AUTO COMPONENTS INDIA JULY 2021 by Next Gen Publishing Pvt Ltd

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UPFRONT EXCLUSIVE

Vol 8 Issue 05

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Chu Tsang Chih (Kurachi), Director, Maxxis India

VOICE OF THE AUTOMOTIVE SUPPLIERS

VALEO FACINGS REACH NEW MARKETS

TYRES AND BRAKING #Trending

Brakes as emitters Of Particulate matter

International BremBo Future oF moBility @autocomponentsindiaofficial

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Goodyear Completes aCquisition oF Cooper www.autocomponentsindia.com

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Cover Story Valeo Facings Reach New Markets

Valeo Friction Materials India has hit the bull’s eye with its export strategy. Ashish Bhatia looks at the all round efforts undertaken to reach new markets despite a raging pandemic.

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Index of Industrial Production April 2021 RBI Bi-monthly monetary policy Women for manufacturing ATMA rubber plantation drive E-100 project marks ‘World Environment Day’ h2e hydrogen fuel-cell three-wheeler Wipro partners FEV Foreign Trade Steel turns twice as dearer Mohan Kumar passed away Incentives to promote emobility Ramesh Suri passed away

13 Upfront

l Taking Measured Steps For Growth

20 Special Reads

l The New Materials That Are Shaping the

Future of Mobility

24 #Trending

l Bharat Forge Outlook

l Brakes As Emitters Of Particulate Matter

30 International

l Brembo Future Of Mobility l NRS Brake Pads

l Continental Tech Talks: The Automotive Software l Goodyear Completes Acquisition Of Cooper

41 #Trendsmap

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Sinusoidal

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608, Trade World, 6th floor, C wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India. Tel +91 9321546598, Email us at a.bhatia@nextgenpublishing.net Executive Editor Ashish Bhatia Editorial Advisory Board H. S. Billimoria, Aspi Bhathena Head - Design & Production Ravi Parmar Correspondent: Deepti Thore Asst Art Director Ajit Manjrekar Production Supervisor Dinesh Bhajnik Publisher Marzban Jasoomani Associate Publisher & General Manager (North & East) Ellora Dasgupta General Manager – South Girish Shet Deputy General Manager – North & East Chanchal Arora (Delhi) Regional Marketing Manager Salma Jabbar (Chennai) Marketing Manager Minocher Parakh (Mumbai) Manager Circulation - North and East Kapil Kaushik (Delhi) Subscription Supervisor Sachin Kelkar Tel +91 9321546598 Apple Newsstand & Magzter Queries: help@magzter.com Territory Sales Incharge (Circulation) Srinivas Gangula (Hyderabad) Cell +91 09000555756 Territory Sales Incharge (Circulation) Vidyasagar Gupta (Kolkata) Mob: 09804085683 REGIONAL MARKETING OFFICES Next Gen Publishing Pvt. Ltd. 608, Trade World, 6th floor, C wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India, Mumbai -400013. Tel +91 22 9321546598 26 B, First Floor, Okhla Industrial Estate, Okhla Phase III, New Delhi - 110020, India Tel +91 11 42346600/78, Fax +91 11 42346679 Unit No:509, 5th Floor, ‘B’ wing, Mittal Towers, MG Road, Bengaluru - 560001, India Tel +91 080 66110116/17, Fax +91 80 41472574 Cenetoph Elite, No.5, Cenetoph 1st street, Teynampet, Chennai - 600018, India Tel +91 044 421-08-421/044 421-75-421 Devendra Mehta - Mob No.- 09714913234 Ahmedabad S.No.261/G.L.R.No.5, East Street,Camp Pune - 411001. Tel + 91 20 26830465

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With OEMs gradually resuming operations post the second wave has shown signs of weakening, inventory turnover will assume greater significance.

Time is the biggest healer. Albeit, it is taking longer than expected by many at first, and then the second time around! A testimony to this is businesses seeing the progress of their operations akin to a sinusoidal wave over the last 15 months. As the sine wave, there is a continual need to see through the period of lows and highs, troughs and crests, and the lateral movements in totality as one business cycle. Keeping in mind that the Sine waves repeat, themselves, Original Equipment Manufacturers (OEMs), tier suppliers and ancillaries, the stakeholders of the aftermarket are all by now accustomed to a crest after every trough and vice versa. No wonder then that the sectoral outlooks today have moved beyond the traditional definitions of short term to long term. Time lines are considerably short sized and considerations to set business goals are more realistic. The erstwhile five-year, long-term outlook of a business is now two to three years that too where there is a degree of healthy optimism. This was the erstwhile medium term. With OEMs gradually resuming operations post the second wave has shown signs of weakening, inventory turnover will assume greater significance. Until then, expect manufacturers to produce at lower than capacity. With Q1FY2022 expected to report a 70 per cent dip in operational profit as per ballpark estimates of rating agencies, expect the rise in commodity prices to be passed on to the vehicle manufacturers with a three to six-month lag. OEMs, in turn, would be forced to pass it on to the end consumer. The vicious cycle will come to an end only with costs cooling down eventually and when the supply and demand curves cross. Ashish Bhatia Executive Editor | a.bhatia@nextgenpublishing.net /autocomponentsindiaofficial /autocomponentsindia ACI Mag

Views and opinions expressed in the magazine are not necessarily those of Next Gen Publishing Pvt. Ltd. Next Gen Publishing Pvt. Ltd. does not take responsibility for returning unsolicited manuscripts, photographs or other material. All material published in Auto Components India is copyright and no part of the magazine may be reproduced in part or full without the express prior written permission of the publisher Printed by Marzban Jasoomani Next Gen Publishing Pvt. Ltd., 608, Trade World, 6th floor, C wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India.. Published by Marzban Jasoomani on behalf of Next Gen Publishing Pvt. Ltd., 608, Trade World, 6th floor, C wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India. Printed at Spring Graphics, 215 & 238, Shah & Nahar Industrial Estate, Sun Mill Compund, Lower Parel (West), Mumbai 400013, India. Published at Next Gen Publishing Pvt. Ltd., 608, Trade World, 6th floor, C wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013, India.

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All readers are recommended to make their own independent enquiries before sending money, incurring expenses or entering into commitments in relation to any advertisement appearing in the publication. Auto Components India does not vouch for any claims made by advertisers for their products and services. The editor, publisher, printer and employees of the publication shall not be held liable for any consequence in the events of such claims not being honoured by the advertisers. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only. Editor Ashish Bhatia

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Index of Industrial Production April 2021 For the month of April 2021, the quick estimates of Index of Industrial Production (IIP) with base 201112 stand at 126.6. The IIP for the manufacturing sector for the month of April 2021 stands at 125.1. It must be noted that the quick estimates will undergo revision in subsequent releases as per the revision policy of IIP. The use-

based classification estimates the indices to be at 126.7 for primary Goods, 82.4 for capital goods, and 137.9 for intermediate goods. Further, the indices for consumer durables and consumer nondurables stand at 112.4 and 142.3 respectively. The release drew attention to the nationwide lock down and other measures implemented to restrict the

spread of Covid-19 pandemic from the end of March 2020 leading to a majority of the establishments not operating in April 2020 and consequently, many units reporting ‘Nil’ production. It is known to have affected comparison of the indices for the months of April 2020 and April 2021. The high estimate is said to be a derivative of the low-base effect.

RBI Bi-monthly Monetary Policy In the June 04, 2021 announcement, Reserve Bank of India (RBI) Governor Shaktikanta Das urged the people at large to not be overwhelmed by the current situation but resolve to collectively overcome it. The Governor informed of the repo rate left unchanged at four per cent and the reverse repo rate fixed at 3.35 per cent.

AUTO COMPONENTS INDIA n JULY 2021

The RBI projection for GDP in FY2022 is 9.5 per cent and it expects inflation to hover around the 5.1 per cent mark. A special liquidity package of Rs.16,000 crore was announced for SIDBI for lending to the SME. Under resolution 2.0, banks are permitted to restructure loans to the MSME, and non-MSME up to Rs.50 crore from Rs.25 crore.

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Women for manufacturing Continental’s “Women for Manufacturing,” initiative is aimed at empowering and supporting women to take up a career in manufacturing through various skill development programs. Deemed to be historically stereotyped as unsuitable for women, and said to have over the years resulted in an under-representation of women in this field, as per the Continental study, a lack of awareness, the sheer breadth of manufacturing across different industries, limited access to skill development programs are among factors that need to change. With the CSR initiative, Continental aims to nurture and inspire girls and women to better understand the industry through access to resources and learning. It aims to convince them to consider manufacturing as a strong career option. Stated Rainer Hetzer, Head of Human Relations Autonomous Mobility and Safety, and HR sponsor for Continental India, “At Continental, we are persistently working to ensure gender parity at the workplace, especially in areas underrepresented by women talent. Focused measures and topics including learning initiatives, sensitising programs, mentorship, leadership development programs, and equal pay

scales are in place for women across different levels.” “Now is the time to apply the same goal for the larger society.,” he expressed. “Through the women for manufacturing program, we aim to create a sustainable ecosystem of a skilled women workforce, creating more opportunities within the industry,” he mentioned. Prashanth Doreswamy, Head of Continental India, and Managing Director Continental Automotive India said, “Manufacturing continues to be a high growth sector in India, and we

need to build the right resource pool to match such an ambitious intent. Women for manufacturing program is Continental’s commitment to prepare and mobilise untapped women talent, towards achieving a more genderbalanced manufacturing society.” Overlapping with Continental’s 150 year celebrations since the company was first established in 1871, the company has zeroed in on the Centum Foundation, Continental’s NGO partner to implement the multiyear program.

ATMA rubber plantation drive Automotive Tyre Manufacturers Association (ATMA) will undertake rubber plantation on about two lakh hectares in North East India with a total capital outlay of approximately Rs.1,100 crore. Said to be aimed at countering the plateauing of natural rubber production in the state of Kerala, the five year project was envisaged to commence in June 2021 with nearly 10,000 hectares plantation targeted in the first year. It is in WWW.AUTOCOMPONENTSINDIA.COM

keeping with the consideration of the Covid-19 restrictions and availability of plants said to be limited. ATMA is expected to provide financial support of Rs.50,000 per hectare through means like credit-linked schemes and or direct payment for the planting materials. North East reportedly accounts for 23 per cent of the total rubber production in the country. Kerala with an estimated eight per cent deduction over the last decade

accounts for 67 per cent of the total 8.22 lakh hectares of rubber plantation in the country. JULY 2021 n AUTO COMPONENTS INDIA

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E-100 project marks World Environment Day

Wipro partners FEV

Prime Minister Narendra Modi on the occasion of World Environment Day released an expert committee report on the road map for ethanol blending in India 2020-2025. He launched the ambitious project in Pune entailing the production and distribution of ethanol across the country. The Prime Minister spoke of the government’s resolve to meet the target of 20 per cent ethanol blending in petrol by 2025 (previously set to 2030) from approximately 8.5 per cent at present. The country’s ethanol requirement is known to have grown from 38 crore litres in 201314 to 320 crore litres. India, in the coming months is expected to allow ethanol-based flex-fuel engines to power vehicles. Ethanol-compatible components will be required to compensate for the different chemical properties and energy content in ethanol, such as modifications to the fuel pump and fuel injection system.

Information technology, consulting and business process services company, Wipro Ltd., entered into a strategic partnership with German company FEV. A global engineering provider, to jointly develop and market solutions for softwaredefined vehicles, the partnership entails joint development. The two will set up an innovation lab, which will develop automotive use cases, engineer scalable software, electronic architecture and develop system features. The partnership is expected to benefit from the strengths each company brings to the table. It includes advancing individual technical capabilities and research goals apart from the commercialisation of the jointly-developed services and products. Thomas Muller, Chief Technology Officer – Engineering and R&D Services at Wipro Ltd. called out FEV as one of the most respected names in the automotive industry to jointly develop innovative solutions for SDVs. He cited this as a reason for the partnership deemed as a significant step towards strengthening Wipro’s services in the automotive and mobility-related markets, globally.

h2e hydrogen fuel-cell three-wheeler Part of the Pune-based Poonawalla Group, h2e will use its green hydrogen production capability to develop India’s first totally integrated hydrogen fuel cell three-wheeler. The company will use PEM fuel cell and advanced hydrogen cylinders in collaboration with Canada based company ‘Hydrogen in Motion’ under a IndoCanadian program funded by a Public Private Partnership (PPP), GITA, between Technology Development Board, Department of Science and Technology, Government of India and CII. Targeted at inter-city public and goods transport, it is an attempt to integrate h2e’s fuel-cell technology with a low-cost and low pressure (50bar) hydrogen cylinder. Claimed to be a path-breaking technology, developed by Hydrogen in Motion, Canada, it is aimed at bringing out a

AUTO COMPONENTS INDIA n JULY 2021

zero emission, cost competitive public transport vehicle. Sidharth R Mayur, Founder and Managing Director, h2e Power Systems stated, “We are already producing green hydrogen from our electrolysers and now developing a three-wheeler concept for inter-city public and goods transport using it. We are thankful to GITA for their support which we believe is a novel idea, which has the promise to amplify the Zero Emission Vehicle (ZEV) concept in India.” WWW.AUTOCOMPONENTSINDIA.COM

Jammu Udhampur Highway, Jammu, India Jammu Udhampur Highway, Jammu, India Jammu Udhampur Highway, Jammu, India

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Foreign Trade India’s overall exports (Merchandise and Services combined) in AprilMay2021 were valued at USD 98.29 billion. A growth of 56.94 per cent over the same period last year. Overall imports in April-May2021 are estimated to be USD 104.14 billion, a growth of 77.82 per cent over the same period last year. Exports in May 2021 were USD 32.27 billion, as compared to USD 19.05 billion in May 2020, exhibiting a positive growth of 69.35 per cent. In Rupee terms, exports were Rs.2,36,426.16 Crore in May 2021, as compared to Rs.1,44,166.01 Crore in May 2020, registering a positive growth of 64.00 per cent. As compared to May 2019, exports in May 2021 exhibited a positive growth of 8.11 per cent in dollar terms and 13.53 per cent in rupee terms. Petroleum goods, electronic goods and engineering goods are known to be among the commodity groups that have shown a positive growth momentum. Imports in May 2021 were valued at Rs.2,82,453.56 Crore, up by 73.64 per

Steel turns twice as dearer Domestic flat steel prices are reported to have nearly doubled to Rs.72,000 per tonne in June from Rs.38,000 per tonne a year ago. In comparison, long steel prices rose 1.4 times to Rs.57,900 per tonne. The price rally is expected to benefit through the first half of this fiscal year with flat steel prices up 70 per cent since April. As per a CRISIL study, while it is expected that the prices will soften in the second half of the year, on a YoY basis they could hold on to 40-45 per cent higher levels.

AUTO COMPONENTS INDIA n JULY 2021

cent in dollar terms and 68.15 per cent in rupee terms over imports of Rs.1,67,977.68 Crore in May 2020. Imports in May 2021 have registered a negative growth of (-)17.42 per cent in dollar terms and (-)13.28 per cent in rupee terms in comparison to May 2019. Cumulative value of imports for the period April-May 2021 were at Rs. 6,22,958.62 Crore, as against

Rs.2,98,502.76 Crore during the period April-May 2020, registering a positive growth of 114.31 per cent in dollar terms and a positive growth of 108.69 per cent in rupee terms. Taking merchandise and services together, the overall trade deficit for April-May 2021 is estimated to be USD 5.85 Billion as compared to the surplus of USD 4.06 Billion in April-May 2020.

Mohan Kumar passed away Michelin India announced with deep sorrow and profound grief the passing away of Mohan Kumar, Executive Vice President - Michelin India earlier in May 2021 due to Covid-19 related complications. Referring to him as a valued member, the company credited him for establishing the Michelin brand in the country. Calling it an untimely loss to Michelin India and the automotive industry as a whole, Michelin offered strength and solidarity to the company’s employees and their families and also the frontline and health workers among those impacted by the pandemic. WWW.AUTOCOMPONENTSINDIA.COM

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COMPONENTS

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UPFRONT EXCL

USIVE

Vol 8 Issue 05

(Kurachi), Chu Tsang Chih India Director, Maxxis

S VALEO FACING ETS RK A M W E N H C A RE E SUPPLIERS

E AUTOMOTIV

VOICE OF TH

AKING

TYRES AND BR

#Trending

s Brakes as emitter atter Of Particulate m

International BremBo Future oF moBility

Available on

Goodyear Completes aCquisition oF Cooper

Digital Platform

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Incentives to promote emobility Minister for Road Transport & Highways (MoRTH) and Micro, Small and Medium Enterprises (MSME), Nitin Gadkari gave an account of the Government actively working to support e-mobility. The government, according to the Union Minister, is supporting e-mobility in the form of several incentives like the GST exemption, and the FAME II scheme. The Centre, for instance, increased the subsidy on electric two-wheelers. According to the Department of Heavy Industries (DHI) notification, the incentive for electric two-wheelers has been increased to Rs.15,000 per kWh, up by Rs.5,000 compared to the old subsidy. The move has led to two-wheeler manufacturers eligible for the Fame II scheme passing on the incentive to the customers by way of significant price reductions. Addressing the World Conference organised by the BRICS Network University (NU), the minister drew attention to the electric vehicle industry having a huge employment potential given that efforts are being made to establish India as the largest automobile manufacturing hub in the world. “India is a power surplus nation and e-mobility would be the most effective solution to develop import substitute, cost-effective, indigenous,

pollution-free mode of transport,” he said. Speaking highly of the country’s research prowess, the Minister added, “India’s research and academic institutions like ISRO, DRDO and IITs are working hard towards the development of indigenous and lowcost battery technology for electric vehicles.” He urged the stakeholders of the industry to consider the use of lowcost raw material for the batteries and leverage the scrappage of old vehicles. The minister exuded confidence in EVs turning out to be the most affordable means of transport by way of indigenous battery technology, localisation of EV components, and

the potential domestic demand. He also expressed confidence in the mass manufacturing of EVs boosting exports. In another move, MoRTH issued a draft notification, further to amend the Central Motor Vehicles Rules (CMVR), 1989 proposing to exempt Battery Operated Vehicles (BOV) from payment of fees for the purpose of issue or renewal of Registration Certificate (RC) and assignment of the new registration mark. Comments from the general public and all stakeholders have been sought within a period of thirty days from the date of issuance of this draft notification, on May 27, 2021.

Ramesh Suri passes away Ramesh Suri, Co-founder, Promoter and Chairman and more recently the ‘Chief Mentor’ for the Subros Ltd. management passed away earlier in May 2021. Ramesh Suri experienced the auto industry closely for more than 50 years and is credited for shaping up India’s largest automotive air conditioning manufacturing company also among the largest Maruti Suzuki dealerships in the country. He contributed to the industry in his roles as the Chairman of ACMA India, and the Northern Region and Vice Chairman

of CII, Uttar Pradesh State Council. Following the demise, the company recently announced the appointment of Ms Shraddha Suri as the Chairperson and Managing Director of the company. Ms Suri with over two decades of automotive experience holds several important posts including on ACMA’s Executive Committee as the Chairperson of the ACMA Northern region. She is also a member of the CII Manufacturing Council and part of CII’s Northern Regional Council.

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Taking Measured Steps For Growth

In an upfront interaction, Chu Tsang Chih (Kurachi), Director, Maxxis India speaks to Ashish Bhatia on the company taking measured steps for growth.

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AUTO COMPONENTS INDIA n JULY 2021

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Q. How did the company fare in the last fiscal on key metrics including inventory turnover and the operating profit? How did the pandemic induced factors drive the direction that business took? A. Maxxis had achieved the highest Original Equipment (OE) sales after the pandemic with an average sale of over 2.4 lakh tyres. Despite the Covid-19 pandemic, the company had sufficient supply and storage of raw material capacity to consider Original Equipment Manufacturer (OEM) orders smoothly due to the effective forecast methodology. Q. To what extent have you recovered from the negatives of the pandemic marred financial year and do you see green shoots for business development and continuity? A. India is facing the heat of the most unprecedented crisis with the second wave of the Covid-19 pandemic. The automobile industry is going through a tough phase due to restricted production as inventories need to be cleared up first, resulting in a slowdown in the tyre industry in India as well. However, as unlock has begun, the auto sector hopes to bounce back soon. As personal mobility would become the preferred mode for a majority of the commuters, we see green shoots for development of the OEM sector. Also, with the pick-up in the vaccination drive, we are quite optimistic and hopeful for sustainable growth. I feel a planned and concerted action, both on an immediate and medium to long term basis will ensure a quick and sustained recovery and we are following the same for a swift recovery at our end. Q. Where do the plant utilisation levels stand post the second wave of the pandemic? Are you still as firm on commissioning new plants and going ahead with the earmarked investments? A. At Maxxis, the employee’s safety has been prioritised over the business

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"The automobile industry is going through a tough phase due to restricted production as inventories need to be cleared up first, resulting in a slowdown in the tyre industry in India as well." targets. There was a shutdown for a brief period. To ensure the workforce's well-being, we have been strictly conducting employee health check-ups including RT-PCR tests, compulsory vaccinations for all the staff. Also, we have been following all government protocols of social distancing, limited workforce, operating in shifts and other safety measures for our employees. The manufacturing unit operates under the guidelines drawn by the Ministry of Home Affairs and the Gujarat State Government. Currently, employees are working in shifts with a full capacity workforce. We intend to augment production as the situation in the country improves and as the demand unfolds. Also with 20K tyres, the current capacity of our plant, we are more or less able to sustain it even in this crisis period. With Maxxis’ technological prowess and a global legacy of over 50 years, we plan to realise our vision of capturing at least 15 per cent of India’s tyre

"The government policies to promote two-wheeler EVs are opening new frontiers for the tyre industry as well. The overall market is positive in the foreseeable future."

market by 2023. We are committed to the Government’s ‘Make in India’ initiative and our robust manufacturing facility with new-age technology will harness Maxxis group’s production excellence. We are also very keen to set up a new facility for the production of four-wheeler tyres. However, we are currently evaluating the market situation and will navigate our strategy as per the future conditions. Q. What is the near and medium to long term sectoral outlook for the key segments you operate in? Has the outlook been redefined with the threat of recurring waves of the pandemic looming large on Q2FY2022? A. The tyre industry has made a huge capex investment despite Covid-19 considering the restrictions on tyre imports, especially Chinese, and in keeping with the goals aimed at the growing population and the twowheeler demand. The government policies to promote two-wheeler EVs are opening new frontiers for the tyre industry as well. The overall market is positive in the foreseeable future. However, major companies depend on the OEMs supply for revenue. It might WWW.AUTOCOMPONENTSINDIA.COM

Upfront affect the tyre industry in their outlook but not on a large scale. Q. How tricky has inventory management been given the volatility of demand from the OEM exposure perspective? A. The company has faced high volatility in the second wave as compared to the first wave. Certain materials faced a shortage due to lack of goods transportation mechanism. The government was understandably more focused on utilising all resources for the commutation of essential medical supplies. Along with this, many OEMs stopped operations suddenly which created a shortage of storage space for finished goods for a few months. As a result, the company had to redefine its raw material acquisition for that particular period. Moreover, rising crude prices and raw material prices forced manufacturers to hike prices. Q. In H22020 we've heard of a shortage in performance tyres for the aftermarket? How has the company and the industry as a whole tackled the situation to avoid any such recurrence? A. India is one of the world’s fastestgrowing economy and its automotive industry is amongst the largest in the

"The tyre market for OE is projected to grow at a CAGR of 5.48 per cent, from 2016 to 2021, and will reach a market size of Rs.2,074-2,423 billion by 2026." world. The two-wheeler segment is the leader of the Indian automobile market and India is in fact, the biggest and fastest-growing two-wheeler market, both in terms of commuter and performance tyres. On the contrary, we have witnessed a growth in demand for performance tyres from the aftermarket. The tyre market for OE is projected to grow at a CAGR of 5.48 per cent, from 2016 to 2021, and will reach a market size of Rs.2,074-2,423 billion by 2026. We offer a diverse portfolio of products right from commuter segment tyres to performance tyres. Our current portfolio covers approximately 82 per cent of the market’s users’ scenario and we plan to raise it to more than 90 per cent this year. To add to this, our ‘Extramaxx’ tyres is the best in class in the industry and is built using the world's strongest aramid fibre. The same fibre is used for making bulletproof vests, leading to better control and also minimises the chances of punctures. Its dual compound composition minimises rolling resistance while improving stability and tyre life. The various line-up of tyres for sports bike with different applications for road and weather conditions will be introduced in a very short time. We are also going to launch cruiser segment tyres in the near future. We are evaluating the market segments for more product introductions. Q. How are you managing the supply chain be it hand holding or upskilling your partner suppliers and ancillaries? A. As a leading tyre manufacturer, we maintain an agile supply chain

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and predict disruptions. We have collaborated closely with our suppliers and dealers through which we have gained an accelerated momentum. Our process ensures our partners/suppliers have the resistance to overcome challenges. Also, during the pandemic, our focus has been on safety and quality which made certain that our suppliers and partners do not compromise on these factors, especially amidst the second wave of the covid pandemic. Also with end-to-end visibility, Maxxis is positioned to tackle any challenge while continuing to grow and meet the customer demand. Currently, the company has two warehouses catering mainly to OE customers. The company is managing its supply chain by looking over the capacity of warehouses as well as forecasting OE and RE orders. Maxxis India has also achieved 14K tyres per day followed by a 17K per day tyre production rate in a phased manner. We are also aiming to achieve the daily full production capacity in the coming months. With these efforts, Maxxis India has earned 30 per cent revenue from RE and 70 per cent revenue from OE. Q. How have on-ground efficiencies evolved in FY2020-21 as you aim to gain market share in the domestic market and look to break into the top five manufacturers? A. We believe that the Indian market is touted to play a vital role in achieving Maxxis’s global vision to become one of the top five tyre manufacturers in the world by 2026. Maxxis India is targeting to capture a market share of at least 15 per cent of India’s two-wheeler tyre market by 2023. We are aggressively building on diversifying our pan India footprint. We have onboarded around 800 dealers during the last fiscal year taking dealer count to 3000 dealerships pan India. In addition to this, we are further strengthening our product portfolio and have introduced Maxxplore, Extramaxx – 2, M116 Rib pattern in more than 15 sizes. In the sports motorcycle segment, we AUTO COMPONENTS INDIA n JULY 2021

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have launched a premium sports tyre Extramaxx for Honda Hornet 2.0, also more than 15 sizes have been introduced. Q. Give us a sense of your OEM exposure including collaborations where you are a 100 per cent supplier? A. I’m glad to share that, we are associated with India’s leading twowheeler manufacturers namely Hero Moto Corp, Honda Motorcycles and Scooter India Ltd., TVS Motor Company, Yamaha Motor India and Suzuki Motorcycles to name a few. Maxxis has formidable strength in the OEMs market where our quality and technology has enabled us to better serve our OEM partners. We have partnered with some of the world largest two-wheeler manufacturers. We are fast expanding our portfolio as per new trends and the market demands. Q. Moving on, how are you managing the mix of brick and mortar versus digital for sales? A. The Covid-19 pandemic came with uncertainties and new realities. While this has been a global challenge on a humanitarian scale, I feel the pandemic has taught us to be ‘Adaptable’. Covid-19 pandemic has brought in new technologies and necessitated new roles to imbibe newer skillsets in the task force and make them digitally prompt especially in the manufacturing sector. The quick adoption of new, advanced technology has acted as a catalyst of change in managerial functions and led to an acceleration in the creation of new policies. In tandem with honing digital skills and improved infrastructure, corporates and leaders also focused on employee transformation.

"The much-awaited scrappage policy will provide a filip to demand of new vehicles and in turn, increase tyre demand." current situation, we are investing in digital marketing to reach out to our customers. Additionally, we are ramping up our existing dealer base and regularly reviewing our dealer acquisition strategy. Our customers can make a well-informed choice by visiting our official website – www.maxxistyres. in and clicking on the Maxxis dealer locator. The dealer locator will advise them to visit the nearest dealership to minimise travel time. Through a consumer-interest campaign, we have been advising our customers from time to time to adopt best practices for maintaining their tyres in general during the lockdown, in monsoons etc. Additionally, we are in the process of making a series of short animations to educate the buyers with concepts ranging from how to buy and how to maintain. Q. Has the government done enough to ensure a stable ecosystem for tyre manufacturers in the country? A. The government’s efforts in alleviating the automotive ecosystem have been well-received. The Production Linked Incentive (PLI) scheme that they have announced

for the auto component sector is a long-awaited initiative. Their support to the MSME sector, of the auto ancillary industry has also helped a lot to ensure a stable ecosystem for tyre manufacturers. Such initiatives are boosting the Indian economy. Also, the emphasis on infrastructure development will augment the demand for personal mobility. The muchawaited scrappage policy will provide a filip to demand of new vehicles and in turn, increase tyre demand. Q. To sum it up, for the company to realise its near to medium-term goals, what are the key goalposts? A. The company made an investment of over USD 400 million in its Sanand plant, in Gujarat. We currently employ a workforce of over 600 people and are committed to expanding the manpower to 2000 within a period of five years. Currently, we have used half of the land (106 acres) we got from the Gujarat government for the planned 60,000 units’ capacity. Owing to the Covid-19 pandemic, we are carefully evaluating the situation this year and will take appropriate steps to realise our future plans, in the times to come. We have penetrated across all 29 states and eight Union Territories of India and opened our first exclusive retail store in Goa last year to meet the growing demands of our customers. We are working on new alignments and partnerships with a new set of OEMs for the twowheeler market as well as working on expanding our portfolio for the replacement market. ACI

Q. As an OEM how are you educating the buyer community for more informed choices? A. As a brand, we continue to focus heavily on digital and social media platforms and devise new ways and means of engaging customers through diverse platforms. Looking at the

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C Valeo Facings Reach New Markets

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Valeo Friction Materials India hit the bull’s eye with its export strategy. Ashish Bhatia looks at the all round efforts undertaken to reach new markets despite a raging pandemic.

he outbreak of the pandemic aggravated the situation and impacted global trade equations. Indian auto component manufacturers, however, in the first half of the fiscal 2020-21, for the first time, witnessed a trade surplus. In effect, the positive trade balance meant that exports outweighed imports. Auto component exports, however, declined by 23.6 per cent to Rs.39,003 crore (USD 5.2 billion) in H12020-21 from Rs.51,028 crore (USD 7.4 billion) in H12019-20. Amidst the trend, Valeo Friction Materials India (VFMI) proved to be an exception as it hit the bull’s eye. In line with its export strategy, the company’s total export sales accounted for seven per cent of its total annual business in

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the year 2019. Valeo’s counter-strategy to steer past the slump in the domestic market had the company, in 2020, enter new territories such as South America, the Balkans, SAARC nations and the ASEAN countries. Establishing its business in new territories, VFMI was able to achieve a significant milestone of 145 per cent growth in exports. It accounted for 19 per cent of the overall annual business. The company attributes the success to key initiatives like strategic pricing of the products, effective negotiation, submitting the samples to prospective customers, and rapid testing and validation. The company credits the growth to the proactive and effective planning of deliveries to circumvent the logistic and supply chain challenges, efforts to reach out and reestablishing connections with the existing network that enabled the company to leverage new business opportunities. The company especially focussed on

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over Story

Self-Adjusting Technology A clutch acts as an interface between the engine and the gearbox. It is known to enable the interruption of torque transfer for a gear change. When the clutch is engaged, the full engine torque is said to be transmitted to the gearbox input shaft. The clutch disc, located between the pressure plate of the cover and the flywheel, in the engaged position, has the two facings squeezed between the two friction surfaces. The facing on one side of the clutch disc is in contact with the flywheel friction surface and the facing on the other side is in contact with the cover pressure plate. As per Valeo

identifying new customers in new geographies besides allocating resources for participation in the overseas automobile and components exhibitions to create an awareness around its products and next-generation technologies.

Focussed on reducing carbon emissions VFMI’s success in exports, in a volatile environment, is centred around the group’s strong focus on reducing carbon emissions. The company manufactures an estimated 14 million facings per

studies, despite different qualities and technologies, the facings are subject to wear over time. The loss of thickness of the facings leads to the pressure plate

moving towards the flywheel, and the diaphragm in contact with the pressure plate changing. When the actuation year. It caters to the two-wheeler and three-wheeler segment on one end of the spectrum and the offhighway segment on the other end of the spectrum. In the middle, it also caters to both the passenger vehicles and commercial vehicles segments as part of the entire automotive universe. Deemed as the first auto components manufacturer to partner customers, from concept to completion, the company is claimed to have channelised 12 per cent of its OE sales powered by a 500+ workforce back into Research and Development (R&D) activities.

force that needs to be applied to the cover via the clutch pedal increases, the pedal effort for the driver also becomes greater. The Valeo SelfAdjusting Technology (S.A.T) ensures that the same pedal effort can be maintained throughout the clutch life. It is achieved by increasing the effective thickness of the pressure plate. Valeo has been producing S.A.T. clutches for car manufacturers since the year 2000. High torque capacity, comfort, compact and robust design, increased durability, efficiency, ease of fit and enhanced clutch life are among the claimed advantages. In product-specific measures, to keep a low carbon footprint, the company relies on fibre glass-based technology. It is known to use a range of materials free from asbestos, lead, organic solvents, ceramic and aramid fibre. The Valeo G5 clutch facings are claimed to offer a longer lifespan and are known to comply with European regulations. The high-performance clutch facings are claimed to be resistant to high temperatures and are manufactured in strict compliance with the global standardisation of raw materials and manufacturing processes to ensure qualitative consistency. Known as the G5 clean technology, it is said to have made VFMI a leader in dry friction clutch facings. The company also manufacturers transmission clutch facings for its segments besides brake friction materials that the company manufactures for the off-highway segment.

S.A.T clutch set

The company launched the SelfAdjusting Technology (S.A.T) clutch set for Jeep Compass 2.0 Diesel in February 2021. It was an opportunity to tap the potential of the Jeep being exported to many right-

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hand drive markets like the United Kingdom, Australia, New Zealand, Brunei, Japan, Indonesia, Nepal, and Thailand and the company couldn’t let go of it. VFMI is known to have priced the clutch aggressively as compared to OEs in a bid to gain market share. With a claimed superior quality and durability, the company launched the product for the Independent Aftermarket (IAM). The vehicle population of 1,00,000 presented a considerable opportunity. Prior to it, in 2020, the company also launched seven new tractor parts for models from Mahindra, Farmtrac, Escort tractors and International tractor aimed at addressing the duty cycles that involve stop and go actions. It is claimed to have addressed the associated clutch wear. The clutch sets are aimed at addressing issues like a sticky clutch,

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soft clutch, hard clutch, high engine revs when the clutch is engaged, a slipping clutch, additional noise, the lack of pedal ‘give’, or the frequent needs for replacement. As an OE supplier to the agriculture segment, the company bundles the clutch sets with cover assembly, driven plates and release bearings. The innovation cycles have led to the company pool

consisting of over 50 parts. The company also became the first IAM supplier for the Maruti Suzuki Super Carry as a testimony to its business interest in the light commercial vehicle segment. VFMI also became the second supplier after OEs to BharatBenz. It added three parts to

the portfolio to tap the segment. These included clutch cover, clutch disc and the clutch set.

The aftermarket

The company strives hard to maintain the same quality grade in its aftermarket offerings. It is capable of doing so without any additional lead time in tooling. The company is also focused on adding moulded clutch facings to the product mix. Moulded clutch facings are known to be suited to segments associated with higher rpm engines. They are claimed to possess higher physical strength like burst, shear, cross braking in comparison to other moulded materials. These are often recommended for tractor and trailer applications as an example. A look at the product mix reveals product grades like F400, F450, F510 UL, and F510 MCC UL to name a few. ACI

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S The New Materials That Are Shaping The Future Of Mobility pecial Reads

Dr Shankar Venugopal, Vice President, Mahindra & Mahindra correlates the discovery of key input materials with the future of mobility.

ustainable mobility is a key growth enabler for fast-growing economies like India. The future of sustainable mobility is being shaped by a combination of technology and business model disruptions. The convergence of electric, connected, autonomous vehicle technologies and the shared mobility business model has the potential to create sustainable mobility options for the future. These new technologies are growing exponentially in their performance and are fast becoming affordable. Leveraging these disruptive technologies and building innovative products are of strategic importance to companies and countries that wish to lead the development of sustainable mobility for the future. The adaption of electric mobility in India will greatly accelerate when (a) the Electric Vehicle (EV)’s range improves sufficiently to remove the range anxiety of customers (b) the initial cost of acquisition of EV reduces to match the price of ICE vehicle (c) the batteries can be charged easily and quickly. As the battery pack contributes to about 40 per cent of the price of EV and determines the range of the EV, it is a key sub-system of the EV both from a performance and price

perspective. The advantage of an EV arises from (a) high energy conversion efficiency and (b) the elimination of vehicular tailpipe emission. When we build a technology roadmap for Connected, Autonomous, Electric and Shared (CASE) vehicle technology, we realise that materials hold the key to unlock a whole new world of opportunities. The number of electric cars rose from 17,000 in 2010 to more than seven million in 2019 — a 400X increase in a decade [1]. Successful scale-up of EVs critically depends on the availability of certain materials - lithium, cobalt, rare earth etc – that enable the batteries and motors for EVs. We will describe two important groups of materials that comprise (a) the battery that stores the energy and (b) the motor that powers the electric vehicle (EV).

EV battery materials

Batteries are key to the performance of EVs as they store incredible amounts of energy that can be discharged quickly, safely, and smoothly— thereby giving EVs instant acceleration, responsive handling, and fast recharging times. The key enablers that would

Figure 1 – CASE for future mobility

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Special Reads

Dr Shankar Venugopal, Vice President, Mahindra & Mahindra

Figure 2 – EV battery materials – Lithium and Cobalt

encourage customers to adopt EVs – improving the range, reducing the initial cost and reducing the time for charging – are all controlled by the battery’s performance. EV batteries hold the key to realising scalable and affordable electric mobility. Most electric vehicle batteries are lithium-based and rely on a mix of cobalt, manganese, nickel, and graphite and other primary components. When the first massmarket EVs were introduced in 2010, their battery packs cost an estimated USD 1,000 per kilowatt-hour (kWh). Today, we are at about USD 200 per kWh - that’s a drop of more than 70 per cent in the price per kWh in six years! EVs are forecast to cost the same or less than a comparable

gasoline-powered vehicle when the price of battery packs falls to between USD 125 and USD 150 per kWh [2]. The cost of storage is expected to reach USD 100 per kWh by 2025 [3]. The 2019 Nobel Prize in Chemistry was awarded to John B. Goodenough, M. Stanley Whittingham and Akira Yoshino, who developed a truly transformative technology that has permeated billions of lives across the planet, touching anyone who uses a cellphone, laptop computer, electric car or any other device that is powered by a rechargeable battery. There are five primary lithium battery combinations for EVs Lithium Nickel Cobalt Aluminium (NCA), Lithium Nickel Manganese

Cobalt (NMC), Lithium Manganese Oxide (LMO), Lithium Titanate (LTO) and Lithium Iron Phosphate (LFP) – of these, NCA and NMC batteries are the most prevalent in EVs [4]. Battery cell materials include lithium, aluminium, carbon, cobalt, copper, graphite, iron, manganese, nickel, silicon, phosphorous, polyvinylidene fluoride and polyolefins. Battery pack materials include aluminium, copper, thermal management materials, thermal interface materials, steel, glass fibre reinforced polymers, carbon fibre reinforced polymers, inter-cell insulation and compression foams and pack fire-retardant materials. An electric car with a 70 kWh battery uses 63 Kg of lithium carbonate

Figure 3 – Electric motor materials – Rare Earth Elements (REE)

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JULY 2021 n AUTO COMPONENTS INDIA

pecial Reads

Figure 4 – Alternative sources for critical materials for EVs

equivalent (more than the amount of lithium in 10,000 cell phones). For every one per cent increase in market penetration of BEVs, there will be additional lithium demand of 70,000 LCE / year. Global reserves of the raw materials for EV batteries are concentrated among a few countries. 75 per cent of the world’s lithium resources are found in the region of ArgentinaBolivia-Chile. 65 per cent of cobalt

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production happens in the Democratic Republic of Congo (DRC). The highly concentrated production of these materials necessitates a risk mitigation strategy for a reliable supply of the raw materials to battery manufacturers. Recent research directions include lithium-air, lithium-glass, lithiumsulphur batteries; researchers have recently reported a battery formulation that can support a million miles.

Electric motor materials

The demand for electric traction motors will increase rapidly over the next 10 years, not just from the overall EV sales but also with the rise of EVs using more than one motor, specifically in premium cars and heavy-duty vehicles. Desirable EV Motor characteristics include high efficiency, high instant power, fast torque response, high power density, low cost, high acceleration and robustness. The majority of EV models use permanent-magnet motors, which are smaller and more efficient than induction motors, the common alternative. Increasing the motor performance will demand stronger magnets, which in turn will require more of the rare-earth elements. These materials typically contain several rare-earth elements (REE) such as Neodymium (Nd), Dysprosium (Dy), Praseodymium (Pr) etc. A magnet’s strength is commonly measured by its coercive force and flux density. The magnets made from the rare earth neodymium rate are the highest in coercivity and are good for high-powered EVs. The drawback of simple neodymium magnets is a low operating temperature. Adding the rare earth element dysprosium to the Neodymium increases the operating temperature. Dysprosium, along with the rare earth element praseodymium, can also increase a magnet’s coercivity, when alloyed with neodymium [5]. WWW.AUTOCOMPONENTSINDIA.COM

Special Reads REEs have a very geographically constrained supply chain and a volatile price history. Whilst they are in a relatively small quantity in the motor, they can make up a very significant portion of the cost of the motor. The important materials that constitute the motor are aluminium, boron, cobalt, copper, dysprosium, iron, neodymium, niobium, siliconsteel, terbium and praseodymium [6]. These rare-earth elements like Nd, Dy are difficult to produce, as they must be extracted from other minerals via labour-intensive refinement processes. More than 90 per cent of the current production of rare earth takes place in China. Research directions include reducing the amount of REEs, formulations with alternative REEs, exploring environmental-friendly mining and refining processes, urban mining (recycling and reuse), motor architectures that do not need permanent magnets etc.

Alternative sources for critical materials

The battery materials (lithium and cobalt) and the motor materials (rare earth elements) are critical for the development of clean mobility and clean energy. Since the availability of these minerals is limited to a few locations on the earth’s crust, there is a strong need to look at alternative sources, use the available materials wisely and ensure abundant availability of the materials in future. (a) Urban Mining - The wise use, from a circular economy perspective, of these materials involves the design of batteries and motors in such a way that the critical materials can be efficiently recycled and reused at the end of the operational life of these components – commonly referred to as Urban mining [7]. The exploration of alternative sources for these materials has also opened up two new opportunities: (b) Deep-sea mining – there WWW.AUTOCOMPONENTSINDIA.COM

are parts of the ocean bed (such as the Clarion - Clipperton Zone CCZ) that are rich in elements such as Manganese (Mn), Cobalt (Co), Nickel (Ni) and even a few rare earth elements (REEs) [8,9]. (c) Asteroid mining – there are many asteroids located in the region between Mars and Jupiter. Among these, the bigger asteroids with slower rotation and having an orbit that revisits Earth often are suitable for mining. Metallic or M-type asteroids (iron meteorites) are composed of up to 90% of iron, nickel and cobalt. Among the M-type asteroids, 16 Psyche, is one of the biggest and made up of iron, nickel and a number of rare metals, including cobalt [10].

Conclusion

With the rising penetration of batterypowered electric vehicles (BEV), the batteries have become the new oil. The lithium-ion battery (LIB) is the energy storage of choice for EVs. Lithium and cobalt are the two most critical elements for EV LIB. There is also a rising demand for this LIB for application in solar photovoltaics (PV). The growing need for compact electric motors, enabled by strong permanent magnets, raises the demand for rare earth elements (REE) – Neodymium, Praseodymium and Dysprosium. These electric motors find application in EVs and wind turbines. The growth of clean mobility and clean energy industries in the future depends on the reliable supply of critical materials lithium, cobalt and rare earth elements. We, as a community of automotive technologists, should focus our research and innovation efforts to systematically mitigate the risks in the supply of these critical materials. Self-sufficiency (Atmanirbharta) in these critical automotive materials, achieved through materials innovation efforts, can enable India to emerge as a global leader in sustainable energy and mobility. ACI

References

https://www.iea.org/reports/global-evoutlook-2020 https://www.ucsusa.org/resources/evbatteries Bloomberg – Better Batteries - https://www.bloomberg.com/ quicktake/batteries https://www.businessinsider.com/ materials-needed-to-fuel-electric-carboom-2016-10?IR=T Electric Vehicles & Rare Earths - https://www.edisongroup.com/ edison-explains/electric-vehicles-andrare-earths/ https://www.idtechex.com/en/ research-report/materials-for-electricvehicles-2020-2030/ Recycling lithium-ion batteries from electric vehicles – Nature https://www.nature.com/articles/ s41586-019-1682-5 Deep-Sea Mining – Daniel Ackerman – https://www.scientificamerican. com/article/deep-sea-mininghow-to-balance-need-formetals-with-ecologicalimpacts1/#:~:text=Interest%20in%20 deep%2Dsea%20minerals,%2C%20 copper%2C%20cobalt%20and%20 nickel.&text=Nodules%20in%20 the%20CCZ%20alone,based%20 reserves%20of%20those%20metals Seabed Mining – Olive Hefferman https://www.nature.com/articles/ d41586-019-02242-y Electric Vehicle’s Celestial Future - https://medium.com/@ tausif000/electric-vehicles-celestialfuture-d77599793962 -----------------------------------------

Courtesy Mobility Engineering

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Stronger Bharat Forge Bharat Forge is tapping new avenues after some effect of the pandemic. Bhushan Mhapralkar looks at factors driving the growth prospects of the company.

harat Forge is emerging stronger from the pandemic. Claimed to maintain a positive outlook of the M&HCV segment on the back of infrastructure spending and the government’s focus on increasing manufacturing share in GDP, PLI schemes, scrappage policy, etc., Bharat Forge is known to explore opportunities in the aluminium space after the commencement of operations at its Nellore plant. Witnessing a rise in consolidated revenue from operations at 19.57 per cent to Rs.2082.85 crore for the fourth quarter ending March 2021 (Q42021) as compared to the consolidated revenue earning of over Rs.1741.92 crore in the same period (Q42020) a year ago, the

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company has secured an order for the development and supply of defence components. Becoming its 100 per cent subsidiary, Kalyani Strategic Systems is well-poised to help Bharat Forge meet eligibility criteria for defence contracts. The pandemic in the first quarter of last fiscal causing temporary disruption, Bharat Forge is concentrating on budgetary support and eliminating any slack in physical interactions with buyers that may have been created. With several successful artillery and vehicle trials by its side, the company is keen to take its cooperation with its clients in the defence space to the next level. Said to follow a three-

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horizon strategy that involves artillery guns, armoured vehicles and speciality vehicles as products; some other type of speciality vehicles as products, and electronics and high-end tech as the third line, Bharat Forge is eyeing a significant chunk of business from the Indian Army as part of the ‘Atmanirbhar Bharat’ policy. Reporting a consolidated net profit of Rs.212.12 crore for the last quarter of FY2020-21 against a net loss of Rs.68.59 crore in the year prior to this, Bharat Forge, an automotive, defence and aerospace components supplier, is confident of strong growth on the basis of an encouraging rebound in export markets. Said to expect robust demand in major export segments such as CVs,

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construction and mining, and oil and gas, the company looks well poised to tide over the current weakness in the domestic market, according to industry sources. Drawing attention to CV majors like Volvo, Daimler and Paccar providing positive demand commentaries and the 2021 calendar year forecast of retail units in North America and Europe being raised by at least 10 per cent post a sharp downturn seen in the 2020 calendar year, sources mention that a strong demand rebound in medium and heavy-duty commercial vehicles in Europe and North American market will help Bharat Forge gain good export traction. Set to benefit from the local manufacture initiative by the Defence

Ministry that imposes restrictions on the import of certain weapons and specialised artillery equipment, the company has seen its aerospace business get impacted because of the fall in demand for global and regional air travel given the centre and state restrictions known to dissuade flyers. Investing Rs.0.01 million to acquire a 100 per cent stake in Kalyani Powertrain Private Ltd. with an aim to undertake various initiatives in the field of e-mobility, Bharat Forge makes airframes, structural, aircraft turbines, fan blades, landing-gear components, compressors and engine parts for the aerospace industry. Acquiring 70 hectares of land at Khed for around Rs.2.4 billion, the company is confident of making positive progress on the aerospace front as growth returns to the aviation sector. Claimed to have restrained from utilising much capex in FY2020-21, Bharat Forge has emerged as a successful bidder for Sanghvi Forging & Engineering Ltd. (Sanghvi Forgings). On May 06, 2021, the Company invested 0.10 million to acquire a 100 per cent stake in the equity of BF Industrial Solutions Private Limited (formerly known as Nouveau Power & Infrastructure Private limited) as a Special Purpose Vehicle (SPV) for implementation of approved resolution plan for acquisition of Sanghvi Forging, Baroda. Keen to see a significant uptick in defence and e-mobility activities, the company is exploring new segments such as renewable energy, and metals and mining. With an EBITDA percentage increase of 310 bps (a little over three per cent) despite the cost inflationary pressures, Bharat Forge is well-poised for upgrading its industrial manufacturing capabilities with the acquisition of Vadodara-based Sanghvi Forgings. Well aware of the spate of changes in regulations coupled with deteriorating fundamentals of the underlying economy leading to torrid times for the automotive industry, the company is continuing to identify and address the new opportunities in the domestic automotive industry. ACI JULY 2021 n AUTO COMPONENTS INDIA

T Brakes As Emitters Of Particulate Matter rending

Peter Fischer, Head of the Institute of Automotive Engineering at TU Graz draws attention to particulate matter emissions from brakes in a world obsessed with exhaust emissions.

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Trending henever you think about emissions it’s quite likely you are thinking exhaust emissions. Opines Peter Fischer, Head of the Institute of Automotive Engineering at TU Graz in a report, “We have a problem and nobody knows how big it is. But one thing is certain: brakes cause more Particulate Matter (PM) emissions than internal combustion engines via their exhaust gases. Nevertheless, there is a shortage of basic knowledge and legal regulations.” The study steers attention away from ICE emissions and towards other particulate emissions from motorised traffic known to be harmful to health and the environment. The study cites particulate emissions from the abrasion of brake discs and brake pads and claims these far exceed PM levels that a diesel vehicle is allowed to emit through the exhaust pipe within all standards and limits. The lack of address to such a potent issue is further weighed down by measurement methods claimed to be lacking coupled with the lack of legal regulations as per the study. In the framework of the Particle Measurement Programme (PMP) of the Economic Commission for Europe UNECE, for instance, work is underway on the recommendation for legislation, on the test procedure and test set-up (on the test bench only). Accordingly, brake PM is to be regulated on the basis of measurement data from the Worldwide Harmonised Light-duty vehicles Test Procedure (WLTP). However, these cycles on the chassis dynamometer are far removed from real-world driving behaviour

and deliver values claimed to be too good to be real. “Our fear is – to put it bluntly – that a driving cycle will be tinkered with in a way that doesn’t match real-world driving and produces low emissions. Especially for mountainous areas, where brakes get extremely hot and other chemical reactions take place, legislation based on these facts would do little to improve the emissions situation,” mentions Fischer.

Highly carcinogenic, highly toxic substances

There are rough country-specific guidelines for the material composition of brake discs and brake pads. However, the detailed composition varies from manufacturer to manufacturer. “Admittedly, we know the possible starting elements. Embedded in a carbon matrix, these are, for example, barium, copper, zirconium, chromium, tin, iron or magnesium. Lead has even been found in old braking systems. So you can imagine that at high temperatures – brakes can reach up to 600-degree Celsius and literally glow – violent chemical reactions take place. Extremely small particles are created, which are hurled directly into the environment,” the report quotes Fischer.

Why is brake PM so dangerous?

“We fear really bad things here. For example, tiny and highly respirable copper oxide particles form from the copper components of the brake

Peter Fischer, Head of the Institute of Automotive Engineering at TU Graz WWW.AUTOCOMPONENTSINDIA.COM

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lining.” There are already some studies on the health effects of traffic-based particulate matter emissions on the cardiovascular system (coronary atherosclerosis, asthma, lung cancer, etc.). Although very few studies focus explicitly on brake abrasion – because it’s still difficult to measure – it can be assumed on the basis of studies of the material compositions of various brakes that Ultra-Fine Brake (UFP) abrasion, among other things, is responsible for the health effects mentioned.

Exactly what is emitted is completely unknown

The analysis of these emissions also presents difficulties. Currently, there are only very rudimentary ways of capturing these brake particulates directly after they have been created. There is a lack of measurement methods and instruments, both in the laboratory on the test bench and even more so while driving on the road. Says Fischer: “Exhaust gases, after all, conveniently collected in the engine before going out through the exhaust pipe, where they can be accurately measured by a probe. Brake abrasion, on the other hand, is immediately transferred into the environment.

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In that second, it mixes with other particles, gets flung out into the environment, changes its composition or burns.” Especially during long downhill runs, on mountain passes, in urban stop-and-go traffic or in other situations in which the brakes become very hot, not only does mass abrasion occur, but also chemical reactions of the particles and dust. To date, however, what exactly is happening here and being emitted is completely unknown. “In alpine areas especially, there will be locally more and chemically different, more critical emissions than in flat areas. Regulations on the basis of hardly relevant scenarios and with such gaps in knowledge will be next to no use at all for the alpine emission situation, nor for the environment and nor for health,” stresses Peter Fischer and adds “the automotive industry will probably keep to the coming regulations, but certainly won’t become active beyond that.”

Back to the drawing board?

So what should be done? One possibility would be to engage with the braking system and rethink certain aspects from scratch. “We can take other coatings or use other material compositions, but of course based on accurate studies of the generation and composition of brake PM emissions.” However, interfering with the extremely established braking system would have far-reaching consequences: “Brake systems have been optimised again

and again for around 120 years. An immense amount of development work has gone into them. Understandably, the idea of going back to the drawing board does not go down well. But it could be necessary for some areas if we shed light on dark, unexplored corners,” says Fischer. This would affect the development of measuring techniques, foundries, vehicle development and design, materials development and other industries that are quite strongly represented, especially in Austria or in the Germanspeaking world in general.

Addressing the problem instead of denying it

Peter Fischer wants to raise awareness of the issue and is appealing in particular to politicians to make funding available for research on the basic side. “What we have studied so far on the subject of brake particulates has been painstakingly squeezed from other funds and literally saved from under our fingernails. The big push now needs financial support and a commitment with industry to joint solutions.” In Graz, the conditions are ideal. At TU Graz, know-how on the subject of braking systems, test and measurement process development, and emissions have been built up over many years. And the industry is also locally accessible with several lead automotive companies – including Magna, AVL and Miba. Addressing them all, Fischer emphasizes: “It’s no use closing your eyes. And brake particulates will not disappear with electric cars. Although they brake differently and basically have lower emissions, they are heavier, which in turn requires more braking power. No matter how you spin it, we can’t avoid this issue. Brake particulates are real, they’re dangerous, and they, at last, deserve to be thoroughly researched.” -------------------------------------------Courtesy: Susanne Eigner (Planet Research), TU Graz University of Technology WWW.AUTOCOMPONENTSINDIA.COM

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Brembo Leaps For Future Of Mobility

Italian brake manufacturer Brembo S.p.A is marching towards its vision of the future of mobility. Ashish Bhatia takes a closer look at some of the key developments including new acquisitions and technological advancements. 30

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rembo S.p. A of Italy is well known for its capabilities in the design, development and production of braking systems. The company recently marked its 60th anniversary with the reveal of a new brake caliper concept set to shape the future of mobility. The New G Sessanta is a new concept known to have been inspired by the first-ever brake calliper for motorbikes produced by the company, in 1972. It draws its name from the designer. It embodies the company’s new vision of the future of mobility. Notably, in a design milestone, the company has made use of the LED technology with a direct application on the body of the

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calliper. The new brake calliper concept is said to be adaptable to every application and type of calliper, which is responsible for enhancing its form and function. It is designed such that it can be both an interface, communicating directly with the user, and an aesthetic choice, adapting to the user’s tastes and preferences. The light is aimed at taking Brembo’s experience in the use of colour to a higher level, giving it new values. The G Sessanta as a concept is claimed to have been designed to be personal. The company has achieved this by using wireless technology. When the vehicle stops, there is a great degree of control over the desired shade of light to express mood, enhance the style of the bike, or adapt it to the surroundings. The use of colour and light is also designed with the potential to enable data and information to be sent on the conditions of the vehicle and the calliper itself. To further customise, a parked vehicle can emit a courtesy light too as a result. Brembo’s pioneering new concept in brake callipers, according to the company, goes beyond the traditional canons of design and technology. It is an attempt to introduce a contemporary dimension that speaks the language of new generations. The design consciously remains true to the iconic lines that were the hallmark of that first model. The concept is known to reinterpret its body with a next-generation framework of dynamic solids and voids, said to be essential in their immediacy and formal consistency. Besides making rapid strides in technological advancements, Brembo S.p.A is on an acquisition spree! The company has concluded two significant acquisitions in line with its vision of the future of mobility. The company followed the acquisition with 100 per cent acquisition of J.Juan Group, a Spanish company specialising in the development and production of motorbike braking systems. Founded in 1965, J.Juan is a Barcelona based company with three plants spread out in Spain and

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China. These plants are especially focused on the manufacture of brake hoses, a strategic safety component for braking systems to complement the current range of Brembo products of motorbikes. The acquisition of J.Juan is being looked at as a move to strengthen the motorbike braking system range of solutions. Averred Alberto Bombassei, Chairman, Brembo, “We are proud to welcome J.Juan to the Brembo Group. This transaction is in line with our global strategy and follows the recent acquisition of SBS Friction of Denmark. We continue to invest to strengthen our motorbike core business.” “The addition of J.Juan is a great opportunity for us, as it reinforces our positioning as a company increasingly oriented to offering comprehensive, integrated and high-quality solutions to our customers,” he stated. The transaction is estimated to be valued at Euro 70 million and will be paid using available cash subject to usual adjustment mechanisms for similar transactions. The enterprise value is pegged at Euro 73 million. It is further subject to approval from antitrust authorities and expected to conclude in the second half of FY2021 (H2FY2021). In January 2021, the company announced the acquisition of Danish company SBS Friction, known to develop and manufacture innovative and eco-friendly sintered and organic material brake pads for motorbikes. The transaction valued at Danish Kroner 224 million (Euro 30.1 million) is paid using available cash and subject to customary adjustment mechanisms. It is estimated that the enterprise value stands at Danish Kroner 300 million (Euro 40.3 million). It is looked at a move for a strategic inclusion of brake pads in Brembo’s current product range. The company with the move is claimed to pay special attention to the environment besides strengthening its leadership in the motorbike sector. On the financial front, compared to Q12020, the company in Q12021, declared revenues worth Euro 675.1 million. The revenue stands higher at 1.2 per cent compared to Q12019. EBITDA

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margin stood at 20.1 per cent, Euro 135.6 million with EBIT margin at 12.4 per cent at Euro 83.7 million. The company’s net investments stood at Euro 48.3 million for the quarter. Commenting on the results, Bombassei termed the results as encouraging. “The figure for the first quarter of 2021 approved by the Board of Directors indicates a robust recovery and points to a continuation of the trend witnessed in the final three months of 2020.” “Never before in Brembo’s history, we had seen revenues this high in the first quarter, up not only in the same period of 2020 but also and above all, in 2019,” he claimed. The results, he explained, were driven by the positive performance of all segments and geographical areas in which the company operates. For instance, the car segment rose by 13.1 per cent, motorbike applications by 40.5 per cent, and commercial vehicle applications by 31.6 per cent. The racing segment grew by 3.3 per cent compared to the same quarter of 2020. Sales in Italy grew by 20.9 per cent, by 6.1 per cent in Germany, by 27.6 per cent in France, and by 6.2 per cent in the United Kingdom. The sales in India grew by 31.2 per cent, by 97.4 per cent in China and by 20 per cent in Japan. Sales in North America rose by 5.9 per cent except for a decline of 21.1 per cent in South American markets. Admitting to the market scenario continuing to be marked by uncertainties, the company, according to Bombassei, is optimistic about the performance in the coming months. “We remain focused on the innovation of our solutions thanks to an increasingly integrated and sustainability-oriented product portfolio which has been expanded through the acquisition of SBS Friction in Denmark and will be further enhanced by the acquisition of J.Juan in Spain,” he concluded. The company is also closely monitoring the impacts of the shortage of electronic components on the client’s supply chain. At this stage, however, the impact is known to be difficult to estimate. ACI WWW.AUTOCOMPONENTSINDIA.COM

NRS Brake Pads

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NRS Brake Pads are claimed to outdo traditional brake pads. Ashish Bhatia looks at the factors that set it apart.

orth American headquartered NRS Brake Pads is among the global leaders in brake pad technology. It has won accolades for the NUCAP Retention System mechanical attachment known to have been licensed by leading brake manufacturers for over two decades. The company’s brake pads are claimed to be among the most sought after. Deemed as the world’s longest-lasting brake pads, these pads stand out over conventional brake pads owing to qualities like being rustfree. These are galvanised steel brake pads and boast superior quality, durability and longevity. From advancements in brake testing, noise suppression and environmentally safe manufacturing, NRS Brakes continues to pursue brake safety and innovation. The use of galvanised steel is said to help the NRS brake pads fend off corrosion and delamination. The use of galvanised steel means that the steel does not deteriorate and keeps friction at bay preventing full wear down. Among other advantages of the brake pads are quieter operation and improved braking performance. The company is claimed to test all its brakes beyond the standards required of Original Equipment Manufacturers (OEMs). The company, for instance, have fitment for all Tesla models including the Model S, Model 3, Model X and the Model Y as a testimony to its acceptance. NRS Brakes’ new EV brake pads for the 2021 Chevrolet Bolt EV are claimed to reduce moisture dissipation and corrosion risk associated by critics with electric vehicle

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brake pads. It is claimed to have been adapted for regenerative braking. Expanding its line of premium brake pads for both Lexus and Toyota sport utility vehicle and pickup truck drivers, NRS Brakes recently launched new galvanized brake pads designed exclusively for 2013-2020 Lexus LX570, 2008-2020 Toyota Land Cruiser, 2007-2017 Toyota Tundra and 2008-2017 Toyota Sequoia.

The X factor

NRS brake pads rely on the use of zinc-plated steel construction and premium friction materials. This is aimed at making sure the availability of superior stopping power throughout the life of the entire brake pad. The pads use the patented SHARK-Metal™ technology in a bid to ensure that the friction material never delaminates from the backing plate. This, in turn, is said to guarantee more

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nternational secure, safer stops. The SHARKMetal™ Technology works such that it mechanically fuses the backing plate to the friction material, giving rise to what the company calls an indestructible bond. It is not new for the automotive industry to benefit from the increased adoption of galvanised steel in the automotive industry. The benefits are amplified especially in coastal areas, to increase the durability of cars and the safety of passengers. While safety standards for the automotive industry by airbags, seatbelts and ABS, studies have highlighted the importance of protecting steel against corrosion as the fourth safety pillar. With nearly 50 per cent of the vehicle structure made of steel, experts have called for the need for supplying only galvanised steel to the automotive industry for the safety of people against rust and corrosion. All NRS brake pads undergo rigorous testing in one of the world’s most advanced brake testing labs to ensure quality, efficiency and performance.

Fleet program

The company also targets commercial vehicle fleets with its offing. To the fleet owner, it claims to offer maximum return on investment given that the brakes last longer than the traditional brake pads. It rates the brakes high on safety as it is claimed to never delaminate. The use of galvanised steel means the brakes are claimed to outlast the frictional material they are attached to. Keeping the total cost of ownership and high uptime requirements of fleets at the forefront, the reduced wear and tear associated with the brakes means less time in the bay for repairs. If ever the brake pads result in a failure as a result of delamination and or separation, NRS Brakes sweetens the deal by offering a lifetime guarantee. The company will replace the brake pads at no cost. NRS Brakes is a founding member of the SafeBraking and Global Brake Safety Council consortiums besides being a part of the NUCAP family of innovative companies. ACI

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I Continental Tech Talk: The Automotive Software nternational

On the sidelines of Auto Shanghai 2021, Continental Automotive held a virtual tech talk. Ashish Bhatia brings out all things automotive software touched upon in the session.

n the sidelines of Auto Shanghai 2021, Continental held a virtual tech talk under its new initiative, ‘The Continental Tech Show Around The World 2021’. Focussed on software, the session spanned the spectrum of software as a key to assisted and automated driving, function integration in the end-toend network: from the sensor to the vehicle high-performance computer to the cloud. It also touched upon driving innovation in the automotive industry: with the Continental Automotive Edge Platform (CAEdge) to new approaches in the case of in-vehicle architectures and software. Averred Dr Ismail Dagli, Senior Vice President, R&D, Business

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Unit ADAS, “The future of autonomous driving will be determined by software the transformation towards software and the datadriven company is a strategic imperative.” Dagli drew attention to Continental being a leading player in full-stack software. Consisting of assisted and or automated driving units, cameras, lidars and radars, Continental, claimed Dagli, delivered more than 100 million units between 2017 and 2019. With over 300 models, and 50 brands the company catered to 25 Original Equipment Manufacturers (OEMs). He cited the increasing content and complexity due to higher automation levels being tackled by the

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company’s portfolio for automated driving. Continental technology, according to Dagli, is classified into partly automated driving (SAE L2), L2 Plus made up of L2 performance and L2 premium, and highly automated driving (SAE L3). Under SAE L2, the company offers highway assisted rated NCAP 5. Under l2 performance, the company offers a traffic companion allowing drivers to ride hands free at speeds less than or equal to 80 kmph. In L2 premium, the highway companion is extended to speeds less than or equal to 130 kmph. It translates to L2 in extended “Operational Design Domain”. Under SAE L3, a cruising chauffeur is on offer. While the AD Highperformance computer is optional in SAE L2, it comes as a standard inclusion in SAE L2 (1 unit) and SAE L3 (2 units). SAE L1 comprises up to five radars which are extended to seven in SAE L2 and SAE L3. There are up to two cameras in SAE L1, and up to six in SAE L2. The camera count goes to nine in SAE L3. Only SAE L3 offers a minimum of two lidars. To sum it up, the content per vehicle in L2 performance is greater than 2X of SAE L2, 4X in L2 premium and 10X in SAE L3. Speaking on radar fundamentals for ADAS and AD, Dagli drew attention to the capabilities of determining the precise distance and speed in real-time and helping to navigate in adverse weather conditions. The next radar generation from Continental ᠆ 4D Imaging Radar offers capabilities that include high resolution, image processing, high detection sensitivity, system availability, and measuring device. Drivers can look forward to enhanced inputs required to steer clear of underride elevated objects, non-overridable ground obstacles, road boundaries, debris and potholes, navigating complex and dense traffic, and recognition of landmarks. Deeming artificial intelligence as key for sensor fusion and sensor interpretation, Dagli gave a sense of

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Body HPC Body HPC is deemed as a cornerstone of modern architecture. It encompasses a data and communications hub for central data and service management for cloud/IoT services and data routing. Using an integration platform, software and services integration of multiple vendors, and X-domain functions integration (up to ASIL-D) is made possible. The Over-The-Air Master facilitates OTA update and upgrade of functions and firmware besides the OTA software distribution cross vehicle E/E architecture. The cyber security master provides an adaptive fire wall and secure access and data storage. detection, tracking and environment modelling to give a perspective on fusion and comprehensive environment modelling through the use of lidar, camera and radar. Emphasising Continental’s readiness for the future, the session led to the vital importance of data quality and efficient data management. Continental is known to have collected approximate 100 terabytes of data each day through a global test fleet. Through the CAEdge platform and an on-premises supercomputer, the company has worked extensively on neural network development, synthetic data generation, and validation and simulation, he shared. Through an AI Competence Center, the company has also invested in the core development of AI tech and the rollout to product development teams. The company has successfully prepared for SOPs of modular and scaleable full-stack capabilities and highperformance computers. For the full stack capability that executes driving and parking functions, perception through the operating system and middle ware, software components are known to be sourced from subsidiaries like Electrobit and Argus besides other third-party entities. Through the high-performance computer, the company offers combinable surround view and assisted driving up to integrated automated driving and parking high-performance computers. On addressing the growing system complexity and the need to attain standardisation, explained Dagli, Continental is leveraging the strengths

of simulation. “The independent layer of stacks are standardised on a priority basis especially where there is a need to introduce efficiencies,” he stated. On automotive grade memories outside of the embedded systems assuming significance, Dagli added, peak performance utilisations banking on the company’s cloud partnerships with partners like Amazon Web Services (AWS). With it, the storage and computational power has neared infinity, he quipped. Philipp Neubauer, Solution Manager Body HPC Platform, Business Area VNI Central Engineering said, “Autonomous and intelligent mobility requires a

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Dr Ismail Dagli, Senior Vice President, R&D, Business Unit ADAS

revolution of vehicle electronics. New architectures go beyond the vehicle: from the sensor to the cloud.” “Endto-end network solutions are based on body high-performance computers for a reliable low-latency connectivity,” he opined. With a projection of more than 50 per cent of cars being connected in 2021, Neubauer spoke of digital transformation revolutionising the E/E architecture. He credited it for leading the way towards software-defined vehicles and addressing complexity and functional growth with the current approach reaching its limits. Going

Philipp Neubauer, Solution Manager - High Performance Computer in conversation with Ashish Bhatia WWW.AUTOCOMPONENTSINDIA.COM

Philipp Neubauer, Solution Manager Body HPC Platform, Business Area VNI Central Engineering

forward, it is expected that users will rely increasingly on smart IoT devices. Using fewer high-performance and zones, significant compute power with more processing cores will be made available. The architecture will read to a 50 per cent reduction of wires with functions defined by software. The integration is made possible by a server-based vehicle architecture from the sensor to the cloud, explained Neubauer. The sensor feeds the zone/IO Box which in turn feeds the HPC/server and is connected to the cloud by offering mobile online services. The Continental Cooperation Portal (CCP) works to facilitates automated software delivery and integration. System integration, as per Neubauer, will be a key competency for the future generation of vehicles. The CCP is claimed to offer a customisable collaboration environment for software projects. Automated software validation and integration are expected to increase quality and efficiency. Martin Schleider, Head of Software Strategy, Holistic Engineering and Technologies drew attention to new business opportunities and prospects of collaboration. “End users can get new software functions and updates over the complete lifecycle of a car,” he mentioned. He called the CCP the basis

of Continental accelerating software development and attaining safety, security and reliability. In the vehicle architecture, the focus is on decoupling hardware from software, converging domains through functional building blocks, improving time to market through agile development and digitising lifecycle management through update and upgrade, he explained. He called for the need for trust-based collaboration models. He laid special impetus on the software-defined vehicle needing a software partner through the vehicle lifecycle to tackle the needs like security and safety support, and maintenance through the middleware sitting between the hardware supplier and OEM. ACI

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I Goodyear Acquires Cooper nternational

Goodyear Tire & Rubber Company has acquired Cooper Tire & Rubber Company following the public announcement earlier this year. Team ACI looks at the prospects of the unison as a subset of the global tyre industry.

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oodyear Tire & Rubber Company have concluded the acquisition of Cooper Tire & Rubber Company following the public announcement earlier this year, on February 22, 2021. Combining the brand portfolios, the acquisition is claimed to bring together two complementary brand portfolios with a comprehensive offering across the value spectrum. The development is expected to provide significant, immediate and long-term financial benefits. It is also expected to present an opportunity to create additional value from both manufacturing and distribution. It is also expected to aid in the expansion of scale to support investments in new mobility and fleet solutions. Goodyear Tire & Rubber Company and Cooper Tire & Rubber Company, bring along complementary product portfolios, services antoies looked upon as the creation of a stronger US-based leader in the global tyre industry. The combined company will offer more options across the value spectrum making it easier for customers and consumers to choose from the Goodyear- and Cooper-

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International Goodyear SightLine

The Goodyear Tire & Rubber Company launched a tyre intelligence solution for cargo van fleets, Goodyear SightLine. Aimed at enabling seamless, safe and reliable mobility for all vehicles starting with cargo vans serving the field service, construction and last-mile delivery industries, the solution will also be made available to Goodyear’s original equipment customers and emerging fleet and mobility providers. Initially, to be offered in North America and Europe, Goodyear SightLine uses sensors with cloud-based algorithms to communicate with fleet operators in real-time. The proprietary predictive maintenance technologies are claimed to help address the many challenges facing drivers and fleet managers today, including predicting breakdowns, minimising downtime and monitoring tyre pressure and wear for enhanced safety and more costefficient mobility. Chris Helsel, Senior WWW.AUTOCOMPONENTSINDIA.COM

Vice President, Global Operations and Chief Technology Officer, explained, “Much like smartwatches that monitor vitals like heartrates and oxygen levels, GoodyearSightLine’s tyre intelligence monitors the health of a tire.” “Goodyear SightLine takes the mystery out of understanding tyres and provides proactive mobility insights to communicate when tyres need service or replacement,” he opined. Goodyear is claimed to have accumulated billions of test miles on tyre solutions powered by GoodyearSightLine through pilot programs and with its launch is claimed to have established the groundwork for a connected-tyre future in which every tyre provides intelligence. The company has articulated its goal to have tyre intelligence in all new products by 2027. In case of future iterations, Goodyear SightLine technology will not only provide feedback on the

tyre but also provide feedback on road conditions, enabling connected, autonomous mobility. Initial testing has shown integrating Goodyear SightLine technology into a vehicle’s control’s system can reduce stopping distance loss by 30 per cent.

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branded portfolios of tyres. Speaking of the acquisition and its potential, Richard J. Kramer, Goodyear chairman, Chief Executive Officer and President said, “We are excited to officially bring Goodyear and Cooper together and unite our shared focus on customers, innovation and high-quality products and solutions. This combination strengthens Goodyear’s ability to serve more consumers globally and provides increased scale to support greater investments in new mobility and fleet solutions.” The acquisition is expected to strengthen Goodyear’s leading position in the global tyre industry. The acquisition further strengthens Goodyear’s leading position in the U.S., while significantly growing its position in other North American markets. In China, for instance, the combination nearly doubles Goodyear’s presence and widens the access to local automakers. It also creates broader distribution for Cooper replacement tyres through Goodyear’s network of 2,500 branded retail stores. The combined entity

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is expected to have the opportunity to leverage the strength of Goodyear original equipment and premium replacement tyres, along with the mid-tier strengths of the Cooper brand, known to be particularly strong in the light truck and SUV segments. Opportunities for expansion of select Cooper facilities are expected to increase capital efficiency and flexibility. The additional revenue growth opportunities are expected to result from the addition of the Cooper brand to Goodyear’s global distribution network. In terms of increasing the scale to support investments in new mobility and fleet solutions, the combined company will offer tyre products and a broad selection of services through Goodyear’s relationships with traditional and emerging original equipment manufacturers; autonomous driving system developers; new and established fleet operators; and other mobility platforms. With complimentary business models, organizational structures and distribution channels, Goodyear will integrate the best of Goodyear and Cooper

in order to benefit its shareholders, customers, consumers and employees. In terms of providing significant, immediate and long-term financial benefits, Goodyear expects to achieve approximately USD 165 million in run-rate cost synergies within two years. The majority of the cost synergies said to be related to overlapping corporate functions and realising operating efficiencies. In addition, the combination is expected to generate a net present value of USD 450 million or more by utiliSing Goodyear’s available U.S. tax attributes. These tax attributes are expected to reduce the company’s cash tax payments, positioning it to generate additional free cash flow. The expected cost synergies do not include manufacturing-related savings. The acquisition is expected to be accretive to earnings per share within the first full year following closing, and modestly improving Goodyear’s balance sheet position. It enhances the company’s ability to de-lever too. ACI

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