

Source: Frost & Sullivan

FADA s 7th Auto Summit - 9th & 10th January 2012 at New Delhi FADA will be organising its major biennial event, viz. 7th Auto Summit on 9th & 10th January 2012 at Hotel Le Meridien, New Delhi, coinciding with Auto Expo scheduled for 7th to 11th January 2012. Having regard to speed-breakers encountered from time to time, the theme of Auto Summit 2012 is SHIFTING GEARS - TERRAIN AHEAD . As earlier Summits, the Auto Summit 2012 is being organised in association with SIAM. Dr Montek Singh Ahluwalia, Dy Chairman, Planning Commission, has kindly agreed to inaugurate the Auto Summit 2012 and to deliver the Inaugural Address. Mr Anand Mahindra, Vice Chairman & MD, Mahindra & Mahindra Ltd will be the Chief Guest at the Inaugural Session, while Mr S Sandilya, President, SIAM and Group Chairman, Eicher Motors will deliver the keynote address. As in the past, Auto Summit 2012 will be a two-day event. The day one, i.e. 9th January 2012 will, by and large, comprise workshops on day-to-day management of automobile dealerships and best dealership practices. The day two of the event, i.e. 10th January 2012 will start with a formal Inaugural Session at 10.30 a.m. followed by other Business/Interactive Sessions. As in the previous Auto Summits, industry leaders, senior Government ministers & officials, captains of allied businesses and renowned management gurus are expected to address and interact with the participants at the 7th Auto Summit. Auto Summit presents a great opportunity for automobile dealers to meet the industry leaders and other members of auto retail fraternity from across India and abroad to share their experiences and exchange ideas. The Auto Summit brings together all stakeholders on a common platform to mull and address the current & emerging challenges for sustained growth of all players connected with automotive business.

The Summit is also an occasion to celebrate and unwind, as cultural evening and networking cocktails & dinner form an integral part of the two-day programme. Presentation of Automotive Dealer Excellence Awards (ADEA) for the year 2011 forms an integral part of the programme.

Background FADA has been organising a biennial Convention of Automobile Dealers, viz. Auto Summit at New Delhi coinciding with the Auto Expo, commencing from the year 2000. The previous Summits were a grand success, each Summit attracting 700-800 participants representing dealerships, vehicle manufacturers, oil companies, banks, insurance & finance companies and media from all over the country and abroad. Practically, all leaders of automotive industry and allied businesses have addressed at this forum in the past on various issues including changing paradigm of auto retail, marketing, human resource management, customer satisfaction, relationship management, etc. The Summit deliberations helped in creating a tremendous awakening and identifying the challenges & opportunities for automotive business as a whole.

Registration and Programme Details For Registration and Programme Details, please contact FADA Office at the following address: Federation of Automobile Dealers Associations (FADA) 805, Surya Kiran, 19, K G Marg, New Delhi - 110 001 Phones: 011 - 2332 0095, 6630 4852, 4153 1495 E-mail: fada@airtelmail.in The registration form and programme details can also be download from FADA s website: www.fadaweb.com

Previous Auto Summits - Flashback

diesel production is rather steep. Diesel being fuel-efficient has led to higher take rates, as the monthly running cost is much lower when compared to a petrol variant. Diesel engines, today, are built with superior technology and their maintenance costs are at par with petrol variants. The compact segment cars, which have the highest sales volume compared to other segments, are always expected to be launched in both the fuel variants by the customers. There is a heavy shift in demand for diesel variants, which has gone up by 75-80 percent with the launch of models such as Maruti Suzuki Swift, General Motors’ Chevrolet Beat, and Ford Figo, considering the above mentioned benefits. However, there may be a setback in the demand if the government’s proposal to increase the excise duty on diesel cars in the Union Budget 2012-13 gets implemented. The ownership benefits enjoyed by the customers on diesel cars are going to be dissolved if this proposal comes into effect. This would derail the growth of vehicle manufacturers who have invested heavily in their in-house diesel technology plant in India. In this milieu, Compressed Natural Gas (CNG) variants are gaining prominence as the running costs of petrol vs CNG variants are in the ratio of 3:1. Eyeing the forthcoming demand for CNG cars, vehicle manufacturers are launching the existing models with CNG options. Maruti Suzuki has launched fi ve of its best-selling models—Alto, Estilo, WagonR, SX4, and Eeco with CNG variants. The other alternate fuels that are expected to see higher preference in the Indian market are electric vehicles and plug-in hybrid cars with the government’s increasing interest to boost their penetration.

Changing preferences towards health, wellness, and wellbeing features

November 2011

17

Over the years, the automotive industry has been experiencing significant changes in customers’ purchase preferences. A car that used to be looked at merely as a means of transportation has now evolved to become the means for a comfortable and convenient driving experience. Customers are attributing their best buy not just to the engine technology, body design, and the car brand, but with more emphasis on the added features being offered by the vehicle manufacturers.

Contd. on page 170


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Contd. from page 168

Features Beneficial for Health, Wellness, and Wellbeing of Customers

Driver Assistance Features Beneficial for Health, Wellness, and Wellbeing of Customers

Source: Frost & Sullivan

Frost & Sullivan’s Survey on Voice of Customer Analysis of Passenger Vehicle Owners found that comfortable driving, reduced stress while driving in uncomfortable external conditions, adjustable seating systems, and in-car climate control are preferred by today’s customers, which are called Health, Wellness, and Well-being (HWW) features. The two major factors associated with stressful driving are toggling between too many features in the car, and psychological and physical stress, which includes driving through congested traffic conditions and over-speeding. Customers give more importance to the car’s internal environment features rather than its physical features, as they look for a peaceful and comfortable driving experience. Having made the airconditioner and heater a standard fitment in all cars moving forward from the compact segment, and with increasing importance being accorded to eco-friendly features, customers look for advanced features such as outside temperature display, automatic climate control, and good sound proofi ng to ensure a peaceful drive. Customers place a high level of emphasis on safety features such as anti-lock braking system (ABS), brake assist system, airbags, child safety locks, seat belt warning, and tyre pressure monitoring system. Currently ABS and driver airbags are being provided as a standard fitment in high-end variants of compact and mid-size segment cars. Driver assistance features such as real-time car diagnostics, automatic crash notification, emergency assistance, and satellite navigation system have gained awareness and prominence. Customers are willing to pay the required premium to get these safety features as part of their new car purchase. Safe options of staying connected on the go offers several benefits. Customers/Self-Driven vehicle owners prefer to attend phone calls while driving with reduced distraction via Bluetooth hands-free devices. Customers also look for satellite navigation devices with updated maps to locate the desired destination and as well to get realtime traffic updates to plan their route accordingly. The Indian customer predominantly tends to listen to music through satellite radio, MP3 connection, or access digital music while driving the car in congested traffic conditions. In-car entertainment features become mandatory to keep the passengers entertained on the go, thereby leading to less stress and a relaxed feeling while driving. With increasing awareness among the customers for such infotainment features, there is an increasing

demand for safety-related connectivity. In future, customers will demand that their vehicles are connected to computers, mobile phones, and workstations to carry out tasks from any where and anytime.

In 2011, customers have started showing willingness to pay an extra premium for infotainment features. Although the cost involved to develop and manufacture these technologies is relatively high for an OEM, in the

Source: Frost & Sullivan

long run, the take rates for these features are expected to be high. With an increasing number of global brands entering the Indian market, the awareness about such advanced features is growing, which leads to customers

opting for the features if provided as a standard fi tment by vehicle manufacturers.

(Courtesy: Automotive & Transportation Practice, Frost & Sullivan, South Asia, Middle East and North Africa )


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Indian buyers to upgrade to higher segment

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ore than one-half of repeat car buyers in India select a model that is either larger or more expensive than the model they previously purchased, according to the JD Power Asia Pacific 2011 India Automotive Performance, Execution and Layout (APEAL) study. The study fi nds that the premium compact car segment gains the most from this migration, as one-third of the repeat car buyers who move up-market select a model in this segment. This is mainly due to the fact that nearly one-half of the repeat car buyers in India previously owned compact car models, which are smaller and less expensive than premium compact car models. “Vehicle ownership has always been a tangible sign of progres-

sion in India,” said Executive Director, JD Power Asia Pacific, Mohit Arora. “The growing demand for a larger or more expensive vehicle amongst Indian owners reflects their rising aspirations. Currently, those owners who aspire to upgrade their vehicles have more options available to them, with new makes and

models launching in all vehicle segments. This growth further fuels consumer demand.” Now in its 13th year, the study is an owner-reported measure of what gratifies owners in India with the design, features, layout and performance of their new vehicle. Ten performance categories contribute to overall APEAL

scores: vehicle exteriors; vehicle interiors; storage and space; audio/entertainment/navigation; seats; Heating, Ventilation and Air-Conditioning (HVAC); driving dynamics; engine/ transmission; visibility and driving safety; and fuel economy. Overall APEAL performance is reported as an index score based

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on a 1,000-point scale, with a higher score indicating higher satisfaction. Satisfaction with new-vehicle design and performance in 2011 averages 829, up from 817 in 2010. Overall, the industry improves across all 10 categories, with the largest improvement occurring in the fuel economy. The study also fi nds that newly launched models garner higher satisfaction ratings amongst customers in India, compared with refreshed and carry-over models. Satisfaction with newly launched models averages 836—seven points higher than satisfaction with existing models. “Launching exciting models with the latest features is crucial for winning over today’s demanding customer,” said Arora. “With manufacturers placing increasing focus on quality and design, owners of newly launched models also experience fewer problems, which enhances their satisfaction levels of their vehicles.”

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Two Maruti Suzuki models— the Alto and Estilo—rank highest in the compact segment, in a tie, with a score of 844 each. While both models perform well in fuel economy, the Alto performs particularly well in the vehicle exterior factor, while the Estilo performs particularly well in the audio/ entertainment/ navigation factor. Two Toyota models—the Corolla Altis and Innova—rank highest in their respective segments. The Corolla Altis ranks highest in the premium midsize car segment with a score of 864 and performs particularly well in all 10 categories. The Toyota Innova ranks highest in the MUV/MPV segment for a fi fth consecutive year. In the SUV segment, the Ford Endeavor ranks highest with a score of 877 and achieves the highest APEAL score in the industry in 2011. In the premium compact segment, the newly launched Nissan Micra receives an award with a score of 857 and performs particularly well in six of the 10 categories: vehicle exterior; audio/ entertainment/ navigation; seats;

HVAC; Visibility & Driving Safety; Fuel Economy The Swift DZire, with a score of 842, receives an award in the entry mid-size car segment for a fourth consecutive year. The newly launched Hyundai Verna ranks highest in the mid-size segment with a score of 863 and performs particularly well in all 10 categories. The 2011 India APEAL Study is based on responses from more than 8,000 owners who purchased a new vehicle between November 2010 and July 2011. The study was fielded between May and September 2011 in 20 cities across India. (Courtesy: JD Power)


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Tho . perc ent 19 need for next fi The petr powerfu l develop tran smis sion as the end of 102 com forts present in economy ress ed engi ne. on in the ic new order to r fuel driv ing segment cle producti 1798 cc avai laufac kets, the ner is an all automat are add of poo dies el l VVT-i rent mar tech nolBorgWar glob ally man ents sort of issu es d by vehi ng tech ZR Dua ant is also -i with ing diffe of new ts pon thes e es supporte 66 percent. a host add ress will be leveragi loped so ive com rove men cou ntri by The vari -sup er CVT shif ty through automot s—engine and grow ing ilar imp ly in manal both compan that it has deve inputs turi ng s, sim ble in eed sequenti manual eous division ne divi sion y with ogie gies ltan entl two them nolo pe, simu engi . Curr under pee d ed seven-sp season in Euro to happen in. The sions also ge of or six-s four-spe far and oper ations drivetra ition transmis cant perc enta mat ic s. The given way in ual add its in sion sold ns. gnifi d from a and Japa n tran smis car has now an insi enger vehicles oper atio be 7 spee Chin rica n AT in this r CVT-i with th Ame the pass sion will will lity supe its Nor tic. tran smis in to the kan faci a and al shif tma avai lable The new tured in Chin The Cha com mercial sequenti will be pric ed from star t segment. manufac ember The car cted to and is and nd Sept is expe has petrol colours on by arou pany ards in seven producti . The Com the 00 onw duri ng `10,53,3 ants. this year orders rate. vari BMW, overall diesel ed new omers like of the bagg case in r than cust e, John ing faste is a reluctance decision an, Bros from year from OR gen, Niss orders ‘There on the MONIT Volk swa add itional kh rs now akers y petrol DATA internak Pare and most buye a car, especiall Top 5 PV-m fuel Deere estic and Abhishe Change for Domestic n the high re ting dom rs. to opt give May-11 exis befo Mumbai y is ones le has May-10 custome compan ring 3.86% powered will be a whi ket in a ltional Sector r, the Eng inee team to It 93,519 a faci mar Mor eove sett ing up prices. to the upra jit 90,041 rnal se 14.63% y eover, the retu rn MSIL an inte ng next pha are entr 31,123 buyers set up said. Mor arou nd evaluati and for its 27,151 and prep of lded to draw way,’ he -9.26% San HMIL major vicin ity -wheeler is yet evaluate plas tic mou of ity in 22,718 , in the term s th, but for 25,035 products 27.53% of the two grow th be of grow rete plan in TML strategy s, extr usion couple ent in 18,515 value ucts to a conc 25 perc over the last cult for prod other 14,518 y part up 0.95% ng MD, d ^ and bod & M&M ent The com s amo 8,292 tics base Chairman segment made it diffimeet the investm tured there. d tank unit hetic or plas `40-50 8,214 r Rai, Vice has akers re base ufac liers to GMI arou nd nsion year s Ajith Kuma eering d synt g galo man 2W-m K supp 5 r, stin adde Ban ent Top Engin inve expa s. plan s ents. d ufac ture to compon Change Suprajit Domestic pany is the current nsion compon cables man from OEMhas embarke re and Apr-11 city expa for the none in y is hoping demand Bangalo the trol capa cror pan Apr-10 city in ring 14.13% ease Its con tics EOU mes Sector is in its capa The com me to incr Eng inee in plas 485,122 percent e segment prog ram a to raise nd 50 ram Suprajit its expertise n425,058 at 100 13.87% Indi by arou in its bid es ent. on a prog ive cabl HHML impleme Nor th at218,321 nology leverage capacity mill ion cabl automot stage of the the nd 50 percy’s con solid ng tech base. 191,726 es over all 16.26% also in by arou pan ly BAL processi from 100 mill ion cabl revenue perc ent the fi nal company is 158,829 r part of It to supp rsify its The com by 42.66 percent 150 The .78 136,621 a majo litie s. to dive 2.77% um to hoping tation. idis grew e from `265 TVS existing ss faci per ann 135,745 of shif tingits UK subs t at ed sale ‘We are products to PAT cror um acro e plan process 132,090 d are also 58.73% t `379.17 last fi scal. The ent per ann up a cabl on from rena med HMSI mee to ucti to 27,959 value addecustomers and leader(now ing prod the 50 perc e stha n, adva nCables 17,614 our is sett crore in by arou nd akers cror in Raja es cust omand new mai ntai n to take IYM ary Gills `22.16 turi ng to eased rol cabl Path redi irements of Europe) Top 5 CV-m ally, ufac ing incr from cont e e estic n rajit hop ition in man Chang Dom Sup 3 cror tion iCha irma the requ th India. Add the low also establish od. Apr-11 to `33. ship posi,’ said Vice ired add Nor tage of It is kan Apr-10 same peri , Suprajit 22.61% ers in India. in Cha Sector in the y has acqu masand ra in busi ness aging Director ar Rai. lity pan 34,044 r base e the com ther faci four-wheele 27,766 the Bom -0.80% Ajith Kumsales in and Man to TML land in to set up a cablof ing ano 8,145 ring, K all tional r mai nly ents l area 8,211 Eng inee that the over likely to -14.92% to cate M&M d requ iremomers. is Indu stria 5,082 sector He adde ent meet the cust 5,973 mobile 28.86% 15 perc plant to India-ba sed ALL the auto arou nd 10 to 3,206 h s with e its sout 2,488 le of year moderat VECV next coupsegment grow -2.24% r over the Eicher 1,658 -wheele ts the two

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Process efficiency lessons from aerospace segment T

he history of the development of Numerical Control (NC) is closely linked to the rise of the aerospace sector in the US and the technical challenges faced by engineers as they designed and made craft and power plants fly faster, higher, further and with greater safety. The aircraft builders pushed their suppliers, and for a while, the technical challenges outstripped manufacturing capability. Then, in the 1970s, due to the availability and proliferation of low cost microprocessors, NC evolved to become CNC, and manufacturing

The aerospace industry is pushing its suppliers to come up with new technology, processes & quality control. These days, manufacturing technology may be setting the pace, as tools become more affordable & precise. Expect to see engine & aircraft development getting more costefficient & part suppliers getting a bigger piece of the action

technology and airplane design accelerated into the future, with one or the other alternately setting the pace. For aircraft passengers, the golden age of aviation might have been the 1950s and 60s, but for aircraft manufacturers and their suppliers, the new golden age is now. Air travel is burgeoning; aircraft and engines are becoming more efficient and reliable, and airlines are buying them in greater numbers. Parts manufacturers willing to invest in the right technology, people and processes, can fi nd themselves working for some of the renowned names in the sector. Take Connecticutbased AeroCision, for example.

AeroCision Founded fifty years ago, AeroCision’s original owners relied mostly on local business for their livelihoods. It’s unlikely, that back in those relatively dark ages of manufacturing technology, they could have imagined that one day they’d be making parts for the latest passenger jet engines, let alone for a customer more than 3,000 miles away. AeroCision specialises in turned ‘ring’ parts for turbofan engines: typically, parts between 150 mm and 750 mm. Its workshop is spotless, as one would expect for a company with aerospace standards. Towards the back of the current floor space is 15,000 sq ft available for expansion, but in the foreground are two manufacturing cells, one with CNC

Contd. on Page 176

Outside and Inside view of the AeroCision facility


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Contd. on Page 175 vertical machining centres and the other with CNC lathes.

Timely Deliveries Two of the most important things for the company and its customers are on-time delivery and zero defects. There are strictly applied penalties for not delivering on time, even if it delivers too early. So, the biggest challenges are scheduling, controlling and reducing set-up and cycle times. Speeds and feeds are critical because there’s a lot of material removal. “Our runs are 20 to 25 pieces, so we need to be quick when we’re changing set-ups. The larger parts necessitate well-designed set-up and shuttle plates and our latest Haas machines have tool setters. We’re also moving towards SPC and certifying our operators as inspectors, which will help us enormously. The SPC will allow us to gather the data, and we’ll be

(L)The biggest challenges are scheduling, controlling and reducing set-up and cycle times (R) Andrew Gibson, CEO, AeroCision

Organised by

Visit

Indian Machine Tool Manufacturers’ Association www.imtma.in

International Forming Technology Exhibition

19 - 24 January 2012, Bangalore Bangalore International Exhibition Centre

International Seminar on

Forming Technology 18 January 2012, Bangalore

Growth & Leadership in Manufacturing

Focus Areas u

METAL FORMING

u

FORGING & FORMING

u

EMERGING TRENDS

Seminar highlights Ø Ø Ø Ø Ø Ø Ø Ø Ø

Overview and latest developments in metal forming; Fraunhofer IWU, Chemnitz,Germany Non - destructive testing for quality assurance of formed parts; Fraunhofer IZFP, Saarbruecken, Germany Innovation in Laser Cutting; Trumpf GmbH, Germany Servo Technology in Presses; Siemens AG, Germany Forging presses with Servo Direct technology; Schuler Pressen GmbH, Germany Laser welding of Camshafts; EMAG Automation, Germany Hot Forming in automotive manufacturing; Electropneumatics & Hydraulic, India Galling on Sheet metal forming Dies/Panels; Ashok Leyland Technology advancements in metal forming; Maruti Suzuki India

Target Audience Users and manufacturers of forming technology equipment from the automotive, white goods, consumer durables, strategic and other industries.

Participation Fee Category

Two of the most important things for the company and its customers are on-time delivery and zero defects. There are strictly applied penalties for not delivering on time, even if it delivers too early. So, the biggest challenges are scheduling, controlling & reducing set-up & cycle times able to chart out trends live on the shop-floor screens. On-machine probing will allow us to measure the parts and send those measurement to our database, so the operators will be able to move the parts through the shop that much more efficiently,” according to a company official. AeroCision has a continuous, live link to its UK customer, whose system downloads a schedule to Chester every Monday morning, where it is imported into the company’s ERP system. People, machines and other resources can be scheduled for the week. During the development phase of one particular, complex ring-part, the company managed to have the process resolved and the fi rst-off component made, well ahead of schedule. It had all four Haas mills running but needed more turning capacity, so it bought the ST30s. When OEMs rationalise their supplier bases, there’s usually only a brief and single opportunity for a company to be included.

Looking Ahead

Registration Fee

Large & Medium companies

Rs. 2500 + 10.3% service tax

IMTMA members & SSI units

Rs. 2000 + 10.3% service tax

Group Discount An additional discount of Rs. 500 per delegate will be offered to companies nominating 3 or more delegates

For more details, contact : Mr. Anuj Kumar E-mail : anuj@imtma.in

Indian Machine Tool Manufacturers’ Association www.imtma.in

10th Mile, Tumkur Road, Madavara Post, Bangalore - 562 123 Tel : 6624 6514 / 6624 6600 Fax : 6624 6658

The aerospace industry is pushing its suppliers more than ever to come up with new technology, processes and quality control—just like in the early years of NC. These days, however, manufacturing technology may actually be setting the pace on some fronts, as CNC machine tools in particular become more affordable and precise. Expect to see engine and aircraft development getting faster and more cost-efficient and precision part suppliers like AeroCision getting a bigger piece of the action.


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Long term prospects for auto sector remain bright Although 2011-12 will prove a bleak year for the Indian automobile industry, and growth will remain muted for segments like commercial vehicles in 2012-13, longterm prospects across automobile segments remain bright.

Industry Growth Prospects in 2011-12 And 2012-13

Sridhar C Head, CRISIL Research

CRISIL Research expects the domestic car market to double in size over the next five years. Given the bright prospects, we expect an increased number of global automakers to enter the market. The existing companies will expand their product portfolio

Rising ownership costs (cost of owning a typical small car including expenses like EMI, fuel cost, maintenance and insurance) made 2011-12 the worst year in a decade for the automobile industry, especially for the cars and utility vehicles segment. For instance, rising interest rates, fuel costs and vehicle prices have driven up ownership costs for cars by almost 25 percent over the past two years. Over and above all these, three strikes at Maruti Suzuki India Ltd also impacted production significantly in 2011-12. We expect sales (including exports) for cars and utility vehicles to grow by twofour percent for 2011-12, a sharp drop from almost 30 percent growth recorded in the previous year. In the commercial vehicles segment, sluggish GDP growth will drag sales growth to 16-18 percent from over 25 percent in the previous year. Within commercial vehicles, LCVs will continue to grow at a robust pace of 26-29 percent in line with the evolution of the hub and spoke model; while medium and heavy commercial vehicles growth will moderate to eight-10 percent with lower industrial production. Two-wheeler sales are likely to grow, over a high base, by 11-13 percent, in sharp contrast to the 27 percent growth in 2010-11. In 2012-13, we expect a decrease in ownership costs led by lower fuel prices and a possible halt in interest rate hikes, and new model launches to drive sales of cars and utility vehicles up by 14-16 percent. Sales growth for commercial vehicles is likely to drop further to nine-12 percent, due to a possible slowdown in industrial production. We expect two-wheeler sales growth to remain unchanged, with buoyant growth in scooter sales amid slowing off take of motorcycles in urban areas.

Rise in interest rates and fuel prices affect car demand growth The cost of owning a car has gone up by 12-14 percent in 2011-12, given frequent increases in fuel price and interest rates. Over April to November, petrol prices (Mumbai) have increased by 13 percent to `71-72 per litre. Fuel costs for a typical petrol-based small car have therefore risen by one-third during the year. The RBI increased interest rates by 400 basis points since March 2010. Given high fi nance penetration levels of over 90 percent in commercial vehicles and over 70 percent in cars the relevance of change in interest rates and its impact on consumer sentiment is high. Although automobile fi nanciers have not fully passed on the increased rates to end users, the increased burden of EMIs

(equated monthly instalments) of other loans could affect customer sentiment. Sales growth for cars in the domestic market has therefore decelerated sharply. We expect domestic car sales to grow at a mere 0-three percent in the current fiscal year. The frequent hikes in petrol prices widened the gap between petrol and diesel prices by almost 36 percent, compared to 29 percent in 2008-09. This has increased demand for diesel cars. Sensing an opportunity, carmakers are focusing on introducing diesel variants, especially in the volume-heavy small-car segment (priced at less than `five lakh). CRISIL Research, therefore, expects the share of diesel cars in total cars sold to rise to 38-40 percent in 2011-12 from 35 percent earlier. We expect this trend to continue over the long term too.

Competition Across Key Automobile Segments CRISIL Research expects the domestic car market to double in size over the next fi ve years. Given the bright prospects, we expect an increased number of global automakers to enter the market. The existing companies will expand their product portfolio. Competition will therefore intensify, especially in the small car segment, where the number of players has increased from seven to 12 over the past two years. While Honda, Toyota and Ford have already launched small-car models, Maruti Suzuki and Hyundai may roll out entry-level models similar to the Tata Nano, stirring up competition in the cars & UVs segment. Tata Motors is also planning to launch diesel and electric variants of its Nano in the coming years. In the two-wheelers space competition is intensifying as global players are directly establishing a presence in India after ending technological tie-ups with Indian players. In the CV segment, players such as Beiqi Foton and GM-SAIC (China), Daimler (Germany), Man trucks have entered in the MHCV space. In the LCV segment, the sub-one tonne category has attracted significant interest from industry players. Local players like Ashok Leyland (ALL) are also adding to the competition in the LCV segment.

Profitability Of Key Automobile Segments For 2011-12 Coinciding with the sharp drop in sales volumes growth across segments, intensifying competition is restricting automakers’ ability to increase vehicle prices, even as input costs rise sharply. We therefore expect the operating margins of car and two-wheeler manufacturers to decline by 150-200 basis points in 2011-12. Tepid demand from transporters and slowing industrial GDP growth will reduce the operating margins of commercial vehicle manufacturers by 100-150 basis points.

Slowdown Affecting Investments Automakers have lined up investments of Rs 280-320 billion for the next 2 years.

Cars and utility vehicles will account for `120-150 billion of these investments, with new players contributing about 60 percent. However, as the recovery in car demand remains uncertain, we expect some of the greenfield projects to be postponed by sixeight months. Investments of Rs 110-115 billion are likely in the commercial vehicle segment by 2012-13. Light commercial vehicles will account for a major chunk of these investments. Two-wheeler companies will invest `45-50 billion mainly to launch new models.

Key Segment Growth Over The Five-Year Period We expect the sales volumes for the Indian automobile industry to grow at 10-12 percent CAGR over the next 5 years. The domestic automobile market will grow more than two fold over the period. By 2015-16, the auto market will expand to `5.4 trillion in value terms—more than two times the size in 2010-11. A healthy long-term outlook for the Indian economy and relatively low vehicle penetration will drive growth. Cars and utility sales are likely to grow at 14-16 percent CAGR over the period, led by increased affordability and competitively priced models. Penetration of cars are, therefore, poised to grow from about nine per thousand people as of September 2011 to about 19 per thousand people by 2015-16, matching China’s penetration level as of 2010. We expect sales of two-wheelers to grow at 10-12 percent CAGR. Lower penetration rates and rising incomes – farm and non-farm—in rural areas will drive two-wheeler sales. Rural penetration of two-wheelers was a low 32 per thousand people as of 2010-11, less than one-third the urban penetration. Urban penetration levels are comparable with global developed counterparts like Japan and sales have stabilized in these markets after reaching these levels. We thus do not expect significant two wheeler growth in the urban markets. Commercial vehicles sales are likely to grow at 13-15 percent CAGR. A more organised logistics industry and a higher GDP growth would drive growth for the segment. Thus, while the industry’s growth is likely to be muted over the next two years, the long-term growth potential is bright. (Please note that the views expressed here are those of CRISIL Research and not of CRISIL’s Ratings division. CRISIL Research operates independently of and does not have access to information obtained by CRISIL’s Ratings Division.)


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Future-proof paint-shop technology Redefining flexibility in the paint process Doris Schulz

T

o meet General Motors’ exacting quality standards, Russian-based ZAO Vlankas invested in a new system for painting bumpers. Eisenmann designed the system to accommodate not only a doubling of output, but also a changeover to a water-based paint system with minimum disruption to production. ZAO Vlankas of St Petersburg, a subsidiary of Krista Group, is the first Russian automotive supplier to produce plastic auto body parts for a western OEM—and very proud of the fact. Vlankas manufactures and paints bumpers for General Motors. In the wake of securing this contract, the suppli-

In accordance with conditions on site, the new paint shop was designed to be very compact and comprised multiple levels linked by lifting devices

Condensers are used to cool the cooling zones and air-condition the spray booths. The heat this produces is utilised in the process

er invested in a new paint system that enables the implementation of GM’s high environmental and quality standards.

Future-Proof Design The major advantage of Eisenmann’s proposal—which gave it the edge over three competing bids—lay in the highly f lexible paint-shop design. Vlankas needed a facility that was not only equipped to handle the current output of 240,000 bumpers per year, but could be extended quickly and easily to manage double that capacity as production grew. The supplier’s project leaders were equally interested in the option of moving to water-based paints without the need for time-consuming conversions. With this capability, Vlankas would be well placed to fulfi l future requirements. Eisenmann made the paint shop readily extensible by incorporating a skid conveyor system that could be loaded from both sides. For this purpose, both the loading and unloading stations are equipped with rotating devices, which make it easy for a single employee to load both sides of the skids. A further benefit of the skid conveyor is that it requires less space than a conventional chain conveyor. Moreover, the design of the spray booths provides for additional robots to be retrofitted for flame treatment and the application of primer, base coat and clear coat. Parts can be coated from both sides of the skids without changing the cycle time, effectively doubling the achievable throughput. At present, Vlankas uses solvent-based paints in a wet-in-wet process. To allow the automotive supplier to switch to water-based paints with minimum disruption to production, the system design can accommodate the inclusion of drying and cooling zones after primer and base coat application—both in terms of floor space and in terms of the process sequence.

Process Across Multiple Levels The facility was to be installed in an existing space with a width and height of only about 12 metres. Eisenmann mastered this challenge on the one hand through a very compact design, and on the other hand by means of a multi-level paint system. The levels are linked by lifting devices. Vlankas produces the bump-


The paint supply system is designed to provide for eight different paints

The major advantage of Eisenmann’s proposal lay in the highly flexible paintshop design ers by injection moulding, then transports them directly to the paint shop. After being fed-in manually at level zero, the parts move through the entire paint process automatically. Stage one is pre-treatment, comprising four zones on the next level up. An interesting feature is the tilting and jogging station, which ensures that fluid from the rinsing zone is removed from the concave geometries of the parts prior to blow-off and the drying process, which takes around 20 minutes. This prevents carry-over of water into the paint process and helps ensure a high-quality finish. On the “treatment level” are the zones for flame treatment, masking and ionising the bumpers, and the spray booths for applying primer, base coat and clear coat, with a flash-off zone between each. The system layout provides for eight different paints to be used at the base coat stage. Paint changeovers are automatic. The oven used in the 45-minute drying process, which takes place at 90°C, is installed on the next level up. After the cooling zone the parts descend once more to level zero, where the bumpers are transported to dispatching via a de-masking and inspection station.

An Energy-Efficient Plant To minimise heat losses during the drying process, the facility utilises a camel-back oven, in which inlet and outlet are located underneath the main oven unit. This special design takes account of the physical behaviour of heat. As a result, very little heat escapes when the parts are moved in and out, minimising energy loss in comparison to conventionally designed dryers. In addition, the spray booths are air-conditioned using an air recirculation system, which contributes to energy efficiency. The heat produced by the cooling condenser is utilised for the process. The exhaust air, which contains solvent, is purified in a regenerative thermal oxidiser by an autothermal process. (Courtesy: Eisenmann. Views expressed are personal)

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All spray booths can be retrofitted with additional robots. As coats can be applied to parts from both sides simultaneously, the system throughput can easily be doubled


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Growth levels in CV demand to plummet post-festivals Revati Kasture

1.60 1.40

Rs/tkm

Deputy Manager, CARE Research

1.20 1.00

Aug -11

Ap r-11

Jun-11

Feb-11

Oct-10

Dec-10

Aug -10

Ap r-10

Jun-10

Feb-10

Oct-09

Dec-09

Aug -09

Jun-09

Freight rates

Key costs

Source: CARE Research Note: Diesel prices and freight rates is calculated for 16 tonne payload capacity vehicle key cost component includes fuel cost, interest cost and other operating cost of an M&HCV

60%

Trend in IIP 0.30

50%

Units (in mn)

30% 20% 10%

IIP: Mining

IIP: Manuf acturing

IIP: Cap ital good s

IIP: Consumer goods

Sep-11

Jul-11

Aug-11

Jun-11

May-11

Apr-11

Mar-11

Jan-11

Feb-11

Dec-10

Nov-10

Oct-10

Sep-10

Jul-10

Jun-10

Apr-10

Aug-10

-20%

May-10

0% -10%

Comparison of production and sales in goods commercial vehicles segment 10 days inventory

0.25

40%

Mar-10

T

HE CV industry has been able to successfully fade away the growing uncertainties in economic situation created due to inflationary pressure, hike in fuel prices and interest rates since the start of second quarter of this fi scal. Upbeat demand from goods carriers (GC) segment in both medium and heavy commercial vehicles (M&HCV) and light commercial vehicles (LCV) on the back of healthy freight movement created due to long festive season kept demand for GC at healthy levels till the fi rst seven months of thecurrent fi scal. Healthy freight demand ensured revenue sustainability for FOs; though profitability took a beating owing to rise in diesel price and interest rates CARE Research observes that during, the past two and half years, healthy freight movement has enabled Freight. Operators (FOs) in keeping utilisation of their vehicles at higher levels. Hence, even though the rise in diesel price and interest cost pulled down their profit margins, sustainability in freight movement both in primary as well as redistribution enabled FOs to increase freight rates and gradually pass on the price rise to their customers. Healthy freight movement also ensured consistency of

Ap r-09

0.80

Source: CMIE

revenues for FOs that kept sales for GCs at decent levels till now. With economic activity slowing down, freight movements have started cooling especially post festivals. The post festive period has been challenging for the economy. Persistence of high inflationary scenario has compelled RBI to resort to yet another interest rates hike last month, which has been the eighth time in last 12 months. However, this move has impacted credit growth substan-

Hence consistent pileup of the inventory at OEM level indicates demand pressure. CARE Research foresees, in short term period industry would witness correction in production levels by some extent to match demand situation which will consequently lead to drop in sales growth levels. Long term outlook for the industry would continue to remain encouraging. CARE Research estimates the domestic CV sales to grow at a CAGR of around 11-12 percent during FY11-FY16 period. CARE Research believes healthy longterm macro-economic outlook

Waiting period

0.20

7 days inventory

0.15 0.10

0.05

Sales

Vishal Srivastav

environmental norms and illegal mining. Whereas, rise in borrowing cost owing to increase in interest rates have led to considerably drop in investments towards expansion projects across various industries. The inventory levels with OEM have risen substantially especially in the goods LCV segment; indicating formation of demand pressure .The impact of the slowdown in industrial production and hardening of interest rates have still not adversely affected the goods commercial vehicle sales, as domestic sales observed a growth of 18.5 per cent in October 2011 on y-o-y basis. However, with

Production

Head, Industry Research, CARE Research

Trend in diesel price and key cost components

1.80

0.00 M&HCV GC

LCV GC

April - October 2011

M&HCV GC

LCV GC

April - October 201 201

Source: CARE Research

tially and has also consequently pulled down India’s IIP (Index of Industrial Production) growth, which merely managed to increase by 1.9 per cent in September 2011, the lowest in last two years. The worst affected has been IIP for mining and capital goods, that has observed a drop of around six percent and seven percent respectively. The mining industry has been hit significantly owing to uncertainties creeping in due changes in regulations by various state governments with respect to

further analysis it was found that there has been inventory pile up of around none-10 days at OEM level since last four-five months pointing towards even more inventory pile up at the dealer level. While during same period in FY10, there was virtually no inventory at the OEM level. Generally automobile OEMs try to push sales at dealer levels and keep minimum or no inventory with themselves in order to have comfortable working capital position.

coupled with increase in government focus towards development of transport infrastructure would fade away the short-term concerns over economic uncertainties and rise in interest rates. The GC segment would continue to dominate the growth as it is expected to grow at a healthy CAGR of around 12-13 per cent during the same period. (The report is prepared by CARE Research, a division of Credit Analysis & Research. Views expressed are personal.)


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Gujarat to become most sought after automotive manufacturing hub Revati Kasture Head, Industry Research, CARE Research Vishal Srivastav Analyst, Auto Sector, CARE Research Samay Ganhar Analyst, CARE Research

Strong revival in economy fuelled growth in Auto industry during FY10 and FY11 The Indian Auto industry had a dream run in FY10 and FY11 after

a dismal performance in FY09. This growth was mainly driven by strong revival in liquidity scenario and improvement in consumer sentiments due to rise in income levels. Such healthy market conditions attracted almost all the major players to expand their operations either by setting up new manufacturing capacities or expanding the existing ones. The attractive prospects of the industry also pulled in some of the global automobile biggies towards domestic market.

Availability of low cost advantage makes India a preferred manufacturing destination The Indian automotive industry has a distinct global competitive advantage in terms of cost and quality to most other developing countries. Availability of skilled labour at low cost owing to large pool of educated population along with availability of raw material at lesser cost and adaptability of technological innovations has made India a preferred manufacturing destination for exports especially in automobile industry during last seven-eight years.

Stringent regulations and lackluster infrastructure playing a spoil sport Though India enjoys low cost destination advantage, inflexible regulations and local political jeopardy towards land acquisition in most of the regions are resulting in slow implementation of projects. Since FY08 14,509 projects were proposed in some of the key industrial states across the country out of which merely 16 percent of the projects got implemented. Various bottlenecks and stringency in regulation were the key factors that have resulted in dismal implementation ratio. Automobile industry has not left un-burnt by these uncertainties, Tata Motors Nano project is the classical example of this roadblock. Furthermore, infrastructure concerns both in terms of energy and transport also acted as restrain to industry growth.

Gujarat addressed the concerns successfully During last one decade a renewed political intent in Gujarat towards development coupled with social support has led significant improvement in infrastructure and refining in policy framework in order to attract investments. This in turn has led to considerable rise in announcements for investments in Gujarat from domestic companies as well as from some of the global manufacturing giants. Furthermore with some of the favourable reforms the state has one of the highest ‘project planned to implementation ratio’ among other industrial states. Automotive industry could not remain untouched with the lucrative opportunity the state offered.

Strategic Location Strategic geographical location in Central India and the longest coastal line makes it a

Contd. on page 186


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Socio economic growth in Gujarat Population Geographical area

4.9% 6.2%

No. of factories GDP( at factor cost)

15.7% 9.6%

Exports

22.0%

Source: Socio economic review 2010 -11 Contd. from page 184 favourable destination for the automotive industry from both logistics as well as exports point of view. Along with favourable infrastructure and conducive policy framework, Gujarat offers an inherent advantage of being located centrally in India as well as has the longest coastline in the country. These factors make it favourable destination especially for automotive industry, for which logistics and supply chain are the key aspects of operation. The Delhi-Mumbai Industrial Corridor (DMIC) project that Government of India plans to develop for connecting industrial zones across six states through railways is estimated to cover 62 percent of the area in Gujarat. Furthermore, sourcing of components from manufacturing bases across the world is the critical aspect of operation for both automobile OEMs and component manufacturers. Hence having a proximity of ports in order to have hazard free imports and exports as well as save on logistics cost is of outmost important. According to Gujarat’s Vision 2020 document, the capacity of Gujarat ports is projected to go up from 140 MMTPA in FY08 to around 750 MMTPA in FY20, forming around 24 percent of the total port capacities in India. CARE Research believes in order to cater the rising demand that is expected to more than double by FY20 from current levels, the automotive industry would require a new manufacturing base in addition to the existing ones. In face of Gujarat, the industry got an ideal base for setting up manufacturing hub that gave good logistics and political support along with strategic geographical location.

Conducive operational environment leading to flurry of investments from automotive industry in Gujarat Conducive policy environment and infrastructure support which Gujarat offered to Tata Nano project after the setback of West Bengal fuelled flurry of investments in automotive sector. Apart from Tata Motors and GM which have manufacturing facility in Gujarat, other global manufacturers like Ford, Peugeot and Maruti Suzuki are some of the key players to set up facility in Gujarat in next 4-5 years. CARE Research estimates that, Gujarat would become the largest producer of four wheeler automobiles in India in next five years, surpassing other automobile hubs like

NCR, Maharashtra and Chennai. Inspite of being sought after destination for investments, Gujarat needs to cope up with increasing demand for skilled labour. Traditionally Gujarat’s

industrial development has been in the field of diamond processing and textile where the requirement of skilled labour is limited. The only exception has been the oil and gas sector which has been

developed over the period of one and half decade. With aggressive investment plans for the state in different industries the demand for skilled labour is likely to witness sharp spurt in next few

years. However, currently due to lesser number of technical institutes as compared to other key industrial centres, the concern for availability of local skilled labour is on the rise.


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BKT to maintain edge, expand capacity Abhishek Parekh Mumbai

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umbai-based B a l k r i s h n a Industries, one of the leading OTR (Off The Road) tyre manufacturer, is looking to maintain its competitive advantage amidst growing competition in the global OTR market. It has a global marketshare of around four percent and is looking to grab an additional two to three percent share over the next couple of years by expanding its market reach and capacity. The company is already implementing its capacity expansion programme by setting up a 90,000 metric tonnes per annum at Bhuj in Gujarat with an investment of around `1,000 crore. Post-

Tyres manufactuing at Chopanki facility

expansion, the company’s total capacity could exceed 230,000 MTPA (Metric Tonne Per Annum) and would be a key aid in providing additional marketshare to the company. “We are sitting on an order backlog of around 70,000 MTPA(Metric

tonnes Per Annum). The current demand scenario is looking optimistic but there is some uncertainty in our key international markets in North America and Europe. We are not very certain of how the current Europe debt crises will play out and affect the economies in these

markets,” said Director, Balkrishna Industries, BK Bansal. He added that over the last few years it has become increasingly unsustainable for tyre production to be carried out in Europe due to labour cost and environmental issues. Most tyre manufacturers in the OTR

segment are looking to shift their production in lower cost countries including India and Sri Lanka. “Like any other tyre company, we are also exposed to fluctuations in raw material costs, currency f luctuations, labour issues and uncertain demand scenario in the international markets. Apart from that, we are continuing to establish and build on our pre-eminent position in the various European and South American markets. We are confident of continuing to build up on our competitive advantage in the OTR segment with introduction of more SKUs (Stock Keeping Units) and low cost of labour,” said Bansal. All three facilities, including the upcoming one in Bhuj, are equipped to manufacture all SKUs allowing the flexibility to ramp up or tone down the production as required by demand supply fluctuations. There are only a handful of tyre companies globally, which are active in the OTR segment. “We cannot have a high level of automation in the production line as that would negate the cost advantage that we enjoy in India. Moreover, high level of automation would also limit our ability to quickly develop and introduce SKUs in the market,” added Bansal. He also pointed out that significant proportion of material handling and equipment related handling work can be automated. Balkrishna Industries, a part of the Mumbai-based Siyaram Poddar Group, sells OTR tyres under the brand name BKT. It manufactures more than 1,900 different SKUs for all off highway segments including agriculture (around 65 percent), construction equipments & material handling (around 30 percent) and other special purpose machineries with focus on the aftermarket segment. It supplies these tyres from existing facilities at Bhiwadi & Chopanki, Rajasthan and Aurangabad, Maharashtra. It also has a small facility with a moulding plant in Dombivali near Mumbai. It has more than 200 distributors in 120 countries and supplies to OEMs like Volvo, John Deere, CNH, Class, Bomag, Same, JCB among other agricultural and construction equipment manufacturers. It sources raw materials from rubber producers in Indonesia, Malaysia, Thailand in addition to India and enjoys logistical advantage compared to its global peers due to proximity of material suppliers. Its consolidated revenues stood at `2,211 crore in the last fi scal and the net profit stood at `195 crore. It achieved total production of around 111,545 metric tonnes in the last fiscal. It is targeting revenues of around `5,000 crore by 2015 while maintaining operating profit margin of around 18 to 20 percent.


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Kia introduces Korea’s first electric vehicle

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ia Motors introduced Korea’s first electric vehicle, with the launch of the new Kia Ray EV—a zero-emissions city car with lively performance and a range of up to 139 km (86 miles) on a single charge. For supply exclusively to the domestic Korean market, the Kia Ray EV is a close relative of Kia’s one-litre gasoline powered Ray CUV, which went on sale in Korea last month. It shares that model’s major dimensions and, in a global fi rst for an EV manufacturer, can share a production line with conventional combustion-engine cars. The front-wheel drive Ray EV is powered by a 50kW electric motor and a high-capacity 16.4 kWh lithium ion polymer battery pack that is engineered for

a 10-year life cycle and skilfully packaged under the rear seat and cabin floor. Although the Ray EV weighs 187 kg more than the gasoline model, the electric motor’s generous torque—167 nm (an increase of 77 percent)—ensures responsive performance. The EV’s acceleration is brisker than the gasoline models (0-to-100 kph in 15.9 seconds), while top speed is 130 kph (81 mph). Recharging times are six hours using a 220V household supply and just 25 minutes in fast-charge mode. The Ray EV’s automatic transmission offers the driver a choice of two modes while in ‘D’ drive. ‘E’ (or ‘eco’) mode optimises the delivery of the motor’s torque to achieve minimum battery consumption and maximum driving range. ‘B’ (or ‘brake’)

mode can be selected when driving downhill on highways and on mountain roads to maximise braking power. Bearing the same striking exterior styling as its gasoline cousin, the Kia Ray EV has four small distinguishing points. A flap in the front radiator grille covers an electricity inlet for a 220V supply for the slow recharge mode, another inlet (for the fast recharge mode) is fitted in the same location as the fuel intake of the regular models, special decals on each front door proclaim the ‘Zero Emissions EV’ message and super-smooth 14-inch alloy wheels improve aerodynamic performance by minimising drag. Inside, the Ray EV features a unique instrument cluster, displaying electric motor opera-

tion, battery status and distance to recharge. It is also equipped with the fi rst-ever EV-specific navigation system that features a seven-inch screen and provides crucial information for EV drivers such as the nearest loca-

tions of the slow/fast recharging stations. The display shows a circular shaped area in which the model can travel with its current level of battery power, so that drivers can see which destinations are reachable without a recharge. Currently there are 500 slow/ fast recharge stations in Korea, and the government plans to increase that figure to 3,100 stations by the end of 2012.The Kia Ray EV embodies numerous innovations. The electric motor achieves 93 percent efficiency, which is the best in its segment. The lithium ion polymer battery’s cell is optimised and highly integrated, which has enabled its weight to be reduced by 13 percent and its energy density to be increased by 15 percent compared to competitors’ systems. The onboard charger, current inverter, high-low voltage converter and EV-specific VCU (vehicle control unit) each features advances over previous equipment. Ray EV is also equipped with a new type of regenerative braking system featuring an Active Hydraulic Booster that utilises the electric motor, instead of the gasoline engine in the regular model, to create hydraulic pressure for the brake system. The result is consistent brake pedal force throughout a wide variety of driving conditions and the ability to harvest excess energy and use it to recharge the car’s battery. Unlike regular gasoline vehicles, Ray EV generates no engine noise, which can be a potential problem with pedestrians being unaware of the approaching car. To prevent accidents, Kia has fitted Ray EV with a VESS (Virtual Engine Sound System). When driven at speeds below 20 kph (12 mph) this system delivers a mixture of recorded gasoline engine noises, which are also emitted whenever the car is backing up. Japan and the USA are already considering the introduction of a legal requirement for EVs to have a virtual engine sound, and Kia has taken the fi rst step to commercialise this system in order to anticipate the global industry’s trend. To ensure that the Ray EV is as safe as gasoline cars, it is equipped with six air-bags, and electronic stability features—VDC (Vehicle Dynamics Control) and HAC (Hill Assist Control, to prevent roll-back)—as a standard. This year, Kia is planning to manufacture 2,500 units of the Ray EV, which will be provided to government departments and public offices as part of Kia’s longterm real-world research and development program to provide environmentally friendly transport to Kia customers around the world during the next decade.


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Mercedes bags major truck order in Brazil

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ercedes-Benz do Brasil continues to register a high level of orders for medium-duty and heavy-duty trucks. One of Brazil’s largest construction companies, Camargo Corrêa has ordered 115 Mercedes-Benz trucks in order to upgrade its fleet recently. The order encompasses a wide range of products, including medium-duty Atego, heavy-duty Axor and Actros trucks. As part of the government’s Growth Acceleration Program (“Programa de Aceleração do Crescimento”/PAC), Camargo Corrêa is currently involved in a number of infrastructure projects for expansion of roads and rail systems. Brazil is preparing for 2014 World Cup and 2016 Summer Olympics. “Demand continues to be

on a historically high level for our commercial vehicles in Latin America,” stated Head of Mercedes-Benz Trucks Europe and Latin America, Hubertus Troska. “We are answering this demand with a state-of-the-art product range of trucks, buses, and light commercial vehicles. Our line-up includes modern BlueTec 5 technology and fulfi ls the Proconve P-7 emissions standard, which is comparable to Euro V and will go into effect in Brazil in January 2012.” Camargo Corrêa is using Mercedes-Benz trucks so that it can make sustainable and rapid headway with its construction and infra-structure projects. In addition to 60 heavy-duty Actros 4844 8x4 and nine heavy-duty Axor 3344 6x4 dump trucks for transport of stone and earth,

Camargo Corrêa is purchasing ten medium-duty Atego 1725 4x4 and 36 medium-duty FPN cab-over-engine models for the Latin American market. The Atego and FPN models will be used for construction support, including material transport and maintenance operations. The MercedesBenz Actros trucks acquired by Camargo Corrêa are equipped w it h MercedesBenz’s innovative Fleetboa rd f leet management system. Fleetboard can reduce fuel consumption by up to ten percent by analysing driver behaviour and providing information on how to achieve better performance through an economical and preventive driving style. “Our purchase decision took into consideration the durability of the components, the strength of the engines, the high load capacity, and all the other things that the brand offers in its vehicles,” said Supply Manager at Camargo Corrêa, Carlos Maximiliano de Souza. “A big contractor like Camargo Corrêa doesn’t want to buy only a truck, but a complete set—from the beginning to the end, as it should be in a partnership.” President of Mercedes-Benz do Brasil and CEO for Latin America, Jürgen Ziegler explained, “Our products stand for high performance, reliabilit y, and durability. We offer outstanding value and can greatly boost the efficiency of our customers’ transport activities and increase their profitability.”

Mercedes-Benz do Brasil Mercedes-Benz do Brasil is the biggest manufacturer of commercial vehicles in Latin America. Its São Bernardo do Campo plant is Daimler’s biggest outside of Germany, and the only one where trucks, bus chassis, powertrains (including engines, transmissions, and axles) and truck cabs are produced at a single location. Another facility is located in Juiz de Fora, which is also part of Mercedes-Benz’ global commercial vehicle production network. Starting in early 2012, the plant will also produce Mercedes-Benz Actros heavy-duty and Accelo light-duty trucks for the Latin American market in order to fully exploit future growth potential. With its 42,000 employees, Camargo Corrêa is one of Brazil’s largest construction companies. It also operates internationally in other South American countries. Over the past 71 years, the major construction fi rm has gained extensive experience in numerous infrastructure projects. The company is currently involved in a variety of PAC projects for construction and maintenance of public works, such as bridges, roads, railroad tracks, subways, and much more. Camargo Corrêa has also participated in major Brazilian public works projects, including the São Paulo subway and the airports of Brasilia and Guarulhos.


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Marelli showcases first platform for ‘connected car’

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agneti Marelli presented the first open-source platform for in-vehicle infotainment devices. The platform complies with automotive requirements in terms of performances and durability, and, at the same time, is equipped with software developed and certified according to GENIVI Alliance compliance specification. The prototype was presented in San José, California, during the fi fth Member Meeting of the GENIVI Alliance (Acronym for Geneva, In-Vehicle Infotainment). GENIVI is an alliance consisting of over 150 companies located around the world—including leading carmakers, automotive component suppliers, electronics and ICT industries—whose main goal is to guide the widespread adoption of an open-source platform for IVI (In-Vehicle Infotainment) devices. The company is one of the founding partners of GENIVI, along with companies such as BMW, PSA, Intel, Windriver. Looking to the ultimate goal of the ‘connected car’, the automotive world is increasingly opening up to the ‘outside’ world, to the internet and to the ‘consumer electronics’ devices. In this view, the connected car can receive onboard rich information (ie traffic, advanced navigation, car parks, etc.) and high-quality multimedia entertainment; allow the car to communicate with the passenger’s consumer devices (mobiles, smartphones, tablets etc.); enable interaction with central infrastructures for data collection and exchange. The medium-term objective is to connect cars also to the ‘cloud’. In this scenario more and more vehicles and models will have to be equipped with infotainment systems incorporating increasingly complex features, including multiple functions, high flexibility, high updating speed and ability to communicate with external devices and software in continuous evolution. In terms of costs and times, it is convenient for the automotive infotainment industry to identify a common technological environment, standard and platform, based on which, customised solutions can be built for carmakers and for families of vehicles and models. In this sense, the compliance specification set out by the GENIVI, supporting the defi nition of an open-source platform, aims at making available to automobile manufacturers and their suppliers a common underlying framework in order to simplify the development and shorten the time-to-market for the In-Vehicle Infotainment devices, that have historically seen multiple, parallel and proprietary developments across the industry. The Magneti Marelli project is the result of three years of work, and it benefits from the company’s specific and established know-how in integrating complex systems and technologies into the vehicle environment. Specifically, this prototype of GENIVI compliant open-source platform for IVI is based on its consolidated expertise on the subject of open software platforms for infotainment and telematics applications. In this sector the company has always

been at the forefront in terms of its approach to technology and to the market. Technically speaking, the platform is Linux-based, and it features hardware and software built according to “automotive” standards, in other words in compliance with specific requirements in terms of durability and performances (ie temperatures, stress, response speed), compatible with the operating conditions of automobiles, incorporating a connection to the electronic control network of the automobile. The platform already includes the basic structure that enables functions such as connectivity to consumer electronics devices, display of internet contents, wireless connections (WiFi, 3G and Bluetooth), playing of audio/ video and high-quality multime-

dia contents, radio and digital hi-fi audio management, and installation and updating of new apps. Magneti Marelli’s solution already offers an environment open to third-party software solutions, also looking at Android that can also incorporate the latest and most advanced technologies on the market in the field of navigation, user interface and advanced graphics. Due to its excellent flexibility, the platform will allow the company to satisfy specific, customised requests by different carmakers. Mass production is scheduled to start in 2013. It designs and produces advanced systems and components for the automotive industry. With its 77 production units, 11 R&D centres and 26 application centres in 18 countries, about

The connected car can receive onboard rich information and high-quality multimedia entertainment. Allow the car to communicate with the passenger’s consumer devices. The medium-term objective is to connect cars also to the ‘cloud’

34,000 employees and a turnover of Euros 5.4 billion in 2010, the group supplies all leading carmakers in Europe, North and South America and the Far East. Its business areas include electronic systems, lighting;

powertrain, suspension systems and shock absorbers, exhaust systems, aftermarket parts & services, plastic components and modules, and fi nally motorsports. Magneti Marelli is part of Fiat Spa.


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Valeo acquires torque enhancement systems business

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s part of its strategy of developing solutions to reduce CO2 emissions, Valeo has acquired the Variable Torque Enhancement System (VTES) business of the British automotive technology development company, Controlled Power Technologies (CPT). With this move, Valeo becomes the fi rst automotive supplier to offer its customers a range of electric superchargers. Unlike exhaust-driven turbochargers, electric superchargers are driven by an electric motor. This innovative technology, which leverages a switched reluctance motor with very low inertia, responds much faster than a conventional turbocharger. Highly efficient at low engine revolutions, electric superchargers make it possible to reduce engine size, an important factor in reducing fuel consumption. Lastly, when coupled with a Valeo energy recovery system, electric superchargers can be used to create a cost-competitive hybrid solution that can deliver fuel savings of up to 20 percent in the standard European driving cycle. “We are very pleased that CPT’s VTES business is joining Valeo,” commented Valeo Chief Executive Officer, Jacques Aschenbroich. “This vibrant, innovative company, backed by an impressive bench of talent, has demonstrated its ability to develop highly effective solutions for reducing CO2 emissions. With this acquisition, Valeo confi rms its unique position in CO2 — reducing technologies, in line with the Group’s strategy.” “CPT has worked with Valeo over a three-year period to defi ne electric supercharging system requirements. Our automotive customers wanted clarity about future plans for the VTES product and a sale to Valeo was the best solution to enable our VTES technology to reach its full potential” commented CPT Chief Executive Officer Nick Pascoe. “It also validates our approach to technology development, which we apply to all our products.” VTES will be integrated into Valeo’s Powertrain Systems Business Group with immediate effect. This acquisition boosts Valeo’s commitment to innovation, which is reflected in an R&D budget of more than Euro 600 million. The group has fi led more than 600 patents this year, making it the fourth-ranked fi ler in France. It was advised on the transaction by Turquoise International (corporate fi nance) and Matthew Arnold Baldwin (Legal & Tax). Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for the automotive industry, mainly for CO2 emissions reduction. Valeo ranks among the world’s top automotive suppliers. The group has 125 plants, 21 research centres, 39 development centres, 10 distribution platforms and employs 67,900 people in 28 countries worldwide. Controlled Power Technologies is an independent developer and supplier of cost-effective automotive technologies designed to improve automotive fuel consumption and emissions, without the need for redesign of the powertrain or vehicle electrical system. In the third quarter 2011 and

the fi rst nine months of the year, global automotive production remained robust in all regions. Production advanced four percent compared to the fi rst nine months of 2010. In Japan, automotive production began to turn around, declining by five percent in the third quarter compared to a drop of 31 percent in the fi rst half of the year. For the fi rst nine months of the year, automotive production in Japan fell 21 percent. Consolidated sales totalled Euros 2,662 million in the third quarter of 2011, up 14 percent (12 percent on a like-for-like basis). In the first nine months of the year, consolidated sales came in at 7,996 million euros, representing an increase of 12 percent on both a reported and like-for-like basis. Changes in

group structure in the third quarter represented 4.2 percent of consolidated sales, including 106 million euros corresponding to the contribution of Niles. Or ig i na l equ ipment sales (85 percent of consolidated sales) came out at 2,262 million euros inthe third quarter, up 17 percent (14 percent on a likefor-like basis), and 6,772 million euros in the first nine months of the year, up 15percent (14 percent on a like-for-like basis). Original equipment sales in Asia represented 25 percent of total original

Jacques Aschenbroich, CEO, Valeo

equipment sales in the third quarter, further to the acquisition of Niles. Aftermarket sales (13 percent

of consolidated sales) amounted to Euros 336 million in the third.


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Mercedes-Benz launches hybrid offensive

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ercedes-Benz is opening a new chapter in its brand’s core segment and at the same time setting new standards for luxury-class business vehicles: the E 300 BlueTEC Hybrid, available as a Saloon and Estate, impresses with new record values when it comes to efficiency. It boasts exemplary consumption levels (4.2 l/100 km) as well as impressive performance: the four-cylinder diesel engine of the E 300 BlueTEC Hybrid has 150 kW (204 hp) and 500 nm. Combined with an electric motor producing 20 kW and 250 nm, this results in a coherent overall concept. The E 300 BlueTEC Hybrid is the most economical luxury-class vehicle in the world. The V6-cylinder petrol engine in the E 400 Hybrid produces 225 kW (306 HP) and 370 nm, and is also supplemented by a further 20 kW and 250 nm from the electric motor. The consumption figures based on the American CAFE standard are: City 24 mpg, Highway 31 mpg, Combined 27 mpg. “With these two E-Class models we are now continuing our comprehensive hybrid offensive. The modular technology opens up a quick way for us to complement other model series with hybrid models”, explained Daimler Board Member for Group Research and Head of MercedesBenz Cars Development, Prof Dr Thomas Weber. “With a clear focus on the different requirements of global markets, we are able to offer precisely the models which our customers want. The E-Class hybrids provide a clear reduction in consumption as well as a very impressive driving experience: they represent hybrid motoring at the premium level.” The new models do not require their passengers to have to compromise when it comes to space, however, whether in terms of the interior or the luggage compartment. And there are also additional benefits to the intelligent modular hybrid concept, which represents a comprehensive enhancement of the Mercedes-Benz S 400 HYBRID which has advanced to the position of clear market leader since 2009: no changes to the vehicle body are required, the hybrid module is both flexible and modular, thus allowing its use in other model series, and in addition to diesel and petrol variants there will also be righthand drive variants. Meanwhile, the extra cost involved here is only moderate. The new hybrid models will be celebrating their world premiere at the Detroit Motor Show (14 to 22 January, 2012) and will appear on the market over the course of the year. The E 300 BlueTEC Hybrid is initially planned to be launched on the European market, while the E 400 Hybrid will be made available on the American market fi rst, followed by other countries such as Japan and China later.

Highlights of the E 300 BlueTEC Hybrid: • Compact, intelligent and modular hybrid concept: no changes to the body of the base vehicle are necessary • Also available as an Estate

• Space, safety and comfort remain unchanged • Significant increase in comfort with start/stop operation; noiseless start, complete climatic comfort • Consumption in the luxury-class business vehicle segment: 4.2 litres/100 km, 109 g CO2/km • Part of the downsizing strategy of Mercedes-Benz: increase in the engine output of the E 300 BlueTEC Hybrid with 150 kW + 20 kW electric motor/500 nm + 250 nm, compared with the E 250 CDI (150 kW/500 Nm), positioning it at the same level as the E 300 CDI (170 kW/540 nm) • Fuel savings of around 15 percent compared with the E 250 CDI—even in actual road traffic conditions

Highlights of the E 400 Hybrid: • Compact, intelligent and modular hybrid concept: no changes to the body of the base veh icle are necessary • Significant increase in comfort with start/stop operation; noiseless start, complete climatic comfort • Consumption combined (CAFE): 27 mpg • Part of the downsizing strategy of Mercedes-Benz: increase in the engine output of the E 400 Hybrid by some 20 kW and 250

nm due to the electric motor • Hybrid driving experience (start/stop function, regen-

erative braking, boost effect, purely electric motoring and “sailing” function)


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Renault announces first wave of UK EV dealers

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ith the arrival of Kangoo Van ZE, the fi rst model in Renau lt’s fou rstrong electric vehicle line-up, the French marque has confi rmed the fi rst wave of UK dealers for its electric vehicles (EV). Twenty one electric vehicle sites, branded ZE Expert, are now live and ready to offer the full range of sales and aftersales services for Renault’s electric vehicle customers, with each one having benefited from a comprehensive sales staff training, site upgrade and infrastructure programme. Each dealership will be able to handle potential EV customer questions, as well as offer advice on making the most of the benefits of running one, including the essential environmental and fi nancial factors to take into account. Trained ZE sales specialists, a minimum of two per showroom, will also be on hand to guide interested private and business customers through funding and charging options, as well as battery hire plans to allay any potential concerns over powertrain replacement costs and performance. All ZE expert sites have a Kangoo Van ZE demonstrator, so

Mazda launches accident repair programme

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a zda UK has launched a pioneering accident repa i r scheme aimed at driving more parts business through its dealer network and providing its approved accident repair centres with additional revenue. Called ‘Save It’, the programme is designed to offer discounted repairs on cars that have been in an accident and on the margin of being written-off by insurance companies due to the value of the repair. Although the winter months tend to see around a 20 percent increase in work for repair centres from the summer months, Mazda UK aftersales director David Wilson-Green believes there is scope to drive more work through the Mazda dealer network and the 146 Mazda Approved Accident Repair Centres. “Scrapping a car is hugely inconvenient for a customer and will invariably cost them money,” Wilson-Green explained. “Customers also have to wait for an insurance company to pay out and then rush to fi nd a replacement vehicle at a time usually inconvenient to them. “While customer satisfaction and convenience is paramount, it also makes good business sense for our dealers who supply the parts for the repairs and our approved accident repair centres to do the work, it also keeps a customer in their Mazda for potential future servicing and parts sales,” added Wilson-Green. Customers can also relax, safe in the knowledge that their vehicle has been repaired back to manufacturer factory standards in a Mazda Approved Accident Repair Centre (MAARC), using Mazda genuine parts and repair methods.

that people can experience for themselves the smooth, silent and serene feeling of driving an electric vehicle. On the service side, workshop staff at each site—a service manager and two technicians have undergone specialist training so that they can address the demands of the new technology

and become familiar with the new tools they have been provided with. The dealerships have also purchased specialist ramps and equipment to deal with the service and maintenance of its electric vehicles, which attract no benefit-in-kind taxation and 100 percent capital write-down allowance in the fi rst year, as well

as being Congestion Charge and VED exempt. Additionally, ZE Expert dealers have invested substantially in three new Chargemaster charging points with UK preferred partner, British Gas—one each for the workshop, demonstrator area and car park. The charging point in the car park will be accessible for all customers to use. There will also be a dummy domestic charging point in the showroom to provide demonstrations to customers. Commenting on the launch of the fi rst set of Renault ZE Expert sites, Managing Director, Renault UK, Thierry Sybord said, “I’m delighted to see so many of our dealers embracing this new era of electric transport. With a full range of four fully-electric models set to launch in the UK in

less than one year, we have high hopes for our ZE range. I’m sure our ZE Expert dealers will reap the rewards on both sales and aftersales and we look forward to charging ahead with them in the months and years ahead as we seek to attract as many electric vehicle buyers as possible.” Supporting the on-site facilities, Renault has launched a series of other resources to help would-be-EV drivers become fully au-fait with the facts of living with a ZE product. Among them are expert ZE Live text chat or one-way video, including video guides. All Renault dealers outside of the 21 specialists have been given a ZE induction and will also be able to handle enquiries and refer customers to a suitable member of the Z.E. Expert dealer network.


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Citroën website recognised in Car Dealer Ewards 2011

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itroën’s digital application of ‘Créative Technologie’ has been rewarded for the second year running in the annual Car Dealer Ewards. The Citroën.co.uk domain has been named ‘Car Manufacturer Website of the Year’ for the second year in a row whilst Ds4seekers, the Facebook-based multi-player game of hide and seek, was awarded ‘Innovation of the Year’. Citroën UK’s national website provides a stylish portal for car buyers and consumers to easily discover the world of Citroën. Redesigned in 2010, the site presents visitors with a flowing wall of information providing easy access to the latest retail offers, competitions, brand news and interactive elements,

as well as improved integration with Citroën’s popular social networks. The Ewards judges said: “Citroën.co.uk is a design-led website that is rich in information. They have taken significant steps in putting the forecourt at the fi ngertips of their online customers. It stood out due to ease of navigation and the ‘configure a car’ option is highly detailed and includes a 360-degree internal view.” Incorporating New Citroën DS4 into the narrative of a fun online game, Ds4seekers used an innovative combination of well known platforms—Facebook, Google Streetview & Google Mobile Maps—to create a multi-player game of hide and seek. Players were able to take part both online and on their smartphones,

mov ing seamlessly between the two thanks to real-time, back-end integration. The competition ran twice, once in July and once in September with a brand New DS4 given away each time. More than 15,000 people took part over the two games, hiding and seeking almost 830,000 virtual DS4s. The Ewards judges said: “Citroën really cracked it with this clever website game promoting the new DS4. The site was hugely innovative in its all-browser compatibility, with seamless, real-time moves between mobile and online. Its

The Citroen website

addictive, engaging and interactive game play kept people coming back for more.”

Jules Tilstone, Citroën UK’s Marketing Director, commented: “We wish to thank Car Dealer

Citroën.co.uk is a design-led website that is rich in information. It stood out due to ease of navigation and the ‘configure a car’ option is highly detailed and includes a 360-degree internal view

magazine for a second year of Ewards recognition. Citroën’s digital platforms are an important focus for our business, especially in how we innovate and use new and emerging online technologies to communicate with our customers. Our national website continues to evolve alongside our latest generation of models, including New Citroën DS5.” Jules continued: “The success of DS4SEEKERS was down to an understanding of the social media consumer, in creating an engaging, innovative and - most importantly - fun interactive platform that would appeal to a wide audience. The game proved hugely popular and helped introduce thousands of players to Citroën and New Citroën DS4.” The Citroën.co.uk website was designed by the Dagobert Web Design Agency and the DS4SEEKERS competition (http:/ info.citroen.co.uk/ds4seekers/) was developed by specialist digital content agency Candyspace.

Lexus presents new LF-LC sports coupe concept at Detroit Lexus is reported to have unvieled a new LF-LC 2+2 sports coupe concept at the North American International Auto Show (NAIAS) in Detroit recently, a vehicle which marks a further step in the development of Lexus’s design direction. Lexus has crafted the LF-LC from a clean sheet of paper, combining high technology and organic shapes to achieve a close connection between driver and car. The concept’s clean lines create a highly distinctive, futuristic look. LF-LC was conceived as an exercise to explore the future of Lexus design and was created at Lexus’s Calty design studio in Newport Beach, California.


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Bosch produces two billion MEMS sensors

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osch sets a new production volume record: the technology company has manufactured two billion MEMS (Micro-ElectroMechanical Systems) sensors since production began 16 years ago. While it took 13 years to produce the fi rst billion, the two-billion mark was recently crossed, just three years later. And production volumes are still growing. Recently, annual production has reached almost half a billion units—more than 1.3 million every working day. Bosch is one of the world leaders in the MEMS sensor market. The automotive and consumer electronics industries are the biggest users of these sensors, and Bosch serves them via its Automotive Electronics division and its Sensortec and Akustica subsidiaries.

1980s Research Led To The “Bosch Process” Bosch researchers developed the basic technology of bulk and surface micromachining from the mid-1980s; this is why one of the main production processes is known in the industry as the “Bosch process.” The research was honoured with prestigious awards: the European Patent Office’s European Inventor Award 2007, and the 2008 German Future Prize, Federal President’s Award for Technology and Innovation. Bosch MEMS sensors are just as precise and reliable when measuring variables such as pressure, acceleration, yaw rate, or flow rate as they are determining the direction of the Earth’s magnetic field. The sensors use microscopically small springs, bars, weights, or membranes to make their measurements. The structures etched into their silicon substrate are just thousandths of a millimeter across. Since micromechanical sensors produce only weak electrical signals, experts have integrated electronics either into the component housing beside the sensor or sometimes even directly on the same chip. These take the weak signal and either process it, amplify it, or convert it into digital data. In this way, MEMS sensors can provide measurements directly to control units.

Automotive Technology The fi rst market for MEMS sensors was in automotive electronics. Here, the miniaturisation of sensors plays only a secondary role. Reliability and robustness are much more important. Bosch Automotive Electronics now produces several hundred vehicle-specific varieties of micromechanical sensors that make cars cleaner and safer, more economical and more comfortable. Each year sees an increase in the number of different varieties and in overall volumes. A modern car features up to 100 of these sensors— and the number is growing. For instance, they are the “senses” for injection systems in gasoline and diesel engines, they are what makes life-saving airbags deploy, and they are an essential part of the ESP anti-skid system.

Mobile Consumer Electronics In consumer electronics, MEMS sensors make mobile devices such as smartphones

or laptops safe, convenient, and user-friendly. The demands of this sector are fundamentally different from those of the automotive industry. For devices to be practical, the sensors they contain need to be tiny, and they must use very little power to conserve battery life and cost-effective. In navigation devices and cell phones with a navigation function, MEMS pressure sensors’ measurements of changes in altitude are accurate enough to allow for navigation even within a multi-story building. MEMS acceleration sensors make it possible to use hand movements to control devices, switch the display of content from portrait to landscape format, prevent the loss of data on hard drives when a notebook is dropped, and open

up new worlds of experiences to users of new game consoles. The latest development is a triaxial MEMS magnetic field sensor. By measuring the Earth’s magnetic field, it can determine the geographic direction. A smartphone containing a digital compass could, for example, be used during a sightseeing tour of a city to display information about whichever sight users are pointing their phone at. MEMS microphones for consumer applications are the specialty of Bosch’s Akustica subsidiary. These tiny microphones, measuring just a few millimeters, stand out for their small size, robustness and immunity to high-frequency signals from surrounding circuitry and displays, enabling consumer device manufacturers to integrate two or

The Bosch MEMS Sensor

more microphones for enhanced noise suppression. The potential for new developments in the consumer market is

as high as ever, so we can expect further spectacular innovations based on MEMS components in the years to come.


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International auto round-up BMW to set up Brazil plant to sustain deliveries

kets,” the EU executive, which acts as competition regulator in the bloc, said in a statement. “The Commission is also examining whether Honeywell engaged in deceptive conduct during the evaluation of (the new refrigerant) 1234yf between 2007 and 2009,” it said. It said complainants accused the company of not disclosing its patents and patent applications while assessing the refrigerNorbert Reithofer, CEO, BMW ant and then by 2020 from 1.6 million this year, Chief Executive Officer, BMW, Norbert Reithofer said. The manufacturer, which will introduce a new version of its best-selling 3-Series sedan in February, anticipates that sales will grow in the US, China and Europe next year, unless the global economy falters, he said. “We are better prepared for a potential crisis” than during the 2009 recession because of lower production costs and a better fi nancial cushion, Reithofer said at the briefi ng yesterday. He reiterated that profit in 2011 will “rise significantly” to a record and automotive earnings before interest and taxes will amount to at least 10 percent of sales. BMW has been considering building a factory in Brazil for months as it seeks to balance growth and avoid over-reliance on a single market. The maker of BMW, Mini and Rolls-Royce vehicles aims to defend its worldwide luxury-car lead from Volkswagen AG’s Audi and Daimler AG’s Mercedes-Benz, which have both vowed to take the top spot. The expansion comes amid a growing car glut in Europe as most automakers continue churning vehicles in the face of slumping sales and growing concern that the sovereign-debt crisis is causing an economic slowdown. Overcapacity in the region may surge 41 percent to 2.92 million vehicles next year, according to forecasts from research group, IHS Automotive. BMW is keeping its factories’ Christmas breaks as short as possible to meet demand, shutting most plants only for the week between Christmas and New Year’s Day. Also, the company is on standby to lower production in case demand falls. Frank-Peter Arndt, BMW’s production chief, said recently that the carmaker can reduce output by 20 percent to 30 percent if necessary. BMW will set up a factory in Brazil to help sustain global sales growth following record deliveries in 2011. BMW is deciding on a site for the plant, which will contribute to the company’s push to increase sales to two million cars

failed to grant licenses on fair and reasonable terms. The new refrigerant is intended to replace an existing product which does not comply with new EU environmental rules on global warming. French specialty chemicals group, Arkema said in a statement that it complained to the EU regulator in April. “Arkema will continue to fully collaborate to the investigation which purpose of which is to clarify the legal environement related to Honeywell & Dupont’s patents,” it said. Honeywell said its actions comply with the law. DuPont said it will cooperate with the investigation, and is confident it will “conclude that actions taken by DuPont complied with applicable laws.” Honeywell makes products like cockpit electronics and control systems for buildings.

DuPont makes chemicals, genetically modified seeds and Kevlar bulletproof fabrics.

Congress ends corn ethanol subsidy The United States has ended a 30-year tax subsidy for cornbased ethanol that cost taxpayers $six billion annually, and ended a tariff on imported Brazilian ethanol. Congress adjourned for the year, failing to extend the tax break that’s drawn a wide variety of critics on Capitol Hill, including Tom Coburn and Dianne Feinstein. Critics also have included environmentalists, frozen food producers, ranchers and others. The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks. Environmental group, Friends

of the Earth praised the move. “The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables,” biofuels policy campaigner Michal Rosenoer said. The subsidy has provided the oil and agribusiness industries with 45 cents per gallon of ethanol blended into gasoline. By some estimates, Congress has awarded $45 billion in subsidies to the ethanol industry since 1980. CEO of Growth Energy, Tom Buis, an ethanol trade group, said earlier this month the industry would survive without the credit. “The blenders’ tax credit initially helped the ethanol industry develop. However today, we don’t have a production problem, we have a market access problem,” Buis said.

Contd. on Page 215

Honeywell, DuPont in EU antitrust probe

EU regulators are probing whether agreements between US conglomerate Honeywell and US chemicals company DuPont on a new global refrigerant for car air-conditioners may be anti-competitive. The European Commission said the investigation was prompted by complaints, but did not say who had made the complaints. “The commission will investigate whether joint development, licensing and production arrangements entered into between the two companies in relation to these refrigerants restrict competition on the mar-

Contd. on Page 56


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International auto round-up Contd. from Page 213 “Without the tax credit, the ethanol industry will survive; it will continue to reduce our dependence on foreign oil, create jobs and strengthen our economy.” Ethanol supporters are worried Congress might roll back a 2007 mandate that dramatically boosts the use of ethanol annually through 2022. The mandate jumps from 15 billion gallons of renewable fuels —including cellulosic ethanol in 2015—to 36 billion gallons by 2022. The corn lobby has lost clout this year, losing votes in Congress. The Senate voted 73-27 in June to end the ethanol tax subsidy and tariff. But Michigan Democrats Carl Levin and Debbie Stabenow were among the 27 senators who voted against ending the subsidy. Michigan is the nation’s 11thlargest corn producer, harvesting 315 million bushels in 2010. The state has more than 11,000 corn growers, and they planted corn on 2.45 million acres last year, or about four percent of all land in the state. Earlier in December, a bipartisan group of more than 70 house members urged a congressional block on higher levels of ethanol blended into gasoline. Automakers and other engine makers have clashed with corn growers since 2010 over whether the United States should allow the use of a new blend of ethanol called E15 because it is 15 percent biofuel. The Environmental Protection Agency has approved the use in all vehicles from 2001 and after. In August, the EPA approved fuel labels designed to warn drivers of older vehicles not to use the fuel, but it still must be registered before the fuel can go on sale. In February, the house voted 285136 to block the EPA from moving ahead with E15 regulations. “E15 is not ready for prime time,” said the letter signed by Gary Peters, Mike Rogers, John Conyers, Tim Walberg, Bill Huizenga, Darrell Issa and Loretta Sanchez among others. Automakers and other groups have opposed approval of E15, warning it could damage engines in some models. Automakers “unanimously expressed concerns that E15 is likely to harm engines, void warranties and reduce fuel efficiency,” said the congressional letter.

Toyota may trim 2012 production target Toyota is expected to produce fewer vehicles next year than it had initially told its suppliers to expect, due to weakening demand in Europe and elsewhere, the Nikkei business daily reported. The new target of 8.65 million units would still set a new record—and be slightly higher than its yearly production record of 8.53 million vehicles set in 2007. It would be about 20 percent more than the automaker’s expected output this year, the newspaper reported. The company had, in August, told its suppliers to expect worldwide output of up to 8.9 million units next year, according to the daily. The automaker is expected to finalise its 2012 production plans and notify major parts suppliers as early as next week, the Nikkei said. For the current year, it had expected to produce 7.7 million vehicles, but is likely to manufacture only about seven million due to problems caused

by the Tsunami in Japan and the floods in Thailand earlier this year, the daily reported. The next year will also see new plants come into production in China in the fi rst half and in Brazil in the second half to meet growing demand from Asia and South America, Nikkei said. Toyota will also come up with entry-level cars priced at around one million yen ($12,900) to target fi rst-time buyers in emerging countries and raise its market share in such markets from around eight percent to 10 percent, the paper added. It intends to maintain its Japanese production at three million units as a cut in the Japanese automobile tonnage tax and a reinstatement of eco-car subsidies is likely to help domestic sales, the newspaper reported.

Chrysler ends production of Caliber Chrysler Group LLC ended production of the much-maligned Dodge Caliber recently, the last of the econoboxes introduced by Detroit’s Big Three during the past decade that came to symbolise a failed strategy in the domestic auto industry. Introduced in 2006 as a replacement for the Dodge Neon, the Caliber was regarded by many industry observers as the worst of a bad bunch. Consumer Reports ranked the Caliber SXT at the bottom of its list of small hatchbacks and wagons in the 2011 annual car issue. When Italy’s Fiat SpA took over the automaker as part of a 2009 bailout brokered by the Obama administration, CEO, Sergio Marchionne made replacing the Caliber a top priority. Its suc-

cessor, the all-new Dodge Dart, will be unveiled next month. The sleek Dart will be based on a platform that was developed by Fiat’s Alfa Romeo brand. Chrysler

sold fewer than 34,000 Calibers from January until the end of November—about 21 percent fewer than it did during the same period a year earlier.


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Elantas Beck India Pvt Ltd .................................................................................. +91-20-30210600 ....................................sanjay.patil@alanta.com ........................................................... www.elantas.com 122, 123 ......... Electronica Hitech Machines Pvt Ltd .................................................................. +91-20-30435400 ....................................marketing@electronicahitech.com ........................................... www.electronicahitech.com 204 ................ Elofic In dustries .................................................................................................. +91-129-4281000 ....................................pawans@elofic.com ................................................................... www.elofic.com 146 ,158 ......... 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Ltd ........................................................................................ +91-20-30472700 .................................... info@exel-in.com ..................................................................... www.kremlinrexson-sames.com 4 .................... Federal M ogul ..................................................................................................... +91-124-4784530 .................................customercare.india@federalmogul.com ................................... www.federalmogul.com 166, 168 ......... Federation Of Automobile Dealers Association ................................................. +91-11-23320095.....................................fada@airtelmail.in ..................................................................... www.fadaweb.com 112 ................. FedernF abrik...................................................................................................... +91-44-24952371 ....................................peganesh@vsnl.net 27................... Ferromatik Milacron India Pvt Ltd ..................................................................... +91-79-25890081 ....................................salesfmi@milacron.com ............................................................ www.milacronindia.com 38, 119 ........... Fiem Industries Ltd ............................................................................................. +91-9991702453......................................s.narayanan@fiemindustries.com ............................................. www.fiemindustries.com 101................. FlirS ystems India Pvt Ltd ................................................................................... +91-11-45603555 . ...................................manpreet.kaur@flir.com.hk ...................................................... www.flir.com 55................... Forging Machinery Manufacturing C o ................................................................ +91-161-5011755 .....................................info@nkhammers.com .............................................................. www.nkhhammers.com 13................... FoxS olutions....................................................................................................... +91-253-6618100 ....................................sales@foxindia.net .................................................................... www.foxindia.net

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1 - 31 JANUARY 2012

Bosch produces 75 millionth common-rail system

B

osch is the world’s leading supplier of common-rail systems. This year, Bosch celebrated its second diesel anniversary: following on from 75 years of diesel in passenger cars. In December, the company celebrated the production of its 75 millionth common-rail system. This technology, which was fi rst used in cars 14 years ago, marked the start of a new image for diesel. In 1997, the share of diesel passenger cars sold in western Europe was 22 percent, whereas today, every second newly registered passenger car is a diesel. “In the past, diesel engines were seen as economical and robust. The modern commonrail diesel is just as efficient and durable, but it is also extremely dynamic, comfortable, and eco-f r iend ly. Common-ra i l high-pressure injection, in conjunction with turbocharging, has revolutionised the diesel engine,” said Executive, Vice-President Passenger Cars, Bosch Diesel Systems division, Dr Markus Heyn. Continuous improvements by Bosch will make diesel engines even more efficient in the future. For instance, by 2015 diesel-powered compact cars are set to consume just 3.6 litres per 100 km. Compared to standard diesel-powered cars in 2009 that represents a fuel-saving of some 30 percent. And if hybrid technology is used, fuel consumption in diesel engines can be brought down by around 40 percent.

Rapid Growth In Unit Sales The fi rst customers for common-rail systems in 1997 were Alfa Romeo, for its 156 JTD model, and Mercedes, for the C220 CDI. Unit sales of commonrail systems grew rapidly in the following years. By 2001, three million Bosch common-rail systems were in use; by 2002 the figure had already grown to ten million, and by the start of 2009 it was 50 million. The necessary components are produced in an international manufacturing network comprising 17 locations. In 2011 alone, Bosch produced some nine million common-rail systems, which were fitted in passenger cars, commercial vehicles, in the off-highway segment, and also in large diesel engines such as those found in ships.

Future common-rail technology with up to 2,500 bar The name “common rail” is a reference to the pressure accumulator from which fuel is injected at high pressure into the cylinders via the injectors connected to it. The possibility of multiple injections that this allows, makes engines quieter and reduces fuel consumption, as well as cutting emissions of CO2 and other pollutants. The fi rst generation of common-rail systems operates at a pressure of 1,350 bar, but today’s CRS2 achieves up to 2,000 bar. Fuel is precisely metered by solenoid valves that allow up to eight single injections per power cycle. CRS2 can be used around the world in all passenger car classes as well as in light commercial vehicles and the offhighway segment. Bosch also offers CRS3 with piezo injectors for the most demanding applications. This makes it possible

to meter the tiniest amounts of fuel even more precisely for preand post-injection, which serves to further reduce NOx emissions and make the engine operate even more quietly. In this system, the injection pressure is as high as 2,200 bar. Bosch engineers are already working on common-rail systems with 2,500 bar and more. This means the diesel engine is well equipped for the future. In conjunction with NOx exhaust gas treatment such as Bosch Denoxtronic, commonrail technology makes it possible to meet the strictest emissions regulations, including Euro VI in Europe from 2014 or Tier II Bin 5 in the United States. Diesel vehicles equipped with the necessary technology are already available in the European and US markets.

Bosch common-rail systems with solenoid valves


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AD INDEX

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Global Autotech Limited ..................................................................................... +91-120-4141800 ....................................info@globalauto.co.in ............................................................... www.globalauto.co.in 126 ................. GNA Duraparts Pvt Ltd........................................................................................ +91-1824-500211 ....................................cadcam@gnaedu.in . ................................................................. www.gnaedu.in 127................. Godrej & Boyce Mfg. Co. Ltd. .............................................................................. +91-22-67962751 ....................................trmktg@godrej.com................................................................... www.godrejtoolings.com 133 ................. Godson Engineering Corponration ..................................................................... +91-281-2361467.....................................godsonindia@hotmail.com ....................................................... www.godson-india.com 193 ................. Grauer & Weil (I) Ltd............................................................................................ +91-22-66993000 ....................................hq@growel.com ......................................................................... www.growel.com 191................. Greaves Cotton Limited ...................................................................................... +91-22-24397575.....................................rahul.rao@greavescotton.com .................................................. www.greavescotton.com BIC ................. Guhring India Private Limited ............................................................................ +91-80-40322500 ...................................info@guhring.in . ....................................................................... www.guhring.in 22 .................. H G Shah & Co ..................................................................................................... +91-79-25621431 ....................................hgshah2000@rediffmail.com .................................................... www.timingpulley.in 199................. HAAS Automation India Pvt. Ltd ........................................................................ +91-22-66098830 ....................................indiasales@haascnc.com ........................................................... www.haascnc.com 51................... Happy Forging Ltd .............................................................................................. +91-161-2510421 .....................................mail@happyforgingsltd.com ..................................................... www.happyforgingsltd.com 167................. Hella India Lighting Ltd ...................................................................................... +91-124-4658600 ....................................puranchandra.joshi@hella.com ................................................ www.hella.co.in 182................. Hero Eco Vehicle Pvt Ltd ..................................................................................... +91-11-41820050 ....................................info.electric@heroeco.com........................................................ www.heroelectric.in 65................... Hi - Life Machine Tools Pvt Ltd ........................................................................... +91-79-22821615.....................................info@hilifegroup.com ................................................................ www.hilifegroup.com 72 .................. Hilux Autoelectric Pvt Ltd ................................................................................... +91-11-41845142 .....................................hilux202@gmail.com ................................................................. www.hiluxautoelectric.com 114 ................. Hindustan Hydraulics Pvt Ltd ............................................................................. +91-181-2670054 ....................................hhpl_sales@vsnl.net ................................................................. www.hindustanhydraulics.com 108................. Hoec Bardahl India Ltd ....................................................................................... +91-22-26044549 ....................................customer.care@hoecbardahl.com............................................. www.hoecbardahl.com 165 ................. Holani Bearings Pvt Ltd ...................................................................................... +91-2827-293342 ....................................vishal@holani,in ........................................................................ www.holani.in 30 .................. IGUS India Pvt Ltd ............................................................................................... +91-80-39127800 ....................................info@igus.in ............................................................................... www.igus.in 214................. ImsC ouncil ......................................................................................................... +91-9311903222......................................sachin.patil@ims2012.in ........................................................... www.indiamanufacturingsshow.com 176 ................. Indian Machine Tools Manufacturers’ Association............................................. +91-80-66246514 ....................................anuj@imtma.in .......................................................................... www.imtma.in 180................. Indian Machine Tools Manufacturers’ Association............................................. +91-80-66246600 ...................................imtma@imtma.in ...................................................................... www.imtma.in 196................. Indian Machine Tools Manufacturers’ Association................................................................................................................................................................................................................... www.imtex.in 161 ................. Indian Oil Corporation Ltd........................................................................................................................................................................................................................................................ www.indianoil.co.in 216................. Ind-Sphinx Precision Ltd .......................................................................................................................................................info@axis-microtools.com ......................................................... www.axis-microtools.com 53................... Ingersoll Rand (India) Ltd ................................................................................... +91-79-22820123 ....................................airsolutionsindia@irco.com....................................................... www.ingersollrand.co.in 99 .................. Inphynyt Accumulators India Pvt Ltd ................................................................. +91-9350328557 .....................................gurpreetsingh@inphynyt.com ................................................... www.inphynyt.com 84 .................. Involute Automation (P) Ltd................................................................................ +91-40-23090022. ..................................response@involuteautomation.com ......................................... www.involuteautomation.com 34 .................. ISK Bearing Industries ........................................................................................ +91-2827-287956 ....................................hub@iskbearings.com ............................................................... www.iskbearings.com 210................. ITW India Ltd....................................................................................................... +91-9560764455 .....................................sanjay.marwah@itwindia.com .................................................. www.binkspce.eu 96 .................. Jay Instruments & Systems Pvt Ltd ..................................................................... +91-22-23526207 ....................................sales@jayinst.com ..................................................................... www.jayinst.com 173................. JMXW orks ........................................................................................................... +91-124-4147912 .....................................info@jmxworks.com .................................................................. www.jmxworks.com 82 .................. Jost’S Engineering Company Limited.................................................................. +91-20-25434350 ....................................marketing@josts.in.................................................................... www.josts.com 23 ,208 .......... Jyoti Cnc Automation Pvt. Ltd. ........................................................................... +91-2827-287081 ....................................info@jyoti.co.in.......................................................................... www.jyoti.co.in FIC.................. Kamal Envirotech Pvt Ltd ................................................................................... +91-9313137970 ......................................enquiry@kamalcedsolution.com .............................................. www.kamalenvirotechgroup.com 94 .................. KNS Material Technologies ................................................................................. +91-9909928822 .....................................info@kmt.co.in .......................................................................... www.kmt.co.in 68 ,70............. Komax Automation India Pvt. Ltd. ..................................................................... +91-124-4599100 ....................................info.dei@komaxgroup.com ....................................................... www.komax.com 47................... Korber Schleifring Gmbh .................................................................................... +91-80-41554601 ....................................sales@schleifring.in ................................................................... www.schleifring.in 183................. Kuka Robotics (India) Pvt. Ltd. ........................................................................... +91-124-4635774 ....................................pradeep@kuka.in ...................................................................... www.kuka.in 115 ................. Lanxess India Pvt Ltd .......................................................................................... +91-22-21729200 ........................................................................................................................................ www.lanxess.in 31................... Larsen & Toubro Limited .................................................................................... +91-9967800456 .....................................SM.Haridas@larsentoubro.com ................................................. www.larsentoubro.com 56 .................. Litel Infrared Systems Pvt Ltd ............................................................................. +91-20-66300636 ....................................sales@litelir.com........................................................................ www.litelir.com 157 ................. Lohia Auto Industries.......................................................................................... +91-120-4141444 ....................................info@lohiaauto.com .................................................................. www.lohiaauto.com 171 ................. Lubrizol Advanced Materials India Pvt Ltd......................................................... +91-22-66027800 ...................................Estane-SA@lubrizol.com ........................................................... www.lubrizol.com/engineeredpolymers 113 ................. Lumax Auto Technolgies Limited ....................................................................... +91-11-28111777 .....................................latlmkt@airtelmail.com ............................................................ www.lumaxautotech.com 7 .................... M And M Auto Indus Ltd ..................................................................................... +91-124-4763200 ....................................corporate@mandmsprings.com ................................................ www.mandmsprings.com 187 ,188 ......... Madhusudan Auto Ltd ........................................................................................ +91-124-4841900 ....................................contact@best-cables.com.......................................................... www.bestprins.com 107................. Mag Industrial Automation Systems ................................................................... +91-80-40677000 ...................................sales-India@mag-ias.in.............................................................. www.mag-ias.in 86 .................. Maha India Automotive Testing Equip ............................................................... +91-11-40601464 ....................................raj.rengarajan@maha-india.in .................................................. www.maha-india.in 67 .................. Mahindra & Mahindra Ltd (Auto) ........................................................................ +91-22-28468525 ....................................adventure@mahindra.com........................................................ www.mahindraadventure.com 163................. Mahindra & Mahindra Ltd (Auto) ........................................................................ +1800-2096006 ........................................................................................................................................... www.mahindrasmallcv.com 153 ................. Mahindra Navistar Automotives Ltd ................................................................... +91-20-27473600 ....................................contactmnal@mahindranavistar.com ....................................... www.mahindranavistar.com 89 .................. Makino India Private Limited ............................................................................. +91-80-28419500 ....................................slim@makino.co.in .................................................................... www.makino.com 74................... Makson Machines Pvt Ltd ................................................................................... +91-278-2446437 ....................................makwana_eng@yahoo.com ...................................................... www.makwanaeng.com 69................... Mann And Hummel Filter Pvt Ltd ....................................................................... +91-80-40207100....................................office.india@mann-hummel.com ............................................. www.mann-hummel.com 142 ................. Mansons Suspensions Pvt. Ltd. ........................................................................... +91-22-27423014.....................................sales@mansonsindia.com ......................................................... www.mansonsindia.com 110 ................. Mark Exhaust Systems Ltd .................................................................................. +91-124-4660400 ....................................messlgn@del2.vsnl.net.in .......................................................... www.markexhaust.com 213 ................. Marks Pryor Marketing Technology P L .............................................................. +91-20-66743300 ....................................info@markspryor.com ............................................................... www.markspryor.com 179................. Mecolam Engineering Pvt Ltd............................................................................. +91-80-25732919 ....................................info@mecolam.com................................................................... www.mecolam.com 120................. Meiban Engineering Technologies Pvt ............................................................... +91-80-26860600....................................sales-turning@meibanengg.com............................................... www.meibanengg.com 95................... Metro Tyres Ltd ................................................................................................... +91-120-4147414 12,BC ............. Micromatic Machine Tools .................................................................................. +91-80-41492285 ....................................mmtblr@acemicromatic.com .................................................... www.acemicromatic.com 211 ................. Mmc Hardmetal India Pvt Ltd ............................................................................ +91-80-23516083 ....................................mmcindia@mmc.co.jp............................................................... www.mitsubishicarbide.com 43................... MTE Industries Pvt Ltd ........................................................................................ +91-40-23777571 ....................................info@mteindustries.com ........................................................... www.mteindustries.com 159 ................. M-Tek E ngineers .................................................................................................. +91-20-66301028 ....................................m_tekengineers@yahoo.co.in ................................................... www.mtekengineers.com 42................... Mutual Industries Ltd ......................................................................................... +91-250-3217731 ....................................walter@mutual-industries.com................................................. www.mutual-industries.com 40 .................. Mvd Auto Components Pvt Ltd ........................................................................... +91-11-26372965.....................................bhatnagar@mvdindia.com ........................................................ www.mvdindia.com 149 ................. Nagata India Pvt Ltd ........................................................................................... +91-124-4369592 ....................................prao@nagata.co.in .................................................................... www.nagataindia.com 46 .................. NamanE lectronics.............................................................................................. +91-79-22900186 ....................................namanelectronics@gmail.com .................................................. www.namanelectronics.com 128................. Napino Auto & Electronics Ltd. .......................................................................... +91-124-2290050 ....................................info@napino.com ...................................................................... www.napino.com 117 ................. National Engineering Industries Ltd......................................................................................................................................................................................................................................... www.nbcbearings.in 116 ................. Nextech E ngineering .......................................................................................... +91-2827- 2 96051 ...................................info@nextechengg.com ............................................................. www.nextechengg.com 93................... NI Systems India Pvt Ltd ..................................................................................... +91-80-41190000 ....................................ni.india@ni.com ........................................................................ www.ni.com

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EUROPEAN SALES

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New Vehicle Registration in Europe -by Manufacturer GROUP BRAND 2011 OCTOBER MV-Motor Vehicles (LV+CV) Aston Martin Aston Martin 114 BMW BMW 54935 Mini 10045 Other 22 Total 65002 China Brilliance Changan 0 Great Wall 136 Landwind 0 Lifan 0 Other 3 Total 139 Chrysler Chrysler 671 Dodge 112 Jeep 1807 Total 2590 DAF DAF Daimler Mercedes 64182 Smart 6248 Other 110 Total 70540 Fiat Alfa Romeo 8575 Fiat 62511 Iveco 8110 Lancia 7882 Other 214 Total 87292 Ford Ford 97940 Mercury 0 Other 0 Total 97940 GM Chevrolet 14037 Opel 75083 Other 13 Total 89133 Jaguar Land Rover Jaguar 1287 Land Rover 7078 Total 8365 Japan Daihatsu 674 Honda 12825 Mazda 8886 Mitsubishi 9419 Nissan 37937 Subaru 2525 Suzuki 13483 Other 1278 Total 87027 Korea Daewoo Hyundai 30889 KIA 25625 Other 570 Total 57084 MAN MAN 4613 Other 10 Total 4623 MG Rover Rover Porsche Porsche 3749 PSA Citroen 74019 Peugeot 84178 Total 158197 Renault Dacia 24470 Renault 112956 Other 6 Total 137432 Scania Scania 2443 Toyota Toyota 42259 Lexus 1760 Total 44019 Volkswagen AG Audi 53513 Seat 23181 Skoda 41613 Volkswagen 151802 Other 102 Total 270211 Volvo Trucks Volvo 3172 Other SAAB 261 Volvo 20419 Other 8019 Total 28699 Total 1217771 PC- Passenger Cars AAston Martin Aston Martin BMW BMW Mini Other Total China Brilliance Changan Great Wall Landwind Lifan Other Total Chrysler Chrysler Dodge Jeep Total DAF DAF Daimler Mercedes Smart Other Total Fiat Alfa Romeo Fiat Iveco Lancia Other Total Ford Ford Mercury Other Total GM Chevrolet

20010 OCTOBER

Source: Association Auxiliaire de l’Automobile

% CHANGE

YEAR TILL DATE 2011

-37.70 4.91 -13.77 -21.43 1.50

2029 541404 136480 416 678300

183 52366 11649 28 64043 0 0 133 0 3 1 137 757 627 937 2321 2888 70673 6166 124 76963 10921 70444 7103 6360 277 95105 92665

-100.00 200.00 1.46 -11.36 -82.14 92.85 11.59 -100.00 -9.18 1.33 -11.29 -8.35 -21.48 -11.26 14.18 23.93 -22.74 -8.22 5.69

1 92666 14381 76286 138 90805 1654 4833 6487 1427 12038 11848 11473 35354 3568 15846 1499 93053

-100.00 5.69 -2.39 -1.58 -90.58 -1.84 -22.19 46.45 28.95 -52.77 6.54 -25.00 -17.90 7.31 -29.23 -14.91 -14.74 -6.48

668522 67199 1542 737263 114101 752900 76812 82814 3827 1030454 1093598 2 8 1093608 147313 919813 862 1067988 19417 69884 89305 10073 128799 123137 119590 437374 31912 152013 14110 1017008

25919 20522 434 46875 4293 17 4310

19.18 24.87 31.34 21.78 7.45 -41.18 7.26

336592 239074 6254 581920 44226 198 44424

3320 79261 86561 165822 23033 116124 54 139211 2588 48975 1103 50078 52748 21449 40060 141016 153 255426 3200 1939 20933 4098 26970 1222451

12.92 -6.61 -2.75 -4.60 6.24 -2.73 -88.89 -1.28 -5.60 -13.71 59.56 -12.10 1.45 8.07 3.88 7.65 -33.33 5.79 -0.88 -86.54 -2.46 95.68 6.41 -0.38

35514 804937 932190 1737127 219506 1116046 56 1335608 26362 476056 22087 498143 575790 262493 422003 1590985 1798 2853069 32594 13057 215347 73275 301679 13192027

GROUP

Jaguar Land Rover

Japan 2.26

2 1837 5 8 25 1877 5189 2742 19826 27757

Korea

MAN MG Rover Porsche PSA

Renault

Scania Toyota

Volkswagen AG

Other

Total

BRAND 2011 OCTOBER Opel 68029 Other 12 Total 82052 Jaguar 1283 Land Rover 6270 Total 7553 Daihatsu 674 Honda 12821 Mazda 8740 Mitsubishi 7851 Nissan 33628 Subaru 2517 Suzuki 13416 Other 277 Total 79924 Daewoo Hyundai 30677 KIA 25551 Other 534 Total 56762 MAN Rover Porsche 3747 Citroen 58938 Peugeot 69023 Total 127961 Dacia 23367 Renault 86525 Total 109892 Scania Toyota 39083 Lexus 1760 Total 40843 Audi 53442 Seat 22972 Skoda 41333 Volkswagen 133680 Other 102 Total 251529 SAAB 261 Volvo 20370 Other 1589 Total 22220 1051068

0 31 0 0 3 34 669 52 1742 2463

183 52023 11649 28 63700 0 0 29 0 3 1 33 662 574 874 2110

-100.00 200.00 3.03 1.06 -90.94 99.31 16.73

2 866 5 8 25 906 4398 1935 19079 25412

45751 6248

52353 6166

-12.61 1.33

496374 67198

LCV-Light Commercial Vehicles up to 3.5t ** BMW BMW 14 Mini Total China Great Wall 105 Chrysler Chrysler 2 Dodge 59 JEEP 65 Total 126 DAF DAF Daimler Mercedes 11526 Fiat Alfa Romeo 16 Fiat 12892 Iveco 4305 Lancia 3 Total 17216 Ford Ford 14980 Other Total GM Chevrolet 24 Opel 6995 SAAB Other 1 Total 7020 Jaguar Land Rover Jaguar 808 Land Rover Japan Daihatsu 0 Honda 4 Mazda 146 Mitsubishi 1359 Nissan 4252 Subaru 8 Suzuki 67 Other 859 Total 6695 Korea Daewoo Hyundai 212 KIA 74 Other 36 Total 322 Porsche Porsche 2 PSA Citroen 15071 Peugeot 15085 Total 30156 Renault Dacia 1103 Renault 23982 Total 25085 Toyota Toyota 3166 Volkswagen AG Audi 71 Seat 209 Skoda 280 Volkswagen 17896 Total 18456 Other Volvo 49 Other 1712 Total 1761 Total 137438

51999 8559 49460 19 7879 214 66131 82861 0 0 82861 14011

58519 10902 56815 54 6359 277 74407 78019

-11.14 -21.49 -12.95 -64.81 23.90 -22.74 -11.12 6.21

1 78020 14359

-100.00 6.20 -2.42

563572 113907 592287 588 82795 3827 793404 933906 2 8 933916 146949

LBC- Light Buses & Coaches upto 3.5 tn Daimler Mercedes Fiat Fiat Iveco Total Ford Ford GM Opel Chevrolet Total Japan Nissan Toyota Total

114 54921 10040 22 64983

-37.70 5.57 -13.81 -21.43 2.01

6.90

2029 541086 136450 416 677952

99 8 0 8 33 46

2010 OCTOBER 70311 119 84789 1654 4146 5800 1427 12032 11621 9589 32092 3557 15763 294 86375

% CHANGE -3.25 -89.92 -3.23 -22.43 51.23 30.22 -52.77 6.56 -24.79 -18.12 4.79 -29.24 -14.89 -5.78 -7.47

YEAR TILL DATE 2011 843718 779 991446 19405 59047 78454 10049 128748 121289 98055 391699 31818 151294 2995 935947

25608 20419 403 46430

19.79 25.13 32.51 22.25

333236 238243 5883 577362

3220 65303 71451 136754 21906 91016 112922

16.37 -9.75 -3.40 -6.43 6.67 -4.93 -2.68

35343 658366 786693 1445059 207445 881485 1088930

45824 1103 46927 52161 21347 39671 126785 153 240117 1939 20904 1900 24743 1065049

-14.71 59.56 -12.96 2.46 7.61 4.19 5.44 -33.33 4.75 -86.54 -2.55 -16.37 -10.20 -1.31

443291 22082 465373 574746 260952 418861 1422815 1798 2679172 13057 214830 16590 244477 11538753

343

-95.92

318

104 95 53 63 211

0.96 -97.89 11.32 3.17 -40.28

971 790 796 747 2333

11083 19 13429 4013 1 17462 14416

4.00 -15.79 -4.00 7.28 200.00 -1.41 3.91

108728 194 156991 42417 19 199621 157710

22 5969

9.09 17.19

348 75601

19 6010 687

-94.74 16.81 17.61

74 76023 10837

0 6 226 1700 3188 11 83 1060 6274

-33.33 -35.40 -20.06 33.38 -27.27 -19.28 -18.96 6.71

24 51 1848 19310 45022 94 718 9513 76580

311 103 31 445 100 13943 15076 29019 1127 22842 23969 3140 587 102 388 13935 15012 29 877 906 129198

-31.83 -28.16 16.13 -27.64 -98.00 8.09 0.06 3.92 -2.13 4.99 4.66 0.83 -87.90 104.90 -27.84 28.42 22.94 68.97 95.21 94.37 6.38

3349 831 371 4551 171 146461 144928 291389 12061 210603 222664 32590 1044 1539 3133 165835 171551 517 10907 11424 1367461

152 11 13 24 52 4

-34.87 -27.27 -100.00 -66.67 -36.54 1050.00

849 226 132 358 583 350

2

-100.00


GROUP Korea

PSA

Renault Volkswagen AG

Other Total

BRAND 2011 OCTOBER Hyundai Kia Other Total Citroen 0 Peugeot 2 Total 2 Renault 38 Audi Seat Skoda Volkswagen 88 Total Dodge Other 140 454

Total Light Commercial Vehicles up to 3.5t (LCV+LBC) BMW BMW 14 Mini Total China Great Wall 105 Chrysler Chrysler 2 Dodge 59 JEEP 65 Total 126 DAF DAF Daimler Mercedes 11625 Fiat Alfa Romeo 16 Fiat 12900 Iveco 4305 Lancia 3 Total 17224 Ford Ford 15013 Other Total GM Chevrolet 24 Opel 7041 SAAB Other 1 Total 7066 Jaguar Land Rover Jaguar 808 Land Rover Japan Daihatsu 0 Honda 4 Mazda 146 Mitsubishi 1359 Nissan 4254 Subaru 8 Suzuki 67 Other 859 Total 6697 Korea Daewoo Hyundai 212 KIA 74 Other 36 Total 322 Porsche Porsche 2 PSA Citroen 15071 Peugeot 15087 Total 30158 Renault Dacia 1103 Renault 24020 Total 25123 Toyota Toyota 3166 Volkswagen AG Audi 71 Seat 209 Skoda 280 Volkswagen 17984 Total 18544 Other Volvo 49 Other 1850 Total 1899 Total 137892 CV-Commercial Vehicles (trucks) over 3.5t ** China Other Chrysler Dodge 1 DAF DAF Daimler Mercedes 6190 Fiat Fiat 117 Iveco 2929 Total 3046 Ford Ford 51 GM Chevrolet 2 Opel 13 Other 0 Total 15 Japan Mitsubishi 209 Nissan 55 Other 140 Total 404 Korea Daewoo MAN MAN 4404 PSA Citroen 8 Peugeot 47 Total 55 Renault Renault 2372 Other 6 Total 2378 Scania Scania 2345 Toyota Toyota 10 Volkswagen AG Volkswagen 107 Volvo Trucks Volvo 3007 Other 3970 Total 25983 BC-Buses & Coaches over 3.5t DAF DAF Daimler Mercedes Others Total Fiat Fiat Iveco Total Ford Ford

616 110 726 34 857 891 15

2010 OCTOBER

% CHANGE

YEAR TILL DATE 2011

GROUP GM Japan

1 3 4 25

-100.00 -33.33 -50.00 52.00

18 17 35 318

120

-26.67

896

152 536

-7.89 -15.30

1433 4822

343

-95.92

318

104 95 53 63 211

0.96 -97.89 11.32 3.17 -40.28

971 790 796 747 2333

11235 19 13440 4026 1 17486 14468

3.47 -15.79 -4.02 6.93 200.00 -1.50 3.77

109577 194 157217 42549 19 199979 158293

MAN

PSA

22 5973

9.09 17.88

348 75951

19 6014 687

-94.74 17.49 17.61

74 76373 10837

0 6 226 1700 3190 11 83 1060 6276

-33.33 -35.40 -20.06 33.35 -27.27 -19.28 -18.96 6.71

24 51 1848 19310 45033 94 719 9513 76592

311 103 31 445 100 13944 15079 29023 1127 22867 23994 3141 587 102 389 14054 15132 29 1029 1058 129734

-31.83 -28.16 16.13 -27.64 -98.00 8.08 0.05 3.91 -2.13 5.04 4.71 0.80 -87.90 104.90 -28.02 27.96 22.55 68.97 79.79 79.49 6.29

3355 831 371 4557 171 146479 144945 291424 12061 210921 222982 32597 1044 1541 3142 166731 172458 517 12304 12821 1372283

0 2867 6431 154 2476 2630 40 0 0 0 0 184 72 145 402

11 -3.75 -24.03 18.30 15.82 27.50

13.59 -23.61 -3.45 0.50

56452 2990 27498 30488 504 15 143 9 167 2225 642 1579 4446

4053 8 24 32 2220 54 2274 2513 10 156 3037 667 25112

8.66 0.00 95.83 71.88 6.85 -88.89 4.57 -6.69 0.00 -31.41 -0.99 495.20 3.47

41819 70 397 467 23296 56 23352 25092 168 1189 30539 38646 253340

21 654 124 778 35 547 582 138

-5.81 -11.29 -6.68 -2.86 56.67 53.09 -89.13

6119 1541 7660 406 6177 6583 895

Renault Scania Volkswagen Volvo Trucks Others Total

th

BRAND 2011 OCTOBER Chevrolet Opel Nissan Mitsubishi Toyota Others 2 Total MAN 209 Others 10 Total 219 Citroen 2 Peugeot 21 Total 23 Renault 39 Scania 98 Volkswagen 31 Volvo 165 619 2828

2010 OCTOBER

Total Commercial Vehicles (Trucks) & (Buses) over 3.5t China Other Chrysler Other 1 DAF DAF Daimler Mercedes 6806 Others 110 Total 6916 Fiat Fiat 151 Iveco 3786 Total 3937 Ford Ford 66 GM Chevrolet 2 Opel 13 Others 0 Total 15 Japan Mitsubishi 209 Nissan 55 Others 142 Total 406 Korea Daewoo Hyundai Total MAN MAN 4613 Others 10 Total 4623 PSA Citroen 10 Peugeot 68 Total 78 Renault Renault 2411 Others 6 Total 2417 Scania Scania 2443 Toyota Toyota 10 Volkswagen AG Volkswagen 138 Volvo Trucks Volvo 3172 Others 4589 Total 28811 HCV-Heavy Commercial Vehicles (trucks) over 16t ** China Other DAF DAF Daimler Mercedes 4036 Fiat Iveco 1410 Ford Ford GM Chevrolet Japan Other 11 MAN MAN 3470 Renault Renault 1930 Other 6 Total 1936 Scania Scania 2345 Volkswagen Volkswagen 4 Volvo Trucks Volvo 2829 Others 3124 Total 19165 HBC-Heavy Buses & Coaches over 16t DAF DAF Daimler Mercedes Other Total Fiat Iveco MAN MAN Others Total Renault Renault Scania Scania Volvo Trucks Volvo Others Total

337 110 447 697 197 10 207 6 98 165 416 2036

2

% CHANGE

YEAR TILL DATE 2011

-100.00

0 223 17 240 6 7 13 21 75 21 163 502 2556

221

RY

EUROPEAN SALES

NIVERSA AN

Auto Monitor

1 - 31 JANUARY 2012

23 -6.28 -41.18 -8.75 -66.67 200.00 76.92 85.71 30.67 47.62 1.23 23.31 10.64

2407 198 2605 22 155 177 344 1270 250 2055 5789 27651

0 2888 7085 124 7209 189 3023 3212 178 0 2 0 2 184 72 145 402

650.00 13.59 -23.61 -2.07 1.00

62571 1542 64113 3396 33675 37071 1399 16 144 9 169 2225 642 1602 4469

4276 17 4293 14 31 45 2241 54 2295 2588 10 177 3200 1169 27668

7.88 -41.18 7.69 -28.57 119.35 73.33 7.59 -88.89 5.32 -5.60 0.00 -22.03 -0.88 292.56 4.13

44226 198 44424 92 552 644 23640 56 23696 26362 168 1439 32594 44432 280991

2532 4061 1216

-0.62 15.95

36427 12679

4 3109 1793 1 1794 2492

175.00 11.61 7.64 500.00 7.92 -5.90

2898 248 18354

-2.38 1159.68 4.42

137 31619 18667 51 18718 25083 50 29025 30385 184123

10 397 124 521 428 210 17 227

-15.11 -11.29 -14.20 62.85 -6.19 -41.18 -8.81

75 163 285 1709

30.67 1.23 45.96 19.13

3390 1541 4931 4750 2257 198 2455 72 1270 2054 3822 19354

-1.91 -11.29 -2.16 28.16

39817 1542 41359 17429

175.00 175.00 10.49 -41.18 10.22 7.98 500.00 8.25 -4.83

137 137 33876 198 34074 18739 51 18790 26353 50 31079 34206 203477

Total Heavy Commercial Vehicles (Trucks & Buses) over 16t China Other DAF DAF 2542 Daimler Mercedes 4373 4458 Other 110 124 Total 4483 4582 Fiat Iveco 2107 1644 GM Chevrolet Japan Others 11 4 Total 11 4 MAN MAN 3667 3319 Others 10 17 Total 3677 3336 Renault Renault 1936 1793 Other 6 1 Total 1942 1794 Scania Scania 2443 2567 Volkswagen Volkswagen 4 Volvo Trucks Volvo 2994 3061 Others 3540 533 Total 21201 20063

11 -3.94 -11.29 -4.06 -20.11 25.24 22.57 -62.92 550.00

-2.19 564.17 5.67

*EU 15 + EEFTA (Iceland, Norway & Switzerland) + Western Europe (10 new members) ‘(*) EU27 including Bulgaria and Romania; data for Malta and Cyprus not available


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PRODUCTION AND SALES FLASH REPORT FOR NOVEMBER 2011 Category Segment/Subsegment Manufacturer.

Production For the month of November 2010

2011

Cumulative April-November 10-11

A: Passenger Cars- No of seats not over 6 A1: Mini - (Upto 3400 mm) Maruti Suzuki India Ltd (Maruti 800 ) 3,468 2,985 25,668 Tata Motors Ltd (Nano) 3,425 1,320 13,202 Total 6,893 4,305 38,870 A2: Compact (3401-4000mm 1,441 620 10,505 Fiat India Automobiles Pvt Ltd (Palio, Fiat500,Grande Punto) Ford india Pvt Ltd ( Fusion, Figo ) 0 5,544 455 General Motors India Pvt Ltd (Beat, Spark,U-VA) 4,822 5,455 31,742 Honda Siel Cars India ltd (Jazz) 0 480 6,609 Hyundai Motors India Ltd(Santro,Getz, i10, i20) 50,535 38,800 346,638 70,618 81,549 500,987 Maruti Suzuki India Ltd (Alto,Wagon R,Zen,Swift, A-Star, Ritz) Nissan Motor India Pvt Ltd (Micra) 0 9,661 0 SkodaAuto india p.ltd ( Fabia ) 777 1,011 3,653 Tata Motors Ltd (Indica) 10,767 9,332 75,829 Volkswagen India Pvt Ltd (Polo) 0 2,075 0 Total 138,960 154,527 976,418 A3: Mid -Size (4001-4500mm) BMW India Pvt Ltd (Z4 Roadster) 0 0 0 Ford India Pvt Ltd (Ford ikon,Fusion,Fiesta) 2,641 1,505 19,504 General Motors India Pvt Ltd (Cheverlet Aveo NB) 412 299 2,148 Hindustan Motors Ltd (Ambassador, Lancer,Cedia) 933 652 5,546 Honda Siel Cars India Ltd (City) 4,870 4,597 28,934 Hyundai Motors India Ltd (Accent,Verna) 4,516 4,581 30,059 Mahindra Renault Pvt Ltd (Logan) 71 960 4,234 Maruti Suzuki India Ltd (SX4,Dzire) 9,226 11,402 62,497 Nissan Motor India Pvt Ltd (Nissan 370Z) 0 0 0 Skoda Auto India Pvt Ltd (Corolla) 0 160 0 Tata Motors Ltd (Indigo,Marina) 3,617 2,441 8,142 Volkswagen - Audi (TT, R8) 0 0 0 Volkswagen India Pvt Ltd (Beetle) 0 2,459 0 Total 26,286 29,056 161,064 A4 : Executive (4501-4700mm) BMW india pvt Ltd (3 Series) 92 93 712 Fiat India Automobiles Pvt Ltd (Linea) 1,016 103 7,703 General Motors India Pvt Ltd (cheverlet Optra, Cruze) 499 970 2,008 Honda Siel Cars India Ltd (Civic) 600 4 3,798 Hyundai Motors India Ltd (Elantra) 0 0 0 Mercedes-Benz India Pvt Ltd (C-Class, 109 144 1,065 SLK Roadster, CLK Cabriolet, E-Coupe) Skoda Auto India Pvt Ltd (Octavia,Laura) 777 458 4,024 Toyota Kirloskar Motor Pvt Ltd (corolla) 796 761 6,172 Volkswagen - Audi (Q5) 0 0 0 Volkswagen India Pvt Ltd (Jetta) 0 234 273 Total 3,889 2,767 25,755 A5 : Premium (4701-5000mm) BMW india pvt Ltd ( 5 & 6 Series) 164 236 1,083 Honda Siel Cars India Ltd ( Accord ) 240 280 1,950 Hyundai Motors India Ltd ( Sonata ) 2 8 322 Mercedes-Benz India Pvt Ltd (E-Class, CLS) 159 251 678 Nissan Motor India Pvt Ltd (Teana)** 0 0 0 Skoda Auto India Pvt Ltd (Superb) 295 295 1,977 Toyota Kirloskar Motor Pvt Ltd (Camry ) 0 0 0 Volkswagen - Audi (A4,A6)* 0 0 0 Volkswagen India Pvt Ltd (Passat, Touareg) 0 0 55 Total 860 1,070 6,065 A6: Luxury (5001mm&abve) BMW india pvt Ltd (7 Series ) 0 0 0 Mercedes-Benz India Pvt Ltd ( S-Class) 22 32 232 Volkswagen - Audi (Q7,A8) 0 0 0 Volkswagen India Pvt Ltd (Phaeton) 0 0 0 Total 22 32 232 Total A 176,910 191,757 1,208,404 Utility Vehicles B: Max. Mass upto 3.5 tn, B1(a): No of seats not over 7 BMW india Pvt Ltd (X3, X5, X6) 0 0 0 Force Motors Ltd (trax) 1 0 14 Ford India Pvt Ltd (Endeavour) 235 81 1,435 General Motors India Pvt Ltd (Tavera, Captiva) 605 637 3,810 Hindustan Motors Ltd (Pajero) 141 170 1,038 Honda Siel Cars India Ltd (CR-V) 0 0 0 Hyundai Motors India Ltd (Tucson) 0 0 0 Mahindra & Mahindra Ltd (Scorpio, Bolero, 7,254 8,397 57,943 Soft Tops, Hard Tops, Xylo) Maruti Suzuki India Ltd (Vitara) 0 0 0 Mercedes-Benz India pvt. Ltd (GL-Class, M Class) 0 0 0 Nissan Motor India Pvt Ltd (X-Trail)* 0 0 0 Tata Motors Ltd (Safari) 1,344 2,325 12,161 Toyota Kirloskar Motor Pvt Ltd (Innova,Prado) 2,507 2,568 15,958 Total 12,087 14,178 92,359 (b) :No of seat inculding driver exceeding 7 but not exceeding 9(7+1&8+1)( M1(B2) ) Force Motors Ltd (Trax) 0 0 10 General Motors India Pvt Ltd (Tavera) 103 119 1,092 International Cars & Motors Ltd (Rhino) 70 29 583 Mahindra & Mahindra Ltd (Scorpio, Bolero, 4,775 3,879 35,310 Soft Tops, Hard Tops, Xylo) Maruti Suzuki India Ltd (Gypsy) 292 237 1,829 Tata Motors Ltd (Sumo, Safari, Winger) 658 963 3,227 Toyota Kirloskar Motor Pvt Ltd (Innova) 2,334 1,809 16,555 Total 8,232 7,036 58,606 Total B1 20,319 21,214 150,965 B2: Max Mass upto 5 tonnes (a) : No of seat inculding driver not exceeding 13(M2(A1)) Force Motors Ltd (Trax, Traveller) 338 518 3,467 General Motors India Pvt Ltd (Tavera) 599 725 3,757 Mahindra & Mahindra Ltd (Bolero, Soft Tops, Hard Tops) 110 0 6,999 Tata Motors Ltd (Sumo, Winger) 111 107 5,625 Total B2 1,158 1,350 19,848 Total Utility Vehicles (Uvs) 21,477 22,564 170,813 C :Multi Purpose Vehicles (MPVs)-Van type vehicles & Max Mass not excdding 3.5 tonnes (M1( c )) Van Type Force Motors Ltd (trip) 0 47 0 Maruti Suzuki India Ltd (Omini,Versa) 8,527 15,102 61,796 Tata Motors Ltd (ACE-Magic) 4,545 3,763 31,760 Total MPVs 13,072 18,912 93,556 Total Passenger Vehicles (PVs) 211,459 233,233 1,472,773 Commercial Vehicles M&HCVs A: Passenger Carriers, A1: Max mass not over 12 tn (b): No of seats over 13 Ashok Leyland Ltd 117 46 966 JCBL Ltd 1 0 1 Swaraj Mazda Ltd 215 208 1,507 Tata Motors Ltd 122 499 2,990 VE CVs - Eicher 100 53 1,237 Total A1 555 806 6,701 A2: Max mass exceeding not over 16.2 tn (b): No of seats over 13 Ashok Leyland Ltd 2,024 2,461 10,504 JCBL Ltd 76 0 99 Swaraj Mazda Ltd 1 2 14 Tata Motors Ltd 1,534 1,025 9,985 VE CVs - Eicher 23 10 153 Volvo Buses India Pvt Ltd 35 7 374 Total A2 3,693 3,505 21,129 A3: Max. Mass exceeding 12 but no exceeding 16.2 tonnes (M3(C)) Passenger Carrier (D) Volvo Buses India Pvt Ltd 11 38 45 Total M&HCVs(passenger carriers) 4,259 4,349 27,875 B: Goods Carriers B1: Max mass over 7.5 tn & less than 12 tn Ashok Leyland Ltd 196 168 1,011 Swaraj Mazda Ltd 370 474 2,336 Tata Motors Ltd 1,661 1,212 12,416 VE CVs - Eicher 1,423 1,843 9,870 Total 3,650 3,697 25,633 B2: Max mass not over 16.2 tn (a): Max mass 12-16.2 tn Ashok Leyland Ltd 1,220 2,041 8,320 Tata Motors Ltd 3,251 4,681 21,186 VE CVs - Eicher 192 307 1,212 Total B2 4,663 7,029 30,718 B3: Max mass over 16.2 tn (a): Rigid Vehicles (i) Max mass 16.2-25 tn Ashok Leyland Ltd 1,949 1,153 9,290 Asia Motor Works Ltd 337 461 1,500 Force Motors Ltd 0 0 1 Mahindra Navistar Automotives Ltd 0 88 0 Tata Motors Ltd 4,664 4,995 33,253 VE CVs - Eicher 24 59 196 VE CVs - Volvo 2 0 6 Total 6,976 6,756 44,246 (b) Max mass over 25 tn Ashok Leyland Ltd 396 664 796 Daimler India Commercial Vehicles Pvt Ltd* 0 23 0 Kamaz Vectra Motors Ltd NA NA NA Mahindra Navistar Automotives Ltd 0 163 0 Mercedes-Benz India Pvt Ltd 29 0 70 Tata Motors Ltd 900 3,874 5,888 VE CVs - Eicher 11 92 139

Source: SIAM

Domestic Sales For the month of Cumulative November April-November

11-12

2010

26,005 41,812 67,817

3,040 3,406 6,446

8,974 56,028 48,338 1,336 350,272 604,972 30,063 4,550 93,147 16,392 1,214,072

2011

Exports For the month of November

10-11

11-12

2010

2,440 509 2,949

22,020 13,924 35,944

17,184 40,976 58,160

757 0 757

1,158 15 4,678 546 25,807 56,005 0 598 9,111 0 97,918

722 5,482 5,618 330 28,840 74,063 1,029 970 5,716 1,975 124,745

9,504 508 32,405 5,978 179,734 407,271 0 3,974 75,619 0 714,993

8,598 50,810 46,908 3,462 212,669 521,031 5,371 4,546 64,350 16,341 934,086

0 13,440 2,911 5,601 32,745 39,389 7,308 84,218 0 291 30,305 0 5,112 221,320

6 2,149 399 922 3,856 2,339 279 8,741 0 0 5,963 0 13 24,667

4 1,823 291 420 3,003 2,647 876 11,115 0 189 6,009 2 2,443 28,822

12 18,276 2,248 5,528 27,860 20,582 3,581 61,770 0 0 29,360 0 13 169,230

1,158 6,218 8,364 3,191 0 1,516

86 807 631 551 0 97

152 301 879 477 0 159

4,558 6,721 0 3,530 35,256

609 819 23 94 3,717

1,509 1,544 169 1,454 0 2,776 0 0 636 8,088

Cumulative April-November

2011

10-11

11-12

1,524 0 1,524

3,231 0 3,231

8,503 0 8,503

81 0 48 4 24,694 10,439 0 0 785 0 36,051

0 793 6 0 11,507 8,235 6,551 0 253 0 27,345

365 0 302 34 178,576 87,212 0 16 2,909 0 269,414

903 4,928 203 15 141,694 86,934 15,737 0 4,317 0 254,731

55 11,605 2,747 5,284 30,751 25,481 5,824 83,056 6 289 58,072 7 5,705 228,882

0 335 13 0 2 2,409 0 65 0 0 119 0 0 2,943

0 11 6 0 1 1,495 0 25 0 0 71 0 0 1,609

0 1,041 49 0 16 11,933 1,000 336 0 0 803 0 0 15,178

0 758 89 1 33 14,197 1,500 508 0 0 1,187 0 0 18,273

745 7,575 2,626 3,698 0 1,136

1,524 6,358 7,354 3,338 2 1,617

0 34 1 0 0 0

0 0 0 0 0 0

0 237 3 0 0 0

0 119 3 3 0 0

403 784 59 191 3,405

5,006 6,121 150 1,449 28,506

4,436 6,713 433 2,332 34,107

0 0 0 0 35

0 0 0 0 0

0 0 0 0 240

0 0 0 0 125

114 172 15 117 11 218 24 63 73 807

313 260 14 265 19 279 9 210 0 1,369

971 1,864 297 641 127 1,899 185 719 440 7,143

1,754 1,629 181 1,500 179 2,735 299 1,405 661 10,343

0 0 0 0 0 0 0 0 0 0

0 3 0 0 0 0 0 0 0 3

0 0 0 0 0 0 0 0 0 0

0 8 0 0 0 0 0 0 0 8

0 414 0 0 414 1,546,967

29 52 67 0 148 133,703

76 43 85 3 207 161,497

256 301 379 0 936 956,752

383 382 403 24 1,192 1,266,770

0 0 0 0 0 39,786

0 0 0 0 0 30,481

0 0 0 0 0 288,063

0 0 0 0 0 281,640

0 24 2,091 5,146 1,781 0 0 65,520

21 3 356 675 145 1 1 6,323

59 0 199 732 160 35 39 7,950

361 16 1,403 4,780 1,034 156 13 55,942

315 24 2,017 6,235 1,777 371 113 64,570

0 0 0 0 0 0 0 175

0 0 0 0 0 0 0 78

0 0 0 2 0 0 0 611

0 0 0 0 0 0 0 800

0 0 0 16,098 24,509 115,169

8 9 14 1,469 2,594 11,619

4 54 31 2,079 2,642 13,984

67 66 107 12,189 16,136 92,270

70 328 331 15,455 24,805 116,411

0 0 0 18 0 193

0 0 0 24 0 102

0 0 0 76 0 689

0 0 0 175 0 975

0 886 489 42,770

0 103 75 4,274

0 120 52 3,599

0 1,638 770 34,231

0 898 480 41,872

0 0 0 30

0 0 0 159

0 0 38 270

0 1 0 1,000

3,108 8,283 17,717 73,253 188,422

245 349 2,357 7,403 19,022

195 275 1,807 6,048 20,032

2,509 2,388 16,479 58,015 150,285

4,358 3,807 17,690 69,105 185,516

8 17 0 55 248

11 35 0 205 307

48 124 0 480 1,169

128 274 0 1,403 2,378

5,225 6,140 1,428 650 13,443 201,865

307 570 141 568 1,586 20,608

486 724 8 1,148 2,366 22,398

3,467 3,404 7,109 7,209 21,189 171,474

5,140 6,032 1,450 8,085 20,707 206,223

15 0 10 2 27 275

0 0 0 10 10 317

19 5 68 129 221 1,390

Force Motors Ltd 0 4 30 85 119 2,497

178 107,014 32,868 140,060 1,888,892

0 8,320 4,113 12,433 166,744

34 14,686 4,262 18,982 202,877

0 60,771 31,011 91,782 1,220,008

102 105,182 33,075 138,359 1,611,352

0 179 25 204 40,265

0 256 38 294 31,092

0 904 120 1,024 290,477

0 1,486 90 1,576 285,713

1,097 0 2,335 3,744 1,699 8,875

66 1 125 289 111 592

82 0 150 379 73 684

753 1 1,181 3,174 1,239 6,348

1,069 0 2,010 4,145 1,703 8,927

30 0 0 7 0 37

10 0 0 69 0 79

173 0 0 50 7 230

151 0 4 390 117 662

15,164 14 55 12,012 133 181 27,559

1,425 76 0 1,420 14 40 2,975

1,628 0 4 905 13 9 2,559

8,047 99 9 8,695 142 337 17,329

11,729 14 47 10,260 114 188 22,352

162 0 0 283 7 0 452

513 0 0 267 1 0 781

954 0 0 2,112 45 0 3,111

2,805 0 0 3,217 12 0 6,034

147 36,581

16 3,583

37 3,280

45 23,722

143 31,422

0 489

0 860

0 3,341

0 6,696

1,907 2,828 11,442 13,890 30,067

133 329 1,589 1,266 3,317

99 361 1,942 1,664 4,066

829 2,141 11,633 9,421 24,024

1,773 2,469 14,556 13,553 32,351

33 31 299 110 473

34 23 120 43 220

253 151 1,075 427 1,906

188 138 1,548 413 2,287

13,055 31,117 2,442 46,614

791 3,044 116 3,951

1,530 3,341 172 5,043

6,455 19,477 567 26,499

10,326 23,957 1,849 36,132

137 374 69 580

618 494 8 1,120

1,347 2,852 648 4,847

2,849 3,623 343 6,815

15,036 3,405 0 458 36,888 579 1 56,367

1,257 320 0 0 4,389 42 2 6,010

451 564 0 30 4,489 36 0 5,570

8,518 1,625 0 0 31,341 227 6 41,717

14,398 3,539 0 87 35,594 493 12 54,123

0 0 0 0 195 0 0 195

53 0 0 0 199 0 0 252

214 0 0 0 1,808 63 0 2,085

53 0 0 0 1,619 4 0 1,676

5,912 121 NA 299 101 28,864 389

220 0 NA 0 28 726 19

16 18 NA 62 0 2,350 51

856 0 NA 0 138 5,129 162

5,298 68 NA 90 83 16,596 325

0 0 NA 0 0 6 0

0 0 NA 0 0 21 0

5 0 NA 0 0 153 12

0 0 NA 0 0 466 0


Category Segment/Subsegment Manufacturer.

Production For the month of November 2010

2011

VE CVs - Volvo 83 91 Total 1,419 4,907 Total B3 8,395 11,663 B4: Max mass over 16.2 tn - Haulage tractor (a) Max. Mass exceeding 16.2 tonnes but not exceeding 26.4 tonnes Ashok Leyland Ltd 0 0 Total 0 0 (b) Max. mass exceeding 26.4 tonnes but not exceeding 35.2 tonnes Ashok Leyland Ltd 136 81 Tata Motors Ltd 0 0 Total 136 81 Ashok Leyland Ltd 232 70 Asia Motor Works Ltd 82 40 Tata Motors Ltd 0 0 VE CVs - Eicher 5 10 VE CVs - Volvo 0 3 Total 319 123 Total B4 455 204 Total M&HCVs (Goods Carriers) 17,163 22,593 Total M&HCVs 21,422 26,942 2: Max mass upto 5 tonnes LCVs A: Passenger carriers A1: Max mass upto 5 tn (M2(A2)) (a): No of seats over 13 Force Motors Ltd 461 518 Hindustan Motors Ltd 0 0 Mahindra & Mahindra Ltd 166 0 Mahindra Navistar Automotives Ltd 0 228 Tata Motors Ltd 246 200 Total A1 873 946 A2: Max mass 5-7.5 tn (b): No of seats up to & over 13 Ashok Leyland Ltd 81 40 Force Motors Ltd 5 0 Mahindra & Mahindra Ltd 28 0 Mahindra Navistar Automotives Ltd 0 33 Swaraj Mazda Ltd 115 133 Tata Motors Ltd 551 1,093 VE CVs - Eicher 142 62 Total 922 1,361 Total LCVs (Passenger Carriers) 1,795 2,307 B Goods Carrier B1: Max mass not over 3.5 tn Force Motors Ltd 203 525 Hindustan Motors Ltd 8 39 Mahindra & Mahindra Ltd 6,061 9,495 Piaggio Vehicles Pvt.Ltd 1,200 251 Tata Motors Ltd 10,974 15,207 Total 18,446 25,517 B2:Max mass 3.5-5 tn Force Motors Ltd 133 90 Mahindra & Mahindra Ltd 129 0 Mahindra Navistar Automotives Ltd 0 2 Tata Motors Ltd 472 661 Total 734 753 B3: Max mass 5-7.5 tn Ashok Leyland Ltd 0 0 Force Motors Ltd 8 20 Mahindra & Mahindra Ltd 473 0 Mahindra Navistar Automotives Ltd 0 436 Swaraj Mazda Ltd 136 213 Tata Motors Ltd 1,861 1,976 VE CVs - Eicher 460 673 Total 2,938 3,318 Total LCVs (Goods Carriers) 22,118 29,588 Total LCVs 23,913 31,895 Total Commercial Vehicles 45,335 58,837 Two Wheelers A: Scooter/Scooterette, Wheelsize not over 12’’ A1: Engine Capacity less than 75cc Mahindra Two Wheelers Ltd 0 947 TVS Motor Company Ltd 2,426 1,200 Total 2,426 2,147 A2: Engine capacity 75-125 cc Bajaj Auto Ltd 262 0 Hero Honda Motors Ltd 16,908 29,374 Honda Motorcycle & Scooter India (Pvt) Ltd 69,732 73,989 Mahindra Two Wheelers Ltd 6,895 14,483 Suzuki Motorcycle India Pvt Ltd 11,192 20,873 TVS Motor Company Ltd 24,746 34,792 Total 129,735 173,511 A3: Engine capacity 125 -250 cc Honda Motorcycle & Scooter India (Pvt) Ltd 0 0 LML Limited NA NA Mahindra Two Wheelers Ltd 0 0 Total 0 0 Total Scooter/Scooterettee 132,161 175,658 B: Motorcycle/Step-Through: Wheel size more than 12” B2: Engine capacity 75-125 cc Bajaj Auto Ltd 165,755 126,379 Hero Honda Motors Ltd 349,656 359,706 Honda Motorcycle & Scooter India (Pvt) Ltd 36 16,055 India Yamaha Motor Pvt Ltd 5,836 4,397 Mahindra Two Wheelers Ltd 0 2,759 TVS Motor Company Ltd 33,654 48,218 Total 554,937 557,514 B3: Engine capacity 125-250 cc Bajaj Auto Ltd 80,601 130,446 Hero Honda Motors Ltd 17,480 27,976 Honda Motorcycle & Scooter India (Pvt) Ltd 45,113 46,368 India Yamaha Motor Pvt Ltd 19,869 26,344 LML Limited NA NA Suzuki Motorcycle & Scooter India (Pvt) Ltd 3,600 5,177 TVS Motor Company Ltd 17,593 19,346 Total 184,256 255,657 B4: Engine capacity over 250 cc Honda Motorcycle & Scooter India (Pvt) Ltd 0 0 India Yamaha Motor Pvt Ltd 0 0 Royal Enfield (Unit of Eicher Ltd) 4,423 4,954 Suzuki Motorcycle India Pvt Ltd 0 0 Total 4,423 4,954 Total Motor Cycles/Step-Throughs 743,616 818,125 C: Mopeds: Engine capacity <75 cc, wheels over 12” TVS Motor Company Ltd 50,629 55,062 Total 50,629 55,062 D: Electric two Wheelers Electrotherm (india)Ltd 0 0 TVS Motor Company Ltd 0 0 Total 0 0 Total Two Wheelers 926,406 1,048,845 III Three Wheelers (CVs) A: Passenger Carriers A1:No. of seats including driver not exceeding 4 & Max.Mass not exceeding 1 tonnes Atul Auto Limited 409 799 Bajaj Auto Ltd 33,073 35,588 Force Motors Ltd 15 0 Mahindra & Mahindra Ltd 2,890 3,797 Piaggio Vehicles Pvt.Ltd 12,604 13,226 Scooters india Ltd 209 203 TVS Motor Company Ltd 1,056 2,973 Total 50,256 56,586 A2: No.of seats including Driver exceeding 4 but not exceeding 7 & Max.Mass exceeding 1.5 tonnes Force Motors Ltd 87 0 Mahindra & Mahindra Ltd 0 460 Piaggio Vehicles Pvt.Ltd 0 0 Scooters india Ltd 266 248 Total 353 708 Total Passenger Carrier 50,609 57,294 B: Goods Carriers B1: Max.mass not exceeding 1 tonnes Atul Auto Limited 697 472 Bajaj Auto Ltd 1,250 266 Mahindra & Mahindra Ltd 1,364 510 Piaggio Vehicles Pvt.Ltd 4,723 5,389 Scooters india Ltd 225 362 Total 8,259 6,999 B2: Others Force Motors Ltd 101 0 Mahindra & Mahindra Ltd 2 302 Piaggio Vehicles Pvt.Ltd 0 10 Scooters india Ltd 255 212 Total 358 524 Total Goods Carrier 8,617 7,523 Total Three Wheelers 59,226 64,817 Grand Total of all Categories 1,242,426 1,405,732 * Exports of Ford indicate CKDs

th

Domestic Sales Cumulative April-November

For the month of November 2010

Exports

Cumulative April-November

2011

223

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Auto Monitor

1 - 31 JANUARY 2012

10-11

For the month of November

11-12

Cumulative April-November

10-11

11-12

2010

2011

10-11

11-12

418 7,311 51,557

608 36,294 92,661

83 1,076 7,086

107 2,604 8,174

532 6,817 48,534

529 22,989 77,112

0 6 201

0 21 273

0 170 2,255

0 466 2,142

0 0

0 0

0 0

0 0

0 0

0 0

50 50

0 0

120 120

433 433

1,600 1 1,601 798 412 0 7 0 1,217 2,818 110,726 138,601

2,027 0 2,027 2,967 498 0 65 96 3,626 5,653 174,995 211,576

106 501 607 191 82 549 2 1 825 1,432 15,786 19,369

11 600 611 25 52 697 1 6 781 1,392 18,675 21,955

1,478 2,936 4,414 1,176 398 3,460 34 39 5,107 9,521 108,578 132,300

2,208 5,284 7,492 2,964 496 6,850 53 86 10,449 17,941 163,536 194,958

5 0 5 5 0 0 0 0 5 60 1,314 1,803

16 0 16 6 0 0 0 0 6 22 1,635 2,495

113 0 113 64 0 10 0 0 74 307 9,315 12,656

61 0 61 31 0 0 0 0 31 525 11,769 18,465

3,342 1 2,126 0 2,889 8,358

5,356 4 0 2,211 2,307 9,878

396 0 219 0 284 899

437 0 0 179 311 927

3,247 4 1,921 0 3,515 8,687

5,176 4 0 2,132 3,235 10,547

31 0 0 0 4 35

0 0 0 0 8 8

102 0 112 0 29 243

84 0 0 0 177 261

604 108 1,831 0 1,281 9,298 1,482 14,604 22,962

675 151 0 1,532 1,975 9,534 1,858 15,725 25,603

48 2 33 0 103 801 92 1,079 1,978

42 5 0 49 197 681 93 1,067 1,994

451 105 1,807 0 1,097 8,794 1,187 13,441 22,128

446 142 0 1,509 1,967 8,812 1,672 14,548 25,095

27 0 18 0 0 97 35 177 212

2 0 0 0 0 273 48 323 331

203 0 126 0 21 997 327 1,674 1,917

75 0 12 0 24 1,558 293 1,962 2,223

1,657 152 45,734 7,360 84,142 139,045

4,262 320 71,221 6,192 111,126 193,121

245 8 5,474 1,116 9,520 16,363

520 20 7,582 474 12,205 20,801

1,611 133 42,096 7,276 75,397 126,513

4,086 262 63,718 6,045 91,660 165,771

0 0 825 0 1,480 2,305

20 0 943 0 1,929 2,892

4 0 3,153 34 5,401 8,592

28 0 6,680 12 15,423 22,143

1,114 787 0 2,640 4,541

794 0 1,088 5,355 7,237

93 139 0 391 623

87 0 6 637 730

1,113 791 0 1,324 3,228

805 0 1,130 4,813 6,748

0 0 0 26 26

0 0 0 59 59

9 0 0 74 83

7 0 0 478 485

0 93 2,525 0 1,179 14,767 2,928 21,492 165,078 188,040 326,641

24 148 0 2,601 972 14,963 4,237 22,945 223,303 248,906 460,482

0 10 387 0 139 1,632 354 2,522 19,508 21,486 40,855

1 16 0 350 167 1,884 416 2,834 24,365 26,359 48,314

0 80 1,969 0 1,102 15,281 2,217 20,649 150,390 172,518 304,818

1 141 0 2,471 678 13,062 3,064 19,417 191,936 217,031 411,989

0 0 82 0 83 263 62 490 2,821 3,033 4,836

0 0 22 0 60 333 84 499 3,450 3,781 6,276

0 2 553 0 381 1,469 466 2,871 11,546 13,463 26,119

0 4 138 0 300 2,228 557 3,227 25,855 28,078 46,543

0 17,033 17,033

9,283 12,952 22,235

0 2,167 2,167

672 1,262 1,934

0 16,644 16,644

7,780 15,076 22,856

0 0 0

0 0 0

0 0 0

0 0 0

3,710 131,453 463,140 26,931 77,860 189,683 892,777

0 214,005 603,323 104,855 142,404 282,247 1,346,834

154 15,890 68,269 7,020 11,113 22,070 124,516

0 27,168 68,278 13,476 20,587 34,171 163,680

3,356 127,701 452,351 29,488 77,663 183,546 874,105

27 204,118 588,744 95,679 142,080 275,169 1,305,817

104 392 930 176 0 856 2,458

0 1,960 1,234 176 0 800 4,170

728 3,436 8,308 793 61 6,676 20,002

0 10,528 8,888 1,162 90 10,489 31,157

0 NA 763 763 910,573

0 NA 0 0 1,369,069

3 NA 0 3 126,686

0 NA 0 0 165,614

290 NA 290 580 891,329

0 NA 68 68 1,328,741

0 NA 0 0 2,458

0 NA 0 0 4,170

0 NA 133 133 20,135

0 NA 0 0 31,157

857,087 2,743,511 66 49,497 0 297,378 3,947,539

1,250,172 3,023,511 129,896 50,852 7,231 419,588 4,881,250

103,839 340,811 14 5,045 0 22,057 471,766

84,033 356,320 12,478 4,164 1,706 36,376 495,077

519,530 2,692,269 27 44,263 0 236,499 3,492,588

795,920 2,952,221 117,397 49,954 4,370 331,677 4,251,539

65,297 7,107 5 1,422 0 5,410 79,241

45,630 8,758 2,812 572 0 5,017 62,789

361,748 56,332 19 3,281 0 52,466 473,846

434,546 72,128 14,125 6,622 0 65,219 592,640

699,154 158,165 307,797 133,216 NA 32,494 121,181 1,452,007

1,050,746 210,491 364,690 178,807 NA 29,561 161,371 1,995,666

58,934 16,482 36,536 12,008 NA 3,280 10,889 138,129

109,141 25,818 38,693 18,544 NA 4,852 13,158 210,206

566,255 152,283 267,089 112,829 NA 31,942 89,734 1,220,132

835,961 199,386 326,925 129,858 NA 29,011 95,085 1,616,226

14,320 696 7,521 6,123 NA 352 6,746 35,758

26,232 1,342 5,921 7,028 NA 0 8,444 48,967

127,002 5,735 40,522 31,886 NA 1,047 30,330 236,522

240,270 8,521 36,844 53,366 NA 449 64,611 404,061

0 0 35,789 0 35,789 5,435,335

0 0 34,727 0 34,727 6,911,643

0 1 4,378 0 4,379 614,274

0 2 4,897 0 4,899 710,182

6 9 34,377 0 34,392 4,747,112

0 25 33,132 0 33,157 5,900,922

0 0 146 0 146 115,145

0 0 135 0 135 111,891

0 0 1,121 0 1,121 711,489

0 0 1,606 0 1,606 998,307

373,236 373,236

459,769 459,769

49,653 49,653

54,574 54,574

369,860 369,860

454,840 454,840

996 996

80 80

3,438 3,438

4,577 4,577

2,549 18 2,567 6,721,711

0 0 0 8,740,481

0 0 0 790,613

0 0 0 930,370

2,482 229 2,711 6,011,012

0 0 0 7,684,503

0 0 0 118,599

0 0 0 116,141

50 0 50 735,112

0 0 0 1,034,041

2,519 205,734 123 19,665 88,228 1,698 7,576 325,543

6,248 285,729 0 27,405 101,867 2,508 25,096 448,853

407 14,462 43 2,765 11,743 211 1,000 30,631

781 14,983 0 3,413 11,508 205 1,650 32,540

2,520 110,834 115 19,585 85,704 1,710 7,094 227,562

6,136 132,616 5 26,443 91,920 2,523 15,984 275,627

0 18,800 0 49 324 0 101 19,274

0 19,007 0 286 1,091 0 1,509 21,893

11 95,780 0 105 2,618 0 423 98,937

139 157,497 0 1,624 9,971 0 8,379 177,610

570 30 0 1,755 2,355 327,898

84 2,629 0 1,731 4,444 453,297

38 0 0 236 274 30,905

0 332 0 268 600 33,140

217 210 0 1,708 2,135 229,697

26 1,881 0 1,620 3,527 279,154

84 0 0 0 84 19,358

0 0 0 0 0 21,893

392 0 0 0 392 99,329

84 0 0 0 84 177,694

4,538 7,027 9,151 32,239 1,894 54,849

5,440 2,229 7,638 39,052 2,833 57,192

692 849 1,353 4,666 229 7,789

483 205 476 5,332 290 6,786

4,551 6,466 9,188 32,465 1,888 54,558

5,467 1,942 7,549 38,451 2,719 56,128

0 0 13 17 0 30

0 0 12 82 0 94

16 0 93 205 0 314

2 174 180 681 0 1,037

824 20 0 1,710 2,554 57,403 385,301 8,906,426

15 2,764 24 1,363 4,166 61,358 514,655 11,604,510

86 0 0 240 326 8,115 39,020 1,037,232

0 247 0 247 494 7,280 40,420 1,221,981

800 17 0 1,686 2,503 57,061 286,758 7,822,596

106 2,670 0 1,493 4,269 60,397 339,551 10,047,395

0 0 0 0 0 30 19,388 183,088

0 0 12 0 12 106 21,999 175,508

9 0 0 0 9 323 99,652 1,151,360

0 0 24 0 24 1,061 178,755 1,545,052


th

1 - 31 JANUARY 2012

AD INDEX

RY

224

NIVERSA AN

Auto Monitor

Pg N o. ........Advertiser .....................................................................................Tel ................................................E-mail ...................................................................... Website 40 .................. Omicron Machine Tools ...................................................................................... +91-2752-242385.....................................omicronmachinetools@yahoo.co.in 109................. Omron Automation Pvt. Ltd. .............................................................................. +91-80-40726400 ...................................in_enquiry@ap.omron.com ...................................................... www.omron-ap.com 203................. Pacco Industrial Corporation ............................................................................. +91-11-26819054.....................................pacco@vsnl.com ........................................................................ www.paccoindia.com COC ................ Padmini Vna Mechatronics Pvt. Ltd. .................................................................. +91-124-3207398 ....................................sales@padminiengg.com........................................................... www.padminivna.com 140................. Patvin Engineering (P) Ltd .................................................................................. +91-22-27780310 ....................................patvin@patvin.co.in .................................................................. www.patvin.co.in 63 .................. Pepperl+Fuchs(India) Pvt Ltd. ............................................................................ +91-80-28378030 ....................................info@in.pepperl-fuchs.com ....................................................... www.pepperl-fuchs.com 49................... Perfect Alloy Components Pvt Ltd ...................................................................... +91-8182-228631 ....................................marketing@perfectalloy.in ........................................................ www.perfectalloy.com 14................... Pick Up Auto India Pvt Ltd .................................................................................. +91-9811061963......................................pickup.ezee@gmail.com............................................................ www.pickupauto.com 54 .................. Precision Components Corporation ................................................................... +91-40-65229339 ....................................info@dynatherm.in ................................................................... www.dynatherm.in 83 .................. Premier L td ......................................................................................................... +91-20-66310000 ....................................mtdsales@premier.co.in ............................................................ www.premier.co.in 105................. Presto Stantest Pvt Ltd........................................................................................ +91-129-4272727 ....................................presto@vsnl.com ....................................................................... www.prestogroup.com 88 .................. Raajratna Ventures Ltd ....................................................................................... +91-79-27561915.....................................sales@raajfasteners.com ........................................................... www.raajfasteners.com 209 ................ Raj Petro Specialities Pvt Ltd.............................................................................. +91-22-24721000 ....................................zoomol@rajgrp.com .................................................................. www.rajgrp.com 18................... Raj Soni & Co....................................................................................................... +91-9717013013 ......................................info@rajsoni.in .......................................................................... www.rajsoni.in 10................... Rajamane Industries Pvt Ltd .............................................................................. +91-80-43659000....................................coolantpump@rajamane.com ................................................... www.rajamane.com 56 .................. Rajan Auto Industries ......................................................................................... +91-9810031116 ......................................rajanautoindustries@gmail.com ............................................... www.raisimcon.com 39................... Rane Holdings Limited ....................................................................................... +91-44-28112472 ....................................j.praveen@rane.co.in ................................................................ www.rane.co.in 169................. Remsons Industries Ltd ...................................................................................... +91-22-61432100 ....................................remsons@vsnl.com .................................................................... www.remsons.com 190................. Rohan Standox Autolack ..................................................................................... +91-22-65803331 ....................................sales@spraytec.net .................................................................... www.spraytec.net 32................... Ronuk G roup ....................................................................................................... +91-22-24936261.....................................ronukgroup@ronukgroup.com ................................................. www.ronuk-ronuplate.com 81 .................. S M Auto Engineering Pvt Ltd ............................................................................. +91-20-65101357 ....................................mktg@smauto.co.in ................................................................... www.smauto.co.in 65................... S S Hydraulics ...................................................................................................... +91-79-22800836 ....................................exports@bosspumps.in ............................................................. www.bosspumps.in 11 ................... Safexpress Private Limited ................................................................................. +1800-113-113 .........................................suyash.srivastava@safexpress.com ........................................... www.safexpress.com 207................. Samkrg Pistons & Rings Ltd ................................................................................ +91-40-23741690 ....................................mktg@samkrg.com.................................................................... www.samkrgpistonsandrings.com 118 ................. Samtel M achines ................................................................................................. +91-9990546700 .....................................soumya@samtelgroup.com ....................................................... www.samtelgroup.com 79 .................. Sandeep Engineers ............................................................................................. +91-80-23390076 ....................................sebvs@vsnl.net .......................................................................... www.witteasia.com 162................. Sankar Sealing Systems Pvt. Ltd. ........................................................................ +91-44-26530220 ....................................info@sankar.com ....................................................................... www.sankar.com 155 ................. Sarabsukh E nterprises ........................................................................................ +91-1871-223893 ....................................sarabsukhbatala@yahoo.co.in .................................................. www.sarabsukhmachines.com 227 ................ Sawalka Kel Pvt Ltd ............................................................................................ +91-33-22878117.....................................mail@safetygloves.in................................................................. www.safetygloves.in 34 .................. Schmalz India Pvt.Ltd. ........................................................................................ +91-20-40725588 ....................................schmalz@schmalz.co.in ............................................................. www.schmalz.com 85................... Schuler India Pvt Ltd .......................................................................................... +91-22-66800300 ....................................info@schularindia.com ............................................................. www.schulergroup.com 35................... Schunk Intec India Pvt Ltd .................................................................................. +91-80-41277361 ....................................info@in.schunk.com .................................................................. www.schunk.com 73 .................. Seamless Autotech Pvt Ltd.................................................................................. +91-2135-662431 ....................................info@seamlessautotech.com..................................................... www.seamlessautotech.com 141 ................. Sekisui P ilon ....................................................................................................... +91-80-26538273 ....................................rajeshbaliga@gmail.com 87 .................. Sellowrap Manufacturing Pvt Ltd ....................................................................... +91-22-66750560 ....................................contact@sellowrap.com ............................................................ www.sellowrap.com 25................... Selvel Auto Traders ............................................................................................. +91-130-2243148.....................................senior@ndf.vsnl.net.in............................................................... www.senior-rubbers.com 236 ................ Setco Automotive Ltd .......................................................................................... +91-22-40755555 ....................................contact@setcoauto.com ............................................................ www.setcoauto.com 152 ................. Shimadzu Analytical (I) Pvt. Ltd.......................................................................... +91-22-29204741.....................................info@shimadzu.in...................................................................... www.shimadzu.in 103................. Shriram Pistons & Rings Ltd ............................................................................... +91-11-23315941 .....................................aarti.anandan@shrirampistons.com 45................... SiemensL td......................................................................................................... +9-22-27645006 .......................................................................................................................................... www.siemens.com/automotive-excellence 64 .................. Sigma Freudenberg Nok Pvt Ltd ......................................................................... +91-11-42411600 .....................................sigma@sigmacorporation.com .................................................. www.sigmacorpoaration.com 132 ................. Sigma Vibracoustic India Pvt Ltd ........................................................................ +91-11-42411600 .....................................sigma@sigmacorporation.com .................................................. www.sigmacorpoaration.com 138................. SreelakshmiT raders ........................................................................................... +91-44-24343343 ....................................sreelakshmitraders@gmail.com ................................................ www.sreelakshmitraders.com 111 ................. Starragheckert Machine Tools Pvt. L .................................................................. +91-80-42770600 ...................................sales.in@starragheckert.com .................................................... www.starragheckert.com 195................. SubrosL td ........................................................................................................... +91-11-23414946 .....................................pmehra@subros.com................................................................. www.subroslimited.com 76................... Sumax Engineering (P) Ltd. ................................................................................. +91-40-27737001 ....................................info@sumaxindia.com ............................................................... www.sumaxindia.com 205................. Sumitron Exports Pvt Ltd. .................................................................................. +91-11-41410631 .....................................sumitron@vsnl.com ................................................................... www.sumitron.com 164................. Swajit Abrasives (P) Ltd ....................................................................................... +91-240-2553787 ....................................enquiry@abracut.in................................................................... www.abracutindia.com 28 .................. Taegutec India Ltd .............................................................................................. +91-80-27839111 ....................................sales@taegutec-india.com ......................................................... www.taegutec-india.com 212................. TAGMA ................................................................................................................. +91-22-28526876 ....................................mumbai@tagmaindia.org ......................................................... www.tagmaindia.org 97................... Talbros Automotive Components Ltd. ................................................................ +91-129- 4 047438....................................hpopli@talbros.com .................................................................. www.talbros.com 172................. Tarang Kinetics Pvt Ltd ....................................................................................... +91-1332-264289.....................................info@tarangkinetics.com .......................................................... www.tarangkinetics.com FGF................. Tata Motors Ltd. .................................................................................................. +91-22-66561866 ....................................charu.gulati@tatamotors.com .................................................. www.tatamotors.com 131 ................. Tech A uto ............................................................................................................ +91-161-4371111 .....................................mktg@techauto.net ................................................................... www.techauto.net 56 .................. Techno Industries ............................................................................................... +91-79-25830742 ....................................info@technoind.com ................................................................. www.technoind.com 170 ................. Techno Spring Industries .................................................................................... +91-129-4024488 ....................................vikastantia@technospringindia.com......................................... www.technospringindia.com 22 .................. Tej Control Systems Pvt. Ltd. .............................................................................. +91-22-25838191 .................................... t ivs@tejcontrol.com.................................................................. www.tejivs.com 15................... The Indian Electric Co ......................................................................................... +91-20-24475845 ....................................iecmktg@indianelectric.com .................................................... www.indianelectric.com 19................... The Supreme Industries Limited ........................................................................ +91-9892569003 .....................................protec@supreme.co.in............................................................... www.supreme.co.in 20................... Time Technoplast (Dat ) ...................................................................................... +91-22-4 2119500....................................3sautocomponent@gmail.com.................................................. www.timetechnoplast.com 46 .................. Tkw Fasteners Pvt Ltd ......................................................................................... +91 -124-4081711....................................tarun@tkwfasteners.com .......................................................... www.tkwfasteners.com 201................. Toyota Material Handling IndiaP vt.................................................................... +91-9582255579 .....................................info.sales@tmhin.toyota-industries.com .................................. www.toyotamaterialhandlingindia.com 92................... TriveniR ubber .................................................................................................... +91-22-25471084 ....................................rohit.millns@trivenirubber.com................................................ www.trivenirubber.com 14, 94............. Tubecraft............................................................................................................. +91-22-24113468 .....................................sales@corrtube.com 143 ................. Tyrolit India Superabrasive Pvt. Lt ..................................................................... +91-80-40953259....................................subrahmanya.kumar@tyrolit.com ............................................ www.tylolit.com 50 .................. United Steel & Structurals Pvt. Ltd. .................................................................... +91-44 42321801 ....................................admin@unitedstructurals.com.................................................. www.unitedstructurals.com 151 ................. Varroc Engineering Pvt Ltd ................................................................................. +91-240-2556227 ....................................varroc.info@varrocgroup.com .................................................. www.varrocgroup.com 136 ................. Victor Reinz India Pvt Ltd ................................................................................... +91-2114-392100.....................................infovri@dana.com ..................................................................... www.victorreinz.in 24................... Vinyork Leather Works........................................................................................ +91-4172-247111 .....................................vinyork.leather@yahoo.co.in .................................................... http://vinyorkleatherworks.com 91................... Volvo India Pvt Ltd.................................................................................................................................................................................................................................................................... www.volvobuses.co.in 129................. Wabco India Limited ........................................................................................... +91-44-30902600....................................vikas.kannan@wabco-tvs.co.in ................................................. www.wabcoindia.com 192 ................. Wagner ................................................................................................................ +91-124-4121626.....................................imtiaz.ahmed@wagner-group.com ........................................... www.wagner-group.com 37................... Weiss Technik India Pvt Ltd ................................................................................ +91-40-23224910 ....................................sales@weissindia.com ............................................................... www.weissindia.com 102................. Weldor Engineering Pvt Ltd ................................................................................ +91-281-2360242 ....................................weldor@weldor.com .................................................................. www.weldor.com 36................... Wendt India ........................................................................................................ +91-4344-405500....................................vijayvernekar@wendtindia.com................................................ www.wendtgroup.com 181................. Windsor Machines Limited ................................................................................. +91-79-25841591 ....................................sales.imm@windsormachines.com ........................................... www.windsormachines.com 156................. Yaskawa Robotics India Ltd ................................................................................ +91-124-4758500 ....................................simranjeetsingh@motoman.co.in ............................................. www.motoman.com

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PRODUCT INDEX

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226

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Auto Monitor

Products ...........................................................................................................Pg. No.

Products ...........................................................................................................Pg. No.

3d co-ordinate measuring machines ................................................................................................................. 57

Brake shoes & camshaft components ................................................................................................................ 142

3d white light scanners (Breuckmann) ............................................................................................................... 77

Brake shoes ........................................................................................................................................................ 14

5-axis machiningc entres.................................................................................................................................... 199

Brass ................................................................................................................................................................... 18

Abrasives............................................................................................................................................................. 76

Brinell utillity software ...................................................................................................................................... 30

AC motors ........................................................................................................................................................... 15

Building automation .......................................................................................................................................... 52

Acc Padle sensor assy ......................................................................................................................................... 173

Bus ACs................................................................................................................................................................ 195

Acc Padle sensor assy ......................................................................................................................................... COC

Buses................................................................................................................................................................... FGF

Acmee exhibition................................................................................................................................................ 206

Bushes ................................................................................................................................................................ 64, 132

ADEA - Automotive Dealership Excellence Awards ............................................................................................ 202

Cable carriers...................................................................................................................................................... 30

Adhesivet apes.................................................................................................................................................... 76

Cable c onnectors ................................................................................................................................................ 30

Advanced auto crimping machines .................................................................................................................... 68, 70

Cable glands ....................................................................................................................................................... 205

Advanced automotive lubricants ....................................................................................................................... 209

Cables for bus systems........................................................................................................................................ 63

Advanced braking systems ................................................................................................................................. 129

CAD/CAM te chnologies ....................................................................................................................................... 126

Air & mechanical suspensions............................................................................................................................ 142

CAM shaft holders .............................................................................................................................................. 18

Airc hillers........................................................................................................................................................... 27

Camms (centralized asset & maintenance management system) ...................................................................... 13

Air-conditioning e quipment ............................................................................................................................... 194

Capacitive & magnetic sensors........................................................................................................................... 63

Air-cooled reciprocating compressors ............................................................................................................... 53

Capacitors discharge ignitors ............................................................................................................................. 128

Aircraft & heavy industrial vehicles ................................................................................................................... 24

Car care products ............................................................................................................................................... 76

Airless ................................................................................................................................................................. 130

Car paints............................................................................................................................................................ 190

Airmix ................................................................................................................................................................. 130

Car polishes ........................................................................................................................................................ 190

Allen caps ........................................................................................................................................................... 88

Car under floor assembly ................................................................................................................................... 81

Allen csk.............................................................................................................................................................. 88

Car wash ............................................................................................................................................................. 76

All-geared auto-feed pillar drilling machines .................................................................................................... 74

Carbide end-mill tools ........................................................................................................................................ 28

Altitude simulation test ..................................................................................................................................... 37

Carbon silicon analysis ....................................................................................................................................... 92

Aluminium casting ............................................................................................................................................. 84,100

Castings............................................................................................................................................................... 100

Aluminium processing........................................................................................................................................ 85

CBD ..................................................................................................................................................................... 147

Aluminum ........................................................................................................................................................... 18

CCD wheel aligner............................................................................................................................................... 46

Amalgamations valeo clutches........................................................................................................................... 61

CCOE approved) .................................................................................................................................................. 41

Amalgmations repco .......................................................................................................................................... 61

CED/KTL c oatings ................................................................................................................................................ fic

Analytical instruments ....................................................................................................................................... 152

Cellular foam p roducts ....................................................................................................................................... 87

Anti-corrosion c oatings ...................................................................................................................................... 32

Centreless grinding machines ............................................................................................................................ 40, 65

Arm rests & seat frame components.................................................................................................................. 131

Centrifugal compressor package ........................................................................................................................ 53

AS-interfaces ystems........................................................................................................................................... 63

Centrifugal .......................................................................................................................................................... 53

Auto components ............................................................................................................................................... 66, 98, 154

C-frame power presses ....................................................................................................................................... 55

Auto electrical test benches ............................................................................................................................... 137

Chain pulley blocks ............................................................................................................................................ 56

Auto Expo-2012................................................................................................................................................... 160

Chain wheels....................................................................................................................................................... 22

Auto feed radial drilling machines..................................................................................................................... 74

Chains ................................................................................................................................................................. 30

Auto light & head lamps ..................................................................................................................................... 66, 98, 154

Chassis assembly lines ........................................................................................................................................ 118

Auto p arts ........................................................................................................................................................... 51, 233

Chassis c arriers ................................................................................................................................................... 73

Autoclaves........................................................................................................................................................... 30

Chassis s ystems ................................................................................................................................................... 97

Autocoding ......................................................................................................................................................... 71

Chassis ................................................................................................................................................................ 113

Autoladles ........................................................................................................................................................... 84

Check w eighers ................................................................................................................................................... 96

Automatic chargers ............................................................................................................................................ 137

Checking g auges ................................................................................................................................................. 79

Automatic guns for robotic applications ............................................................................................................ 130

Chuck j aws .......................................................................................................................................................... 35

Automatic painting systems ............................................................................................................................... 140

Circlips ................................................................................................................................................................ 207

Automatic spray guns ......................................................................................................................................... 192

Clamping t ools .................................................................................................................................................... 28

Automation......................................................................................................................................................... 35, 52

Clamps ................................................................................................................................................................ 16

Automobile parts................................................................................................................................................ 16

Clutch b earings ................................................................................................................................................... 34

Automotive b atteries .......................................................................................................................................... 99

Clutch p lates ....................................................................................................................................................... 14

Automotive battery chargers & testers .............................................................................................................. 137

Clutchs hoes........................................................................................................................................................ 14

Automotive c omponents .................................................................................................................................... 17, 40, 56, 81, 106

CNC angular cylindrical grinding machines ....................................................................................................... 65

Automotive corrosion tests ................................................................................................................................ 37

CNC cutting machines......................................................................................................................................... 52

Automotive electrical components .................................................................................................................... 151

CNC cylindrical grinding machines .................................................................................................................... 65

Automotive h oses ............................................................................................................................................... 177

CNC gear cutting machines................................................................................................................................. 83

Automotive labelling .......................................................................................................................................... 29, 38, 44, 178, 226, 119, 167

CNC HMCs............................................................................................................................................................ 23, 208

Automotive lights ............................................................................................................................................... 72

CNC hydraulic turret punch presses ................................................................................................................... 102

Automotive plastic components ........................................................................................................................ 72

CNC laser cutting machines ................................................................................................................................ 52

Automotive wire harness.................................................................................................................................... 128

CNC l athes ........................................................................................................................................................... 12, BC

Automotive ......................................................................................................................................................... 24

CNC m achines ..................................................................................................................................................... 23, 208

Autopour............................................................................................................................................................. 84

CNC machining ................................................................................................................................................... 92

Autopouring ....................................................................................................................................................... 84

CNC oval turning centres .................................................................................................................................... 23, 208

Axles ................................................................................................................................................................... 51, 142, 233

CNC oxyfuel cutting machines............................................................................................................................ 52

Ballb earings....................................................................................................................................................... 34, 139

CNC plasma cutting machines ............................................................................................................................ 52, 102

Bardahl additives & lubricants........................................................................................................................... 108

CNC press brakes ................................................................................................................................................ 114, 102

Basic frames ....................................................................................................................................................... 79

CNC synchro press brakes ................................................................................................................................... 102

Bearing ............................................................................................................................................................... 30, 34, 48, 139, 165, 231

CNC tube bending machines .............................................................................................................................. 122

Bearings for automotive..................................................................................................................................... 175

CNC turn mill centres.......................................................................................................................................... 23, 208

Belt and rollers ................................................................................................................................................... 68, 70

CNC turning centres ............................................................................................................................................ 23, 199, 208

Belt conveyors .................................................................................................................................................... 118

CNC vertical machining centres.......................................................................................................................... 23, 208

Belts .................................................................................................................................................................... 164

CNC vertical turning machines ........................................................................................................................... 83

Bicycle components & assemblies ..................................................................................................................... 18

CNCs .................................................................................................................................................................... 23, 208

Billet shearing m achines .................................................................................................................................... 55

CNG dispenser probe O-rings ............................................................................................................................. 92

Bimetal b earings ................................................................................................................................................ 61

CNG-NRV O -rings ................................................................................................................................................ 92

Blanking l ines ..................................................................................................................................................... 85

Coating machines ............................................................................................................................................... 52

Blow film & plastic molded components ........................................................................................................... 87

Coatingp lants..................................................................................................................................................... 52

Blue b ucks .......................................................................................................................................................... 79

Coating raw materials......................................................................................................................................... 235

Bolts.................................................................................................................................................................... 233

Coating s ystems .................................................................................................................................................. 52

Bopt .................................................................................................................................................................... 201

Cockpit s ystems .................................................................................................................................................. 197

Brake linings ....................................................................................................................................................... 39

Coding & marking s ystems ................................................................................................................................. 96

Brake m otors ...................................................................................................................................................... 15

Cold form sections .............................................................................................................................................. 50

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G L O B A L WAT C H

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Auto Monitor

1 - 31 JANUARY 2012

Federal-Mogul develops touch-free lighting

G

loba l suppl ier of automotive technologies and innovation, Federal-Mogul Corporation, has developed an innovation that makes vehicle interior lighting systems slimmer, cooler, more efficient and stylish. The company’s new ultrathin lighting combines LEDs and a specially designed lamp lens to reduce the profi le of interior lamps by up to 60 percent.

Features The company’s touch-free light provides increased lighting functions and eliminates the driver’s search for the correct mechanical switch in increasingly crowded consoles and instrument panels, enabling more attention to remain focused on the road. The utilisation of

The homogeneous appearance of the ultra-thin lamp is unrivalled in the industry. It provides new opportunities for interior designers and offers greater design alternatives while improving packaging, safety and energy efficiency this innovative technology provides for improved durability and reduced energy use while eliminating the design constraints of mechanical switches. The touch-free dome lamp integrates a capacitive sensor into the vehicle’s overhead console. The capacitive proximity sensor functions by detecting the hand’s conductivity as it enters a field. The field sensitivity range can be set to function from 0 mm to 80 mm. As the hand enters the field, the switch is triggered by a change in capacitance caused by the conductivity of iron in the blood. The system continually monitors the environment to calibrate and optimise performance and range. Federal-Mogul’s system works even when the operator is wearing gloves, unlike competing technologies, such as infrared proximity sensors.

Increased Demands The need to make vehicles more energy efficient coupled with the demand from consumers for premium interiors and personalisation is driving growth in the use of LEDs for functional interior and exterior lighting. What’s more, the growing demand for vehicles with higher seating positions and lower roofl ines means vehicle manufacturers operate within tightening constraints to create sufficient headroom for occupants. Increasing headroom is a contributing factor in improving the safety of occupants during a rollover event. “With interior lamp profi les typically of 30 mm or more, the size of interior lighting modules has been a limiting factor for vehicle manufacturers. Our new lamp is just 12 mm thick, giv-

ing vehicle designers an extra 18 mm of space and increased styling design opportunities.” said Federal-Mogul’s Senior Vice President, Vehicle Safety and Protection, Ramzi Hermiz. NovaLens is a specially designed lens that incorporates unique geometric features, which reflect and refract the light from LEDs positioned at opposite sides of the lamp to produce visually uniform illumination from the entire lens. The inner surface of NovaLens incorporates optical features that vary in shape, depth and position, depending on their distance from the nearest LED. The outer surface of NovaLens contains several parallel optical flutes.

Reduced Emissions “The consistent, homogeneous

appearance of our new ultra-thin lamp with NovaLens is unrivalled in the industry,” Hermiz said. “It provides exciting new opportunities for interior designers and a competitive advantage for Federal-Mogul’s customers.” LED technology can draw less than 2 W, depending on customer requirements, compared to 10 W for the equivalent incandescent bulbs. This reduced electrical demand cuts CO2 emissions and helps reduce battery drain, which is especially important in electric vehicles. LEDs also last more than ten times as long as incandescent bulbs and operate 95 degrees Celsius cooler, improving thermal management, installation and styling options. Federal-Mogul is in discussion with vehicle manufacturers on several continents regard-

Ultra-thin lighting with NovaLens

ing its new ultra-thin lamp with NovaLens. The company’s fi rst production applications will reach the market during 2012. The technology was developed

at Federal-Mogul’s Lighting Technical Centre in Ann Arbor, Mich, US, one of the company’s 18 globally networked technical centres.


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PRODUCT INDEX

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228

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Auto Monitor

Products ...........................................................................................................Pg. No.

Products ...........................................................................................................Pg. No.

Cold forming machines ...................................................................................................................................... 107

Exhausts ystems.................................................................................................................................................. 110

Colour ................................................................................................................................................................. 96

Exhibitions .......................................................................................................................................................... 146, 158, 196, 198, 206, 212

Combination s witches ........................................................................................................................................ 128

Extension springs ............................................................................................................................................... 7, 170

Commercialv ehicles........................................................................................................................................... 91, 153, 163, 189, FGF

Exteriort rims...................................................................................................................................................... 197

Common rail diesel systems ............................................................................................................................... 62

Fabric reinforced diaphragms ............................................................................................................................ 92

Compact c hillers ................................................................................................................................................. 27

Factory a utomation ............................................................................................................................................ 52

Compact measurement modules ....................................................................................................................... 71

Factory design & layout ...................................................................................................................................... 18

Compaction & concreting equipment ................................................................................................................ 191

Fastc hargers....................................................................................................................................................... 137

Compressed air filters......................................................................................................................................... 229

Fasteners............................................................................................................................................................. 46, 88

Compression springs .......................................................................................................................................... 7, 170

Fibreglass automobiles ...................................................................................................................................... 179

Compression testing machines .......................................................................................................................... 30

Filters & filtration systems ................................................................................................................................. 69

Compressors ....................................................................................................................................................... 53, 195

Five-axis machining centres ............................................................................................................................... 111

Condensers ......................................................................................................................................................... 195

Fixtures ............................................................................................................................................................... 16

Coniflexc utters................................................................................................................................................... 135

Flameproof hoists............................................................................................................................................... 56

Connecting rods.................................................................................................................................................. 18

Flameproofm otors............................................................................................................................................. 15

Connectors.......................................................................................................................................................... 30, 205

Flange mounting m otors .................................................................................................................................... 15

Construction hydraulics & clutches.................................................................................................................... 236

Flap w heels ......................................................................................................................................................... 164

Control c ables ..................................................................................................................................................... 169

Flexibles hafts..................................................................................................................................................... 169

Conventional & monoblock pumps.................................................................................................................... 10

Foam p ads .......................................................................................................................................................... 76

Conventional p roducts ....................................................................................................................................... 129

Foams ................................................................................................................................................................. 141

Coolant accessories ............................................................................................................................................ 10

Forged................................................................................................................................................................. 18

Coolant pumps ................................................................................................................................................... 10

Forging p resses ................................................................................................................................................... 55

Cooling m odules ................................................................................................................................................. 195

Forgings .............................................................................................................................................................. 51, 97

Copper ................................................................................................................................................................ 18

Fork l ift ............................................................................................................................................................... 145, 201

Corrosion p roducts ............................................................................................................................................. 193

Form & cylindricity testers ................................................................................................................................. 57

Corrugated t ubes ................................................................................................................................................ 14 ,94

Foundry automation .......................................................................................................................................... 84

Counters & powers upplies................................................................................................................................. 109

Foundry .............................................................................................................................................................. 92

Countersinks ....................................................................................................................................................... BIC

Four-axis horizontal machining centres............................................................................................................. 111

Crabs ................................................................................................................................................................... 56

Friction drop hammers ...................................................................................................................................... 55

Cranes ................................................................................................................................................................. 56, 145

Friction screw presses ........................................................................................................................................ 55

Crankshafts ......................................................................................................................................................... 51