Buorseasbs? c Escorts thinks end to end • Terex Vectra fine tunes strategy
R E P P I K E H E S C I S M T O R U P DEOWS HUGE
At the heart of the indian trucks & bus industry
Volume 3 Issue 12 • September 2009
Straightdrive Over the last couple of days, Pune has presented me with the sight of heavy rain amidst bright sunlight. The views are undoubtedly beautiful, but people without umbrellas are confused. They wonder… what will prevail… the sun or the rain? That is very much the scene with the Indian economy and indeed the CV industry. Modest signs of recovery are visible, but will this last the distance without pickup in infrastructure spending and export markets? The big picture is still not clear. Economists cannot decide if we are witnessing a ‘V’, ‘U’ or a ‘W’ shaped recession. While the former is a straight forward down-up movement for a year, the latter two, involve a fair bit of downside(s) for at least two years. This is worrying, since we are barely a year into the slowdown. The flow of finance and export demand for India will depend on which of these curves prevails. Our cover story profiles a company that set shop bang at the onset of the slowdown. But Deutsche Kipper, an Indian company founded by a German, did not lose heart. It has decided to target niche areas with innovative products. These include heated tippers, three-way tippers and even efficient waste managers built on the Tata Ace platform. Escorts Construction Equipment Limited has also similarly kept its options open in the quest to fight back the slowdown. Business is expected to come back to near normal levels after a 40 percent crash last year. And the company is plotting a series of alliances and manufacturing plans to become an end to end manufacturer. Another construction equipment maker, Terex Vectra Construction Equipment is staying focussed. It has just introduced a 76 HP version of its 90 HP backhoe loader. Its skid steers will also find use beyond the defence forces. A greater thrust is also expected on the compactors and an upcoming ‘digging’ machine. Now onto two component makers. Goraya-based GNA is expanding its product portfolio beyond the rear axle shafts that it is known for. The new offerings, inclusive of output shafts and kingpins, will help the company reach out to newer export markets and also The big picture is still not clear. make a bid for the domestic aftermarket. Economists cannot decide if Automotive cables-maker Remsons is we are witnessing a ‘V’, ‘U’ or also banking upon a slew of new orders and a ‘W’ shaped recession. upcoming CV launches. Orders are expected from the likes of Tata Motors, Piaggio, Force Motors and M&M who want to tailor their transmissions to more stringent emission norms. The last two stories pertain to logistics. On the one hand, we map the Mumbai-Pune route for the best public transport options. As it turns out, what is in the customer’s interest also turns out to be in the public transport operators’ too. MSRTC’s buses score over private buses and cool cabs, because they are also the most efficient. Car-carrier Janta Roadways too votes for better logistics practices. Car carriers are typically allied with a single manufacturer. This means there is a problem in terms of return loads. The solution therefore is a hub and spoke model. We have a bit of logistics to be taken care of too. The next issue will be our third anniversary special!! Sridhar Chari email@example.com
Commercial Vehicle Magazine 401B, Gandhi Empire, 5th Floor, 2 Sareen Estate, Kondhwa Road, Pune 411 040. India Tel +91-20-32930291 / 2 Fax +91-20-26830465 Email us at firstname.lastname@example.org Executive Editor Test Editor European Editor Staff Writers Group Art Director and Production-in-Charge Art Director Senior Designers Assistant Designer Photographer Production Executive Administrative Executive Publisher Associate Publisher
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september 2009 / Commercial Vehicle /
What’s inside Straight Drive
GNA looks at Indian aftermarket
The confidence stems from a new line-up of king pins, output shafts, drive shafts, half shafts and various powertrain components and sub assemblies.
Motherson eyes thermal systems biz Through its JVs with Spheros GmbH and Zanoti S.p.A, the Sumi Motherson Group is eyeing both the bus and truck AC market.
On the busy MumbaiPune route, passengers choose between various modes of transport based on the cost-time equation. We tell you, how these choices impact the economics of each mode.
Remsons registers a strong comeback The Mumbai based automotive cables manufacturer is witnessing good times, thank to a slew of products that are going to be introduced by CV makers.
MAN enhances the comfort factor
Travelling in MAN’s tourist coaches will be that much smoother, courtesy the TipMatic Coach gearbox.
Buses or cabs?
Deutsche Kipper shows Promise
A new entrant to the list of tipper body builders, the Pune-based company is concentrating its attention on certain niche but high growth ideas with innovative solutions.
Mitsubishi Fuso’s timely move
Japan’s prominent truck maker gets ready for future with its recently announced range of Euro V compliant Fuso Canter vehicles.
Two new vans from Citroen
Citroen adopts an application oriented focus with the launch of the Berlingo XTR+ and Berlingo 725 L2 crew van.
Into the power zone
Take a look at John Deere’s 8R series of high powered row crop tractors.
Volvo gets serious with Safespot
Accidents could well become things of the past if Volvo has its way in developing some advanced safety solutions.
We welcome suggestions, feedback, comments, bouquets and brickbats on how the magazine is shaping up and what you would like to see and read more about. Write in to: email@example.com / Commercial Vehicle / september 2009
Escorts thinks end to end From cranes to digging, material handling and road construction equipment, the span is pretty huge. Escorts intend to have them all in its portfolio over the next 2-3 years.
To Subscribe turn to page
Terex fine tunes strategy
Janta Roadways seeks hub and spoke paradigm
There is a more fuel-efficient backhoe now. Compactors are next in line.
The Chennai-based car carrier says that the unidirectional transport of cars is hurting viability. The solution is to have regional warehouses.
49 september 2009 / Commercial Vehicle /
letters to cv
Readies for a take off
JCB’s excavators perform well • Swaraj looks at product innovations
of r e t Let month More focus needed on school buses The story on school buses was awesome. shaw is that much easier and the
I have always felt that this segment doesn’t get the kind of attention it deserves from the manufacturers. To substantiate my view, I would just like to quote one point from your story which says that around 2, 50,000 students are transported by three wheelers in the city of Pune. The safety of 10 to 12 children crammed in an auto rickshaw can be well imagined, when the three-wheeler is meant for only three adults or say… around five children. Now let me get back to the Pune example. If you need to shift these 2, 50,000 children into buses, you will need a minimum of 2,500 units of 15 seater buses considering six visits per bus. And we are speaking only about one city. If we take all the major cities into consideration, the demand would be substantial enough to keep all manufacturers busy throughout the year. So the question is why OEMs are not able to tap into this market. Is it that they are not able to roll out the required number buses or are there some other issues that are hampering their progress? As per my understanding supply is not an issue for the OEMs – therefore cost is the most likely reason. Most of individuals who operate school buses are primarily single owners, for whom it is a means of livelihood. These individuals are also financially not that sound and therefore acquisition of an Rs 6-8 lakh mini-bus is a bit of a task for them. On the other, spending Rs 1 lakh on an auto rick-
At the heart of the indian trucks & bus industry Volume 3 Issue 11 • August 2009
also comparatively less risky. Even if an individual wants to operate a school bus, the cost of acquisition is an issue which NO STOPS FOR deters him from going for it. So does that mean that this gap will persist and children will continue to travel in cramped three-wheelers? I think the answer could be in the negative, if manufacturers look at offering dedicated school vans on a platform like the Tata Magic. The cost of acquisition of these vehicles would be lower. Moreover, the safety of a four-wheeler is far better as compared to that of a three-wheeler and therefore even operators would be in a position to bargain a little more from parents, who would like their children to travel in the safest means possible. Also there are still certain areas in cities where even a mini-bus cannot navigate easily - and a small school van would be handy in these areas. There is a huge scope for developing solutions for transporting school children. It would be better if OEs get a bit more innovative.
09 CV_August_cover.indd 1
■ Gajanan Shinde, Mumbai
What is meant by integrated transport? This is with regard to a news article mentioning the Karnataka Government’s plan to have an integrated public transport system. At the outset, this seems like a sound idea – it will surely save passengers the ordeal of having to stand in multiple ticket lines. But it would be wrong to assume that all travel woes would be addressed with this one move. The point is that, while the usual passengers will find their commute easier, no new ones will be added. After all, it is no use if a combination of a metro and a bus can only take you so far and no more. The basic problem that commuters face in using
public transport is last mile connectivity. Suppose, I want to go from place X to place Y and despite all the integrated transport, I can only travel till point Z then my problems are not solved. I may need to either walk to point or take an expensive rickshaw or a taxi, to point Y. In other words, integrated transport should not be assumed to be an end in itself, it will work only if there is integration with commuters’ needs. If that happens, the question of single or multiple tickets may not very important at all. ■ Bala Fernandez, Bangalore
Pen down your views and queries to Commercial Vehicle, NextGen Automotive, 401 B Gandhi Empire, 5th Floor, 2 Sareen Estate, Kondhwa Road, Pune 411040, INDIA. or Fax +91 20 26830465 or Email firstname.lastname@example.org / Commercial Vehicle / september 2009
7/31/2009 3:39:46 PM
news / cv monitor
Volvo to sell the world’s longest bus to Bogota
M&M rides on UVs and PTL
&M has registered a thumping first quarter thanks to a 28 percent increase in YoY UV sales - from 37,919 units to 48,720 units that increased the company’s market share in this segment from 51 to 65 percent. Its net profit at Rs 400.85 crore grew by 152 percent vis-à-vis the same period last year. Correspondingly, at Rs 4,675 crore, net sales also scaled up 26 percent. But, it must be noted that these figures also includes a component from Punjab Tractors Limited, which was integrated into M&M in July 2008. While, M&M’s own tractor sales grew by just 8.3 percent at 30,502 units that for PTL climbed 32 percent to touch 11,628 units. Tractor sales in India have been flat for a while now. And even exports to mar-
by M&M to be the answer to the gauntlet thrown by the Tata Ace. Secondly, the logo and branding for the upcoming Mahindra Navistar range of CVs will be unveiled by December. A 25tonner may debut at the 2010 Auto Expo in Delhi. kets like the US have crashed by 35 percent. But, the festive season is expected to bring about a growth of 8-10 percent in the domestic market. Moving back to UVs, M&M officials say that the margins have been good due to cost cutting measures, but that sales may not grow as fast for the remainder of this year. M&M is also due to launch a diesel pick-up in the US by 2010. Distribution arrangements have been signed with 330 dealers in that country. UVs are also expected to be exported to China sooner rather than later. In other quarters, the company is getting ready to launch its sub-one tonner LCV by October. This mini-truck powered by a three-cylinder engine is touted
The China advantage M&M is bullish on the Chinese tractor industry, which has registered a CAGR of 25 percent over the last 4-5 years. India’s tractor industry, on the other hand, has seen only 5-7 percent growth during the same period. Add to this, the fact that Chinese tractors are at least 25 percent cheaper than India and this makes China a very attractive market. M&M acquired an 80 percent stake in a venture with Jiangling
Motors Corp in 2004. Last year, the company bought a 51 percent stake in the holding company of Jiangsu Yueda Yancheng Tractor Manufacturing Co at an investment of USD 26 million. At the moment, the Chinese companies are producing very little. But, over the next 5 years, 30 percent of their production could be exported. In the FY 08-09 fiscal, M&M sold 1,19,708 tractors, of which exports accounted for 7,013 units. It is also suggested by M&M officials that some auto components could be sourced from China. ■ / Commercial Vehicle / september 2009
olvo Buses has received an order for 50 articulated buses for one of the largest and most efficient bus-based transport systems, Transmilenio, in Colombia’s capital city Bogota. Ten of the buses will be the longest type of bus in the world - Volvo’s bi-articulated bus - at 27.2 meters long. Volvo’s articulated buses comprise a large portion of the buses in Transmilenio - some 560 of them. As well as placing an order for 40 new articulated buses of the Volvo B12MA model, the BRT system is now taking a step further by purchasing ten bi-articulated buses, also of the Volvo
B12MA model. At 27.2 meters, the bi-articulated bus is the longest in the world with a capacity to transport 240 passengers. The Transmilenio BRT system has been a resounding success, particularly in terms of its effect on the environment in Bogota. At present, 1.6 million passengers are rapidly and conveniently transported each day on the buses in the system. The chassis are built in Volvo’s plant in Curitiba, Brazil, and the bodies are manufactured by Superpolo in Colombia, which is a subsidiary of the body builder Marcopolo. The customer is Ciudad Movil, one of the operators in Transmilenio. All of the buses will be delivered during August and September. The first five bi-articulated buses were delivered in mid-August. The sixth of these buses will be delivered in September and this is important, since it will be the first bus fitted with a Euro IV engine to enter service in South America. Euro IV engines will not be mandatory in the BRT system in Colombia until January 2010. As a result of the use of articulated buses with high passenger capacity, it has been possible to remove a large number of smaller buses from the streets. Combined with the decision by many of the city’s in-
habitants to leave their cars at home and instead take the bus, this has led to a 59 percent reduction in exhaust fumes from traffic. This has resulted in Transmilenio receiving approval from the United Nations to sell carbon dioxide emission rights. ■
Tata Motors may buy out Thai JV partners’ stake
ata Motors may acquire the remaining 20 percent stake in its JV with Thonburi Automotive, its partner in Thailand. This is because the venture – Tata Motors Thailand Limited (TMTL) may not be able to raise enough equity by itself. As per the terms of the JV, Tata Motors can guarantee only 70 percent of the Rs 121.7 crore in long term and short term loans extended by Citibank. But that may not be enough to ensure the flow of more funds. It may be noted that Tata Motors has itself lent more than Rs 100 crore to TMTL. ■ september 2009 / Commercial Vehicle /
CV monitor / news
MAN acquires 25 percent stake in China’s Sinotruk
n a bid to increase its footprint in the promising BRIC markets, German CV giant MAN SE has picked up a 25 percent plus one share stake in Chinese truck maker, Sinotruk Ltd. The USD 780.6 million investment will lead
to a development of a new line of heavy duty trucks for China. MAN will license its flagship TGA truck technology, including that for axles, engines and chassis in order to create the new line-up. Sinotruk has a 20 percent stake in
China’s heavy duty truck market, with a production of 1,00,000 trucks last year. Its revenues tallied to an impressive USD 3.8 billion during the same year. This deal represents the single biggest investment by a German company in a listed Chinese company. MAN has paid a 21 percent premium over the 60-day trading average price of the company in subscribing to convertible bonds and existing shares. Upon conversion of these bonds, MAN will become the single largest minority shareholder, with Sinotruk’s parent company China National Heavy Duty Truck Group (CNHTC), retaining control with a 51 percent majority stake. This will be MAN’s second foray into China, after the first one came apart due to impropriety on the part of the then Chinese partner. Irrespective of this fact, MAN has been coasting the wave in BRIC countries. In March 2009, MAN invested Euro 1.8 billion to acquire Volkswagen’s Brazilian heavy truck operations. Incidentally, Volkswagen is MAN’s single largest shareholder with a 29 percent stake. ■
Construction equipment rentals start improving
onstruction equipment rental companies are starting to see fleet utilisation rates and payment cycles coming back on track. This is on the back of the UPA government’s announcement to award Rs 1,00,000 crore in road building contracts this year. Significant investments are also expected in the ports and energy sectors. The pickup in the real estate segment has also brought some cheer. Overall fleet utilisation rates are now not far below the usual 85-90 percent rates – which in any case is the highest in the world. Secondly, payment cycles have come back to the nor10 / Commercial Vehicle / september 2009
mal 110-120 days as opposed to 150-160 days during the slowdown. This is in contrast to what occurred in the recent past. According to some estimates, fleet utilisation for the roads sector dropped 20 percent, while that for the real estate sector crashed by a massive 60-70 percent. What made matters worse was that even contractors/developers who owned equipment, decided to let them out in order to meet their EMIs. There may be definite improvement now, with further revival expected post
monsoon. But certain quarters of the industry are not so impressed. They reckon that if the machines have to be mobilised post monsoon, activity needs to be starting now. This activity has not yet commenced in right earnest. ■
CV monitor / news
news / cv monitor
Goa to implement High Security Registration Plates
VRDE comes out with electromagnetic compatibility test centre
he Vehicle Research and Development Establishment (VRDE) has come out with India’s first electromagnetic compatibility (EMC) testing centre. It will measure the radiation emitted by a vehicle’s electronic components and the result of such radiation on other equipment in the vehicle. This test is important since the extent of electronics in vehicles is increasing in order to enhance fuel-efficiency and safety, while reducing tailpipe emissions. In military and commercial vehicles, electromagnetic radiation can cause significant damage to critical hardware. ‘The EMC Tech Centre will cater to the long-felt needs of the Indian automotive industry and the defence sector,’ said Vilasrao Deshmukh, Union minister for heavy industries and public enterprises. ‘The proportion of electronics incorporated in vehicles has increased dra-
matically in recent times and the trend is rising at a faster pace. In such a scenario, this kind of a testing centre was a must.’ The EMC centre, based in VRDE’s Ahmednagar facility will save India abundant foreign exchange. Prior to its coming into existence, Indian OEMs used to send their vehicles to overseas facilities at a cost of Rs 50 lakh. Now the same can be accomplished here at a cost of just Rs 3 lakh. Needless to say, the EMC centre can be used for both emission compliance as well as development purposes. Besides the EMC centre, VRDE has a very sound testing infrastructure consisting of: a semi-anechoic chamber, a chassis dynamometer on a turntable, instrumentation for radiated and conducted emission/ immunity, a bulk current injection system, a generator, strip-line testing and on-board transmission testing. The facility also of-
G fers platform-level testing of wheeled and tracked vehicles as per military standards. ■
Liugong sets shop in Pithampur
hinese construction equipment major, Liugong has opened its facility in Pithampur. This makes it the first Chinese construction equipment company to open a plant outside China. The company has 16 manufacturing plants and all but one are in China. Covering an area of 1,77,000 sq. metres the new wheeled loader factory in Pithampur, near Indore, currently employs about 200 people – 90 percent of whom were recruited from India - the remainder are Chinese. Liugong is launching the new plant in three phases and will invest a total of USD 30 million in the project by 2012. By its final phase, the 20,000 square meters facility will be capable of producing up to 2,000 wheeled loaders per month as well as excavators, backhoes, compactors and forklift trucks. The company said wheeled loaders are already rolling off the production line to meet the needs of India’s booming construction market. It took less than a year to construct the new plant. ■ 12 / Commercial Vehicle / september 2009
oa has now become the third state to introduce High Security Registration Plates (HSRPs), following Meghalaya and Sikkim The Government of Goa had issued a Letter of Intent to introduce HSRPSs as early as 2005. But several legal hassles meant that it took a Supreme Court judgment to vindicate the stance of the Goa government. The HSRPS to be implemented by Shimnit Utsch India Pvt Ltd have smart security features. These features will ensure safety as well as increse the government’s revenues by nabbing tax-evaders, detecting fake documentation, identifying offenders in hit and run cases and smoothening the registration process. The smart features include a hotstamped chromium based hologram which will prevent counterfeiting: an ingressed IND Legend, ie a laser etched standardised mark that ensures national identity, a nine digit code which act like a watermark, which will aid in sequential identification of individual license plates all over the country. Then, a security inscript will be visible on the alpha numerals and in borders, thus prevent
painting or screen painting. Added to that, a tamper-proof snap lock fitted on the rear license plate of the vehicle will self-destruct if tampered with. Further, a superior grade reflective sheeting (white for noncommercial vehicles and yellow for CVs) which has an enhanced visibility of 200 meters, will help prevent accidents during the night. What is more, embossed alphanumerals and borders will ensure enhanced readability and easy identification. Apart from curbing vehicle-related crimes, these smart plates will make data mining easier, owing to the creation of a database of vehicle population.This data will empower as well as increase state revenues, create secondary validation processes in documentation of key-unique numbers such as chassis number, engine number and the registration number together.
Thus, besides regulating resale and curbing tax evaders by proper implementation, the plates will provide the state additional revenues to the state by payments of royalty, sales tax and VAT. Public benefits In Goa, it will be mandatory to register vehicles within two years of the implementation of the HSRPs by filling up forms at the RTO office.A payment of Rs 550 for two-wheelers and Rs.1,200 for light motor vehicles, which includes all taxes is to be collected by the RTOs themselves. The conversion may entail a significant expenditure, but the public will benefit from improved chances of recovery if their vehicle is stolen, a reduction of expenses on anti-theft devices and reduction in accidents due to better visibility. On account of all these features, insurance premiums will also fall too. Vehicles registered in other states, (which may not have implemented HSRPs) that enter Goa will not face a problem with authorities. But, when they permanently move to Goa, they will need to convert to Goan registration or upgrade to HSRPs in their states itself if the HSRPs programme is being implemented. ■
september 2009 / Commercial Vehicle / 13
CV monitor / news
news / cv monitor
CV makers see revival on the horizon
iding on positive outlook, the CV industry is on a recovery path now. The Union budget’s higher allocation of funds for infrastructure may soon pull up MHCV sales. In fact, the HCV market which saw a decline of 51 percent in the last 6 months of the calendar year 2008, fell by just 9 percent in July 2009. The tipper market, which accounts for 26 percent of heavy duty truck demand is expected to go up too on the back of increased construction and mining activity. LCV sales, lead from the front with expected growth of 23.7 percent in July. The bus markets are fairly well off, with demand for city buses under JNNURM and a stable school buses market. As a result, Tata Motors reported an increase of 27 percent in sales volume in July 09 versus July 08, while VE Commercial Vehicles Ltd, reported a 35.3 percent increase in 14 / Commercial Vehicle / september 2009
CV sales. Ashok Leyland though remains in the red, with a 35.3 percent decline in July sales. Meanwhile, industry experts however warn that, percentages may mean nothing, as the base was really low last
year. The slowdown had already kicked in by that time last year, though many did not recognise it. In fact, what has hit the CV industry hardest has been a combination of a downward phase of a 3-4 year cycle combined with a sharp shrinkage of finance. Till they began to fall about 15 -18 months ago, CV sales showed a CAGR of 30 to 35 percent over the past 3 to 4 years. Besides the often cited reason of finance, overcapacity of vehicles was a key factor hurting industry sales. As 12 to 16 tonners began to be replaced by 25 to 40 tonners (multi-axles and tractor trailers), the capacity increased well over 100 percent in a short period of time. Good roads further reduced turnaround times – meaning that even more capacity was available at any point in time. Hence observers believe that sales would have fallen even if there was no financial crisis. But all said and done, the lull in sales has resulted in some of this extra capacity being absorbed. This is reflected in the 10-15 percent increase in freight rates. Moreover, as interest rates have also declined by 1-2 percent, sentiments will further improve. The recent government thrust on infrastructure building – if properly implemented will- also provide further fillip to sentiment. Yet experts reckon that it is too early to celebrate – this is only the start of a long uphill climb. Much will depend on whether private sector spending can take over, once government spending slows down in face of concerns over a mounting fiscal deficit. ■
ALL holds its head high despite setbacks
he three cyclical factors of cash, capital and confidence have badly impacted Ashok Leyland, but the company is far from being down and out. The net profit for FY 08-09 may have dipped to Rs 190 crore from Rs 469 crore in the previous year. But the CV major still gains comfort from its ‘unbroken record of profitability’. Sales dropped 34.7 percent to touch 54,431 units overall after seeing a peak of 83,307 vehicles in the previous fiscal – leading to a 1.8 percent loss in market share. Annual sales stood at just Rs 6,666 crore, compared to Rs 8,947 crore in the last fiscal. ALL has reckoned that this weakness is because the company’s traditional stronghold of South India is not faring so well, while in the East, which is going strong, it has little market presence. Therefore, the dealership network has been upped to 170, while the authorised service centers and workshops have gone up by 146 and 2,000 numbers respectively. In the same breath, the MHCV segment has fallen by 33 percent, even as exports decline. The company is facing challenges in Sri Lanka post the civil war. Secondly,
it has managed to sell only 30 vehicles in the Dubai, a fall from 300 last year. To overcome this vulnerability, ALL will go after other foreign markets. This trend has made the company apply brakes from circa January 2009. Headcount in this fiscal has come down from 13,304 to 11,939 employees in FY08, even as expected capex over the next three years has declined from Rs. 3,000 crore to Rs 2,000 crore. The company has implemented the ‘IMPROVE’ program for cost reduction, where several employees contribute value to the company. While these are some of the measures on the commercial vehicle segment, there has also been a conscious focus on noncyclical business. Revenues from engines,
buses, spare parts, and defence business increased from 34 percent of turnover last year to 50 percent of turnover. This has allowed ALL to declare a 100 percent dividend on sales. Interestingly, ALL has realised that the bus segment, where it retains a 46 percent market share has degrown by only 10 percent. The JNNURM has been a real shot in the arm as the company has bagged more than half of all orders. ALL sees the airports as a growing segment and has pioneered in producing India’s first HCNG engines. Weak Q1 In Q1FY10, the company’s standalone net sales went down by 51.6 percent to Rs 912 crore. The standalone net profit declined 84 percent at Rs.7.7 crore from Rs.50.6 crore on a YoY basis. Ashok Leyland wants to bounce back this year,with new launches. The company expects 10 percent sales volume growth this fiscal with a target of 60,000 vehicles. This, may bring the company’s OPM Operating Profit Margin back to 10 to 11 percent levels. ■
september 2009 / Commercial Vehicle / 15
CV monitor / news
Low cargo volumes reveal declining imports and exports
he freight data from major ports is showing a dismal trend, reflecting declining exports and imports in the wake of the global financial crisis. This calls for a quicker recovery of domestic demand. The cargo handled at the country’s 12 major ports in April-July grew only by a marginal 1.17 percent, (YoY) to reach 180.1 million tonnes. The growth during the same period last year was a good 8.26 percent. The major ports fell short by 5 percent in traffic volumes in terms of the targeted 189.6 million tonnes set by the shipping ministry for the April-July quarter. This means that the government’s target of see 1 billion tonnes of cargo being handled at all Indian ports by March 2012 seems unlikely to be achieved.
Chinese demand for iron-ore has not come back to the original levels after recovery from recession. After all, last year’s high demand was on account of the Beijing Olympics. And after all the hype about the event subsided, China has had to contend with a huge unused infrastructure – not very good news for steel makers or iron ore exporters. This trend is expected to last till the end of this year. Industry experts at the Kolkata port blame this on the export duty levied on Indian iron ore, which makes it more expensive than that offered by competitors from Brazil. Besides the global slowdown, there is also one in India’s manufacturing sector. This has caused domestic steel production to come down. The natural corollary to this issue is that the import of coking coal has also decreased. To put it in figures, iron ore cargo handled at 12 major ports declined by 1.9 percent YoY to 30.2 million tonnes, even as coking coal fell 24.3 percent to 8.3 million tonnes during the same period. In the 16 / Commercial Vehicle / september 2009
corresponding last fiscal,the iron ore handled in fact, had risen by 12.85 percent to 30.8 million tonnes, while coking coal scorched up by 40.44 percent to 10.9 million tonnes. Container traffic came down by 5.4 percent with these major ports handling 2.2 million tonne 20 feet long units. During Q1 2008, container traffic had in fact, increased by 11.28 percent. POL (Petroleum, Oil and Lubricants) cargo increased only by 1.96 percent to 56.7 million tonnes compared to last year’s 2.25 percent growth. The chief data pertains to iron ore, POL, fertilisers, coal and container cargo put together. Interestingly, production in these six core industries shot up by 26.7 percent percent in June alone. The increase in the index of six core industries, stands at 6.5 percent, which is a 16 month high. For this quarter, the increase has hence pushed up this segment’s growth to 5.8 percent, which is only marginally higher than the 3.5 percent growth in the same period last fiscal. ■
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Tyre exports nosedive by 25 percent during April-May
n sharp contrast to an increase in domestic market sales, the Automotive Tyre Manufacturers Association (ATMA) has reported a dip of 25 percent in tyre exports. Sales numbers dipped from 9,85,273 units to 736,070, units during April-May 09, as opposed to the same period a year earlier. The truck and bus segment, the biggest for the export segment – and the harbinger of superior margins declined by 10 percent. The numbers fell to 2,82,247 units as against 3,14,938 units last year. Secondly, passenger car tyre exports sunk by 19 per cent at 1,25,542 units, as against 1,55,934 units. Finally, exports of light commercial vehicle tyres declined by 35 per cent- from 3,09,450 units to 2,01,478 units. These figures are especially concerning since the tyre industry, plagued by perennially low margins is dependent on the higher margin exports segment to the extent of 15 percent of turnover. The decline in exports is mainly because the global markets have yet to recover from the economic slowdown. Secondly, aided by subsidies, Chinese tyre makers are making aggressive forays at the expense of Indian
A tyre makers. The decline in Indian exports is reflected in the export Free On Board (FOB) value. The monthly FOB value which stood at 42.96 million dollars in 2007-08, declined by 4.9 percent to 40.88 million dollars in 2008-09. Alarmingly, the current year’s figures have sunk 21.2 percent to USD 32.20 million. This decline would have been even more pronounced if not for the depreciation in the Rupee vis-à-vis the Dollar. The Rupee was at an average of 40.23 to a
Dollar in 200708. This figure fell to 46.47 to a Dollar.in 2008-09, a depreciation of about 14 percent. What hurts Indian tyre makers the most is that their global competitors are raiding their home turf. The Chinese and the Koreans are aggresively flooding the domestic market, with imports increasing by a huge 47 percent. India has imported 2.4 million tyres during April-Jan 2009, as opposed to the same year period last year. The tyre industry calls for more stringent anti-dumping duties. ■
WB govt. slackens scrappage rules for 2-stroke 3-wheelers
he West Bengal government has partly reversed an earlier decision to phase out 31,000 2-stroke three-wheelers in Kolkata. There are 34,000 three-wheelers in the city, of which, only 3,000 are four-stroke. Of the remainder, 10,000 two-stroke three-wheelers have been manufactured after August 1, 2000- the date when Indian OEMs adopted Bharat Stage emission norms. These three-wheelers have been exempted from scrapping, if they get a retrofitment of LPG kits. This decision has attracted criticism from environmentalists, since it has not been vetted by the High Court. This is not the only instance of the WB government buckling under public pressure. It has allowed pre-1993 buses to be replaced by less expensive 4-cylinder buses. Currently, 2,557 buses and 522 minibuses need to be replaced. ■ 18 / Commercial Vehicle / september 2009
Apollo partners with M&M for farm equipment radialisation
pollo has bagged M&M’s mandate to supply its Farm King radials for the Mahindra Arjun tractor. This makes Apollo the first supplier of radials as OE fitment. Buoyed by this development, Apollo, the largest producer of radials for the farm equipment sector is set to boost production starting from October. The key benefit to the end-user is ultimately, a great comfort in driving and maneuvering. As farm equipment, plying in rugged terrain do not have suspension systems, radial tyres will help ease driving discomfort for the farmer. The other added benefits relative to cross ply farm tyres, include greater fuel economy, higher tyre life and low soil compaction. Radialisation of farm equipments has been growing at a good pace since the launch of the Mahindra’s Farm King radial range in 2001. Farmers in advanced agricultural states such as Punjab, Andhra Pradesh, Haryana
and Maharashtra have been pioneers in adopting radials. Radialisation in Indian farm equipment has been growing at 20 percent, albeit on a low base, considering that the current extent of radialisation is only 2-3 percent. Going good Apollo Tyres is also increasing overall production levels from 800 tonnes a day to 1,000 tonnes a day. This is because; the company expects an 11 percent improvement in sales this year. The consolidated
sales for Apollo including the Dutch and the South African markets posted an annual 20 percent rise from the previous levels of Rs 4,984 crore. Currently, the company has an operating margin of 16.5 percent and a net margin of 8 percent. Apollo’s Indian profits has also risen to Rs 94.67 crore in the first quarter of this fiscal from Rs 48.63 crore last year. Meanwhile, the combined effect of revival in the auto sector, lower interest rates and input costs has led Apollo’s competitor JK Tyre to report a 100 percent increase in net quarterly margins too. ■
Aftermarket nets highly improved margins for MRF
RF Ltd has seen a massive increase in its margins on account of a greater focus on the aftermarket and a decline in input costs. The company reported a net profit of Rs 125 crore on sales of Rs 1,433 crore, which is noticeably higher than the previous year’s corresponding quarter when a net profit of just Rs 31.86 crore on sales of Rs 1,273 crore was recorded. MRF officials were quick to clarify that the focus on the aftermarket was not at the expense of the OEM segment. Sales to OEMs have remained flat on account of a decline in the production of tyres for that segment. Two of MRF’s factories - in Arakkonam and Puducherry had encountered a lockout due to labor issues during April - May. Production at these sites is now getting back to normal. Low input costs have also contributed to the buoyant first quarter. The prices of natural rubber, which accounts for as much as 60 percent of tyre manufacturing costs, had fallen by around 17 percent in the April-June period. ■
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Caterpillar stoops to conquer in China
Butadiene price increase threatens tyre makers
he price of key feeder material Butadiene (BD) has been rising fast, worrying the tyre industry. Butadiene is the feedstock for SBR, which is Styrene Butadiene Rubber, a key ingredient in the manufacture of tyres. BD prices have hit as high as USD 1,000-1,050 per tonne, CFR (Cost and Freight) Northeast Asia (NE) – a rise of USD 200 per tonne. These prices are being closely watched by SBR producers, whose profit margins are coming under severe strain. They need a margin of USD 400-500 per tonne to have a profitable business. The situation is further worsened, since SBR makers have already signed deals with tyre makers to supply SBR at USD 1,300-1,400 per tonne for the third quarter. Therefore, even while, some SBR makers have tried to raise prices, others have opted for a shutdown. In any case, tyre makers are surely bracing for SBR price increases in the fourth quarter. This issue could just postpone whatever mild signs of recovery have been seen so far in the tyre industry. Although Asian tyre makers are not as badly hit as their counterparts in Europe and the US, there is an impact nevertheless. Tyre major Goodyear has announced that it will shut down its Philippines plant entirely. That implies a job loss for 500 people. European and US tyre producers such as Continental and Michelin have already shut down their factories, and laid off employees. ■
20 / Commercial Vehicle / september 2009
WABCO to supply OptiDrive AMTs to ALL
abco Holidings Inc, a global tier 1 supplier of braking and transmission systems to the CV industry has signed an agreement with Ashok Leyland, for the development of Transmission Automation Technology and a long term commitment for supply of the OptiDrive Automated Manual Transmission systems from 2010 to 2015. Ashok Leyland will be the first among Indian OEMs to to adopt WABCO’s OptiDrive System in volume production. This system is also targeted at other emerging countries such as Brazil, Russia and China. The OptiDrive modular AMT system supplied by WABCO’s arm - WABCO Vehicle Control Systems’ can change gears in fully automatic mode or as initiated by the driver.By effectively shifting gears at the most efficient speed, the technology yields significant fuel consumption reduction. WABCO claims that the system requires less maintenance and therefore has reduced downtime and greater operating efficiency. Driver comfort also increases along with improved vehicle controls and enhanced safety. The USD 2.6 billion WABCO has been a pioneer in several ways. As early as 1986, the 140-year old company introduced its first electronic transmission for commercial vehicles, and it continues to be at the helm of transmission automation technology. ‘This agreement with ALL is WABCO’s first new major contract since taking control over WABCO -TVS two months ago, thus anchoring our dominance in the local markets as well’ said P.Kanniappan, Director, WABCO TVS, further stressing on WABCO’s success in cross-border connectivity between teams from manufacturing to customer support. ■
onstruction equipment company Caterpillar Inc is moving away from its conventional strategy of selling high-end CAT branded products in developing countries. For instance, in China, it is targeting the mid-price segment with its SEM branded range. The brand accrued to Caterpillar, post its acquisition of Shandong Engineering Machinery about 18 months ago. There are indications that Caterpillar may get into other alliances or acquisitions to boost its presence in China. What is interesting is that the company may locally make some of the older models of motor graders, wheel loaders and bulldozers. These machines, branded under names other than CAT will be priced aggressively to take on Chinese competition in the mid-price segment. These developments are important for Caterpillar, since experts predict that, a decade from now, developing markets will account for 70 percent of construction equipment sales – roughly double the 37 percent currently. Caterpillar has been moving in the right direction. Business from the developing world has doubled from 7 percent in 2005 to 15 percent in 2008.
China itself constitutes 27 percent of global construction equipment sales. The thinking is that if a construction equipment company has to claim global leadership, it has to first lead the market in China. Caterpillar’s sales and revenue from China totaled USD 2.6 billion in 2008, or 5 percent of total sales. The company wants annual sales from China to reach USD 4.2 billion by the end of 2012. Caterpillar hopes that as its mid-range products gain in popularity and scale, customers will graduate to its CAT branded higher end products. But, this is easier said than done. China already has many manufacturers who specialise in the mid-range space. Secondly, there is a danger that customers may take far too long to migrate to the CAT brand. Until that happens, Caterpillar may continue to suffer lower margins. Amidst this uncertainty, the company may draw some comfort from the fact that as developing countries strive to build their infrastructure; they may need to go for high performing machines as a matter of necessity. ■
Bajaj Auto’s LCV plans back on track
ajaj Auto Ltd, has fine tuned its plans to produce mini-trucks. The buzz is that as opposed to a 3.5 tonner being talked about earlier, the LCV offering will be a 1-tonner, more in line with products like the Tata Ace and Piaggio Ape Truk. This product will have a few tweaks on the originally
proposed design in order to be relevant to market needs. The location of the plant and investments is however yet to be decided. Sources say, that production may not happen at the current Chakan Facility. The product may be rolled out by next fiscal. ■ september 2009 / Commercial Vehicle / 21
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JCB predicts mixed bag
ndia accounts for a huge 33 percent of production volume for JCB, the global construction industry giant. India also boasts of the biggest backhoe loader plant in the world, near Delhi. JCB sees a month on month increase in this market, on the back of favourable election results. Brazil, another market, which has not been very stable for JCB in the past, has been surprisingly good for JCB. And then, China a smaller market for JCB’s backhoes has also been faring well on the back of the government’s stimulus packages. But, JCB is not so sure of the efficacy of the implementation of the stimulus packages across US and Europe. Excluding India, JCB’s volumes have come down by an overall 60 percent since the start of this fiscal. JCB officials state that these markets are still reeling from the economic crisis. What may come as some relief for JCB is that markets in Russia and the Middle East may revive soon. Yet, complete recovery may not yet be in sight. This may well be a
‘W’ shaped slowdown. Governments have already spent a huge amount on economic stimulus packages to fuel the current glimmer of recovery. But this spending will
have to stop at some time. Recovery will continue, only if the private sector can take over the spending part. Else, we may be in for another dip. ■
Volvo opens new dealership in Chandrapur
ntending to build on its 70 percent market share in India for premium European trucks, Volvo Trucks India, has inaugurated a sales and service dealership at Chandrapur. The aim is to provide aftermarket support to the population of 200 Volvo tippers that is set to grow rapidly around the Western Coalfields Limited. The Dealership is spread across 5,000 sq ft
22 / Commercial Vehicle / september 2009
acreage with a 2,000 sq ft warehouse. There are air conditioned aggregate overhaul rooms and four workshop bays. Additional features include inspection
pits,washing ramps and tooling rooms. In fact, there are conference rooms, customer lounges , resting bays for technicians and drivers, and a cafeteria as well. In addition to this, the dealerships will have an effluent treatment plant as well as a rain water harvesting facility. ‘Volvo trucks are highperformance machines and normally utilized as long as 20 hours in a day. We are confident that we will not give anything but more than 90 percent average machine uptime. Our dealership in Chandrapur will be a motivation for our customers from across the country who participate in Western Coalfields Limited (WCL) contracts. In addition to taking firm steps in network expansion we are heavily focusing on our soft offerings aimed at making a positive difference in the Volvo truck Customer’s operational capabilities,’ said Somnath Bhattacharjee, President, Volvo Trucks India. ■
Eicher Engg. gets into supply of gearboxes to US tractor makers
icher Engineering Components, part of VE Commercial Vehicles has started exporting gearboxes to tractor manufacturers in the US. In fact, Eicher Engineering has bagged an order from 15 US companies, one each in Europe and Africa as well as six countries in South-Asia. The gearboxes will be shipped to tractor manufacturers from Eicher’s Pithampur SEZ plant. The facility has a capacity to produce 5,000 gearboxes monthly. These can be split into 3,000 units of 15 kg gearboxes, 1,500 gearboxes below 150 kg and 500 gearboxes exceeding 150 kg. The factory’s 10-acre sprawl indicates that, it can easily be scaled up by 9 times to meet future needs. The plant was commissioned in July 09. Eicher Engineering also has a plant near Thane, (near Mumbai) that makes gears for the domestic tractor and CV markets. The company’s Dewas facility in Madhya Pradesh makes transmission gears
and shafts. Speaking about numbers, the company expects an annual revenue of Rs 35-40 crore from this business, and to double it
as soon as markets come back on track, globally. Currently, however, exports to the US and European market are down 70 percent. ■
Timken ties up with Spearage for industrial oil seals
imken Company, t h e world’s leading friction management and power transmission products manufacturer has forged an agreement with Spareage India to offer oil seals to the industrial sector. Key sectors where the seals will be offered include: cement, metals, mining, energy and geardrive sectors. At its regional headquarters in Bangalore,
Ajay Dass, Managing Director, Timken India Ltd, said, ‘Introducing this range of oil seals is part of our strategy to bring a more complete line of friction management products to the industrial distribution channel. Customers have come to rely on Timken’s expertise in managing friction in a wide array of applications, and we are continually providing new products and services to help them improve their performance.’ About the agreement, J.S. Sabhar-
wal, Director, Spareage Seals Limited, said, ‘Being specialists in our respective fields, this collaboration will bring greater productivity and efficiency to our end customers.’ The product range extends from the smallest size of seals to those almost 4 meter diameter for critical and non-critical mobile applications. Additionally, Timken sells large and small bore seals, as well as metric and high temperature varieties. Timken also provides after market support to all their products as in installation, deter seal and bearing damage as well as in the prevention premature seal leakages. Timken, with a sales value of USD 5.7 Billion is present in 26 countries worldwide. ■ september 2009 / Commercial Vehicle / 23
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BFL to focus on non-auto biz
orging major, Bharat Forge is looking at the non-auto business to provide it relief from the global slowdown in the auto industry. It’s Scottish and US arms have been badly hit. Bharat Forge Scottish Stampings Ltd and Bharat Forge America Inc, are having to rely on workforce reduction, cost control, efficient working capital management and new product development to stay afloat. While supporting these measures, Bharat Forge has also announced a pause on capital expenditure this year. Considering that revenues rose by just 2.6 percent to Rs 4,744 crore and profits fell 81 percent, to only Rs 58 crore. This has prompted Bharat Forge to target upping its non-auto business from 21 percent currently to 40 percent by 2011-12. In line with this strategy, BFL has formed joint ventures with: NTPC Ltd for balance of plant for the power sector; Alstom to make turbines and generators for sub- and super-critical power plants; and, Areva to manufacture heavy forgings for power sector applications. The company’s Mundhwa and Baramati plants are set to start full fledged production of these components very soon. What has led to the delay is that fact that these plants started operations, just as the slowdown started. Therefore, expansion is dependent on the right arriving to the table in the form new clients. The thrust into the non-auto space represents the third phase for BFL. In the 1990s, it began an aggressive drive towards exports as the first wave, and then in the second, just as the global auto industry was booming, the company went on an overseas acquisition spree. BFL now has four plants in India, three in Germany, two in China, and one each in Sweden, Scotland and the US. ■ 24 / Commercial Vehicle / september 2009
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Pricol’s relocation hurting local suppliers
uto component maker Pricol’s move to relocate part of its production out of Coimbatore has raised the hackles of the local vendor community. Almost 75 percent of the local vendors count the Rs 614 crore Pricol as their sole customer. In all, the 130 vendors directly employ about 3,500 workers with the addition of 1,500 indirect employees. The Tamil Nadu State Government earned Rs 16 crore last year as sales tax from them. But for Pricol, which has traditionally had its home base in Coimbatore, acquiring supplies made here and transporting them to its plants in Pune and Gurgaon is becoming logistically tenable – more so in these trying times. As a result, the company has moved 20 percent of its local supplies to other locations over the last two years. ■
Peugeot to decide India entry by year-end
rance, PSA Peugeot Citroen will decide by the end of the year as to whether it wants to enter India. The No.2 car maker in Europe is evaluating whether it makes sense to set up a plant here. Sourcing possibilities are on the horizon too. At one stage, Peugeot’s entry into India was almost certain. But, the global slowdown has forced a rethink. ■
Chinese public transport ahead of Indian counterpart
comparison at cities in China and India reveal a large number of differences. India and China are comparable in urbanisation as nearly 70 percent of the GDP of China comes from its cities, while for India, it is nearly 50 percent. The urban density i.e. persons per hectare in China however is much lower at 146 people, while for Indian cities such as Mumbai and Chennai, it is cramped as 204 people per hectare. There are a big number of disparities between the two countries’ urban lives. Expressways which greatly increase the speed of travel and cut down on travel time are a tremendous asset to any nation. While China boasts of a total length of 60,300 km of expressways, at par with the USA and Europe by the end of 2008, the number is very small in India. India only has a length of 66,590 km of national highways out of a total of 2,24,352 km of roads. Kachcha roads constitute a considerable 27 percent of the total figure. Public transport is tremendously cheaper and efficient in China, as occupancy rates are 53 persons on an average against
38 percent in Indian cities like Mumbai. The reason: affordable and frequent public transport connecting various parts of cities providing convenient connectivity. One yuan of money can take you on a city bus from any corner to another in Beijing. Barring the local train service of Mumbai, the Delhi Metro and BMTC Bangalore’s cheap-ticket initiatives, there is no cheap and effective public transport in India. With nearly 50 percent of people living in unauthorised settlements, an average Indian spends as much as 20 to 30 percent of family income on just the daily commute.
Rural development is better in China, as the funds are available at decent levels. Chinese local government revenues constitute 6 percent of the GDP while in USA and Canada, it is eight and nine percent respectively. India, on the other hand has only 0.75 percent GDP coming from local governments. In addition, to this, Indian municipal governance is bogged down by archaic laws and inefficient funding, almost absent from private hands. As Indian cities struggle with drawing funds for economic planning, Chinese cities are way ahead, as they compete with each other in attracting investments. An example of the healthy competition between Shenzhen and Guangzhou was pointed out during the Urban Development Session at the Shanghai Forum 2009. Ahmedabad in India has to a certain extent tapped the capital market for long-term funds. Barring this exception however, there has not been any significant initiatives by Indian cities in this front. The government ought to learn from Chinese efficiency, and channelise public money more efficiently in renewing urban life. Indian cities need more planning and laws as restrictions in rural-urban migration should help urban governance more efficiently. China, under its Hukuo system, has achieved good strides in restricting migration from rural areas to cities by limiting benefits to the migrants. ■
Governance and development Chinese governmental initiatives have proven to be much efficient than those in India. Efficient governance, albeit sprinkled with corruption has proven to be the key factor in China’s development. september 2009 / Commercial Vehicle / 25
need of the hour
janta roadways / need of the hour
Janta Roadways seeks hub and spoke model
up 10,000 kilometers, thus transporting more cars at a lower cost. We are ready to invest Rs 50 crore in such a yard, if such an initiative were to crystallise. We are in talks with Tata Motors, Maruti and Hyundai regarding this,’ reveals Rajinder Singh. Besides the challenges of logistics, car transporters like Janta Roadways have to contend with the dearth of qualified drivers and the harassment by corrupt officials. ‘Inter-state laws and all our systems are still archaic and shout for change. Moreover, today a driver’s salary is disproportionate to his efforts. Naturally, talent inflow has continued to dwindle’, feels Rajinder.
Rajinder Singh says that in countries like Germany, there are common car warehousing yards at intervals of 500-600 km.
Car transportation logistics is not necessarily as easy as it seems. Janta Roadways has a few ideas to help smoothen the process.
Story Ramkumar Ramaswamy hennai-based Janta Roadways Ltd has been going strong in the car transportation arena since the early 1980s. Vehicle tranportation happened with a contract from TAFE to deliver tractors to North India in 1982. A tie-up with Maruti ABT in 1984-85 gave Janta their first ever
Operating since the 1980s, Janta Roadways has a fleet of 167 trucks.
26 / Commercial Vehicle / September 2009
long term contract to transport Maruti cars across India. Janta benefited from the arrival of Hyundai on the scene in Chennai, sometime in 1998. The company which transports 40,000 cars per month, relying on a fleet of 167 trucks is ready to get a move on now. ‘We foresee a very big future for car transportation in a few years from now.
What was a 10,000 car transportation industry 25 years ago, now handles as many as a million cars across the length and breadth of the country each year. A total of 2 million cars are expected to be produced in 2012-13, which calls for a huge upgradation of current capacity. A joint involvement by the car makers and transporters will be very essential to meet this demand’
says Rajinder Singh, MD, Janta Roadways Pvt Ltd. Janta’s key clients include Maruti Suzuki, Hyundai Motors, Toyota, Tata Motors and Ford Motors. But in order for car transport to reach its logical potential, a few hurdles need to be There is a high imbalance in geographical production of cars in India. More than half of the cars come from a single OEM in north India, Maruti, while Hyundai does a sizeable number by itself in the South. This means, car carriers do not get adequate return loads. With, India’s NorthSouth span being close to 3,000 kms this scenario is unviable. Waiting times for transporters can be as long as 20-25 days. Rajinder Singh has a few ideas to remedy this situation. ‘In Europe and Singapore, there are common warehousing yards or hubs every 500- 600 km in countries as Germany, where the cars are parked in transit. This helps transporters to take in as many as they can, helping improve fleet utilisation. A visit to such a facility at Dusseldorf in Germany was an enriching experience for me. As many as 40,000 cars were parked collectively and effectively managed in the hub. The placement of the hubs in close proximity to the railway line has also been of advantage, the transporters get access to multi-modal transport op-
tions,’ Rajinder Singh explains. If the hub and spoke model comes up, Rajinder feels, with the current capacity, his company can carry 50 percent more cars than now, and with a nominal 25 percent addition in fleet strength, the company can double carrying capacity. India does not wholly lack such initiatives though. Maruti has already set up its own yard at Tumkur in Karnataka. More importantly, warehouses in India should emerge by a collective understanding among OEMs and not being brand specific set-ups. ‘Today, a Delhi-Chennai round trip takes almost 25 days, covering 6,000 kilometres per month. If a hub and spoke model comes up, we can definitely notch
The fleet The first batch of 28 car carriers run by Janta was built on Ashok Leyland platform in Chennai, with local expertise. The current strength is 167 vehicles, which includes 79 rigid trucks and 87 tractor trailers. The vehicles are built on Tata 1512, 1613, 1616, 3516 and 3015 models. There are also 10 Eicher 3025 trucks. While a rigid truck car carrier costs Rs 15-18 lakh, a tractor trailer is worth Rs 25 lakh. The car carriers were initially open top. But, as orders from the likes of Hyundai started flowing in, closed construction started in 1998 by using the services of established body builders like PL Haulwell. Generally, each OEM has its own specifications for car carriers, and hence, one vehicle may not suit the other, before making a lot of design changes to carry a different model. Hence, the OEMs typically sign contracts on long term, scrutinised and reviewed comprehensively every year. A car carrier typically carries 8-10 cars.
Janta Roadways transports 40,000 cars per month.
Each car carrier typically carries 8-10 cars.
September 2009 / Commercial Vehicle / 27
need of the hour / janta roadways
The design of car carriers is not standardised. Recently, the SIAM and ARAI have been taking initiatives to drive this process.
‘We carry cars across the country except the North Eastern region. Our vehicles have evolved continuously along the way. Improvements such as pperforated floors, high-grade material usage and the overall moving over to multi-axle platforms such as the Eicher 3025 from the commonly used 1613 platforms has notched up security to very high levels. With a heavy 10 tyre vehicle as that built on Eicher 3025, toppling of cargo in case of accidents is now ruled out. Quality, safety and respon-
sibility are our watchwords,’ explains fully owned call centre, contingency team Singh proudly. and periodically trained and skilled drivCar carriers dont have comprehensive ers. All the vehicles are fitted with GPS design standardisation laws in India when systems to help provide fullproof fleetcompared with advanced countries. And, tracking assurance to customers. with OEMs specifying designs that are best Car transportation definitely demands suited to their products, car carriers are a more attention in a booming economy as long way from being standardised. Only India. With common warehousing, better now are the SIAM (Society of Indian Au- understanding from government officials tomobile Manufacturers) and ARAI (Au- and standardisation of safety norms and tomotive Research Association of India) designs will make the car buyer definitely taking up initiatives. But some proposals smile a little longer. ■ which have already submitted to the government are still pending. Rajinder Singh sees a big future for Tow Bar trailers that are generally used in the western countries. ’Such concepts are extremely important, if we are to carry more cars, faster and in a more cost–effective manner,’ he states. Janta has other credits on their list too. These include a Any example of multi-level car A curtain sider car-carrying trailer. carriers in Europe. robust ERP system, a dedicated
28 / Commercial Vehicle / September 2009
gna / assured moves
The use of robotics allows for very precise operations.
GNA Enterprises ‘axle’rates There has been a lull in the recent past. But things are looking quite different now, thanks to an exciting product pipeline. Story Ahfaaz Khan and Sridhar Chari Gurinder Singh says that with the help of the new technologies, the yield of the products can be increased to 90 percent.
NA Enterprises Limited will introduce many new components including king pins, output shafts, drive shafts, half shafts and various powertrain components and sub assemblies by next year’s Auto Expo. The company has been working on these products since the end of last year. These components will be directed at both the commercial vehicle and trailer market. Some of them will be manufactured using the new warm forging technology. The company has installed a special imported press for this purpose at one of its plant in Jamalpur-Phagwara. ‘We anticipate that the manufacturers will be unveiling new set of vehicles and we are also upgrading ourselves accordingly with the introduction of new technology like warm forging,’ comments Gurinder Singh, Joint Managing Director, GNA Enterprises Limited. GNA Enterprises supplies its axle shafts to a number of global and domestic CV manufacturers including 30 / Commercial Vehicle / September 2009
tier I suppliers who in turn supply axles to CV majors. The company has also improvised on its cold extrusion technology recently. ‘With the introduction of new set up yield of our products can be improved to 90 percent’ remarks Singh. Currently exports account for more than 50 percent of GNAE’s total production. In fact our Jamalpur-Phagwara is a
This level of precision is necessary, since exports account for more than 50 percent of GNAE’s turnover.
dedicated export oriented plant set up with an investment of Rs 130 crore. The plant has state of art forging and machining setup and is supplying axle shafts along with others to European and South American clients. However as the market tumbled, the supplies to European majors also registered a downturn. ‘Those were challenging times
for us. During these testing times we capitalise on development of new components specially those components that are not subject to cyclic ups and down common in CVs. Also we enhanced training hours of our staff to improve on skills and optimisation of input costs’ narrates Singh. However recent months have seen some improvement in the global and domestic demand. This has resulted in sales improvement in many of company’s sale territories in Europe and West Asia. The company has also bagged an order to supply its rear axle shafts to major tier-1 company for its South America operations. ‘Once we start executing this order, the production will increase and will basically reach 85 percent of our earlier levels’ says Singh. More focus on domestic market Going further, GNAE is also plans to focus
in a strong manner to the domestic market. ‘With our new press we can launch smaller warm forged components that are ready to be used,’ says Singh. The company currently manufactures rear axle shafts for the very popular Tata Ace, Scorpio, Xylo, Safari and Innova besides supplying to other CV manufacturer for their HCV to LCV applications. It has already supplied a rear axle shafts for the Tata Motors’ World Truck range. GNAE is also on board for the Mahindra-Navistar truck project. The company has developed Spindles and Drive Shafts for TATA’s which it expects will bring in substantial volumes. The company develops components for off-highway equipments in India. Earlier, we had no capacity to accommodate bigger flanges, but with the installation of our new press we have the capacity to accommodate bigger flanges that would be
necessary to make shafts for the off-road segment,’ informs Singh. Talks are also underway with other construction equipment manufacturers. The company feels that it global portfolio will enable it to cater to all future vehicles that will be introduced in India. ‘We have developed around 350 types of axles shafts and producing currently close to 2,00,000 units a month. We have been supplying to customers in Europe and thereby we already have products ready for most of the new generation vehicles that are being launched in India,’ comments Singh. R&D Centre GNA Enterprises is also setting up an R&D centre within the walls of its facility at Jamalpur-Phagwara. Apart from developing new designs, the centre is also equipped to perform torque testing and September 2009 / Commercial Vehicle / 31
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Another example of GNAEâ€™s exacting technology and testing regimen.
fatigue testing of the products manufactured here. â€˜In the long run, we will not be able to compete on just the basis of costs. Hence in order to retain our advantage, we would need to offer one stop solution right from designing to testing,â€™ Singh adds. The defence market holds a big potential for GNAE. The company is developing a 70 kg axle for this segment. Singh expects the defence segment in India to contribute 5 percent of its total turnover over the next 32 / Commercial Vehicle / September 2009
two years. Another interesting development for GNAE on the domestic front is the entry into the aftermarket with a new product portfolio hitherto. â€˜The company is developing new components and currently we are testing the products and hope to start the supply very soonâ€™ comments Singh. The introduction of these components into the Indian aftermarket will also help GNAE to compensate for its absence in the
Abundant brainstorming taking place in advance of GNARâ€™s entry into the domestic aftermarket
Â‚ P PRB