AUTO COMPONENTS INDIA NOVEMBER 2022

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Optimising Processes

The auto components industry continues to streamline processes with a direct bearing on shopfloor efficiencies. To be in good shape, the different verticals of modern day organisations are working with even greater synergy today. This internal synergy then extends to the upstream and the downstream of the value chain. The tier1s are more closely involved with the tier2s and beyond, for example. This effort, the industry likes to call teamwork. At a recent visit to a leading tyre manufacturer’s Research & Development (R&D), Centre of Excellence (CoE), the link between R&D pursuits and enhanced shopfloor efficiencies was found to be deeper than perceived. It is to stay ahead of the curve and be more agile in the face of volatility, and meet the stringent requirements of the Environment, Social and Corporate Governance (ESG). This, in effect, has Original Equipment Manufacturers (OEMs) resorting to new trends. OEMs are finding new ways to balance this need for optimal processes sans any compromise on performance. In line with this objective, the industry is looking at intensive, internal training programmes with a long-term view for their bluecollar employees, a key stakeholder. This will aid in further optimising processes, be it the pilot stage or the launch stage of the new products going forward.

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Editor Ashish Bhatia

Newscast Government backs industry for upscaling flex-fuel engines

Hardeep Singh Puri, Petroleum and Natural Gas Minister confirmed the readiness to launch the flex-fuel E20. To be made available from April 2023, the 20 per cent ethanol blend is a milestone, advanced by five years, from 2030 to 2025. At the International Conference on Biofuels, Puri assured

manufacturers and suppliers of the sure demand from the consumer end to make their expansion a viable business. He committed a comprehensive, government support to the industry from supply, policy and the demand side. With the E20 blend attained by 2025, India could save an estimated

Stable and brighter LEDs

In a new breakthrough, LEDs could turn stable and brighter. While plasma treating nano materials, the LEDs of the future could enhance stability, brightness and be affordable. Challenging until now for scientists, at the Centre for Nano and Soft Material Sciences (CeNS), an autonomous research institute under the Department of Science and Technology (DST), hopes are pinned on a simple treatment of the inorganic material of cesium lead halide nano crystals. Led by Dr Pralay K. Santra, the team is claimed to have found a mechanism of plasma treatment in the inorganic perovskite nano crystals. This is said to induce a crosslinking of the organic molecules, oleylamine, found to be on the surface of the nano crystals. It creates a stronger network of ligands that is known to provide better encapsulation and higher PL intensity. The team has filed for a provisional Indian patent and is actively scouting for commercial partners.

Rs.30,000 crore per annum on foreign exchange. As a testimony of the infrastructure growing in parallel, he cited a three-fold rise in petrol pumps selling biofuels. From 29,897 in 2016-17 to 67,641 in 2021-22. He said, the demand is poised to grow to 10.16 billion litres by 2025.

GST revenue inches higher

The gross GST revenue collected in the month of September 2022 stood at Rs.1,47,686 crore. In a further breakup, CGST stood at Rs. 25,271 crore, and SGST at Rs.31,813 crore. IGST has valued at Rs.80,464 crore (including Rs.41,215 crore collected on the import of goods). Here the cess is Rs.10,137 crore (including Rs.856 crore collected on import of goods). The total revenue of the Centre and the States after regular settlements in the month of September 2022 is Rs.57,151 crore for CGST and Rs.59,216 crore for SGST. The revenues for the month of September 2022 are 26 per cent higher than the GST revenues in the same month last year. This is the eighth month and for the seventh month in a row now, the monthly GST revenues have been more than Rs.1.4 lakh crore. The growth in GST revenue till September 2022 over the same period last year is 27 per cent. In August 2022, 7.7 crore e-way bills were generated, which was marginally higher than 7.5 crore in July 2022. Notably, the month witnessed the second highest single day collection of Rs.49,453 crore on September 20, 2022, with the second highest number of 8.77 lakh challans filed, next only to Rs. 57,846 crore collected on July 2022 through 9.58 lakh challans, which pertained to end of the year returns. September also saw more than 1.1 crore e-way bills and e-invoices, combined (72.94 lakh e-invoices and 37.74 lakh e-way bills) being generated.

RBI Repo Rate Hike

The Reserve Bank of India hiked the repo rate, the rate at which RBI lends money to commercial banks by 50 bps again. Taking into account the prevailing adverse global environment, resilience

in domestic economic activity and uncomfortably high inflation level, the policy repo rate was hiked by 50 bps to 5.40 per cent by RBI. This also brought about hikes in the Standing Deposit Facility (SDF) rate adjusted to 5.65 per cent and the Marginal Standing Facility (MSF) rate and the Bank Rate to 6.15 per cent. The Monetary Policy Committee (MPC) decided to remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth, stated RBI Governor Shaktikanta Das. The central bank’s growth projection for the Indian economy for 202223 is projected at 7.0 per cent with Q2 at 6.3 per cent; Q3 at 4.6 per cent; and Q4:2022-23

at 4.6 per cent. Here risks are claimed to have been broadly balanced. The growth for Q1 of 2023-24 is projected to be 7.2 per cent as per the analysis.

“Against the current challenging global environment, economic activity in India remains stable,” stated the RBI Governor. “While real GDP in the first quarter of this year turned out to be lower than expectations, it is perhaps the highest among major global economies,” he added. On inflation, he opined, the global geopolitical developments are weighing heavily on the domestic inflation trajectory, he said. The RBI Governor also stated that monetary policy has to carry forward its calibrated action on policy rates and liquidity conditions consistent with the evolving inflation growth dynamics. It must remain alert and nimble, he mentioned. Inflation inched up to 7.0 per cent in August from 6.7 per cent in July.

Statiq and M&M collaborate

EV charging provider Statiq announced a partnership with Mahindra & Mahindra Ltd. (M&M). It is aimed at offer a robust, accessible, affordable, and reliable mobility network across the country. Akshit Bansal, Co-founder and Chief Executive Officer at Statiq, said, “We are delighted to partner with M&M as we share the aim to offer four-wheeler EV charging solutions across the country at a time of them launching their electric XUV400.” Veejay Nakra, President of - the

Automotive Division, M&M said, “Our partnership with Statiq will ensure robust EV infrastructure solutions

for all our customers, in the most seamless manner. It will enable faster charging and wider reach through

Dr Raghupati Singhania honoured

Dr Raghupati Singhania, Chairman and Managing Director, JK Tyre Industries Ltd. was conferred the prestigious ‘Lifetime Achievement Award 2022’ at PHDCCI’s 117th Annual Session 2022. Celebrating India’s pursuit of self-reliance, the award was presented to Dr Singhania by Om Birla, the Speaker of the Lok Sabha. As a prominent industrialist, Dr Singhania is known to be highly tech-savvy with a strong focus on innovation and has led transformation in each of his businesses. Known for having pioneered radial technology in India way back in 1977, Dr Singhania, on receiving the award expressed, “I am grateful and honoured to receive this prestigious award. I am thankful to PHD Chamber of Commerce and Industry and jury members for conferring this honour on me. The award is a testament to JK Group’s efforts toward serving society with innovation and collaborative efforts. I would also like to thank my colleagues and industry partners for their support in our successful journey.”

our extensive dealership network across the country.” This partnership comes close on the heel of Statiq collaborating with Ather, to enhance the combined EV charging network in the northern states, with a special emphasis on the NCR region. Statiq is claimed to have installed 6500 plus charging stations including at Mangaluru in Karnataka, Himachal Pradesh, and Rajasthan which it is looking to expand to a 20,000-strong charging network by the end of 2022.

Steelbird International recognition

Steelbird International was recently honoured at the Bosch India suppliers meet. This coincides with the centenary celebrations of Bosch in India. Manav Kapur, Executive Director at Steelbird International, received the award handed over in recognition as one of the long-term Bosch suppliers. Bosch is committed to an investment of Rs.1000 crore in localisation of Advanced Automotive Technologies (AAT) over a five year period. As per Dr Stefan Hartung, Chairman of the Board of Management, “Bosch India has brought together the best of German engineering and Indian entrepreneurship to develop innovative products across all segments.”

Al Logistix and Sun Mobility partner

AI Logistix has partnered with Sun Mobility. As part of this partnership, Sun Mobility and AI Logistix plan to deploy 500 loaders and electric two-wheelers till March 2023. The

plan is to add approximately 100 vehicles to the fleet every month with the initial deployment focused in Bengaluru and Hyderabad before expanding pan India. The

Lohum partners

Glencore

Lohum teams up with Glencore to produce lithium for battery manufacturing. Together, the firms have announced a strategic partnership to advance circularity in the Li-ion battery supply chain. Lohum will supply Glencore with 10,000 MT of specialty chemicals such as cathodes, sulphates, carbonates, and oxides of various metals used in Li-ion batteries over a five year span. Commenting on this partnership, Rajat Verma, Founder and Chief Executive Officer of Lohum, said, “Our partnership with Glencore underpins our global commitment to expanding the availability of existing battery resources through recycling. This major development will directly boost India’s battery industry and energy security, leading to large scale value creation in employment, domestic ecosystem growth, and import savings on the LIB raw materials.”

partnership between the two companies will offer intelligent and customisable solutions to address everyday two- and three-wheeler mobility challenges.

Valvoline All fleet Turbo Plus engine oil

Valvoline Cummins Pvt. Ltd. has launched ‘Valvoline All Fleet Turbo Plus’ (Haulage Expert) for high HP tractors and other agricultural allied implements. All Fleet Turbo Plus Haulage Expert from Valvoline is a testament to the brand’s commitment towards technological advancement for ground-breaking products. Designed and engineered to meet the specific needs of high horse power tractors whether on road or on farm, the industry-first product meets the rising complexities of new age tractors, reduces cost per hour due its longer drain interval and offers highest levels of engine protection when carrying heavy loads. It effortlessly meets the challenges that arise from wide applications of tractors and is adapted to the changing and expanding role of tractors.

Newscast / international

New STMicroelectronics plant

STMicroelectronics to build integrated Silicon Carbide substrate manufacturing facility at its Catania site in Italy. It is claimed to be the first-of-a-kind 150 mm SiC epitaxial substrate manufacturing facility in Europe. The new plant will support the increasing demand from

the company’s customers for SiC devices across automotive and industrial applications as they transition to electrification and seek higher efficiency. The production is expected to start from 2023. Built alongside the existing SiC device manufacturing facility, the

Schaeffler acquires Paravan Technologie GmbH

Schaeffler Technologies AG & Co. KG and Arnold Verwaltungs GmbH signed a basic agreement in which Schaeffler Technologies AG & Co. KG will acquire Arnold Verwaltungs GmbH’s retaining 10 per cent stake in the joint venture company Schaeffler Paravan Technologie GmbH & Co. KG (Schaeffler Paravan). Schaeffler Technologies AG & Co. KG currently owns 90% of Schaeffler Paravan and will own the company entirely once the transaction is completed. The firms have agreed not to reveal any financial information. Schaeffler will take over Schaeffler Paravan’s 70 employees and run the company under its own management. Schaeffler will also continue to maintain the highly successful relationships that Schaeffler Paravan has with its existing customers and partners. Schaeffler Paravan’s current Managing Director, Roland Arnold, is stepping down from his management role and will be succeeded by Clément Feltz, Head of the Chassis business division at Schaeffler. “We would like to thank Roland Arnold for his immense contribution to Schaeffler Paravan and for developing the globally unique Space Drive technology,” said Matthias Zink, Chief Executive Officer Automotive Technologies at Schaeffler AG.

new project involves investment of around Euro 730 million over five years which will be supported financially by the State of Italy in the framework of the National Recovery and Resilience Plan and it will create around 700 direct additional jobs at full build-out.

NEI Global Technology Center

National Engineering Industries Ltd. (NEI), a subsidiary of the CK Birla Group and the manufacturer of the NBC brand of bearings established a Global Technology Center (GTC) at Würzburg (Wuerzburg), in Bavaria (Germany). The technology centre will focus on automotive and industrial application engineering, product development, and manufacturing technology. It will support the Euopean among other global OEM customers. It will also act as an extended arm for NBC bearing in India by driving innovation, implementing new ideas rapidly, responding to customer needs, and addressing market demands. Commenting on the new centre, Rohit Saboo, President and Chief Executive Officer, NEI, said “It is a moment of great pride as we start our very first GTC to focus on customer-centred bearings, an integral component to every kind of machinery.” Further, Andreas Knopf, Head of GTC, NBC Global (Germany) Gmbh added, “This centre will provide a strong impetus for growth to NBC, both from customer proximity and technology perspective.” To capitalise on the synergies, GTC will also work in close cooperation with NBC Global’s entity in Slovakia, Kinex Bearings.

Upfront

Re-imagining AMeaningful Business

In an industry talk session, Satish Sharma, President of the Asia Pacific, Middle East & Africa (APMEA), Apollo Tyres Ltd. and Chairman, Automotive Tyre Manufacturers Association (ATMA), speaks to Ashish Bhatia on the need to re-imagine a meaningful business.

Q. What is your broad-based analysis of the industry sentiment?

A. The industry has seen a fair amount of a rather tough period with challenges. We are definitely out of that cycle and have entered an up cycle now. From the time, the regulation on the axle load and before it the liquidity crisis, things were already challenging for the industry. Then came Covid-19. Now we see a revival of the economy and the up cycle forming for the CVs. Having said that, the expectation is that a V-shaped recovery will help the industry go back to a prepandemic level. I see it happening slowly in a gradual and organic manner. It’s taking its time and for the good in my opinion. It’s a far surer way and yes, everything points towards a recovery. All it leaves is the extent of recovery and the pace of it to be debated.

I must add that the recovery is a fractured mandate and various segments, for example, the people movers with the bus segment are back. A segment that suffered the most. If you compare it to the low base of the bus segment in Covid-19, yes it’s a V-shaped recovery. The tippers were always doing well. The multi-axles and Medium & Heavy Commercial Vehicles (M&HCVs) are now beginning to come around. It depends on which segment you are looking at, the market you are looking at and so the shape of recovery is different for different segments.

Q. Are there any weak links in the value chain both upstream and downstream and do you see the stakeholders hand holding one another?

A. The value chain as such is a strong one. The weakest would be the raw material from a country standpoint. So from that perspective, our consumption is ahead by ~40 per cent of our production. Therefore, we are net importers and are left to deal with the vagaries of the exchange rate, the geopolitical risks, and the risk of natural disasters from flooding to draughts. So we are exposed to many of those risks. We are trying to offset it by focusing on the North-East, going beyond Kerala to try and produce Natural Rubber (NR). Everywhere, there are a whole lot of opportunities driven by changes that are happening. That is quite exciting. More than hand holding, I would call the recent efforts as teamwork. There is a better openness and appreciation of each other’s concerns. Knowledge sharing that might benefit someone else has helped. It was a time when everybody said we are all in it together and will get out of it together. There was more empathy and listening. It all contributed to good teamwork and bonding. The industry, despite being in a very challenging period is looking at it as things of the past. We’ve benefitted from a lot of learnings with every member on board. The good part is that people are putting into practice, permanently, many of those learnings. As an industry, we have come out of the challenging period, a stronger unit than before.

Q. A word on the OEM and tier supplier contractual agreements.

Are these designed to create a level playing field?

A. Finally, everything boils down to market forces. You can’t go against the law of nature. So if a certain market segment has leverage over another

market segment that leverage will only play out. The context would be in which environment are you operating.

If it’s an inflationary trend it plays out in a certain manner; a recessionary trend plays out in a certain manner. That’s the nature of the business. One can’t really change that. Everybody is bleeding and while there is an understanding, you also need to show, what is it that you can do differently during these stressful periods. That’s what actually makes all the difference. The leverage that one has will always be there irrespective of the times, it’s only the tone and manner that perhaps might change.

Q. Are the projections of the automotive industry’s contribution to economic growth in the Amrit Kaal burdening or attainable?

A. The automotive industry in India has never disappointed. It’s been at the forefront of leading the economy. I think, the nature of geopolitics, the manner in which the world is playing out, it looks like India is the flavour. Recently, the Mckinsey Chief Executive Officer spoke of it being not only India’s decade but the century. A couple of other people have voiced a similar scale of optimism. I share that optimism. I think, if you connect the dots on what’s happening around the

world, coupled with India’s standing on the life cycle, from the maturing technology to the manufacturing progress to the organic strengths of digital technology, and getting to the intersection of the mechanical and the electronic world. All of these point towards a formation of momentum for India.

It’s not just the domestic market which in any case is very big, the address ability of Indian products is vastly improving by the day. Therefore Indian products will find favour around many markets of the world. It gives a positive sense. Also, Indian entrepreneurs have become more confident. They have stepped out, they’ve upped the technology game and built collaborations. The results of this are still ahead of us but one can see them in the making.

Q. What has been the direct impact of the government’s infrastructure impetus on the tyre manufacturers?

A. The government is absolutely right. When you build a road, the multiplier effect is always north of 10x. It is a very big multiplier force. It doesn’t happen instantly but it plays out over a period of time. Naturally, the manufacturing industry is a sure beneficiary of this. Also, the government is impacting in more ways than one. It’s also pushing in a lot of regulations. These regulations in turn along with the growing and improving infrastructure are nudging the industry and as a result, merging it with the directions of the rest of the world. Even if manufacturers cry foul on the regulations accelerating the change, in hindsight, it always ends up making the industry stronger.

Q. How do you look at the pace of recovery at Apollo Tyres vis-a-vis the tyre industry?

A. It is at a pace slower than desired. While on a standalone basis you can make it look very good. It depends

There is a better openness and appreciation of each other’s concerns. Knowledge sharing that might benefit someone else has helped.

Upfront

on your side, perspective and the lens with which you are looking at recovery. The automotive world at large broadly speaking is still pre-pandemic. The earlier highs in different categories have happened in different years of the past. One

would think that the tyre industry domestically could have done better. The volatility of everything happening around it comes finally on all the components. From that perspective, you always feel it could be better; you prepare for something to be bigger than what it actually turns out to be. Here, I must stress the fact that the volatility is huge. One month goes very good and makes you feel good followed by a slower month. It’s a bit of a startstop scenario with respect to the wider momentum that one expects and so a slightly slower pace than expected.

Q. How soon do you expect Apollo Tyres and the industry as a whole to scale past the pre-pandemic performance peaks?

A. That way we are scaling our peaks. Our quarterly turnovers are definitely the highest ever. But it’s also got some inflation built in. Prices have been raised. Even if I were to net out we are better than before. It’s just that

in our understanding of the India growth story, we portrayed a far bigger scenario. So from an expectations perspective, the jump is not that big.

Q. Would you be able to assess the near-to-medium term sectorial outlook on a segment, tonnage basis by looking at the tyre consumption trends at large?

A. We do not track the market on a tonnage basis the way the OEMs do. On a tonnage basis, my sense is that the growth is much higher on a unit basis. We are carrying far higher tonnage on the same unit of a CV. The vehicles have grown; the number of axles has increased. While the axle load has reduced the units it is allowing greater tonnage per vehicle unit (~20-25 per cent higher tonnage). We don’t track that on a tonnage basis but it could be a higher proportion.

Q. Would you say operating margins have been and continue to be a

Because we are absorbing the inflation of our supplier group into our products, to that extent, the cost is passed back to us. Many of these costs can’t be absorbed by us over a long period.

Upfront | Exclusive

concern area for the bottom line? How are you juggling the balancing act from an end consumer perspective?

A. The pressure on operating margins is huge. Compared to a period of 17-18 per cent operating margins today we are on a high single-digit number. That’s quite a massive reduction. Relatively, compared to the industry, given the strength of our products, our distribution and every value-addition, we are trying to do a better job than our peer group. On a standalone basis, we wish we could have done better. We should have done better finally given that as businesses, the inflation is borne by the end user.

Because we are absorbing the inflation of our supplier group into our products, to that extent, the cost is passed back to us. Many of these costs can’t be absorbed by us over a long period. We tried our best but we definitely hoped to do better. There is no case for rolling back the price hikes in the foreseeable future. And that is to do with a high single-digit operating margin. Even with some softening of prices, at best, one can hope for convergence. Our task is cut out. So maybe the period of raising prices might stop, and the effort will be to hold on to levels where we have reached so far. I do not see that happening either.

Q. Has the equation of domestic NR production vis-a-vis dependency on the import changed with the focus on the former? How long before we get to a level which could be an industry tipping point?

A. We are yet to reach that point. The imports are of the same magnitude of 35-40 per cent. While the rubber tonnage has grown so has the Total Industry Volumes (TIV). The nontyre application of rubber has gone up hugely during the pandemic. Be it allocation for PPEs, disposables etc. contributing to a higher proportion further skewing the equation. So

imports continue to be a large portion. Of course, the efforts are there to create North East as a hub. But the rubber tree growing process is a long one. The rubber tree takes anywhere up to seven years before it becomes productive. So one starts with experimentation and then with the whole ecosystem. So North East does contribute to rubber procurement and it is moving in the right direction. The Indian tyre companies are contributing a lot towards this effort but still a long road ahead before we reach any tipping point.

Q. A word on pursuing your contribution towards a circular economy using more alternate, and sustainable input raw materials?

A. Year-over-Year (YoY) there is an improvement. The serious part of the circular economy though is still to kick in. Going forward also it will improve on a YoY basis as we move towards our internally set targets which are very ambitious, and audacious. The usage of sustainable materials from hereon is set to exponentially increase. It is still early years in that journey.

Q. What is the business contribution of the segments you are present in including the one’s that you have recently entered? Any white spaces as a full range player?

A. We do not just look at Apollo Tyres as a full-range player but as the freshest, smartest, youngest player with the potential to displace many other peer members from the positions that we’re holding onto. We are looking very good on the range aspect and from a perspective of securing our right to win in various categories.

Q. How are you complying with the new standards for the tyre industry?

Will this compliance come at a price that may have to be passed on to the customer inevitably?

A. We welcome regulations because it

is nudging the industry to merge with the developed world. For example, the star labelling regulation is making the consumer more informed on his purchase journey. In the voluntary phase of trials, we already brought in five-star rated tyres in passenger cars and light truck tyres. It allows us to differentiate ourselves. Of course, there are challenges with respect to the testing infrastructure which wasn’t there earlier. With the formation of the National Automotive Testing and R&D Infrastructure Project (NATRiP) and National Automotive Test Tracks (NATRAX), the government has done a lot and they are trying to make sure that all the investment that has gone in, it starts to give returns through enhanced testing in its early days. We need to overcome the teething issues as an industry.

Q. How has the focus on digitisation at Apollo Tyres shaped up from fronts like sales to manufacturing against the backdrop of a new hub inaugurated in the UK?

A. A lot is happening on that front as one of the levers of attaining our vision. Both from a top line as well as margins growth perspective. Every aspect as you rightly said is being touched by it

So while we are very strong on the earlier pieces of the way business operated that was about a product, traditional network or traditional sourcing we have to reinvent on all the fronts to do things differently.

Upfront | Exclusive

from procurement to the dealerships and the end user life cycle. Whether its the efficiency of our processes in the plant and elsewhere. It has extended to connectivity and capturing data and learning to leverage that big data for actionable, business insights on the road to improvement. In addition to preparing new business models altogether to be able to tackle the future differently. We are hopeful of learning and enhancing our capabilities.

Q. What are the current utilisation level trends across your plants today?

A. On a Month-over-Month (MoM) basis, this keeps changing. 85 per cent would have been a fair figure for the first quarter (Q1-FY23) with it dropping a little to align with seasonality like monsoons. We are hopeful of getting back up there.

Q. Given these volatilities would it be fair to assume that CapEx cycles would be postponed?

A. Definitely. We have invested for our immediate growth with the current focus on sweating the assets and digitalising the ecosystem among other priority focus areas. So there is a case to not just up the utilisation but within that utilisation to be able to de-bottleneck and to change the approach and be able to sweat higher than normally.

Q. How have exports fared in comparison for the company? Does the government’s push on signing FTAs with target export markets help in giving it a push?

A. The government is working on Free Trade Agreements (FTAs) in a very judicious manner. They are consulting the industry and at the end of the day, it is a give-and-take equation. The government is well seized on which sector it can negotiate for and what is in the best interest of our country. They have sought audience from us when needed where we have put across our points of view. We trust the government to make the right calls in the best interests of the industry and the nation as a whole.

Q. Compared to OE sales how big is the used PV and CV market opportunity for Apollo Tyres and the tyre industry as a whole?

A. From category to category that opportunity varies. In a CV that replacement cycle is quicker; in the case of cars, it’s four to five years.

Q. What is the focus on strengthening service offerings as a strong non-core revenue stream?

A. Yes, the service aspect is increasing. While surveying the market a few

days back, we met up with our CV zones head. He was looking at a 4x growth in two years and much of it was attributed to service. From front-end load to being able to sell the tyres. That was quite refreshing to see how the market orientation is beginning to change. With the BSVI and technology-embedded products, service orientation comes to the fore organically. We are equipping our network to be able to deal with it, to empower them. Going about differently, we, therefore, have the largest service network. The objective is to look at doing things differently with the so-called sales network and the service network.

Q. To sum up, how resilient, diversified and future-ready is Apollo Tyres?

A. Apollo Tyres is inherently emerging as a strong player even if I may say so myself. The point is not to sit on our laurels but to use the tools at our disposal to be able to re-imagine the business. It entails a capabilitybuilding period, a whole lot of experimentation and calls for high levels of innovation. So while we are very strong on the earlier pieces of the way business operated that was about a product, traditional network or traditional sourcing we have to reinvent on all the fronts to do things differently. There are areas where we could be ahead of the curve and in other areas a laggard. There could be other fronts where we find ourselves re-experimenting and re-imagining. It’s exciting times with the best part being that it is a great leveller for every company. We believe in our strengths and we do believe that we can create a much more meaningful business as compared to what we’ve achieved so far. Therefore we hope to get stronger, better, more agile, more humble and more customer-centric. Marrying to the volatility is both exciting and stressful on a lighter note. ACI

Upfront

Tyre Priorities And Prospects

Against the backdrop of a new tyre range launch, Samir Gupta, Managing Director, Continental Tires India, and Head of Central Region BA PLT RE APAC talks to Sumesh Soman about the industry sentiment, priorities and future prospects.

Q: What is the approach behind the launch of the new range of tyres and how did the project come into being?

A: The first link is how its aligned with the initiatives taken by the Indian

government. The priority is safety and then comes rolling resistance, wet grip and noise as the other focus areas. There is quite the action in the industry with the fifth generation

Internet (5G) being rolled out, and sustainability at the centre of it all. Continental, as a brand, is very much aligned with the movement and these products are following suit.

(From left) Samir Gupta, Managing Director, Continental Tires India, and Head of Central Region BA PLT RE APAC with Kuldeep Singh, Vice President Manufacturing, Continental Tires, Plant Modi Puram, Modipuram.

Q: How are the tyres expected to standout?

A: The automotive tyres come with factory-fitted sensors. They are smart tyres that have sensors embedded and meant for working 24by7. They provide information to the drivers regarding inflation of the tyre; it can also be connected to GPS and help locate the vehicle by fleet owners, remotely. This helps the driver and the fleet owners in taking better decisions before the tyre deflates. Real-time health status is also available, this includes air pressure, tyre temperature, wear and tyre information to name a few. Globally, these features have helped in extending the life of tyre by 20 per cent and reduction of fuel consumption by three per cent.

Q: How does the brand expect to evolve in the future?

A: We are already using Taraxagum in the bicycle series derived from the botanical name for the dandelion. It is dandelion rubber that will be used and experimented with to explore further use cases and how it fits into the mix instead of synthetic and natural rubber. Apart from that, we

Upfront

are using recycled PET to produce the polyester that is being used in our products. These are the directions that point straight at sustainability and that is the future as well.

Q: What are the advantages of the Modipuram plant?

A: It is not a very big plant, we started producing Passenger and Light truck (PLT) tyres, precision car tyres and Truck and Bus Radials (TBRs) in 2014. Since then we are investing in the plant to bring up the capabilities and competency of the plant. Bringing these new products is a part of that initiative, recently the capacity of the plant has been increased to 15 per cent for the PLT tyre production. And we are still evaluating further investment opportunities. The plant is capable of manufacturing both automotive and PV tyres.

Q: What does the pan-India reach of the brand look like going forward?

A: From the market perspective, we

have closed to 200 image shops. They can sell tyres of other brands as well but predominantly sell Continental tyres. These shops are focused on consumer experience and essentially give a touch and feel of the product. More such centres will be considered to expand the footprint of the brand across the country.

Q: Where does the brand capability with EVs in the mix?

A: The products that have been launched today are very much compatible with EVs as they are with ICE products. One has to understand that an EV tyre is subject to a lot of instant torque, thus the tyre should be able to withstand that for years. Moving further, an EV tyre should be less noisy as compared to an ICE tyre because an ICE vehicle has the sound of the engine that masks the tyre noise. And then comes rolling resistance where the tyres have to have a better coefficient of drag. The tyres that have been launched have been put together after taking into consideration these parameters. So, not only are these products compatible with EVs, the future products will also be EV fine-tuned for an optimal performance. ACI

The products that have been launched today are very much compatible with EV products as they are with ICE products.

There is quite the action in the industry with the fifthgeneration Internet (5G) being rolled out, and sustainability at the centre of it all.

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The R&D Link To Shopfloor Efficiencies

The Raghupati Singhania Center of Excellence (CoE) at Mysuru, in Karnataka is at the heart of JK Tyre’s R&D activities and operational excellence. The facility is well equipped and boasts state-of-the-art laboratories with cutting-edge technology committed to a single purpose of aligning with the latest tyre technology trends. The goal is to also better products and upgrade the existing portfolio to stay relevant. Known to have been established with an investment of about Rs.150 crore, it has over 250 engineers, scientists and technicians that contribute day-in and day-out to find a better solution for the tyre segment. “If we do a random check, 95 out of 100 vehicle owners will have their tyre pressure wrong, but a periodic service of their vehicle is less likely to be missed. A tyre is one product that is not looked after in a very serious manner up until the wear and tear is visible to the naked eye,” explained Dr R. Mukhopadhyay, Director-R&D, JK Tyre & Industries Ltd. He further added, “This customer behaviour has pushed us to make the product as such that it remains maintenance-free until its totally worn out.”

But now the industry is asking a lot more from the product than just longevity. OEMs

JK Tyres is enhancing shopfloor efficiencies on the back of R&D excellence. Sumesh Soman visited the Mysore CoE to establish the link.

are demanding good ride quality, less noise and with EVs into the picture, the tyre will have to bear with the instant initial torque. All of this with a long life is what is expected from the product. Mukhopadhyay averred, “The facility is equipped with the latest state-of-the-art machinery and labs that help in developing new compounds and test the products under extreme conditions.“

q Variables and Invariables

A tyre looks quite simple in its structure and is made in a way to do one simple task, move the chassis and the superstructure using the engine power. But it is far from that, the impact it has to the entire motion and the ripples it affects are far more. With a keen eye, one can tell apart the vehicle dynamics, sound and vibration difference from one tread pattern to the other and the chassis is shod with a size more or less of the standard set. Mukhopadhyay informed, “Quite a lot goes into the making of a tyre, electronics, composites, material chemistry and physics, bonding, adhesion, surface science, rheology, trilogy, diffusion chemistry, heat transfer and process engineering, thermodynamics and fluid dynamics to name a few.” For something that we see on a daily basis, that’s a lot to take, but the devil lies in the details. The above-mentioned put together determine the durability, longevity and other parameters like dry grip, wet grip, stability etc. This is also tweaked according to the clientele and application of the product.

q Future considerations

Sustainability is the name of the game! From the very beginning, the process of tyre making has evolved to a stage today where it is deemed advanced. Mukhopadhyay stated, “Companies are now looking

at modelling and simulation, autonomous factory, smart and adaptive tyres in terms of advancement in the manufacturing of the product. As a result a lot of time and money is saved, courtesy of VR and AR infused to the traditional methods of making a tyre.” When it comes to raw materials, improvements to NR yields and disease resistance is being paid more attention to. Biosourcing of tyre raw materials and bio-devulcanistation is now a priority for companies. Mukhopadhyay drew attention to South India as one of the biggest sources of rubber, with new regions like North East vying for the second-best source for rubber procurement. Here the topography and weather is almost similar to that of South India.

Importing natural rubber is not something that everyone wants to depend on anymore as per Mukhopadhyay. A secondary source within the country borders rather sought after considering the reduced cost and swift transportation logistics associated with the locally procured material. Tyres now have a lot more sensors and RFID tags, smart and intelligent adaptive tyres will be the norm going forward. Mukhopadhyay opined, “In the PV segment and in the CV segment too, OEMs are now demanding more information to be relayed on the instrument cluster and on hand helds where the relay of metrics like pressure and temperature have turned a priority. Alerts can be set if these metrics are pushed to a point where things get risky, he added.

The face of the tyre will also change in the not-so-distant future as ICE vehicles will share the space with electric, hybrids, hydrogen and gas-powered vehicles. The choice of powertrain here is expected to alter a lot of wear and tear that a tyre goes through, thus changes will be incorporated and are being worked upon at the CoE. Mukhopadhyay

mentioned, “With an electric vehicle, there is a lot of instant initial torque that a tyre is subjected to, this will take a toll over the years when compared to an ICE vehicle. Thus new tyres are in process of development not just for EVs but other forms of powertrains as well, a continuous process it is.” In the short term, the tyre industry continues to grapple with the Covid19-induced slump and the more recent supply-chain bottlenecks in the backdrop of geopolitical turmoils. The tyre industry suffered because a significant amount of latex and rubber resources were redirected to the health sector as it was a priority for the world. This has also pushed the industry to look for alternate raw materials and opt for less dependency on just a single source or place of procurement, he admitted.

q Compliance withnew legislations andregulations

Before a tyre makes it to the open road, it has to be cleared and meet certain standards. This itself is a challenge because the certification of the tyre is coming with a conflict of fulfilling its purpose. “There are multiple ACTs and regulations put on OEMs that make it tougher to

Ahead of testing, the rubber compound passes through various machines for ascertaining its properties and compatibilities.

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Research Facility

RUBBER PROCESSING LAB

An entire section is allocated for processing rubber with different ingredients. Here, the sheets are made and further tested for different types of applications. Different permutations of the compound are tried and tested in its raw form and subjected to grinding and drilling. This is where the rubber is moulded into thin flat sheets before it goes on to take the shape of a tyre.

RHEOLOGY LAB

Rheological properties of the rubber or the compound is tested in this lab. Test output includes Mooney viscosity, scorch safety, cure rate, cure time, payne effect, and variable temperature curve to name

a few. The performance characteristics include material evaluation, compound development, chain branching, gel content, compound process safety, rubber filler interaction and cure simulation.

PROCESSIBILITY TESTING LAB

The lab essentially tests the mixing characteristics that includes torque, temperature and time profile along with extrusion characteristics including dye, swell, shrinkage and surface appearance and optimisation of different variables. The performance characteristics of these tests stand out to be material evaluation, compound development, processing characteristics and advanced material mixing technology development.

PHYSICAL TESTING OF VULCANIZATES

The compound goes under stress to check the strain properties, also subjected to Hysteresis, checked for hardness, creep and dress relaxation, coefficient of air permeability, rebound resilience and testing compression

set. The performance determines material evaluation, compound development, durability, energy absorption, air retention performance of inner liner and tube along with state of curve.

WEATHERING/AGING TEST OF VULCANIZATES

The compound is put to test where it is observed for the retention of stress-strain properties after ageing along with retention of adhesion with subject to hot air/ humid/salt and ozone resistance. The performance of the compound determines development, evaluation, life prediction, durability and weathering resistance.

3D SCANNING MACHINE AND 2D LASER PROFILE METER

The machine scans tangible moulds for scanning and creating a model that can be reversed engineered for multiple usage. It has a capacity of 500 and 200 FOV and a range for all tyres. The test output creates point cloud data, profile measurement, monitors tyre growth under change in inflation. The performance characteristics include reverse engineering, inputs for simulation and measurements and 3D analysis.

PLUNGER TYRE TESTING MACHINE

This is A fully automatic machine with controlled parameters like load, inflation pressure and speed. It is capable of measuring the plunger energy and tyre foot print as per National and International test Standards.

TYRE UNIVERSAL TESTING MACHINE (UTM)

UTM measures tyre stiffness characteristics (radial, lateral, longitudinal and torsional), static footprint (shape, size and pressure distribution), side wall profile through laser scanning, beat unseat and electrical resistance.

TYRE ROLLING RESISTANCE TESTING MACHINE

A fully automatic machine with controlled parameters like load, speed, inflation pressure and measures parameters tyre rolling resistance by force and torque method as per various standards (SAE, ISO, etc.) and regulatory requirements (ECE R 117).

ONLEVEL TYRE TESTING MACHINE

OnLevel tyre testing machine measures forces and moments; rolling resistance; high-speed uniformity; conicity and ply steer; Ply steer Residual Aligning Torque (PRAT); Conicity Residual Aligning Torque (CRAT); Rolling Radial Spring Rate; Revolution Per Kilometre (RPK) as per various standards (SAE, ISO, GMW, etc.).

MULTIFUNCTION LOAD DEFLECTION TYRE

MACHINE

Loading Deflection machine can test tyres

24-inch on following test parameters on

Capability: Capable of doing following tests as per ISO, SAE, JASO, etc.:

Interior Noise and sound quality analysis

Noise Testing, pass-by noise testing as per ISO 362 and ISO 13325 (R117 Regulation)

experimental analysis as per SAE 2710

Path Analysis (TPA)

Ride Quality and Comfort

SKID TRAILER

Used for On-Road Tyre characterisation (Force and Moment, Rolling Resistance dry and wet grip).

BRABENDER PLASTI-CORDER

To study the rheological behaviour (flow) and processing characteristics of rubber compounds (mixing and extrudability).

UNIVERSAL TESTING MACHINE

measure the stress-strain properties of different cured rubber compounds, finished products, fabrics, wires, adhesion strength of composites, hysteresis etc. at ambient, high and low temperatures.

TEAR FATIGUE ANALYSER

Characterisation of fracture mechanical behaviour of elastomer samples and determination of fatigue crack growth rate.

LAT 100 MACHINE

The Laboratory Abrasion Tester measure’s abrasion characteristics of rubber wheel under various test conditions (load, speed, slip angle, temperature etc.).

DYNAMIC MECHANICAL ANALYSER (DMA)

DMA measures viscoelastic characteristics of cured rubber under different operational conditions (strain, temperature, frequency, waveforms) and different deformation modes (tension, compression and shear).

OZONE CHAMBER

The precise control of Ozone concentration helps to check the Ozone resistance power of cured rubber compounds and finished products in different modes and wide test conditions or as per specific requirement.

ANECHOIC CHAMBER

TYRE NOISE TESTING

Noise, Vibration and Harshness (NVH)

Semi Anechoic Chamber, Pass by Noise

A room designed to stop reflections of either sound or electromagnetic waves. They are also often isolated from energy entering from their surroundings. This combination means that a person or detector exclusively hears direct sounds, in effect simulating being outside in a free field. The chamber is quite big enough for testing a truck’s NVH levels.

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manufacture a product that does not compromise on performance. And this is just the beginning, we will be faced with more stringent norms considering how the world is now taking sustainability seriously.” Few regulations and legislation on tyres include the Transportation, Recall Enhancement, Accountability and Documentation (TREAD) Act, Registration, Evaluation, Authorisation and restriction of Chemical (REACH), and compliances for End of Life Vehicles (ELVs). Then there is Labeling of Tyres: Tyre Rating/AIS 142/ECE R117, End of Life Tyre(ELT), Extended Producer Responsibility (EPR), Uniform Tyre Quality Grade(UTGQ) to name a few.

q Material trends

From raw materials to nano materials, a new trend is manifesting around the globe and reaching the Indian shores as well. Environment-friendly process of manufacturing is encouraged by the government, thus OEMs are pro-actively resorting to new trends. Mukhopadhyay said, “Our labs and researchers are dedicated to finding alternate sources and perfecting the permutation in way that it does

not compromise on performance.” Currently, OEMs are pursuing alternate source of NR along with modified NR. The pursuit also covers Functionalised Solution-polymerised Styrene-Butadiene Rubber (SSBR), Hydrogenated Styrene-Butadiene Rubber (SBR), Bio Source Synthetic Rubber (BSSR), Ethylene Propylene Diene Monomer, (EPDM), and Engineered Elastomer. For fillers, OEMs are resorting to austin black, latex-C black/silica master batch, functionalised C-Black, carbon black from biomass, silica from rice husk, lignin and corn powder starch to name a few.

Reinforcing materials like high tensile, low weight steel cord, recycled polyester, eco-friendly dip solution, polyster from bio source, carbon nano fibre, hybrid cord, celluosics are now in demand considering their sustainable characteristics, informed Mukhopadhyay. Similarly, chemicals and process aids are also following the suit. Mukhopadhyay averred, “Practices like the elimination of zinc, REACH compliance is now the norm for OEMs. Pre-dispersed rubber chemicals, reversion resistance cure systems, resorcinol-free resin,

chemically modified bio-oil and process aids-natural sources like soya, corn, sunflower, palm, neem and castor oil are a priority for our industry.” All these interventions lead to a simple goal of curbing emissions in every way possible.

Currently, the global rubber raw material trend stands at around 71 per cent dependency on petrochemicals, this includes SR/C-Black/chemicals/ orginal tyre chords, 24 per cent on biosourced materials including NR/eco-oil/ silica and about five per cent on recycled materials. And at JK Tyre, these figures stand at 64 per cent for petrochemicals, 33 per cent for bio-sourced materials and three per cent on recycled materials. For 2024-25, the company looks at reducing the dependency on petrochemicals to 59 per cent, increasing bio-sourced material dependency to 35 per cent and recycled materials to six per cent, hailed as significant. Mukhopadhyay quipped “Fuel efficiency, safety, ride comfort, noise, vibrations, handling are the primary parameters that went on before construction of a tyre, up until now. Henceforth, we have a new parameter and that is resourcesaving, one that will be looked after quite diligently.” ACI

Exhibition And Conference Staying True To Their DNA

The 62nd ACMA Annual Summit had the stakeholders of the automotive industry hail the suppliers support received over the past fiscal. Ashish Bhatia writes on the push for staying true to their DNA for manifold growth.

The 62nd ACMA Annual Summit had the marquee event return to its physical form this year. In a departure from the practice of being held a day after the SIAM Annual Session, this year the suppliers kick start the two-day summit that had stakeholders of the automotive industry in full attendance. Coming on the close heels of the components industry, regaining its pre-pandemic levels and clocking the highest-ever turnover of Rs. 4.2 lakh crore (USD 56.5 billion), the industry sentiment was buoyant despite near-term concerns. The industry is hopeful of building on the newfound momentum where it surpassed the previous peak turnover (inclusive of the aftermarket) of Rs.3.95 lakh crore in FY18-19, a 23 per cent growth in FY 2021-22. Exports have registered a 43 per cent growth to Rs.1.41 lakh crore (USD 19.0 billion). With the imports growing by 33 per cent to Rs.1.36 lakh crore (USD 18.3 billion), the industry was able to register a trade surplus of USD 700 million. Using this performance as the backdrop, at Hotel Taj Palace, in New Delhi, in a pre-summit, select media gathering, ACMA committee members led by

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the President were joined by team McKinsey to share new findings that the industry would work around to reach the desired status to align with the future of mobility.

To stay ahead of the opportunity, Sunjay Kapur, President, ACMA pinned the industry’s ambition and hopes of succeeding on investments made in technology. Admitting to emerging from volatile times, he was affirmative on the phenomenon of disruption is real. “There is a high level of disruption in products, processes and services. Disruptions in the material are also on the anvil,” he stated. He called upon the industry to invest as it was a question of staying relevant and gave the example of even the government backing it. Drawing parallels with the fin tech industry, he opined, disruption was albeit higher in the case of the automotive industry. He acknowledged that the competitive landscape is changing. Shivanshu Gupta, Senior Partner at McKinsey & Company brought in insight as he drew attention to the Total Cost of Ownership (TCO) as a key driver of decision-making going forward.

And Conference

Of the opinion that the industry must brace itself for the fast disruption, especially for the twoand three-wheeler industry where TCO could be more attractive. As per the McKinsey study, it could witness a 70 per cent penetration over the next five to seven years. Here, Heavy Commercial Vehicles (HCVs) will see a lower penetration, he pointed out. In a further breakup, he said, twowheelers could see an EV penetration anywhere between 50-80 per cent by 2030. This could be 60-80 per cent for three-wheelers. Passenger Vehicles could witness a 10-15 per cent penetration and CVs up to 10 per cent in the same span. The shift would be more tilted in the favour of Hydrogen Fuel Cell Electric Vehicles, he opined. Speaking on the powertrain, he said, an estimated 43 per cent shift could be seen in the Business of Materials (BOM) as headwinds for the industry. According to early estimates, the study expects the transition to EVs to impact up to 50 per cent of the ICE BOM for components. It expects disruption to the portfolio of incumbents in traditional ICE

Exhibition And Conference

opportunity that is at stake, he exclaimed.

Srikant Inampudi, Senior Partner, McKinsey & Company spoke of governments dictating priorities for industry and ecosystem to adjust, barring in the US. He advocated the need for constant dialogue between the government and industry. Giving the stakeholders a reality check, he quipped, “It’s not that the world is waiting for India to enter into segments where it is not present.”

Yes, it is hard to break through an established marketplace but it is also true, that automotive is an evolving marketplace and one which is open with no one taking ownership of the direction of progress, he explained. Citing India’s cost competitiveness as an advantage, he called upon the industry to recognise its strengths. He pointed out that it was the integrated hardware and software that continued to be India’s forte and must be used to our advantage.

categories as a result.

To give it a global context, Gupta, spoke of the lessons learnt by the EU, China and India. “The EU EV drive is driven by a regulatory framework. Here ~ 60 per cent of the transition by 2030 is expected to be driven by fleet buyers,” he informed. Admitting to the pace of this transition being unclear in the case of China, he estimated that it was nevertheless a close second as per the regulatory trends. In the case of the US, these were more consumer-driven and focused on the luxury segment. He stressed the importance of the company’s putting in place, specific strategies to survive. The approach of manufacturers to stay focused on a particular technology, he admitted,

may not be the best approach for component companies. With the drive train bound for change, an estimated 30 per cent of the vehicle is directly under threat, he cautioned. He presented CASE as the opportunity for which there is a need to invest in the ecosystem.

Expecting new generation businesses to define the future, he comforted ICE players on the continued opportunity even as EV penetration is on the rise. He drew attention to the opportunity for exports and called for innovation on the fronts of services and connectivity. The study pegs it at USD 10bn which expands and is not limited to the castings, casings on motors, and housing.

It all totals to an ~ USD 95-100 bn

Shradha Suri Marwah, Vice President, ACMA and Chairperson and Managing Director at Subros agreed to the opportunity being real. An estimated seven million of the PV universe could witness an EV transition of 10-15 per cent. She called upon the need to handhold the tier2s given the high cost of capital. Speaking on behalf of ACMA peers, she sought concrete action to align the tier2s for opportunities across the domestic and export markets. Inampudi summarised the huge opportunity for component manufacturers to increase their global supplies. He sensitised them to the Environmental, Social and Governance (ESG) movement making it hard to make carbonintensive products. Gupta called for companies to firm up their roadmaps and suggested dedicating

management bandwidth and dedicating resources. Suri called it a transformational period with enough opportunities for everyone. She urged the industry to work on components and design in a manner that is true to their DNA. In

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contrast to the Finance Minister, Nirmala Sitharaman, urging the industry to invest, Kapur clarified, that there was no hesitancy on the industry’s part and the investment cycles were on. In quick math, to drive home the point, Kapur cited the criteria for Production Linked Incentive (PLI)

a minimum commitment of Rs.250 crore. From an industry

that’s Rs.18,500 crore of investment, he confirmed.

members acknowledged the contributions of the nontraditional automotive players making their presence felt.

walk the talk, ACMA, he said, had on boarded two such companies. The committee in a unanimous view admitted to the demand for locally produced semiconductors on the sidelines of the Vedanta-Foxconn MoU for manufacturing semiconductors

in Gujarat that was learnt of on the eve of the summit. have great demand. The automotive industry consumes seven per cent of the entire semiconductor industry consumption. It is projected to double and triple over the coming few years. Kenichi Ayukawa san, President of SIAM and Executive Vice Chairman of Maruti Suzuki, spoke on behalf of the automotive industry’s Original Equipment Manufacturers (OEMs). He urged the suppliers to localise the smallest of components as it looks to invest in future technology. He stressed that there was a need to invest to a greater extent in R&D and at the same time equally important to invest in a company’s core components business. He emphasised that the suppliers must strengthen their financial capability and build a greater ability to deal with challenges in a speech marking the completion of a successful twoyear term.

Amitabh Kant, Sherpa, G20 pinned his hopes on battery chemistry breakthroughs to drive the transformation of the components industry. He expressed confidence in the mobility revolution being powered by automation, Artificial Intelligence, Power electronics, and IT components. He urged component manufacturers to work in sync with IT companies for the projected emobility revolution to be realised. “The journey to 10-20 per cent CAGR growth for the next decades across the value chain of components has just begun and I am sure the components industry would emerge as global champions,” he concluded. On the sidelines of the summit, Rane Brake Lining bagged the recognition for QCT shopfloor awards that witnessed a participation of 265 teams where 12 teams emerged as finalists. ACI

Amitabh Kant, Sherpa, G20.

Exhibition And Conference Coming Together To Raise The Bar

To realise the inherent growth potential, at the 62nd SIAM Annual Convention, stakeholders of the automotive industry agreed to raise the bar of aspirations. Ashish Bhatia shares the key takeaways.

With the festive season underway, Original Equipment Manufacturers (OEM) among other stakeholders of the automotive industry hailed the recent reversal and upturn of the commercial vehicle industry as a whole. The 62nd SIAM Annual Convention, held in New Delhi, had the industry come together in full attendance. The reunion at the very forum, for the first time, in a postCovid-19 era, had the industry sentiments at an all-time high. The pleasant exchanges were against the backdrop of the realisation of commercial vehicle sales registering a 24 per cent growth in August 2022. These also touched upon a record turnover of Rs.4.2 lakh crore (USD 56.5 bn) for FY2022, registering a 23 per cent growth. A testimony to the OEMs and suppliers working closely is the latter registering a 23 per cent growth in sales to the former on the back of the recovery. The convention had Prime Minister Narendra Modi, set the tone as he hailed the mobility sector in his virtual address. While congratulating the industry for its contribution to the nation’s economy, he urged the industry to raise the bar of aspirations. He emphasised the need to accomplish a higher degree of self-sufficiency in the automobile sector during the ‘Amrit Kaal’ by availing of the benefits of his government’s initiatives like the Production

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Exhibition And Conference

Linked Incentive (PLI) scheme to boost manufacturing.

q Vision 2047

Speaking at the first plenary session, set on the theme, “Indian Auto Sector’s Journey in the “Amrit Kaal”: Vision @2047”, Anurag Jain, Secretary, and Department for Promotion of Industry & Internal Trade, Government of India (DPIIT) cited India’s expected growth from a three to 32 trilliondollar economy by 2047. “The auto industry is extremely crucial for India’s economy and manufacturing sector.

The vision is to create a strong ecosystem where the industry can thrive, which necessitates adequate investment in R&D, skilled manpower, technological advancements, and focus on knowledge and emphasis on sustainability,” he mentioned. Acknowledging the viewpoint, Kenichi Ayukawa san, President, of SIAM and Executive Vice Chairman at Maruti Suzuki, was quick to express support for the Government’s vision and raised pertinent concerns that need to be addressed for the industry to live up to the expectations. “The Automotive Industry is facing a deep structural slowdown even before Covid-19 and now in the aftermath of the pandemic and conflict in the Ukrainian Industry has been facing a severe strain on the supply chain,” he expressed. ACMA President, Sunjay Kapur congratulated the industry on behalf of members for the automotive industry’s performance after a nearly three-year slump while also thanking OEMs for hand holding partner suppliers during the pandemic-marred fiscal.

For India’s economic growth Nitin Gadkari, Union Minister of Road, Transport and Highways hailed the industry as the “growth engine” of the economy. He drew attention to the industry employing nearly four crore people; bringing in maximum Goods and Services Tax (GST) revenue for both the centre and the states. At this juncture, he cited the need to lower the logistics cost at ~14 per cent of the GDP in comparison to China at eight to 10 per cent and the European Union (EU) at 10-12 per cent. “The need of the hour is to lower the logistics cost by ~four per cent to the 10 per cent mark,” he opined. Here, the government’s Gati Shakti National Programme was hailed as the tool to realise this ambition. It would help the industry further its GDP contribution from 6.2 per cent at present and manufacturing contribution upwards of 39 per cent, he added. Gadkari laid down the vision to take the industry to 15 lac crore

valuation and make India a global manufacturing hub. He urged the manufacturers and suppliers in attendance to be “quality centric and not cost-centric”. Reiterating the importance of such an alignment, he further stressed the need to ensure high levels of quality and safety. He highlighted the role of Bharat NCAP in attaining export growth. Shifting the focus to emission standards, Gadkari cited the Bharat Stage VI transition made by the industry. He urged stakeholders to discourage the use of petrol and diesel engines after careful study and undertaking a feasibility analysis. He also lauded the industry for 15 lakh EV registrations with overall industry sales witnessing a 422 per cent jump. The role of ~52 startups in this shift was praised. The minister hailed the automotive industry where e-buses have shown a 1600 per cent jump in comparison. Speaking of the bus tender of

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electric trucks. The stress was on the electrification of public transportation as a whole.

5500 buses, Gadkari cited the need to attain a low Total Cost of Ownership (TCO) compared to the running costs of non-AC buses at Rs.39 per kilometre; AC at Rs.41 per kilometre, and diesel at Rs.115 per kilometre. Urging stakeholders to build the EV industry further, he also explained the potential for export that the industry stood to benefit from. He expressed his hope of India turning into a manufacturing hub for all alternative fuel solutions. “The incentives under the FAME I and FAME II schemes have helped increase electric vehicle penetration in the country. The government should continue it until a threshold has been achieved,” opined Girish Wagh, Chairman, SIAM Commercial Vehicle CEOs Council and Executive Director (CVBU), Tata Motors Ltd. while committing support to the government’s vision. He concluded by sharing his perception on the outlines of the 7Cs of electric mobility – Common, Connected,

Convenient, Congestion-free, Charge, Clean and Cuttingedge. Gadkari also cited the life cycle cost of Lithium at USD 130 per kilo Watt hour to put his point across. Coaxing the industry to stretch beyond its comfort zone, Gadkari also cited the potential for developing luxury electric double-decker buses to automotive OEMs gathered. Straying from conventional CVs, the minister called upon the industry to use their automotive experience and help the government look at electric trolley buses, and e-highway apart from novel solutions like hyper loops, skybuses on routes like Daula Kua to Manesar for instance, and rope ways where he claimed an estimated 206 projects were in the sanctioning stage. He went a step ahead and offered a 120-acre land parcel for the development and called for the need to put in place a Detailed Project Report (DPR). Apart from e-buses, the minister also focused on the need to develop

Besides electrification, he highlighted the scope of bio-fuel mechanisms with the country producing surplus sugar (~360 lakh tonne against a demand of Rs.280 lakh tonne). Given that farmers are said to be profitable with the increased sugar acreage, the minister called upon the industry to focus more on ethanol-based flex-fuel engines. He cited the Flexi-Fuel Strong Hybrid Electric Vehicles (FFV-SHEV), Toyota Corolla Altis car developed to push his case of it being possible on a mass scale across segments. The role of LNG in the future was also touched upon. With LNG at 50 per cent of the cost of diesel, he promoted its use beyond long-haul vehicles into Construction Equipment Vehicles (CEVs) to make a case for import substitution. He also made a case for green hydrogen in the overall mix. Deeming solid and liquid waste management as a rupees five lakh crore industry, he encouraged stakeholders for greater participation.

Admitting to power accounting for 70 per cent of the cost in green hydrogen production, he took the example of a homegrown, Bengaluru firm known to export electrolysers to the United States to convince the industry of its potential in turning mainstream akin to petrol as an example.

The industry was urged to cooperate with the government even more on the vehicle scrappage policy. The components industry

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was urged to play its part and leverage the scrappage centres for the required input material for manufacturing components supplied to the OEM. In other ways to incentivise owners to scrap their vehicles voluntarily, he sought a higher incentive and/or discount with a GST incentive. He also encouraged them to look at semiconductor manufacturing to secure the Indian supply chain relying on imports. Hoping for the worse to be behind the industry, the cautious optimism, had the industry revel in its success as well as address the pain points during the session.

q theDecarbonising Automotive sector

The significance and ways to decarbonise the Indian CV segment to help India accomplish its goal of net zero by 2070 was the focal point at the summit. Dr J. R. Bhatt, Advisor/Scientist, Ministry of Environment, Forest and Climate Change, Government of India, said, “Climate change is one of the most important environmental challenges today. India’s vision for transport must be based on low carbon emissions and affordability.” The role of Brazil and India to work on sustainable development was highlighted. Andre Aranha Correa Do Lago, Brazilian Ambassador to India, said, “Brazil and India are the two largest sugarcane producers and have the potential to produce enormous amounts of ethanol. Brazil will work with India on flex-fuel technology, sustainable aviation fuels, second-generation ethanol,

hybrid flex-fuel vehicles, and fuel cells to name a few areas of collaboration.” To attain this level of maturity, the solution to key concerns must be sought. Sharad Verma, Managing Director and Senior Partner, Boston Consulting Group, said, “India needs to solve three key considerations, which are carbon footprint reduction, economic affordability of vehicles, and self-sufficiency of the industry while ensuring continued competitive advantage.”

q Nation building

The industry also deliberated upon the need to tap the opportunities from technology advancements and unconventional approaches.

Arun Goel, Secretary, Ministry of Heavy Industries, Government of India, commented, “We need to encash the disruption of modern technologies and innovative approaches such as EVs,

biofuels, and others. The FAME II scheme of the government helped in catapulting EV adoption. The Government and the industry need to make dedicated efforts to help India achieve the target of net zero by 2070 while making the country an auto manufacturing hub for the world.” Echoing a similar sentiment, Sumita Dawra, Additional Secretary, Department for Promotion of Industry & Internal Trade, Ministry of Commerce and Industry, Government of India, said, “Our country is making great strides in every segment including the automobile sector. As manufacturing is the backbone of the economy, we are constantly working to improve our ease of doing business by removing or integrating the approval and compliance requirements.” “PLI scheme by the government is providing the necessary support to the automobile sector to grow swiftly,” she concluded. ACI

Exhibition And Conference Growth Models For Sustenance

At the Frost & Sullivan, 14th Annual Intelligence Mobility Summit, the adoption of an innovationled growth path was hailed. Prateek Pardeshi and Deepti

Thore checked on the scale of sustenance.

The fundamentals of the mobility industry are changing and so are customer preferences and expectations. The convergence of autonomous, connected, electric and shared mobility technologies is radically altering the way people move around, live, work, and engage with their environment. To address these changes, Frost & Sullivan hosted 14th Annual Intelligent Mobility Summit (IMS) themed as “Towards Sustainable Future”. The pandemic has accelerated this process of transformation, while offering stakeholders the opportunity to reset their future in the direction of sustainable, innovation-led growth models. While the industry is working towards decarbonisation and carbonneutral manufacturing with the rising emission levels, adopting clean energy practices across the mobility value chain have become critical.

According to Frost & Sullivan, growing awareness on environmental issues, evolving consumer preferences, and regulatory imperatives are incubating new technology enablers in the form of Connected vehicles, Autonomous driving, Shared mobility and Electromobility (C.A.S.E.). Allied with this is the emergence of innovative mobility solutions like ‘mobilityas-a service’ and ‘lifestyle-as-a-service’. Meanwhile, logistics supply chains are aligning with trends like ‘Innovating to Zero’ and electrification too. Increasing end-of-life vehicle waste is compelling the need to pay greater attention to bringing in transparency and accountability in the mobility ecosystem. Circular economy and battery recycling concepts are highlighting how environmentally-friendly reduce, reuse, recover and recycle practices can be powerful tools for sustainable growth and competitive differentiation.

@Prateek2101

@DeeptiT9

Cutting-edge technologies are anchoring shared mobility modes like car sharing, bike sharing, micro mobility, and peer-to-peer ride sharing. Advanced connectivity and autonomy technologies are heralding a highly disruptive shift towards softwaredefined vehicles. The transformation of cars into smartphones on wheels will push the mobility industry into an uncharted territory. Stakeholders will have to find ways to build a future defined by resilient and responsible growth. To drive the industry on this path of growth, the two-day event, brought together industry experts, policymakers, investors and innovators on a single digital platform.

q Profitability &Sustainability

Darrell Huntsman, Chief Executive Officer, Frost & Sullivan in his opening speech mentioned that the mobility ecosystem has become really complex and is facing many challenges. “A response to these challenges is not last-mile mobility but safe and sustainable mobility,” he stressed. He was of the opinion that the need is to adopt technology and solutions that continually advance sustainability agendas. After witnessing no changes for almost a century, the mobility industry saw sweeping and unprecedented transformation in the

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last decade in terms of product, pricing, place and promotion, highlighted Vivek Vaidya, Associate Partner and Senior Vice President, Mobility Practice, Asia Pacific, Frost & Sullivan. Products are more zero-emission focused, and more autonomous and connected; pricing has become more personalised and products are catering to customers changing value perceptions; the sales are no more restricted to showrooms but have become omni-channel and promotions are getting more and more personalised. Focused on the zero emission, battery will become the new engine, opined Vaidya. More than pricing, mobility-as-a-service and connectivity as-a-service will play a major part. 25 per cent of the vehicles will be sold online by 2025. To address these changes there are certain solutions which need to be looked at.

The need is to change from

automotive to a mobility mindset. Powertrain will change from engine to battery; product segment will change from horsepower to computing power; efficiency of operations will change from mass production to personalisation or customisation. In terms of the span of control, the need is to worry about energy source than the tier n suppliers. More than customer satisfaction, engaging the customers will be more crucial. The Key Performance Indicator (KPI) which was market share earlier for the industry will now be more inclined towards share of mobility. Continuous cash flow is also among the very crucial factors. The need is to improve profit margins. “Sales of the vehicle should not be the end of the vehicle cash flow cycle but should be the beginning,” stated Vaidya. Carbon which is buried under the sustainability report will now

Darrell Huntsman, Chief Executive Officer, Frost & Sullivan

Ponz Pandikuthira, Global Vice President, Marketing, Nissan

Vivek Vaidya, Associate Partner and Senior Vice President, Mobility Practice, Asia Pacific, Frost & Sullivan.

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move to the P & L report. By 2040, most of the companies want to be carbon neutral but this can only happen if they purchase carbon credits. “Carbon footprint saved is carbon credit earned,” he mentioned. Most of the OEMs are also looking at a comprehensive sustainability strategy to improve units in operation. To sum up: three factors which are key for success are change to mobility mindset, look at profitable goals and move to sustainability for orientation.

q Decarbonisation

Focusing on the theme, Zero Emission Vehicles : Decarbonisation

Driving Sustainable Mobility, Ponz Pandikuthira, Global Vice President, Marketing, Nissan opined that the need is to drive innovation to enrich people’s lives and thereby adopt sustainable mobility on a path to zero-emissions. Addressing the major shifts that are shaping the future, Pandikuthira pointed to climate change, social issues and conscious customers as major driving factors. The need is to invest

ambitiously in sustainable mobility. As per the Nissan Ambition 2030, since 2010 the company has invested around one trillion JPY in electrification and plans to invest two trillion by 2026. The company plans to expand its electric mobility line-up further by 2030.

These changes will not happen overnight hence the need is to look at e-power as the option where the electric powertrain will get the power from the battery pack. That is an innovative pathway to enable electric driving experience, instant and powerful acceleration through enabling regenerative braking, offering motor drive, high level cabin quietness and intelligent engine switching along with excellent fuel economy.

Building battery production capacity is also deemed fit to create an electric future. According to Pandikuthira, by 2026 battery production capacity is expected to increase to 52 GWh and to 130 GWh by 2030. It is also very important to build a sustainable and efficient EV ecosystem. The need is to have

efficient batteries to power electric vehicles and launch them in countries with proper CO2 credits. Offering energy solutions through V2X, to gain financial benefits, have backup power, grid stabilisation and use of green energy. When the electric vehicle gets old, the need is to have a repurpose program in place for reusing the batteries and increasing EV residual value for carbon emissions reduction.

With the purpose of adopting zero waste policy, the need is to recycle and generate value. Creating a distributable energy model-V2X is required for stabilising the grid. Investing in infrastructure for charging and ensuring reliable access to charging are also very crucial. Speaking of introducing All-Solid State Batteries (ASSB) by 2028, Pandikuthira mentioned that these make EVs more efficient and more accessible. They also help reduce charging time and increase energy density. Nissan aims at reducing carbon emissions in its plant by 40 per cent through its intelligent factory where renewable energy is used to power the

factory, EV36Zero EV hub in Sunderland and the Canton Plant which focused on building EVs in the US.

q innovationPowering

Dr Jose Pereira, Director, Frost & Sullivan drew attention to the key challenges and opportunities foreseen on the path to attain zero-emissions. Transport sector has the highest dependency on fossil fuels of any sector and accounts for 37 per cent of carbon emissions, he stated. He drew attention to five key trends required to power innovation and growth in the industry to accelerate its drive towards sustainable mobility. These include digital engineering for zero prototypes which is a simulationdriven development, modular and software-defined platforms, digital twins for continuous in-use product optimisation, data collection and human-AI collaborative engineering and tech-driven business models to unlock value pools.

q Battery technology

Prajyot Sathe, Research Manager, Frost & Sullivan spoke of the advancement in battery technology and an expected

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shift towards 800V architecture. He drew attention to key upcoming trends in the field of battery and battery infrastructure. These include global emergence of gigafactories, charging infrastructure development, next-gen battery tech-module less battery packs, transition to SIC-based power electronics, wireless BMS, and electrification of fleets.

q Future roadmap ofCV Industry

As the CV industry is transitioning from cleaner alternatives, the fueling or charging infrastructure needs a revamp too. The CNG and LNG penetration in India in recent times have gone up. The overall sector of CVs has seen alternate drivetrains penetrate different segments, from SCVs to HCVs including buses for attaining lower TCO. Commenting on the penetration of CNG in the Indian CV market he said, “As the sales units go higher the CNG refuelling pumps and infrastructure availability must get the due attention too.” Later, the gasification trends look promising with the industry looking at LNG as a long-haul choice. Notably, Annriddha also mentioned about the research work happening around the long range

of CNG trucks, where trucks would be capable of crossing 1000 kms on a full tank, this is achievable and testimony to it are the recently rolled out models from Ashok Leyland and Blue Energy Motors in partnership with IVECO group company FPT.

Dr Jose Pereira, Director, Frost & Sullivan

Prajyot Sathe, Research Manager, Frost & Sullivan

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As far as battery electric trucks are concerned, charging infrastructure is a big issue. Today we have 48V architecture, 96V and so on. MBEV trucks have already entered the mining segment with companies like BYD and Volvo Trucks having the technology. Hydrogen-powered drivelines have exciting prospects too. Annirudha hoped for experimental launches or a captive customer for pilot runs. Various efforts are under the process working on auto components and other OEMs. As a forecast, he projected the ecosystem to be up and running over the next half a decade.

Daniel Majewski, Head of Strategy R&D and System Solutions, ZF, Commercial Vehicle Solutions, bought the concept autonomous truck into context. He said,“The key to success is to make autonomous solutions adaptable and interoperable.” Connecting the dots, Annirudha mentioned, the work on autonomous trucks has already begun in India. Solutions that will be apt for India will need to align with the wide CV segment. India has trucks starting from 14- to 48-tonne having multi-axle configurations. Moreover, the Total Cost of Ownership (TCO) and active safety assist features will continue to be prioritised. These will have to cater to the price sensitivity in the India market. ADAS level-1 trucks have already hit the roads from the Tata

Motors stable, for instance. Autonomous trucks have a long way to go though. The concept is not just to make the truck work independent of the driver but also focusing on the entire ecosystem. For example, if the truck is delivering the goods, there should be someone to receive it. Commenting on the future, CarlMagnus Norden, Founder, Volta Trucks said, “Autonomous trucking has a huge growth potential, we are witnessing the start of it, within the span of 10-15 years we will move beyond diesel engines completely.” Autonomous solutions can also be among the major contributors for public transport.

q Future Mass Transit

Traffic congestion in metropolitan areas is like an active volcano just ready to erupt. Let’s take Mumbai for instance, covering 10 kms in peak hour is a nightmare. Improving public transport will encourage users to opt for it over private modes. Here, autonomy was split into a three-part consideration: ecurity, ease of use and cost reduction. A comparison of electric bus annual running costs was looked at with autonomous shuttle TCO.

While e-buses account for 65 per cent costs attributed to human capital, the shuttles account for 30 per cent on the same scale. According to Back in July 2020, Navya launched the autonomous L4 shuttle service

in a closed environment with a vision on aspects like a structured value chain, political dynamics, legal framework, realistic expectations and technology breakthrough.

Today’s shared mobility market is valued about USD 835 bn which is shared across (Carsharing, Ridehailing, DRT, Public transport, etc). By 2030, this market is expected to grow to USD two trillion courtesy a significant growth in DRT and public transport, stated Shwetha Surender, Director, Frost and Sullivan. With the emphasis on autonomous vehicles, the industry could see mass adoption with LIDAR and autonomous software costs expected to go down by 2025 and 2030 respectively.

q Future-Gen Automotive

For growth of any industry collaboration is of utmost importance. A tug of war between automotive manufaturers and IT Giants has always been in the picture. The value proposition for software-defined vehicle for automotive ecosystem brings faster developments time, highly scaleable business models, and reduced detection and overall complexity of vehicle. According to Somasundharam Muthumanickam, Lead Software Architect, Automated Driving, ZF Group, said,” The conventional way of development for new technology can be faster, the overall complexity where a vehicle uses multiple ECUs can be much simpler. While today many vehicles are a mix of electronics and hardware this is where software-based automotive ecosystem has the advantage.” Further Anuj Jain, Mobility Expert (Strategy & Business Development, AWS Automotive) VP Bosch, stated, “Vehicles today roll out from the showroom with all loaded features. In the near future, with software capabilities they will be regularly updated with features on the personalisation front and improving safety features. ACI

Rodrigo Pinto Maia, Vice President,ContiTech

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Kuldeep Kumar Upadhyay, Salesforce-S.P. Jain Institute of Management & Research, Gurgaon, Haryana

Prakash Panjwani, Mumbai

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