INDIA’S FIRST MAGAZINE FOR THE AUTOMOTIVE AFTERMARKET
Vol. 1 No. 6 December 2011
68 Pages `50
Drive the way Ashok Leyland’s organised driver training to re-route careers
EXTRA MILE
Advaith Hyundai
CUTTING EDGE
Bosch Automotive Aftermarket
INTERVIEW
R Srivatchan, President, TVS Automobile Solutions
Brought to you by
Auto Monitor
Plot no. 18E, Block ‘A’, 1st C Main, II Phase, Peenya Industrial Area, Peenya, Bangalore 560 058. INDIA. Telefax : 91-080-28395273 / 28397463 / 28374313 www.sushmaindustries.com Email : marketing@sushmaindustries.com
EDITORIAL DigitAlly DESPITE the sales volumes of passenger cars and commercial vehicles being inconsistent for some time, the expectations of the end consumers of all the vehicle segments are snowballing. With every new entrant—read MNCs—entering the market, the aspirations of the consumers are growing by leaps and bounds in a way that it becomes an ever-shifting goalpost, when it comes to dealerships and aftersales service support. While the customers want the sales points and service outlets closer to their homes, the challenge for the dealership community is to cater to the emerging requirements by opening up more sales, service and spares or 3S outlets in multiple locations. However, the challenge is increasingly becoming severe with the soaring cost of finances, real estate and manpower costs and the availability of workforce per se. A recent study shows that potential customers of passenger cars continue to be more demanding from dealerships. It further stated that less than half of the customers are willing to travel about 15 km to purchase a car. Around 40 percent of the respondents are not ready to travel more than ten km to make a purchase. The rest expect the dealerships as close as five km from their residential colonies. Is it possible for the dealers to manage the emerging demands with the ever-thinning margins? Secondly, when the going is good, the dealers are not getting adequate stocks though the payments towards the same have been made well in advance. However, during the lean sales period, the dealerships are bombarded with stocks to shore up monthly sales numbers. The digital and online mania is catching up with the consumers in purchasing vehicles too. Though there is still a long way to go before potential buyers hit ‘enter’ to seal the deal, it is necessary to look at what has happened to the travel agencies. It is crucial to have new thinking amongst the vehicle manufacturers and the dealers to address the changing consumers’ requirements. Wishing you much pleasure reading. Do send us your feedback.
T. Murrali t.murrali@infomedia18.in
DECEMBER 2011 AFTERMARKET
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CONTENTS NEWS
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10 New fleet of driving schools to shape next-gen learners 12 Atul Auto to expand its product portfolio 14 Comstar focuses on Indian avenues 18 Leyland Deere loads more punch in aftersales service 22 Suprajit Engineering evaluates new products 26 LGB to introduce silent, lighter chains 34
COVER STORY 29 Ashok Leyland takes initiative in driver training Ashok Leyland has set up a Driver Training Institute near Salem to provide more trained drivers to the system and impart dignity to the profession
Drive the way
29
Ashok Leyland’s organised driver training to re-route careers
IN CONVERSATION 34 Marc Nassif, MD, Renault India says that customer satisfaction will take priority while setting up sales & service network INDIA’S FIRST MAGAZINE FOR THE AUTOMOTIVE AFTERMARKET
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33 Vol. 1 No. 6 December 2011
68 Pages `50
Drive the way Ashok Leyland’s organised driver training to re-route careers
EXTRA MILE
Advaith Hyundai
CUTTING EDGE
Bosch Automotive Aftermarket
SPECIAL REPORT 24 Seventh Auto Summit to promote international collaboration
INTERVIEW
R Srivatchan, President, TVS Automobile Solutions
Brought to you by
Auto Monitor
Cover Design
CUTTING EDGE
Mahesh Talkar
33 Bosch Automotive Aftermarket India inaugurates Delhi Training Centre
DECEMBER 2011 AFTERMARKET
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DECEMBER 2011 AFTERMARKET
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NEWS
New fleet of driving schools to shape next-gen learners Our Bureau
MARUTI Suzuki India (MSI) is planning to double its driving schools to over 400 in the next couple of years to train more people about road safety. Currently, the company has six Inst itutes of Driving and Traffic Research (IDTR) and 192 Maruti driving schools that train learners about road safety. In the last decade, MSI has trained more than ten lakh people and out of these, five lakh people have been trained under its fl agship programme—National Road Safety Mission (NRSM), which started in December 2008. Managing Executive Officer (Marketing and Sales), Maruti Suzuki India, Mayank Pareek said, “So far, we have trained over ten lakh people and now we are targeting to double the network of Maruti driving schools to 400 in the next two to three years. India loses close to about `100,000 crore every year in road accidents and in terms of fatalities, around 160,000 lives are lost annually in road accidents. As the automobile sector continues to grow, there is a need to bring in high quality training inst itutes, which help inst itutionalise high ‘quality training’ on road safety,” he added. Maruti Suzuki has been working on road safety since 2000. But it was only in 2008 that the company gave a formal st ruct ure to its initiatives on road safety through its fl agship National Road Safety Mission (NRSM) programme. Over the last
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AFTERMARKET DECEMBER 2011
decade, Maruti Suzuki has developed two successful forms of driver training infrast ruct ure: One is in association with st ate governments (public-private partnership model) and the other is in association with its dealers. To strengthen its road safety initiatives, the company recently, added another interesting format in the form of ‘Road Safety Knowledge
India loses close to about `100,000 crore every year in road accidents and in terms of fatalities, around 160,000 lives are lost annually in road accidents. There is a need to bring in high quality training institutes, which help institutionalise high ‘quality training’ on road safety
Centre’, in partnership with the Gurgaon police. This new platform is aimed at enhancing traffic education and inculcating safe driving habits for commuters of Gurgaon. In addition to existing driving training modules, the centre has been equipped to offer specialised training to traffic violators. IDTRs offers superior infrastructure in terms of training quality, tracks, simulators and modules as per international norms. The two IDTRs have trained around 700,000 people, predominantly commercial drivers. In addition to Delhi, Maruti Suzuki now has IDTRs at Vadodara (Gujarat), Dehradun (Uttarakhand), Rohtak and Bahadurgarh in Haryana. In addition to driver training, the Vadodara IDTR offers skill training to tribal youths thereby strengthening employability prospects of learners. Several state governments have shown interest in setting up similar facilities with Maruti Suzuki.
No car is complete without Bosch.
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Bosch Limited, Automotive Aftermarket, P.B. No. 3000, Hosur Road, Adugodi, Bengaluru - 560 030. Ph.: (080) 2299 9228. Fax: (080) 2299 9796. www.boschindia.com a es f ces Ahmedabad Ph.: (079) 6614 2200 – 08. Ben a uru Ph.: (080) 2213 2081/ 2227 7653/ 2227 9672. Bhubaneswar Ph.: (0651) 223 2801. handi arh Ph.: (0172) 263 8207. hennai Ph.: (044) 2815 5815/ 2815 3916. e hi Ph.: (011) 2334 8260/ 61. rnaku am Ph.: (0484) 280 5601. ha iabad Ph.: (011) 4316 6145. uwahati Ph.: (0361) 213 1647/ 648. ub i Ph.: (080) 2223 7056. ndore Ph.: (0731) 425 5010. ai ur Ph.: (0141) 238 7048. o kata Ph.: (033) 2217 4221/ 2226 5360/ 2217 6739. Lucknow Ph.: (0522) 326 4409/ 320 8474/ 75. adurai Ph.: (044) 2815 5815/ 2815 3916. umbai Ph.: (022) 2493 2071. a ur Ph.: (0712) 268 1738. anchku a Ph.: (0172) 458 7735. atna Ph.: (0612) 645 0685. un ab Ph.: (0172) 458 7708. une Ph.: (020) 6725 4769. ai ur Ph.: (0771) 402 6333/ 444. anchi Ph.: (0651) 236 1152. a kot Ph.: (0281) 246 1571. ecunderabad Ph.: (040) 2799 0366. i a awada Ph.: (040) 2799 0266/ 0308.
NEWS
The shopfloor
Atul Auto
to expand its dealership network, product portfolio Shambhavi Anand
THE three-wheeler manufact urer Atul Auto based in Rajkot, is set to increase the number of dealerships across the nation. From its current 115, it wants to increase the number to 140. Th is plan comes as a part of a larger plan under which, the `300
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AFTERMARKET DECEMBER 2011
crore company plans to touch a turnover of `1,000 crore in three years. It hopes to achieve this huge leap by expanding its product portfolio, exploring export opportunities, entering new geographical regions within the national boundaries and also a few allied business in the same sector. In India, the company has pres-
NEWS
ence in 15 st ates including Gujarat, Rajast han, Bihar, Orissa, Parts of Maharashtra, Haryana, Punjab, Jammu and Kashmir among others. It has just entered the market in Assam. The south Indian market is handled from Maharashtra. It started operations in Madhya Pradesh in October 2011. According to Chairman and Managing Director, Atul Auto, Jayantibhai J Chandra, “We want to have st rong presence throughout the nations like we have in Gujarat and Rajast han.” The company is also planning to venture into a smaller size of three-wheeler and a four-wheeler that will be in the one-tonne capacity in the class of Maxximo and Ace. “We manufact ure vehicles for common people, both in CNG and diesel range. Our new products will be on the similar line,” he added. It manufact ures front engine of 500 kg body capacity known as Shakti and Gem, which was started two years ago has a rear engine.
The product , which is in the nascent st age of development, is being developed in the in-house research and development centre of the company based at Pune, which has test ing facilities for protos and employs around 50 people. It is also planning to set up a new plant. The land for putting up the plant in Ahmedabad has already been acquired and the work will commence soon. They will be putting in an investment of `150-200 crore. The new three-wheeler and the four-wheeler will be manufact ured in the new plant. The capacity of its current plant is 24,000 units per annum. The company is increasing its capacity by increasing the number of shift to two in the vehicle assembling side and three in the paint shop side. In line with its plan of touching the turnover target of `1,000 crore, it is also focusing on exports. Currently, the company exports its passenger as well as cargo vehicles to Bangladesh,
Jayantibhai J Chandra, Managing Director and Chairman, Atul Auto
Kenya and Sri Lanka, where it is in the seeding st age. It also plans to export to other countries once it has created a hold on the current export markets. Atul is also exploring to have manufact uring facilities in Bangladesh. Atul Auto’s Rajkot facility
DECEMBER 2011 AFTERMARKET
13
NEWS
Comstar renews focus on
local avenues Akmal Rahman B
AUTO elect ric part manufact urer, Comstar Automotive Technologies is planning to enter automotive aftermarket business within a year. The company currently exports 90 percent of its product ion to Japan, Europe, North America, South Africa, Brazil, Canada, Philippines, Thailand and China while it will also supply to OEMs and aftermarket in India. In a recent interact ion with Aftermarket, Director and Chief Financial Officer, Comstar Automotive Technologies, Sat Mohan Gupta said, “We have started working on Indian aftermarket operations, which is at the starting stage of the launch”. Elaborating on the strategy for aftermarket operations, Gupta stated that the company is looking for a limited number of dealers with financially strong background and with good understanding of aftermarket business, preferably with their own network to adequately cover the bigger areas. “Currently we are looking at around 50-55 dealers in the first phase,” he said. Currently, the company is supplying starter motor and alternators to Ford, Tata Motors, Jaguar, Land Rover, Volvo, Aston Martin, Nissan, Ashok Leyland and Mazda in the national and international markets. It has started working aggressively with Indian OEMs to focus on the Indian market and is expect ing a gradual growth. The company aims to improve its two key offerings—starters and alter-
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AFTERMARKET
DECEMBER 2011
The Comstar plant
nators. The company is also looking at making its motors compact and eliminating waste materials. To make the components lighter, Comstar is opting for alternate materials like aluminium to reduce the component weight. The second line of improvement is revising the cost st ruct ure of the process. Weight reduct ion process may not always result in reduction of costs. Lighter materials like aluminium are more expensive. The company foresees the need to focus on innovation and product development and catch up with technology. It develops and designs all its products in-house in Chennai. It has recently setup a testing facility and invested in enhancing its manufact uring facilities. It is in the process of expanding the capacity for starter motors as its already utilising 80 percent of the exist ing capacity. It has spent around `15 crore for the purpose. Comstar also has other ongoing developments round the corner. “We
are also working to support the OEMs on newer technologies like improving the efficiency of vehicles—for instance, enhancing mileage and reducing carbon content,” stated Gupta. The company has exported more than 60,000 units of stop-start system for the past five months. However, the challenge is to supply the product in the domest ic market. “We could notch up a turnover of `300 crore in the last fiscal and are looking at 20 percent growth in the current fiscal and a major presence in the domest ic market,” he added. It is also working on procuring orders from new OEMs in the future. Gupta revealed that it is working with Indian, Chinese, European and North American OEMs, although it would take a while before the results would materialise. The company “wants to consolidate and develop more products like starters and alternators.” He concluded, “We are hoping to cross `500 crore turnover by 2013.”
NEWS
Imperial Motors to strengthen command
with new strategies, products Our Bureau
IMPERIAL Motor Stores, a Mumbai based spare parts dist ributor, is targeting to maintain its growth rate of around 30 to 35 percent this fiscal and is looking to grow its brand portfolio in the aftermarket business. It is currently a leading dist ributor for around 14 different auto component manufact urers in the aftermarket. “We are in the process of drawing up a business plan for enhancing our product range and Stock Keeping Units (SKUs) for our network dealers. Such an initiative will help raise our profi le as a spare parts dist ributor and we are also evaluating the feasibility of retailing spare parts for select brands,” said Partner, Imperial Motor Stores, Amit Sangharaska. He added that though margins on selling OEM certified parts are not necessarily better than other parts, being enrolled as an OE certified spare parts dist ributor lends credibility to the dist ributor. Imperial has been in the automobile spare parts dist ribution business for the last five decades and has an extensive dist ribution network for around fourteen other auto component brands. It gets around 50 to 55 percent of its turnover from selling Tata Motors genuine parts. It notched up a turnover of `55 crore in the last fiscal and is looking to achieve a growth of 30 to 35 percent this fiscal. Currently, its focus is on four-wheeler passenger vehicle segment. It has been anointed as a dist ributor for Tata Motors Original Parts (TOP) for Maharashtra region.
A spare parts dist ributor is one level above a spare parts dealer in the aftermarket. A dist ributor typically has agreements with multiple Tier I and II auto components suppliers for a given geographical location and sets up and services/refurbishes the channel partners. It could also be a direct dealer for select parts or SKU in cases where dealers are unable or unwill-
Imperial is in the process of drawing up plans for enhancing its product range & SKUs for network dealers. Such an initiative will help raise its pro le as a spare parts distributor. It is also evaluating the feasibility of retailing spare parts for select brands
ing to sell the said SKUs. Dist ributors play a key role in penetration of the aftermarket for suppliers as well as OEMs as setting up an exclusive or non-exclusive dealership network may not be a viable preposition for every auto component supplier. Moreover, the auto component manufact urer can rely upon the dist ributor for building the network and maintaining the relationship as well as refurbishments as suitable. According to market sources, Tata Motors is looking to have a concept of dedicated retail counters in each town across the country. A dealer needs to dedicate around 150 to 200 sq feet in exist ing set up for Tata Motors Original Parts (TOP), if the concerned dealer does not opt for exclusive ‘TOP’ dealership. The company has promulgated TOP brand for its passenger vehicle spare parts in the aftermarket.
DECEMBER 2011 AFTERMARKET
15
NEWS
Mini concrete mixer ‘Nimo’ to revolutionise construction landscape THE Chennai-based German concrete const ruct ion equipment manufact urer, Schwing Stetter launched ‘Nimo’, a mini concrete mixer with a capacity of three cubic metre. Currently, the company has a higher capacity of concrete mixer of six cubic metre and is planning to sell around 250 Nimos in 2012. Managing Director, Schwing Stetter India, Anand Sundaresan said, “Nimo is expected to set a new trend in residential const ruct ion indust ry taking the benefits in view of the size. Currently, ready mix concrete has a share of less than ten percent in the country and is likely to gain greater momentum with the indust ry looking towards a boom.”
The Nimo, measuring 6,500 mm in length, 2,400 mm in width and 3,100 mm in height, has been designed to cater to the needs of small service centres, garages and residential const ruct ion indust ry in the country. One of the major advantages of Nimo is that unlike the case of larger transit mixers, which are not allowed to ply in the city during working hours, this new model can be used anytime within or outside the city limits. Moreover, the lighter weight of the model also means that it is ideally suited for manoeuvring through narrow lanes as well as softer terrains. “It is indeed promising to see India emerging as a major manufact uring hub for the const ruct ion equipment indust ry. Th is indust ry is expected to grow to a size of $6.5 billion
Imperial is in the process of drawing up plans for enhancing its product range & SKUs for our network dealers. Such an initiative will help raise its pro le as a spare parts distributor. It is also evaluating the feasibility of retailing spare parts for select brands
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AFTERMARKET DECEMBER 2011
by the year 2014 as reported by the Confederation of Indian Indust ries (CII),” Sundaresan said. Nimo has been designed keeping in mind the increased infrast ruct ure and real estate development pace in India. The new mini mobile concrete mixer is ideally suited for beating problems such as traffic congestion and deliver concrete on time at project sites. Speaking about the new product, Chief Operating Officer, Schwing Stetter India, VG Sakthikumar said, “The launch of Nimo underlines a landmark event for Schwing Stetter. It will bring about a revolution in the construction landscape with its small size, as it will help negotiate traffic during the day and noise pollution during the nights, and will accelerate the execution and delivery of time bound projects.”
Photograph: Bhargav TS
Our Bureau
NEWS
BMS Motors dealership kicked off by HM-Mitsubishi BMS Motors during inauguration
Our Bureau
HINDUSTAN Motors-Mitsubishi inaugurated BMS Motors in Ranigunj, Secunderabad, Andhra Pradesh, raising its dealership count in the country to 41 and its second dealership in the state. BMS Motors already operates a dealership in Vijaywada in Andhra Pradesh. Located near Tank Bund-Hussain Sagar Lake, the showroom, spread over 3,600 sq ft, can display four vehicles and is manned by half a dozen trained personnel. The service station covers a larger area of 7,800 sq ft and has seven service bays including body shop. With its 20 qualified technical employees it can take care of 10 vehicles in a day. HM-Mitsubishi has launched other products in the Indian market including the Pajero, Cedia, Montero, Outlander and Evo X. Hindustan Motors’ manufacturing facilities are situated in Uttarpara (West Bengal), Pithampur (Madhya Pradesh) and Tiruvallur (Tamil Nadu). It currently has 48 customer touch points across India including key cities like Chennai, Mumbai, Bengaluru, Delhi, Ahmedabad, Pune, Hyderabad and Kolkata.
DECEMBER 2011 AFTERMARKET
17
NEWS
Leyland Deere loads more punch in aftersales service
Our Bureau
REALISING the importance of the aftersales service in the const ruct ion equipment indust ry, Ashok Leyland John Deere Const ruct ion Equipment (ALJDCE) has had several dry runs and trials not only on the product, but also on its new concept, which has been evolved to address customers’ aftersales service requirements. This exercise has been done for the JV company’s debutante product—435 backhoe loader, launched recently, and will compete in the market having a size of about 20,000 units annually. One of the unique sales propositions that the company claims is its initiative called CAREi —an acronym for lower cost of operation minimisation,
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AFTERMARKET DECEMBER 2011
availability of machines, reliability of the equipment, easy-to-do business and intelligence evolved over a period of time. The key initiative in CAREi is the commitment the company gives to the customers to restore the machine within 24 hours of registering the complaint. Company sources told Auto Monitor that they tried a mock drill of registering a customer complaint in a temple town—Palani, about 430 km south of Chennai to check the time taken by the company to address a complaint. They found that the exercise could be completed in less than 20 hours from the time of receipt of the complaint call, including the shipment of the required spare parts. The spare parts were shipped from its central ware-
NEWS
house in Gummidipoondi, about 45 km north of Chennai, where the company has its manufact uring facility. Similarly, it tried this exercise successfully with a customer in Bidar, situated in the north-western part of Karnataka and about 500 km away from Chennai. After the exercise proved to be successful, the company launched this initiative, sources added. Recently, ALJDCE has launched its first product, 435 backhoe loader in Chennai. Manufact ured by an equal joint venture between Ashok Leyland and John Deere, the product is marketed under the brand Leyland Deere. John Deere brings in its advance technical know-how and experience in global construction equipment space, while Ashok Leyland lends its indepth knowledge of the Indian market, expertise in manufact uring, sourcing and distribution, to this strategic partnership. The company claims that the product has been designed to transform the nature of the const ruct ion equipment business in India as well as redefi ne the way const ruct ion equipment product s are perceived and used. The product has been manufact ured to the address the critical considerations of lower operating cost , higher productivity and greater uptime. Powered by Ashok Leyland’s H-series engine, the 435 backhoe loader comes with power shift transmission, larger cabin with better visibility and roll over protect ion st ruct ure and falling object protect ion system—key elements for the operator safety. Besides, the cabin has three-layer roof to insulate from heat. It also has an elect ronic monitoring system, higher breakout forces and greater dig depths. The company has invested around `200 crore towards product development and const ruct ion of the plant having a capacity of 10,000 units. It is planning to introduce two more
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AFTERMARKET DECEMBER 2011
Cabin space
products—the fi rst one being the wheel-loader to be introduced in 2013. It hopes to reach full capacity by 2016 with the backhoe loader accounting for about 90 percent of the sales.
John Deere brings its advance technical experience in global construction equipment, while ALL lends its indepth knowledge of Indian market & expertise in manufacturing & distribution to this strategic partnership The CAREi programme will also include an extended warranty of a year after the fi rst year of warranty, committed restoration of time for the equipment and regular and periodic visits by service engineers during warranty periods and an insurance over of `two lakh for customers operator. When asked how it was possible to commit such a service to the customers, Chairman, ALJDCE, Dr V Sumantran said, “We leverage the bus services to ship spare parts as the buses
run overnight and reach the dest ination the next day. Our dealers have also introduced service vans and technicians with two-wheelers to reach the customers’ place at the earliest possible time.” Interest ingly, aftersales service has been the key in const ruct ion equipment segment and many players did not get to the next level due to poor after sales network. The equipment is initially launched in the southern states, before being rolled out nationally. The JV company has also announced TVS & Sons as the dealer for Tamil Nadu and Kerala. President (dealership line of business), TVS & Sons, N Krishnamoorthy said that the company will have five Tier I dealerships and seven Tier II dealerships. When asked about the st rategy, he said that the former will have more products displayed and will be in most ly in big cities, while the latter will have one product on display manned by more service engineers. Th is is to support the customers’ requirements of aftersales service, since the equipment is most ly operating in the rural areas.
NEWS MILE EXTRA
xxxxxxxxxx
K Ajith Kumar Rai, Chairman & MD, Suprajit Engineering
Suprajit Engineering evaluates new products Abhishek Parekh
SUPRAJIT is evaluating new components and assemblies and is also looking to increase its range of cables and moulded products for the aftermarket. The company is renewing its focus on the dome ic aftermarket segment, currently growing at a double digit rate for elect romechanical products. The company derives around ďŹ ve to
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AFTERMARKET DECEMBER 2011
seven percent of its total turnover from the aftermarket segment and is looking to increase this share to around 10 to 12 percent over the next couple of years. It is also looking to expand its footprint in the international markets for OEM and replacement demands. The company has set up two dedicated facilities to cater to the aftermarket segment as compared to the conventional pract ice of supplying to
NEWS
aftermarket dealers from common product ion lines catering to all customers. “There is a tendency to cut down on supplies to the aftermarket segment when the OEM demand goes up, if a company has common product ion lines for all market segments. We are hoping to avoid this scenario by having dedicated aftermarket product ion and marketing so we can grow our marketshare,” said Chairman & Managing Director, Suprajit Engineering, K Ajith Kumar Rai. Typically, the customer in the aftermarket moves on to the next available replacement if the original product from a supplier is not available with the aftermarket dealer. Th is can be a major setback for any player hoping to establish a foothold or grow its marketshare in the automotive replacement market. The company has established a major presence in the aftermarket segment through 225 odd dist ributors covering all major towns and cities. Goods and Services Tax (GST) is
one of the critical legislations, according to Rai, that can lead to unorganised or peripheral players moving out of the aftermarket and helping reliable OEM suppliers like Suprajit win customer confidence in the aftermarket. “Many suppliers evade paying taxes in the aftermarket and can do so due to tax loopholes. However, if GST is effective in closing these loopholes, it is likely to be a positive development for organised suppliers in the aftermarket, not to forget the logistical advantage that GST regime can bestow on any supplier,” said Rai. The company is a major supplier of clutch cables for the automotive sector and has a major presence in the two, three and four-wheeler segment. It will have 14 facilities across the country by middle of next year and its annual manufacturing capacity for cables is likely to touch around 120 million units and further to 150 million units by the end of next calendar year. It is aiming to be among the top five cable manufacturers globally by as early as next year in terms of value and volume.
Suprajit Engineering’s annual manufacturing capacity for cables is likely to touch around 120 million units and further to 150 million units by the end of next calendar year. It is aiming to be among the top ve cable manufacturers globally The shopfloor
DECEMBER 2011 AFTERMARKET
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Image: Akmal Rahman B
SPECIAL REPORT
Seventh Auto Summit to promote international collaboration Nabeel A Khan
FEDERATION of Automobile Dealers Associations (FADA) is gearing up to organising its biennial event— Seventh Auto Summit, in association with Society of Indian Automobile Manufact urers (SIAM) at New Delhi on 9 and 10 January, 2012. The event will be coinciding with Auto Expo scheduled from 7-11 January, 2012. The theme of Auto
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AFTERMARKET DECEMBER 2011
Summit 2012 is ‘Shifting Gears: Terrain Ahead” and Anand Mahindra will be the keynote speaker for the upcoming summit. Auto Summit will present an opportunity for the dealers to meet the industry leaders and other members of auto retail fraternity from across the country to share experiences and exchange ideas. The summit will bring together all stakeholders on a common platform to
SPECIAL REPORT
An important agenda of the summit is to forge an international alliance by making an international dealer council a reality. The association has invited a number of countries to participate in the summit
Nikunj Sanghi, President, FADA
mull and address the current and emerging challenges for sustained growth of all players connected with automotive business.
International Platform An important agenda of the summit is to forge an international alliance by making an international dealer council a reality. The association has invited a number of countries to participate in the summit. “We already have confi rmations from seven to eight countries including the US based NADA and the current chairman of the American dealers association has agreed to participate in the auto summit. We have circulated the vision paper to 17 countries and we look forward to signing a MoU for forming the international dealership council,” President, FADA, Nikunj Sanghi told Aftermarket. Presently FADA is sharing only
national experiences while the auto indust ry in other countries is far more mature than that of India. The association feels that there are lots of knowledge and learning which will come to Indian dealers when it shares experiences and pract ices on a global level. There are a range of expertise that the international dealers can also earn from Indian dealers, as this is one of the fastest growing auto markets in the world. The exposure to the developed markets will help domest ic dealers to become more customers centric.
Towards Vibrancy The creation of international council will help not only in knowledge sharing but also the dealer manufact urer relationship of the other countries and this platform will help in learning from each other’s experiences. There are manufact urers which are operating
in India and also in other countries; here they have a different rule from other countries so the international council may help in bringing common and helpful pract ices. FADA has received participation confi rmation from Italy, Brazil, the UK and Germany and looking forward to getting confi rmation from China, France and a lot of other countries. The Auto summit will also aim to offer exposure to the dealers, which they otherwise do not have access to, at their current locations. For the inaugural session, the association has invited Deputy Chairman, Planning Commission, Dr Montek Singh Ahulwalia and hopes that the summit would help create awareness to what is happening to the auto retail indust ry. The industry body will also convey to him about what is required to be done by the government to make the auto retail industry more vibrant because the industry is not only the biggest revenue generator for both the state and central government but also the biggest employment generator. “If you take average direct employment of 200 people in each dealership multiplying it to the 7,000 dealerships across the country, imagine the kind of employment offered by the auto industry. This presence is very important for the auto summit.” Sanghi explained.
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Photograph: Bhargav TS
NEWS
A range of components from LGB
LGB technology to silence market with lighter chains Bhargav TS
LG Balakrishnan & Bros (LGB), the Coimbatore headquartered component manufact urer, has designed and developed a silent chain for two-wheeler and four-wheeler applications. Currently, it is supplying silent chains in the aftermarket and is soon expected to supply it to vehicle manufact urers as well. “Today all the cars are equipped with silent chains instead of belt drives, therefore we see good potential for silent chains in the future, which is the futurist ic project of LGB. We believe that our inhouse R&D is our core st rength and we have formed technical alliances with various companies for better quality services to clients in India,” said the company’s Deputy Managing Director, Prabakaran P. LGB recently has bagged an order
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AFTERMARKET DECEMBER 2011
from Ashok Leyland (ALL) to supply transmission parts for its range of vehicles. “We have received the orders from Ashok Leyland for the first time since we incepted in 1937, and we will supply transmission parts next year. We are gearing ourselves to supply more parts to them and we will be growing with them in a big way,” he said. For the past ten years, the company’s main focus is on fine blanking technology and currently, it has 25 presses to manufact ure 100 tonne to 1,000 tonne. LGB acquired fine blanking technology for manufact uring chain plates. It further extended its fine blanking division as a separate manufact uring section during the late 1990s, to cater to the OEMs demand for fine blanked components. “Fine blanking is our key area and we have increased our customer base and strengthened our existing customers.
This will help us grow further and this year we will be growing by 40 percent in fine blanking alone,” he said. In fine blanking, the company manufact ures two-wheeler chassis components and engine components. For the four-wheeler segment, it manufact ures engine components, brake components and transmission parts. Prabakaran also revealed that the company has started supplying transmission parts to ZF and Eaton and will be supplying the same components to Daimler next year. LGB is also supplying sprockets to BMW motorcycles through Hero Motors and garnered expertise in supplying components to premium motorcycles. It is also in talks with Harley Davidson to supply a few fine blanking parts and expected to supply the same in 2012.
NEWS
To manufact ure lighter components, LGB is taking several initiatives and implementing the same. As a result of this, the company has engineered and manufact ured a chain, which is Prabakaran P, Deputy MD, LGB 200 gram lighter compared to the traditionally manufact ured chain. LGB is also working towards cutting the steel content in the chain to reduce the weight, cost and improve vehicle’s fuel efficiency. When asked about the progress of the China plant, Prabakaran replied, “We have temporarily post poned the plan because we thought labour and infrast ruct ure cost will less compared to India. However, after exploring further, we realised that the labour and infrast ruct ure cost is higher than that of India. Moreover, we didn’t get any specific advantage over India and our customers are happy to procure the products from here. Therefore we have brought back the machineries for the time being,” he said. The manufact urer has earmarked a capex of `100 crore towards new machineries and expansion of the exist ing facility. Currently, it has four plants in Coimbatore and one each in Pantnagar, Maneser, Tapukar, Ahmedabad, Pune, Bangalore and Mysore. LGB has dedicated plant in Coimbatore to make fine blanking components. From these facilities, it produces seven million fine blanking parts, three million chains and three million sprockets per month. According to Prabakaran, the company is facing severe problems due to the non-availability of power and increase in fuel price. It is not able to meet the demands of its customers due to insufficient power. And the increase in fuel price affects the logist ic business and hence the company is looking to install additional power back up units in their facilities. For the last three years, LGB has been growing by 25 percent and this year, it is expect ing to grow by 30 percent. In 2010-11, the LGB Group reported a turnover of `700 crore. In addition to automotive chain, which is the flagship product of the company under the brand ‘Rolon’, LGB makes fi ne blanking, sprockets, forged and cold heading components, V-belts and other chains for textiles, agriculture and conveyors.
DECEMBER 2011 AFTERMARKET
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EVENTS
The Global Hub:
Engineering Expo Chennai Bhargav TS
TAMIL Nadu continues to be a favoured destination for investments not only for the service sector but also the manufact uring sector due to several factors like availability of abundant talent pool and the infrastruct ure facilities including sea, air, rail and road network. Inspite of a couple of major investments from the automobile industry going out of Tamil Nadu, the state has yet not lost its sheen. Catalysing growth to the next level is the fourth edition of Engineering Expo Chennai, scheduled from 8-11 December 2011. This edition will further augment the industrial activities that are synonymous to the competitive spirit of Engineering Expo and the state as well. Japan has identified Tamil Nadu as one of the most potential states for its investments recently and towards this, the Japanese Ministry of Economy, Trade and Industry (METI) has signed a bilateral economic co-operation agreement with Tamil Nadu. The agreement is a feather in the cap for the state as it has been identified as a potential investment destination by none other than an industrial giant like Japan. It is estimated that about 240 of the 725 Japanese companies are already in Tamil Nadu and many more investors are looking at the state as an attractive investment destination. With the Engineering Expo—organised by Infomedia 18—celebrating its tenth year of successful operations this year, primarily by establishing itself as a key enabler in propelling the growth of the manufacturing and service sectors, the Chennai edition of the
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Expo is shaping up as a conducive platform in amalgamating the capabilities of the state with the specific needs of the industries. Countries like Korea, Japan and Thailand have evinced interest in investing in the state particularly close to the major ports. Tamil Nadu has a unique distinction of having three major ports—Chennai, Tuticorin and Ennore. It also boasts of having the first corporatised port—Ennore, in the country. The state government, apart from large indust ries, is also looking at accelerating growth of Micro, Small and Medium Enterprises (MSME) with additional incentives. Tamil Nadu Small Indust ries Development Corporation has identified over 2,256 acres in 25 locations to promote indust rial clusters for MSME. The government is also revamping land pricing policies to simplify the processes. CEO, Publishing, Infomedia 18, Sandeep Khosla stated, “The last three editions of Engineering Expo has contributed immensely to the engineering and service industries from this part of the country. ”
The Chennai Advantage With its strong base in MSME, Engineering Expo Chennai offers a unique advantage, as it becomes the eye-opener for not only new opportunities in enhancing the business but also to augment the existing process with
cost effective technologies. Though it is a common phenomenon, the MSMEs are the worst affected due to the rising cost of finance and volatile raw material prices. There are options for these enterprises to become competitive. And to stay afloat, it is necessary to look for innovative technologies to reduce the cost of manufact uring while satisfying the customers’ specific requirements. In this scenario, the Engineering Expo Chennai helps connect not only the buyer and seller but also the giver and taker of affordable technologies. More than 250 exhibitors from diverse engineering and service industries are expected to participate in the Engineering Expo in Chennai. To be held in Chennai Trade Centre, which is about six km from the Chennai airport, the event will have participants from several indust rial segments including machine tools & accessories, hydraulics & pneumatics, instrumentation, light and medium indust ries, automation, elect rical & elect ronics and process plant machinery and equipment. The forthcoming event is expected to witness significant growth in terms of exhibitors as well as visitors.
COVER STORY
Drive the way Ashok Leyland’s organised driver training to re-route careers
Ashok Lelyand’s Driver Training Institute in Namakkal, near Salem has been instrumental in providing trained drivers to the system and impart dignity to the profession. DECEMEBR 2011 AFTERMARKET
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COVER STORY
T Murrali
HUMAN resource is an important tool in every aspect of a business—be it manufact uring or be it service. While the unemployment problem is severely felt in the country, there are some segments where there is enough employment but shortage of people willing to work. And the truck drivers segment is a prominent example of such a pocket in the economy. According to recent reports, about ten percent of the heavy trucks are idle for want of drivers. This is more so in some pockets for light commercial vehicles too. While the issues pertaining to LCVs are addressed to some extent by the owners themselves doubling up as drivers, it is not so in the case of MHCVs. Though this situation has been burgeoning in the recent past, the Chennai headquartered Ashok Leyland realised long ago and set up a Driver Training Inst itute (DTI) in Namakkal, near Salem, about 350 km southwest of Chennai. Established about 15 years ago, the object ive of DTI is primarily to provide more trained drivers to
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AFTERMARKET DECEMEBR 2011
the system so that it helps not only to increase drivers in terms of volumes but also qualitatively. Trained drivers are held in high esteem as they can reduce the carbon footprint, enhance profitability, besides reducing the number of accidents, which causes huge losses to the country. On an average, about one lakh people are killed in road accidents every year resulting in a material loss of `60,000 crore per year. Currently, more than six lakh MHCVs ply in the country and the numbers will only go up with National Highways adding about 30 km per day to the existing road length of about 66,000 km. Besides, the country has over 1.3 lakh km of state highways and about 3.14 million km of other roads. It is est imated that close to 80 percent of the accidents are due to negligence of the driver. If drivers are properly trained, the loss of lives and related damages (incluidng damage of properties and goods) could be minimised. With better roads being setup and the more powerful trucks being manufact ured, the challenge to produce trained drivers grows manifold.
K Nallathambi, President of Federation of Tamil Nadu Lorry Owners’ Association
According to a recent st udy, it is necessary to add 1.5 lakh drivers every year from the year 2015 onwards to meet the burgeoning demand. However, already close to ten percent of MHCVs are idle for want of drivers. If the situation continues, the demand will skyrocket in the next five years. With the government of India announcing a grant to create qualified drivers in its current five year plan, Ashok Leyland is expanding its service by leveraging the existing opportunities. In addition to Namakkal, the company currently operates one more DTI in Burari near Delhi. Speaking to Aftermarket, Assistant General Manager (Sales & Marketing group), Ashok Leyland, KC Balasubramanian said the company is currently working on setting up similar inst itutes in Kaithal in Haryana. Th is is the fi rst project under the government of India funding model where land is given by st ate government while the funds for const ruct ing the buildings and laying tracks are disbursed by the central government and Ashok Leyland is contributing the required equipment and vehicles. Under this model a society is formed, which will lay down rules to operate the inst itute. The new centre will be ready soon, he said. A similar project is also coming up in Chatia near Bhubaneshwar on the
COVER STORY
Nallusamy , President, LPG Tanker Lorry Owners’ Association
Kolkata highway. The company has also received the sanct ion letter from the government of Madhya Pradesh to set up a DTI in Chhindwara near Nagpur. The inst itute will commence operations by March 2012, he said. Ashok Leyland has also signed an MoU with Government of Rajast han to set up a DTI in Udaipur, which will be operational by October 2012. “We have finalised the project in Karnataka, which will be coming up near the Bangalore international airport. We are also in discussion with Punjab, Tamil Nadu, Meghalaya and Haryana to start similar inst itutes,” he said. In the upcoming projects, the role of Ashok Leyland will primarily be in running the institute by sharing its expertise, provide trained manpower and support with all the required
training software. According to the notification, the society will prescribe the fee st ruct ure so that the institute can run on ‘no-loss-no-profit’ basis. The role of the state government is to provide a minimum of 15 acre, get necessary grant from government of India for const ruct ion of the building and tracks. According to Balasubramanian, the country currently has over 30 lakh drivers (2010 Jan data) including 21 lakh for MHCV, transporting 3,150 million tonne per year and 60 million passengers per day. Loss to GDP due to accidents has increased from `32,000 crore in 2008 to one lakh crore in 2011. Quoting the data published by Ministry of Road Transport and Highways, he said that over 80 percent of road accidents happen due to the drivers’ fault, 17.4 percent due to bad weather, road blockages and cattle on road, two percent due to mechanical defects, 1.36 percent on pedestrian faults and 1.32 percent due to bad roads. Highlighting the fact that about 80 percent of the accidents happen due to negligence of drivers, he said it is imperative to train the drivers systematically to save lives and prevent accident-related damages. What are the impediments for the drivers to be developed? Balasubramanian replied that first ly
the driver community per se is shrinking as the next generation is not getting into the profession. This is primarily due to varied options available to the younger generation. Organised training to tweak skills of drivers will help in reducing accidents and enhance overall efficiency of driving, road discipline and fuel efficiency. In Namakkal, which is one of the major truck hubs in the country and the largest in southern India, 74 people own more than 100 trucks. The place became the Mecca of trucking due to constraints like lands unfavourable for agriculture and lack of scope for industrialisation. However, things are different now with people getting lot of opportunities. The President of Federation of Tamil Nadu Lorry Owners’ Association, K Nallathambi said that lack of recognition by the society hampers the process of the nextgen getting into truck driving. “Now the situation is such that even if the fleet operators are ready to pay `20,000 a month, as salary in addition to perks, they are not able to get drivers,” he added. The President of LPG Tanker Lorry Owners’ Association, Nallusamy shared the same view. He said that all stakeholders must join hands to remove the roadblocks in driver training. Even if five to 10 percent of fuel is saved due to better driving, it will significantly improve
Different kinds of tracks at DTI in Namakkal
DECEMEBR 2011 AFTERMARKET
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COVER STORY
the operating economics since bad driving habits can not only destroy the vehicle but also end up guzzling more fuel, which is a precious commodity, he said. “We are not able to get drivers for even scheduled loads such as LPG running in pre-determined roads that are generally good. At least ten percent of our fleet is ideal due to driver shortage. In fact, we have reworked our capex plan for this year by reducing the procurement of new vehicles due to nonavailability of drivers,” Nallusamy said. The fact that every year it is necessary to add more than a lakh drivers seems to be unachievable due to several constraints including the low capacity of driving schools, prohibitive costs, nonavailability of land and lack of motivation to take up organised driver training and enforcements in India. It is estimated that in addition to land cost it is necessary to invest `16-18 crore to set up a driver training institute. Unless there is increased involvement of government, things will not change. Balasubramanian stated that the DSTC has been running with an objective of upgrading the skill levels of drivers, re-training for road safety and fuel savings, upliftment of driver status and extracting better efficiency out of the vehicles. At Namakkal, Ashok Leyland offers
about 22 different types of courses in eight categories—each one designed for specific requirements with the duration ranging from few hours up to three months. It also trains motor vehicle inspectors and fire-engine drivers manning fire stations at airports. At present, the centre has 14 different varieties of vehicles (eight buses and five trucks and one LH drive) including one with left hand drive to impart training for those seeking jobs abroad. It hopes to consolidate it to ten varieties and make it contemporary by introducing U-Truck and BS4 variants of exist ing range of vehicles. The inst itute has every possible configuration of road for the trainees to experience the different road conditions. Besides, it has a full-fledged classroom and a laboratory with cutsect ion of major aggregates of the commercial vehicles including engine, gearbox and axles. In addition, it also has components that have been dest royed on account of bad driving— to make the trainees understand the extent of damage that they can make if the vehicle is not driven properly. In order to help Ashok Leyland’s customers to get specialised training, DSTC has appointed 16 field trainers recently, positioned across the country. “We have plans to have two field trainers in every
One of the training sessions
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AFTERMARKET DECEMEBR 2011
K C Balasubramanian, AGM (Sales & Mktg) & EN Surendran, Sr Manager (Driver Training), Ashok Leyland
state, depending up on vehicle parc with a maximum 48 trainers. The main objective to improve fuel economy,” he said. The government of Tamil Nadu recognises DSTC in Namakkal while the Delhi government recognises the one at Burari. Interestingly, the Delhi govt made it mandatory to undergo a refresher course to renew HMV license. Currently, it offers only retraining for Delhi Transport Corporation. It is authorised to conduct a test for 300 drivers every year for Delhi Staff Selection Board, who are absorbed in Delhi government service. It is currently planning to introduce a new driver training concept, which will have 50 persons per batch, commencing from January. It will be similar to Namakkal in a year’s time, he said. Both institutes have trained about four lakh drivers so far. However, despite the potential to earn a reasonable salary, the intent of people to join training institutes to learn driving skills is not encouraging. This is primarily due to initial costs involved in training courses. People willing to take up driving prefer to join the existing driver as an assistant or cleaner and learn the skills of driving while earning simultaneously or on-the-job. Though this method has been prevalent ever since trucks existed, industry experts feel that it may not be suitable in the future since the vehicles are becoming tech intensive, calling for skilled hands to drive them.
CUTTING CUTTINGEDGE EDGE
The inauguration of the Technical Training Centre
Bosch Automotive Aftermarket India
inaugurates Delhi Training Centre Shambhavi Anand
WITH a view to train mechanics, aspiring engineers, technicians, employees, customers for a future-ready skilled workforce, Bosch Automotive Aftermarket, supplier of automotive parts and accessories, diagnost ic and test equipment and authorised car service inaugurated its second Technical Training Centre in India. Located in New Delhi, the training centre has been built with an investment of `30 million in association with DEG Germany. The training centre will impart training to aspiring engineers, technicians, employees and customers in the northern region of the country, enhancing their level of technical competence on emerging automotive technology and service to global standards. “We are witnessing a lot of change. The automotive industry has graduated from classic Ambassadors to ABS induced high performance cars, from carburettor systems to elect ronic fuel
inject ion systems and conventional mechanical braking to elect ronically controlled breaking. Emissions norms have become more st ringent and there is greater focus on safe and economical driving resulting in a shift from conventional mechanical systems to modern elect ronic systems. This shift has lead to increased demand for automotive diagnost ics. The indust ry at present however doesn’t possess adequate skilled manpower to cater to this increasing demand,” Vice President, Automotive Aftermarket, Bosch, S Muralidharan said. “It is anticipated that meeting this demand would require a trained workforce of 2.5 million technicians and mechanics by 2025. As indust ry leaders we are attempting to bridge this gap. We intend to transform technicians into knowledge workers by equipping them with skills and confidence needed for automotive service, diagnostic interrogation and resolution,” he added. The centre has a capacity to train 50 people at a time and offers 70 spe-
cialised training modules for different skill sets like car service, elect rical module service, vehicle maintenance and systems, workshop and test equipment applications, diesel fuel injection equipment among others. It also offers specific modules for st udents, technicians, customers, trainers, new and old employees, sales and service personnel. The course fee ranges from nothing to `500 a day. The centre can also hold customised courses for its customers depending upon their requirements. On completion of training, candidates would be awarded a certificate from Bosch Automotive Aftermarket. Th is is the second largest training centre of the company in the country after Bangalore. It has 11 other centres spread across the nation which train around 2000 people every month. “We want to double the number of trainees in the next three years and might look at opening more centres in eastern and western regions,” Muralidharan said. The company may open four more such centres in the next three years.
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IN CONVERSATION
“Soon you will find our network from
Kashmir to Kanyakumari” Marc Nassif Having commissioned 40 dealerships in six months, the Indian arm of the French car manufacturer, Renault wants to expand its presence across the length and breadth of the country and hopes to enlist 100 dealers by the end of 2012. The company will give utmost importance to providing good services stressed Managing Director, Renault India, Marc Nassif while talking to Nabeel A Khan. He made it clear that customer satisfaction will be the prime focus while setting up new workshops and outlets in order to associate the brand with quality and efficiency.
So far, the sales volume is very less. How are you going to convince the dealers to join and stay with you for a long time? We will achieve the same by telling them about our st rategy and act ing accordingly. We have told them that we are going to bring fi ve cars by the end of 2012 and we are doing it. We will keep them informed about the developments. Can you profi le an ideal dealer? I reiterate that the customer is the best judge. I think the customers want to be pampered. We would like that our dealers are able to deliver on it. Dealers should be able to take care of all the issues that the customer is facing. A dealer who can offer customer a good cost of ownership amongst other things, is the ideal dealer.
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What kind of services will Renault offer on its products? We are offering an extended warranty and we think the customer is smart enough to understand. Th is is going to be one of the attributes that differentiates us from the competition. Service is very important. What is your future sales forecast ? Once we reach 100 dealerships in India, we will be able to reach the annual sales target of one lakh units. We may reach this figure by FY13 or 15 perhaps. This will completely depend on the market and the kind of competition coming up. However, this is the kind of level we want to reach in the near future. Renault India aimed to be among top three foreign brands in the country by 2015. What is your take on it?
Yes, but you don’t measure a brand only by sales volume. You measure brands by certain attributes. According to you, what are the attributes of a successful brand? The pillars of a brand are quality, excellence, reliability, design, st yling, innovation and roominess. How serious is Renault about India? Do you know of any other international brand, which has launched five cars in a period of 15 months in India? Nobody has made such quick launches I think. We launched Fluence in May, Koleos in September, and now showcasing Pulse, while Duster will be launched in the second part of 2012. Nobody has grown a network from zero to 40 in six months. Nobody has invested as much as we have done in Chennai; no company
IN CONVERSATION
has over 2,000 engineers that we share with our alliance partner. We had frozen the plan and then again re-started and built teams to deliver it. Is this not enough to show our commitment?
uct and not delivering extended warranty; we want to give warranty up to two years on our cars. However, if our customers have other preferences, they can always opt to go to our competition. No issues.
Do you think the market has responded in the same tone as your commitment? So far, yes. You know the customers are the judges. It’s not about numbers; we don’t pretend to flow the market; we want to build a foundation for the brand. And the brand comes from customer satisfaction. What we want is that every Fluence customer or Koleos customer be satisfied and delighted with the product. We do not have the ambition to go and battle with the main player who is doing 50 percent of the volume. We will not start competing with them by reducing the price or distorting the quality of the prod-
What are your basic parameters for success? Well, obviously the kind of services we are offering. The only way to judge is customer satisfaction and there are different ways to measure the same. Let’s take an example: In Germany, we talk about German brands but its public that Renault in Germany has better rating among the customers than that of Volkswagen and I am not saying it, the German customer is saying it. Pulse has been designed by the Mumbai team. How do you see their design strength?
The car is completely designed for Indian roads and Indian customers. The Mumbai design team does not only design products that are exclusively for India. Whenever we have global design projects, the Mumbai design team is sweating on it. The result of their st rength is shown here in the latest product (Pulse). If you like this, then they are of course doing great job. What are your expectations from the new hatchback—Pulse—from the Indian market? First, we wanted to increase the volume so that we can increase the dealers’ network; this is because we want to be visible and want to create trust and connect with the customer. We hope this product will help us. Very soon you will be able to find us from Kashmir to Kanyakumari.
DECEMBER 2011 AFTERMARKET
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“Our aim is to look at the problem from the customers’ point of view”
Photograph: Akmal Rahman B
Chennai headquartered TVS Automobile Solutions is expanding its service centre network and exploring joint ventures and acquisitions. Besides, it is also looking at chains that have around five to seven workshops to introduce training, IT and service capabilities. President, TVS Automobile Solutions, R Srivatchan speaks to Bhargav TS on the company’s plans to have 120 company owned workshop and approximately 400 franchise workshops by 2014.
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IN CONVERSATION
What are all the challenges you’re facing in the servicing indust ry? The major challenges that we are facing are arranging quality parts in a timely manner and making sure that our franchises and workshops grow very fast, year-on-year and month-on-month. What kind of feedback are you receiving from service networks? From our point of view, our customers are happy. Since we have two service verticals, one is the workshop service and the other is on-road emergency service networks. We provide two types of workshop services—one is our company owned services and other is the franchise-owned workshops. In all the services we are receiving good customer responses as a whole, with a few exceptions. However, we are addressing those responses very fast. Since many companies are entering into this business, how are you gearing up to meet the competition? We are slow but steady, and we don’t want to make a very aggressive pitch and then subsequently fi nd our name everywhere. Also, we recover very fast and will not allow the customers to experience any dissatisfact ion. We need to give the right response to our customers and stakeholders. Our business model reflects the growth of the market. Today, the market is at a nascent stage and only now it is getting recognised across the world. People are looking at this service centre as a serious alternative. There are challenges, at the same time you find that the authorised service networks and their standards have also increased and many of them are highly profitable. To compete with them is also a major challenge for us. Are there any plans to enter new
geographies? Yes. We are evaluating our plans to enter six markets like UAE, Qatar, Saudi Arabia, Sri Lanka, Turkey and Thailand. Recently, you have joined hands with a few passenger car manufact urers. Are there any plans for a tie-up with two-wheeler and commercial vehicle manufact urers? As far as the commercial vehicles are concerned, we have started conducting few trails and establishing our own capabilities. After exploring the possibilities, we will be entering into this market, either as a branded product or as a white label service to the CV manufact urers. At the moment it is in the capability building stage. What is the scope for these kinds of service networks in India? In the aftermarket business, if anyone has five percent market share, which is around `900 crore, it is considered huge. As far as ‘MyTVS’ is concerned, we are less than one percent where we had a `35 crore turnover last year and this year we are planning to do around `80 crore. Th is way, by FY 2013, we can reach one percent. Earlier, OEMs considered you as a competitor. What is the current scenario? From our point of view, we don’t consider either the OEMs or the small garages as our competitors. We can see the competition in a mature market or where the market is limited, but India is a growing market. Thus, currently we don’t see any competition. We are in a position where we can collaborate with car manufact urers, car dealers, part manufact urers, as well as the small garages and technicians to give a level of service and standard of service to consumers—we
can collaborate with all of these people. Our aim is to look at the problem from the customers’ point of view and the customers are taken care of as well. Also we do not encourage spurious parts. The vehicle manufact ures should encourage selling original parts and aggressively st art promoting their parts and make sure that it reaches the end customers. The vehicle population is increasing day-by-day. Are there plans to expand the MyTVS service networks? Yes. We have taken private equity invest ments of about `80 crore from Kitara Capital and with our business model, we believe that with this `80 crore and our promoter’s capital of `40 crore, we will be able to bring in approximately `500 crore of investments into this business. We have made this as a separate company called TVS Automobile Solutions. We are pursuing the expansion of workshop services all over the India. Currently, we have 16 workshops and this year we are planning to put another 30 workshops. Th is will give us formidable network st rength to address the market needs. What is the roadmap for MyTVS? Besides expanding the number of workshops, we are also exploring joint ventures and acquisitions in other parts of India. Acquisitions can be through the JVs or partnerships. We are also looking at chains that have around five to seven workshops and establish associations with them. This way, we will be able to bring things like training, IT and service capabilities to enhance their level of service deliveries and ensure that customers receive good services. Therefore by 2014, we will be having 100 to 120 company-owned workshops and approximately 400 franchise workshops.
DECEMBER 2011 AFTERMARKET
37
EVENTS
Tyrexpo Africa 2012 set to expand footprint across continent
LEADING international tyre manufact urers are gearing up for next year’s Tyrexpo Africa 2012 exhibition to be held from 6-8 March 2012, Sandton Convention Centre, Johannesburg, by announcing plans for new products aimed at increasing penetration of southern African markets. Among them will be the popular and successful Infi nity brand, dist ributed by Tyrecor, for whom Managing Director, Charl de Villiers st ated, “Tyrecor is looking forward to the upcoming Tyrexpo Africa 2012. We will be celebrating our 10 year anniversary and will make use of this opportunity to exhibit the brands that we represent in Southern Africa. We have recently expanded our Infi nity UHP range and will showcase many of these new sizes at the show. He continued, “Solideal Const ruct ion tyres and Starmaxx Agricultural tyres will also feature
38
AFTERMARKET DECEMBER 2011
in our lineup of products. Both these brands have received great support since being introduced to the market and we wish to build on this. We would like to invite all our customers to join us at Tyrexpo Africa 2012 and experience fi rst-hand our quality brands and join in the 10th anniversary celebrations.” Singapore-based Stamford Tyres is another leading manufact urer returning to exhibit at TyrexpoAfrica 2012 and will use the event to launch several new products in both their private brand, Firenza, and exclusive brand, Falken. Taking centrestage will be the launch of the brand’s first 4x4/SUV tyre—the Firenza AT186, which will initially be available in sizes ranging from 15 to 17 inches. There will also be a combination of Falken brands, which are exclusively dist ributed throughout South
Africa by the Stamford Tyres Group. At the same time the very latest Falken UHP pattern will be introduced— the FK453—which will become the new flagship pattern in the high performance sector. The FK453 will be available in sizes ranging from 16 to 22 inches and has a specially designed tread pattern for super handling and performance on wet roads. Stamford Tyres has established a growing presence throughout South Africa and currently operates sales and administ ration bases in Johannesburg, Durban and Cape Town, Port Elizabeth and Bloemfontein, which support st rategically placed warehouses across the country. Tubestone, the local dist ributor of BKT and Nankang tyres, will be another prominent exhibitor next March. India’s BKT is one of the world’s leading manufact urers of Off Highway tyres and supply Tubestone
EVENTS
with their range of agricultural, const ruct ion, indust rial, earthmover and port application tyres. Nankang provides the company’s passenger tyre range and remains on the forefront in technology and quality. They aim to constantly improve comfort, speed and safety in transportation. “Tyrexpo Africa is utilised to raise our presence in the market, showcase new and existing products and interact with show visitors” said Tubestone’s Managing Director, Pieter Kruger. According to Pieter, delegates can once again expect an impres-
sive setup from Tubestone, BKT and Nankang, with plans for a professional, yet comfortable and relaxing area for visitors. They urge visitors to stop by their st ands, C01 and D01, where Tubestone, Nankang and BKT exhibiting employees will be happy to supply more information regarding their product s. Techking is another brand keen to promote its all-round product ion capabilities, which has seen the recent launch of new truck and bus tyres in the TBR range and development of the new ETMPT 1 tyre for loaders, grad-
ers and backhoe applications. While tyres will naturally have a high profi le at the show, visitors will also have the opportunity to see the latest in workshop equipment and accessories from leading suppliers. These will include Automotive Equipment, Hofmann Megaplan, Launch Technologies, Leaderquip, Leadertread, Robert Bosch, SDS Systemtechnik, Wheelquip and Haweka. Tyrexpo Africa 2012 takes place at the Sandton Convention Centre, Johannesburg (SCC), South Africa between 6-8 March 2011.
Automechanika Shanghai marks highest number of overseas buyers AUTOMECHANIKA Shanghai 2011 to be held at the Shanghai New International Expo Centre from 7-10 December, is expect ing more than 60,000 professional buyers at the show including delegations from Aust ralia, Iran, Malaysia, Middle East and Poland as well as Chinese delegations from Anhui, Hunan, Fujian and Guangdong. Show visitors will be able to visit more than 3,600 exhibitors who will be showcasing their latest products and technologies in 160,000 sqm of exhibition space.
Focus On Hot Industry Issues Th is year’s fringe programme will explore the current issues ranging from remanufact uring and new energy to auto accessories, parts & components and repair & maintenance.
•
International Automotive Congress 2011: Co-organised with Institut für Kraftfahrwesen Aachen University (ika), the event has confirmed speak-
ers include professionals and analysts from automotive research institutions. Focusing on automotive industry technology trends, this annual congress will cover industry development and new technology, powertain and energy saving, automotive electronic and safety system as well as chassis and drive system.
Automechanika Shanghai is promoted asone of Asia’s “must attend” largest trade fairs for automotive parts, equipment and services. Many well-known international brands including Affi nia, Federal Mogul, Meguiar, Philips and Schaeffler, will use this opportunity to host show events to enhance their brand awareness.
DECEMBER 2011 AFTERMARKET
39
SPECIAL REPORT
Capgemini study highlights increased online demand for new vehicles Our Bureau
CAPGEMINI, the technology and outsourcing consultancy services recently released its 13th annual global automotive st udy, Cars Online 11/12. Th is year’s report reveals increased interest in buying cars online, and a growing demand for new vehicles in mature markets (66 percent, up from 61 percent in 2010). At the same time, however, many consumers indicated they were post poning buying a car until the economy shows more signs of stability. New ownership trends such as car-sharing and technology developments like smart phone apps are also impact ing the global automotive indust ry as the number of channels for researching and buying cars increases, and customers’ expectations and choices continue to rise. The st udy surveyed over 8,000 consumers in Brazil, China, France, Germany, India, Russia, the UK and US and provides a detailed analysis of CV buying behaviour around the world including shopping patterns, social media usage, online buying, green vehicles, customer interaction, aftersales and servicing. Key findings from this year’s st udy
40
AFTERMARKET DECEMBER 2011
include the role of the internet and social media—putting consumers in the driving seat. Consumer internet behaviour, as well as the rise of tablets and smartphones are increasingly impact ing the vehicle decision and buying process, with price, guidance and product information continuing to be the primary features consumers research via the Internet. The role of the internet during the vehicle buying process is becoming increasingly important, with fewer people visiting showrooms until very close to the point of purchase. Web usage for both purchasing and research has increased, with the number of consumers researching online reaching 94 percent. Th is is driven in part by increased use in developing markets. Consumers are increasingly expanding their web usage during the research process to include social media, particularly in developing markets. Among the tools consumers turn to are dealer and manufact urer social media sites, automotive blogs and discussion groups, information/ encyclopedia sites, personal and professional social networking sites, video and photo-sharing sites, and social messaging/micro-blogging sites. 71 percent of respondents said they would be likely to purchase a vehicle if
they found positive comments posted on social media sites. In this year’s st udy, 42 percent of consumers said they were likely to purchase a vehicle over the Internet, up from 37 percent two years ago. Consumers who are not interested in buying online cite the inability to test drive the vehicle, to receive full product and price information and to see photos/video of the vehicle. These perceived barriers have remained consistent over the past few years, yet they are clearly addressable and should be capitalised upon by dealers and manufact urers with a formal social media and channel management strategy to engage with existing and potential customers.
Alternative Buying Models Increasing demand for alternative buying models reflects a growing shift from products to services as consumers move from traditional vehicle ownership to “power by the hour.” Nearly 40 percent of respondents would consider alternatives such as vehicle-sharing, up from 35 percent in 2010. The buying cycle continues to shrink leaving dealers with fewer opportunities to interact faceto-face with customers, and the trend for non-traditional approaches to vehicle
SPECIAL REPORT
31
Dealer or manufact urer social media sites
28
Th ird-party automotive discussion group/forum
23
Th ird-party automotive weblog
31
12
Professional social networking sites
24
9
Photo sharing sites
26
9
Mobile phone applications/advertisements Social messaging/micro-blogging services
8
Social bookmarking sites
8 7
RSS feeds
18 23 Mature Markets
16
Developing Markets
12
1 0%
Consumer interest in green vehicles continues to gradually increase as this year electric vehicles made it to the mass market for the first time. 44 percent of consumers (up from 41 percent in 2009) said they currently own a fuel-efficient or alternative-fuel vehicle and 39 percent are planning to buy a green vehicle (up from 30 percent in 2009. This is expected to continue as fuel prices fluct uate, environmental awareness rises and governments provide tax credits and other incentives. In this year’s st udy, 42 percent of respondents expect full-electric vehicles to be a viable sales option (in terms of pricing and availability) within two years, up from 36 percent the prior year. Additional vehicle types identified by respondents include hybrid, biodiesel, hydrogen fuel cell and natural gas. However, price remains the biggest blocker to sales of alternative-fuel vehicles, followed by battery range, reliability and safety. The lack of charging locations is another concern for consumers considering electric vehicles. The automotive industry needs to develop effective solutions and work with government and
28
13
Online video site/vide-sharing service
Green Vehicles
31
16
Personal social networking sites
buying and ownership continues to grow.
33
19
Information/encyclopedia site with user-generated content
Other
42
24
None of these
Use of Social Media and Other Online Tools (% saying)
43
10%
20%
30%
40%
50%
other third parties to ensure that the necessary infrastruct ure is in place to support the move toward e-Mobility.
Customer Loyalty While satisfact ion levels grew, brand and dealer loyalty again declined this year. Sixty-one percent of consumers said they were likely to purchase/ lease the same make or brand as their current vehicle, down from 65 percent in 2010 and 68 percent in 2009. Similarly, dealer loyalty edged down to 55 percent, compared with 56 percent in 2010 and 63 percent in 2009. Customer loyalty remains st rongest in the developing markets, but is declining somewhat from the very high levels seen a few years ago. Th is is not surprising as the number of brands and dealers grows in the developing markets, providing car buyers with more choices. This is also the case for loyalty to servicing dealers, which is declining in the developing regions as competition increases.
Conclusion Th is year’s Cars Online report makes it clear that the automotive indust ry faces critical changes and challenges in the marketplace.
Automotive companies must understand how consumer dynamics are evolving and consider the impact these changes may have on their business in the coming years. Following are recommendations to help automotive companies apply the report’s fi ndings to their own business: a) Develop a formal social media management st rategy Consumers increasingly rely on and are influenced by social media during the vehicle buying process as well as the ownership lifecycle. The automotive indust ry has the opportunity to leverage social media to build brands, generate leads, drive sales, manage customer relationships and retain customers. To capitalise on this opportunity, companies should develop a formal social media management st rategy that includes real-time web listening, analysis and customer outreach. b)Maximise the consumer interactions with integrated end-to-end campaigns As the buying cycle shrinks, dealers have fewer opportunities to interact face-to-face with customers. Yet overall, the possible customer touchpoints have increased due to the growing number of channels and devices used by consumers during the buying process, presenting new and different opportunities for interact ion. This development, along with the increasing sophist ication and empowerment of customers, is driving a need for businesses to fully integrate marketing campaigns in order to take advantage of all possible touchpoints. c) Experiment with alternative buying and ownership models As consumers show budding interest in new approaches such as mobility packages and vehicle sharing, automotive companies should test the waters. If these new models take hold they could have a significant impact on billing systems, cash flow and
DECEMBER 2011 AFTERMARKET
41
SPECIAL REPORT
Nick Gill, Global Automotive Sector Leader, Capgemini yes; however, up until now, it has never radically changed. The OEM is st ill using the dealer as the primary retailer. In social media it is going to be exact ly the same. Somehow, as an example, the OEMs will be looking at dealerships in a certain area and they will be working with all the dealer principles. It will help address the demand spread in different pockets of the region. So the social media will be a win-win between the OEMs, dealers and consumers. T Murrali
Your st udy recommended for developing a formal social media network management due to increasing purchases over internet (37 to 42 percent)—would that affect dealership business? I think social media has not existed in the most peoples’ thinking about five years ago. Now it is big and important, but people are not really sure on how to use it and leverage it to a position where I think the market has matured. Every time where there is a new channel—like the internet or lead management—there is always a concern whether it will change the status between the OEM, the dealer and the consumer. The answer is
Dealers say their margins are under pressure due to escalating cost of real estate and operational costs, and this business is losing its charm. However, your st udy wanted more dealerships to be opened. How do you view this? The dealers work on low margins and are always under severe pressure. The OEMs will try to push as much products as possible to the dealers and dealers try to push the consumers. And the consumers will try to reduce the price. Where does the power sit? In the old world, it generally sat with the manufact urers. In the new world ie in the last ten years, the power sits with the consumer. Those dealers who provide the sales outlets within 50 miles
fi nancial services. d) Focus on a holist ic dealer st rategy in developing markets Dealer network development in countries such as China and India needs to focus on a number of elements. Proximity is critical as consumers are unwilling to travel far to buy or service their vehicles. However, it’s not enough just to saturate a market; dealer quality is becoming increasingly important in the developing regions as competition grows and
consumers become more demanding. Th is requires invest ments in training, systems and processes, and a st rong aftersales/servicing programme. e) Seize the online buying opportunity Despite growing consumer demand for online buying of vehicles, parts and accessories, the capability remains scarce in most markets. When launching an online buying model, automotive companies should consider the key factors consumers are looking for: price dis-
42
AFTERMARKET DECEMBER 2011
and service outlet within ten miles or so, will be the winner. What’s the scene in India? If the OEMs or the dealers in India think that somehow they can know what the consumer wants, they can succeed. More than sales outlets it is essential to have service points as the sales happen perhaps once in five years, while the customers need to visit service centres more often. Thus service is critical part of sales. The Indian dealers have to take a long-term view. The interest in Indian market for all of the OEMs is not the size of the market today but tomorrow. Therefore it is necessary to plan for tomorrow. The aftersales service ranking has moved upwards to 4th position from 7th position last year. What is the reason? Over 50 percent of respondents said that they would buy the next car from the same place that they get their car serviced today. It is because of the good relationships that the service centres maintain with the consumers. As we move on to social media— the fast interaction world—I think there will be more communication between the after sales points and the consumers. count, ease and speed of transaction, full price and product details, and the ability to solve the test drive issue. f) Keep “green” on your radar The emergence of electric vehicles and e-Mobility may drive a wide range of fundamental changes in the automotive industry, and companies will need to develop effective solutions to manage them. The changes are likely to impact areas such as competition, innovation, partnerships, and technology systems and processes.
EXTRA MILE
Advaith Hyundai’s Bangalore service centre
Setting an example Personal connect with customers has helped SVS Subramanya Gupta of Advaith Hyundai become one of the top Hyundai dealers nationally Abhishek Parekh
PASSION for cars and hardnosed salesmanship got SVS Subramanya Gupta into the dealership business and has also helped him make Bangalorebased Advaith Hyundai, among the first of the Hyundai dealers to set up shop and emerge among the top selling dealership of the Korean car maker in the country. Gupta attributes the success of his dealership to his management skills and customer driven product lineup from Hyundai Motors. It has also helped
that Bangalore has emerged as a mega metro over the last decade spurred by information technology and manufacturing-led employment growth. “There is a cosmopolitan culture in Bangalore where people from all walks of life keep and remain in close touch with each other. This microcosm of the city has played a key role in our success as a dealer,” said Director, Advaith Motors, SVS Subramanya Gupta. He added that as a dealer, his priority has always been to give more time to unsatisfied customers and go the extra mile to cater to them. Such effort has
DECEMBER 2011 AFTERMARKET
43
EXTRA MILE
The showroom
helped him get a ‘word-of-mouth’ following and expand his customer base across multiple cities. Understanding customers’ requirements and presenting them with numerous options is the key differentiator for any dealer. Options could also be in terms of presenting numerous finance options for the customers to enable him/her to shift to a higher segment car. He believes in leading from the front. An outgoing salesman, Gupta has taken upon a target of selling at least two cars himself daily, irrespect ive of his location during the day, and has managed to achieve this target on most days over the past few months! Located in the heart of Bangalore,
Advaith has consciously put off the idea of having round the clock operations despite significant pressure on the service centre to do so. “We are able to manage the work intensity so far, and will continue to do so going forward. Starting round the clock service operations has other operational implications as accounts a6nd other support services also need to be running round the clock,” he elaborated. Vehicles coming for servicing, with or without service appointments, are taken care of within a working day. In case of major service or overhaul work, it keeps the car for a day longer and delivers it to customers at the earliest. An automobile enthusiast himself,
Gupta had his fi rst tryst with automobile dealership business running Kinetic Honda dealership in the nineties and subsequently shifted to running a Ford dealership. He joined hands with Hyundai as soon as the Korean car maker entered India around 1998 and has been a leading dealer of Hyundai Motors for the last 13 odd years. Over the past couple of years, he has been looking to expand his vehicle range and has forayed into selling Mercedes Benz buses, Mahindra tractors and JCB’s range of const ruct ion equipments. When pointed out that a major metropolitan city like Bangalore has only three Hyundai dealerships thus providing an open playing ground in a growing market for cars, Gupta offers a different take on the issue. “We have taken the financial risk and expanded our operations keeping in mind the potential of this city even as the overall market for cars has grown multi-fold over the last decade. My fellow dealers in other metros like Delhi and Mumbai too were provided the opportunity by Hyundai to expand by opening multiple outlets. Some of them took up the offer and some did not. The point is that the OEM has the ambition to be the leading brand and we have been able to grow with them,” said Gupta. He added that even during his time as a leading Ford dealer in Bangalore,
The interiors
44
AFTERMARKET DECEMBER 2011
EXTRA MILE
Gupta was outselling his fellow dealers in the heart of the city despite his dealership located on the outskirts and limited market for a premium cars in the late nineties. He is already operating four showrooms in and around Bangalore and two more in Mysore, around three hours drive from Bangalore. Additionally, he is also running one showroom each in Hassan and Mangalore. Additional showrooms are coming up in Kolar, Ramanagaram and Uttaradi, all within short driving distance from Bangalore. He already employs more than 1,500 people in sales, service and other support staff across showrooms and sells an average of around 800 to 850 cars every month from all outlets. Gupta is gearing up for more act ion and is already drawing up plans for additional showrooms in South India as opportunities are provided to him. He has been among the top selling
Gupta (in white half sleeve shirt) with his Advaith team
dealers by volume for Hyundai Motors nationally and claims to be top seller for Hyundai Motors globally in the dealership category. Hyundai operates company owned showrooms in many markets globally. Some of the priorities going forward for Advaith are retaining and attract ing skilled and unskilled man-
power and expand service network in indust rial zones in and around cities. Gupta points out that he has made an effort to gather a team of people who are as passionate about automobiles as he himself is. Th is has ensured that worker product ivity and additional effort at going that extra mile has never been a problem.
DECEMBER 2011 AFTERMARKET
45
AUTO POINT
Growth levels in CV demand to plummet post-festivals Revati Kasture Head, Industry Research, CARE Research Vishal Srivastav Deputy Manager, CARE Research
Operators (FOs) in keeping utilisation of their vehicles at higher levels. Hence, even though the rise in diesel price and interest cost pulled down their profit margins, sustainability in freight movement both in primary as well as redistribution enabled FOs to increase freight rates and gradually pass on the price rise to their customers. Healthy freight movement also ensured consistency of revenues for FOs that kept sales for GCs at decent levels till now. With economic activity slowing down, freight movements have started cooling especially post fest ivals. The post fest ive period has been challenging for the economy. Persistence of high inflationary scenario has compelled RBI to resort to yet another interest rates hike last month, which has been the eighth time in last 12 months.
THE CV industry has been able to successfully fade away the growing uncertainties in economic situation created due to inflationary pressure, hike in fuel prices and interest rates since the start of second quarter of this fiscal. Upbeat demand from goods carriers (GC) segment in both medium and heavy commercial vehicles (M&HCV) and light commercial vehicles (LCV) on the back of healthy freight movement created due to long festive season kept demand for GC at healthy levels till the first seven months of thecurrent fiscal. Healthy freight demand ensured revenue sustainability for FOs; though profitability took a beating owing to rise in diesel price and interest rates CARE Research observes that during, the past two and half years, healthy freight movement has enabled Freight 1.80
Trend in diesel price and key cost components
1.60
Rs/tkm
1.40 1.20 1.00
Key costs
Source: CARE Research Note: Diesel prices and freight rates is calculated for 16 tonne payload capacity vehicle key cost component includes fuel cost, interest cost and other operating cost of an M&HCV
46
AFTERMARKET DECEMBER 2011
Jun-11
Aug -11
Apr-11
Feb-11
Dec-10
Oct-10
Aug -10
Apr-10
Freight rates
Jun-10
Feb-10
Dec-09
Oct-09
Aug -09
Apr-09
Jun-09
0.80
AUTO POINT
Trend in IIP
60% 50% 40%
30% 20% 10%
IIP: Mining
IIP: Manuf acturing
IIP: Capital goods
IIP: Consumer goods
Sep-11
Aug-11
Jul-11
Jun-11
Apr-11
May-11
Mar-11
Feb-11
Jan-11
Dec-10
Oct-10
Nov-10
Aug-10
Sep-10
Jul-10
Jun-10
Apr-10
-20%
May-10
-10%
Mar-10
0%
Source: CMIE
However, this move has impacted credit growth substantially and has also consequently pulled down India’s IIP (Index of Indust rial Product ion) growth, which merely managed to increase by 1.9 per cent in September 2011, the lowest in last two years. The worst affected has been IIP for mining and capital goods, that has observed a drop of around six percent and seven percent respect ively. The mining indus-
try has been hit significantly owing to uncertainties creeping in due changes in regulations by various state governments with respect to environmental norms and illegal mining. Whereas, rise in borrowing cost owing to increase in interest rates have led to considerably drop in investments towards expansion projects across various indust ries. The inventory levels with OEM have risen substantially especially in the
Comparison of production and sales in goods commercial vehicles segment
0.30 10 days inventory
Waiting period
0.20
7 days inventory
0.10
0.05
Sales
0.15
Production
Units (in mn)
0.25
0.00 M&HCV GC
LCV GC
April - October 2011
M&HCV GC
goods LCV segment; indicating formation of demand pressure .The impact of the slowdown in indust rial product ion and hardening of interest rates have st ill not adversely affected the goods commercial vehicle sales, as domest ic sales observed a growth of 18.5 per cent in October 2011 on y-o-y basis. However, with further analysis it was found that there has been inventory pile up of around none-10 days at OEM level since last four-five months pointing towards even more inventory pile up at the dealer level. While during same period in FY10, there was virtually no inventory at the OEM level. Generally automobile OEMs try to push sales at dealer levels and keep minimum or no inventory with themselves in order to have comfortable working capital position. Hence consistent pileup of the inventory at OEM level indicates demand pressure. CARE Research foresees, in short term period indust ry would witness correct ion in production levels by some extent to match demand situation which will consequently lead to drop in sales growth levels. Long term outlook for the industry would continue to remain encouraging. CARE Research estimates the domestic CV sales to grow at a CAGR of around 11-12 percent during FY11-FY16 period. CARE Research believes healthy long-term macro-economic outlook coupled with increase in government focus towards development of transport infrastructure would fade away the short-term concerns over economic uncertainties and rise in interest rates. The GC segment would continue to dominate the growth as it is expected to grow at a healthy CAGR of around 12-13 per cent during the same period.
LCV GC
April - October 2010
(The report is prepared by CARE Research, a division of Credit Analysis & Research. Views expressed are personal.)
Source: CARE Research
DECEMBER 2011 AFTERMARKET
47
STUDY
Emissions grow in developing countries India among top ten polluters WHILE the emissions of developing countries continued to grow in 2009 (+3.3 percent), led by Asia and the Middle East, the emissions of developed countries fell sharply (-6.5 percent), putting them at 6.4 percent below their 1990 collect ive level. It should be noted that 2009 emission levels for the group of countries participating in the Kyoto protocol were 14.7 percent below their 1990 level. Early indications suggest that CO2 emission trends in developing countries in 2010 will continue to increase through growing consumption of fossil fuels in some of the
48
AFTERMARKET DECEMBER 2011
larger countries. The trend of emissions in developed countries will rebound in 2010 and CO2 emissions will likely be at a similar level to 2008, before the recent financial crisis and the slowdown in economic activity. In the medium term, CO2 emissions are expected to rebound when economic conditions pick up. In its New Policies Scenario, the World Energy Outlook (WEO 2010)4 projects that world CO2 emissions from fuel combust ion will continue to grow unabated, albeit at a lower rate, reaching 35.4 Gt CO2 by 2035. Th is is an improvement over the Current Policies Scenario of the WEO and
STUDY
is in line with the worst-case scenario presented by the Intergovernmental Panel on Climate Change (IPCC)5 in the Fourth Assessment Report (2007), which projects a world average temperature increase of between 2.4°C and 6.4°C by 2100. In 2009, 43 percent of CO2 emissions from fuel combust ion were produced from coal, 37 percent from oil and 20 percent from gas. Currently, coal is fi lling much of the growing energy demand of those developing countries, such as China and India, where energy-intensive indust rial production is growing rapidly and large coal reserves exist with limited reserves of other energy sources. Without additional measures, Energy Technology Perspect ives (ETP 2010) shows that intensified use of coal would substantially increase CO2 emissions unless there was a very widespread deployment of carbon capture and storage (CCS). Two-thirds of global emissions for 2009 originated from just ten countries, with the shares of China and the United States far surpassing those of all others. Combined, these two countries alone produced 12.0 Gt CO2, 41 percent of world CO2 emissions. Two sectors, elect ricity and heat generation and transport, produced nearly twothirds of global CO2 emissions in 2009. Generation of elect ricity and heat was by far the largest producer of CO2 emissions and was responsible for 41 percent of the world CO2 emissions in global emissions. Countries such as Aust ralia, China, India, Poland and South Africa produce between 68 percent and 94 percent of their elect ricity and heat through the combust ion of coal. By 2035, the WEO 2010 projects that demand for elect ricity will be approximately three-quarters higher than current demand. Th is demand will be driven by rapid growth in population
50
AFTERMARKET DECEMBER 2011
Top 10 emitting countries in 2009 Gt CO2
0
2
4
6
8
China United States India Russian Federation Japan Germany Islamic Republic of Iran Canada Korea
Top 10 total: 19.0 Gt CO2
World total: 29.0 Gt CO
2
United Kingdom
Source: Indust ry Reports and ICR A’s Analysis
and income in developing countries, by the continuing increase in the number of elect rical devices used in homes and commercial buildings, and by the growth in elect rically driven indust rial processes. Meanwhile, the share of renewables in total electricity generation rises from 19 percent in 2008 to 23 percent, 32 percent and 45 percent in the current policies, new policies and 450 scenarios, respect ively. Transport, the second-largest sector, represented 23 percent of global CO2 emissions in 2009. CO2 emissions in this sector decreased between 2008 and 2009 by 1.7 percent. The United States has the highest level of passenger travel per capita in the world (more than 25,000 km per person per year). Until recently, lower fuel prices in the United States contributed to the use of larger vehicles, while in Europe higher fuel prices encouraged improved fuel economy (along with the EU voluntary agreement with manufacturers). As a result, there is more than a 50 percent variation in the average fuel
consumption of new light-duty vehicles across OECD member countries. Global demand for transport appears unlikely to decrease in the foreseeable future; the WEO 2010 projects that transport fuel demand will grow by about 40 percent by 2035. To limit emissions from this sector, policy makers should first and foremost consider measures to encourage or require improved vehicle efficiency, as the United States has recently done, and the European Union is currently doing as a follow-up to the voluntary agreements. Policies that encourage a shift from cars to public transportation and to lower emission modes of transportation can also help. Finally, policies can encourage a shift to new, preferably low-carbon fuels. These include elect ricity (eg elect ric and plug-in hybrid vehicles), hydrogen (eg through the introduction of fuel cell vehicles) and greater use of biofuels (eg as a blend in gasoline and diesel fuel). To avoid a rebound in transport fuel demand, these moves must also be backed up by emissions
FADA s 7th Auto Summit - 9th & 10th January 2012 at New Delhi FADA will be organising its major biennial event, viz. 7th Auto Summit on 9th & 10th January 2012 at Hotel Le Meridien, New Delhi, coinciding with Auto Expo scheduled for 7th to 11th January 2012. Having regard to speed-breakers encountered from time to time, the theme of Auto Summit 2012 is SHIFTING GEARS - TERRAIN AHEAD . As earlier Summits, the Auto Summit 2012 is being organised in association with SIAM. Dr Montek Singh Ahluwalia, Dy Chairman, Planning Commission, has kindly agreed to inaugurate the Auto Summit 2012 and to deliver the Inaugural Address. Mr Anand Mahindra, Vice Chairman & MD, Mahindra & Mahindra Ltd will be the Chief Guest at the Inaugural Session, while Mr S Sandilya, President, SIAM and Group Chairman, Eicher Motors will deliver the keynote address. As in the past, Auto Summit 2012 will be a two-day event. The day one, i.e. 9th January 2012 will, by and large, comprise workshops on day-to-day management of automobile dealerships and best dealership practices. The day two of the event, i.e. 10th January 2012 will start with a formal Inaugural Session at 10.30 a.m. followed by other Business/Interactive Sessions. As in the previous Auto Summits, industry leaders, senior Government ministers & officials, captains of allied businesses and renowned management gurus are expected to address and interact with the participants at the 7th Auto Summit. Auto Summit presents a great opportunity for automobile dealers to meet the industry leaders and other members of auto retail fraternity from across India and abroad to share their experiences and exchange ideas. The Auto Summit brings together all stakeholders on a common platform to mull and address the current & emerging challenges for sustained growth of all players connected with automotive business.
The Summit is also an occasion to celebrate and unwind, as cultural evening and networking cocktails & dinner form an integral part of the two-day programme. Presentation of Automotive Dealer Excellence Awards (ADEA) for the year 2011 forms an integral part of the programme.
Background FADA has been organising a biennial Convention of Automobile Dealers, viz. Auto Summit at New Delhi coinciding with the Auto Expo, commencing from the year 2000. The previous Summits were a grand success, each Summit attracting 700-800 participants representing dealerships, vehicle manufacturers, oil companies, banks, insurance & finance companies and media from all over the country and abroad. Practically, all leaders of automotive industry and allied businesses have addressed at this forum in the past on various issues including changing paradigm of auto retail, marketing, human resource management, customer satisfaction, relationship management, etc. The Summit deliberations helped in creating a tremendous awakening and identifying the challenges & opportunities for automotive business as a whole.
Registration and Programme Details For Registration and Programme Details, please contact FADA Office at the following address: Federation of Automobile Dealers Associations (FADA) 805, Surya Kiran, 19, K G Marg, New Delhi - 110 001 Phones: 011 - 2332 0095, 6630 4852, 4153 1495 E-mail: fada@airtelmail.in The registration form and programme details can also be download from FADA s website: www.fadaweb.com
Previous Auto Summits - Flashback
November 2011
17
STUDY
pricing or fuel excise policies. These policies would both reduce the environmental impact of transport and help to secure domestic fuel supplies, which are sometimes unsettled by the threat of supply disruptions, whether from natural disasters, accidents or the geopolitics of oil trade. As these policies will ease demand growth, they are also likely to help reduce oil prices below what the prices might otherwise be. Indicators such as those briefly discussed in this sect ion st rongly reflect energy const raints and choices made to supply the economic activities of each country. They also reflect sectors that predominate in different countries’ economies. In 2009, the largest five emitters (China, the United States, India, the Russian Federation and Japan) comprised 45 percent of the total population and together produced 56 percent of the global CO2 emissions and 51 percent of the world gross domestic product (GDP). Although climate and other variables also affect energy use, relatively high values of emissions per GDP indicate a potential for decoupling CO2 emissions from economic growth. Among the five largest emitters of CO2 in 2009, China, the Russian Federation and the United States have significantly reduced their CO2 emissions per unit of GDP between 1990 and 2009. The other two countries, India and Japan, already had much lower emissions per GDP. Worldwide, the highest levels of emissions per GDP are observed for the oil and gas exporting region of the Middle East and for the relatively energy-intensive. Economies in transition EITs9. China emissions per GDP have fallen close to the level of the United States. As compared to emissions per unit of GDP, the range of per capita emission levels across the world is even larger, highlighting wide divergences in the way different countries and regions use energy.
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AFTERMARKET DECEMBER 2011
In 2009, the United States alone generated 18 percent of world CO2 emissions, despite a population of less than five percent of the global total. Conversely, China contributed a comparable share of world emissions (24 percent) while accounting for 20 percent of the world population. India, with 17 percent of world population, contributed more than five percent of the CO2 emissions. Among the five largest emitters, the levels of per capita emissions were very diverse, ranging from 1 t of CO2 per capita for India and 5 t for China to 17 t for the United States. Indust rialised countries emit far larger amounts of CO2 per capita than the world average. However, some rapidly expanding economies are significantly increasing their emissions per capita. For example, between 1990 and 2009, among the top five emitting countries, China increased its per capita emissions by over two and a half times and India doubled them. Clearly, these two countries contributed much to the 8 percent increase of global per capita emissions over the period. Conversely, both the Russian Federation and the United States decreased their per capita emissions significantly, by 27 percent and 13 percent respect ively, over the same period.
India’s Pro le India emits more than five percent of global CO2 emissions, and emissions continue to grow. CO2 emissions have almost tripled between 1990 and 2009. The WEO 2010 New Policies Scenario projects that CO2 emissions in India will increase by almost 2.5 times between 2008 and 2035. A large share of these emissions are produced by the elect ricity and heat sector, which represented 54 percent of CO2 in 2009, up from 40 percent in 1990. CO2 emissions in the transport sector accounted for only nine percent of
total emissions in 2009, but transport is one of the fastest growing sectors. In 2009, 69 percent of elect ricity in India came from coal, another 12 percent from natural gas and 3 percent from oil. The share of fossil fuels in the generation mix grew from 73 percent in 1990 to 85 percent in 2002. The share of fossil fuels has declined steadily since then, falling to 81 percent in 2006, although increasing back up to 84 percent in 2009. Although elect ricity produced from hydro has act ually risen during this period, the share fell from 25 percent in 1990 to 12 percent in 2009. India is promoting the addition of other renewable power sources into its generation mix and had an installed capacity of 17 GW of renewable energy sources on 30 June 2010. Under its National Action Plan on climate change, India plans to install 20 GW of solar power by 2020. With an installed wind capacity of 12 GW in June 2010, India has the world’s fifth-largest installed capacity of wind power. Of the BRICS countries, India has the lowest CO2 emissions per capita (1.4 t CO2 in 2009), about one third that of the world average. However, due to the recent large increases in emissions, the Indian ratio is more than two times that of its ratio in 1990 and will continue to grow. India’s per capita emissions in 2035 will, however, still be well below those in the OECD member countries today. In terms of CO2/GDP, India has continuously improved the efficiency of its economy and reduced the CO2 emissions per unit of GDP by 16 percent between 1990 and 2009. India aims to further reduce emissions intensity of GDP by 20-25 percent by 2020 compared with the 2005 level. (Extracts: ‘CO emissions from fuel combustion’ - International Energy Agency) 2
STUDY
Indian port sector: Growth plans ambitious, uncertainty over implementation CARGO growth at Indian ports was moderate in 2010-11, with the overall increase in throughput at four percent year-on-year (yoy). This resulted from the low growth in cargo volumes at the major ports (1.6 percent yoy increase) because of a significant reduction in volumes of iron ore, a major cargo category, following Karnataka’s banning of iron ore exports since August 2010. The cargo growth at the non-major ports however continued to be robust, with volumes increasing by nine percent on yoy basis. In market share terms, the non-major ports increased their share marginally from 34 percent of the total cargo in 2009-10 to 35 percent in 2010-11. The outlook for cargo growth remains favourable, given the robust domestic demand from key end-user industries. The main cargoes, the volumes of which are expected to drive growth, include coal; crude oil and containers. Accordingly, port ventures with an exposure to these cargo categories stand to gain. While the favourable demand—supply scenario in the Indian port sector augurs well for indust ry participants, from a credit perspect ive ICRA believes that its rated portfolio of companies is faced with certain challenges the most prominent of which include: project execution risks given that many companies are in a moderate to large scale capital expenditure mode; the hardening interest rate environment; regulatory risks emanating from an evolving policy environment; cargo concentration risk particularly
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for entities having a high exposure to ironore cargo given the ongoing uncertainties on iron-ore mining act ivities in various states; possibility of temporary capacity overhang in some cargo segments and incremental risks associated with expansion in scope of business/inorganic growth.
Background India’s long coast line of over 7,500 km is home to the country’s 13 major ports and around 200 non-major ports located along the western and eastern corridors. While the number of non-major ports is large, only about one-third of them undertake regular commercial operations; these ports are located mainly in Gujarat, Andhra Pradesh, Goa, and Maharashtra. The trend is expected to gain traction with the major ports increasingly moving to a landlord/asset ownership model, allowing the private sector a dominant role in capacity additions and port services and operations.
Cargo Trends & Outlook Cargo traffic at Indian ports increased to 883 million tonnes (mmt) in 2010-11 from 850 mmt in 2009-10. The lower yoy increase in cargo at 4 percent in 2010-11 (14 percent yoy growth in 2009-10) may be attributed partly to the larger cargo base and partly to the low growth (two percent yoy in 2010-11) in the volume of cargo handled by the major ports. The weak performance of the major
STUDY
Cargo Mix of Major Ports - 2010-11 Coal, 13% Fertilisers & Fertiliser Raw Materials , 4%
POL, 32%
Iron-ore, 15%
Other Cargo, 17%
Containers, 20%
Source: Indust ry Reports and ICR A’s Analysis
ports followed mainly the decline in volumes of one of the principal commodities, iron ore, by 13 percent yoy to 87 mmt in 2010-11 from 100 mmt in 2009-10 with iron ore exports being banned in Karnataka. The non-major ports on the other hand reported a nine percent yoy increase in cargo volumes and as a result gained market share (35 percent in 2010-11 as against 34 percent in 2009-10).
Growth Estimates Among the major ports, Kandla in Gujarat continued to lead in terms of cargo volumes (82 mmt in 2010-11, at three percent yoy growth) followed by Vishakhapatnam in Andhra Pradesh (68 mmt at four percent yoy growth). While cargo volumes at all the major ports increased in 2010-11, although in single digits, the volumes at New Mangalore and Paradip reported a dip of 11 percent and two percent yoy respect ively, primarily because of their high exposure to iron ore. Among the non-major ports, Mundra Port and Special Economic Zone Limited located in Gujarat was the largest operator (52 mmt in 2010-11), followed by
Essar Ports (40 mmt) which has two facilities at Vadinar and Hazira , both located in the state of Gujarat. By cargo mix, petroleum, oil & lubricants (POL) continued to account for the largest share of 32 percent in 2010-11 (31 percent in 2009-10), followed by containers (20 percent against 18 percent). ICRA’s view on cargo growth over the medium to long term remains positive based on the level of act ivities in the key end-user indust ries. Going forward, growth of traffic at Indian ports is expected to be driven mainly by higher volumes of coal (to meet the requirements of the large number of current and proposed thermal power projects based on imported coal); containers (given the market under-penetration and potential for cost savings); crude oil and POL (large upcoming refi nery capacity); fertilisers (st rong domest ic demand and low self-sufficiency); and steel (mega projects proposed in the eastern part of the country).
Port Milestones According to the est imates of the Minist ry of Shipping (MoS), cargo
volumes in India are expected to breach the one billion tonne mark in the current fiscal (2011-12); the two billion tonne mark by 2016-17 (seven-year CAGR of 13 percent); and 2.4 billion tonnes by 2019-20 (10-year CAGR of 11 percent). Growth at the non-major ports is expected to outpace that at the major ports, with the former commanding a 51 percent share of the total cargo in a decade’s time. By composition, coal (expected 10-year CAGR of 18 percent) and containers (expected 10-year CAGR of 15 percent) are expected to drive much of the growth. Thus, port ventures with a higher exposure to these cargo categories are favourably placed. On the supply side, the Indian port sector has seen certain major milestones being reached in the recent past, including the commissioning of the first phase of operations at: International Container Transhipment Terminal, Vallarpadam; solid cargo port terminal, Dahej; coal terminal, Mundra; bulk terminal, Hazira; and a greenfield port, Dhamra. The ambitious National Maritime Development Programme (NMDP) has failed to live up to expectations because of the absence of various enabling factors and is due to complete its tenure in March 2012. To replace it, the MoS has formulated the Maritime Agenda 2010-20, outlining the next decades’ programme for the development of the Indian maritime sector.
Three-Pronged Strategy As a part of its efforts to improve the inst itutional framework for PPP project s at major ports, the Central Government const ituted a committee under the Chairmanship of BK Chaturvedi in February 2010 to review and recommend revisions in the Model Concession Agreement (MCA), which is the basic contract ual
DECEMBER 2011 AFTERMARKET
55
STUDY
Volumes at indian ports
900
In Million Tonnes
800 289
700 600
500
203
155
314
213
186
Hub Ports
400 300 200
424
464
519
531
561
570
100 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Major Ports
Non-Major Ports
Source: Indust ry Reports and ICR A’s Analysis
framework governing the PPP model in India. The key recommendations of the committee (made in September 2010) include the following: A threepronged st rategy may be adopted to improve the tariff setting mechanism as follows: st reamlining TAMP procedures and building in-house capacity in the short term; delegating the tariff setting funct ion to the respect ive port trust s over the medium term and allowing market forces to determine tariff s over the long term with the role of the port authorities being limited to oversight. While ICRA does not expect the viability of port projects to be adversely impacted by the additional land cost , as that would be governed more by other st rategic considerations such as cargo potential, extent of handling infrast ruct ure, and draught, the higher land cost is likely to lead to higher capital intensity, which in turn would lead to some moderation in the return on capital employed.
Capacity Expansion The Maritime Agenda envisages
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the guidelines for fi xing of tariff s. Also, a regulator is to be est ablished to oversee the act ivities and tariff s of the non-major ports. Greater focus is to be placed on environmental aspect s and an environment clearance mechanism to be inst ituted to expedite progress of project s.
a cumulative invest ment of around `2,774 billion in the port sector over the next 10 years in three phases. The non-major ports are expected to account for 61 percent of the proposed invest ment, and the major ports for the rest . Capacity expansion by way of const ruct ion of new berths and jetties accounts for 65 percent of the total outlay, and other support works for the rest . With the envisaged capital expenditure being made, the capacity of the port sector would likely increase to over 3 billion tonnes by 2019-20; the non-major ports would account for 53 percent of the enhanced capacity and the major ones for the rest 47 percent. The projected capacity expansion and the expected cargo growth would bring down the utilisation levels at the major ports from the current 90 percent levels to around 80 percent, paving the path for better service. Key policies and framework agreements to be reviewed periodically and modified from time-to-time include the policy for land use, model documents like RFQ , RFP and MCA and
Hub ports to be developed to receive 13,500+ TEU2 containerships; at least two such hubs to be established on the eastern coast (Chennai and Visakhapatnam) and two on the west coast (Jawaharlal Nehru and Cochin ports). A specialised Maritime Finance Corporation is to be formed with the equity of ports and financial inst itutions to appraise and fund port projects, given their specialised nature and requirements.
Progress & Policies A special purpose vehicle, Indian Ports’ Global, is to be set up to make invest ments in ports overseas. A monitoring and feedback mechanism to be inst ituted to track progress at the level of the ports and at the government‘s level so that timely act ion on slippages in progress and implementation can be taken. Apart from the above, another recently formulated policy is the Policy for Prevention of Monopoly at Major Ports, 2010, which seeks to rest rain operators with exist ing facilities at a port from bidding for similar terminal development projects within the same port and/or within a radius of 100 km of it. The intention is to allow development of healthy market competition and prevent capacity concentration, which may impact pricing and performance standards. (Courtesy : ICRA Research)
PRODUCTS
Hydraulic Floor Portable (manually Towable) Cranes VANJAX Sales, based in Chennai manufact ures hydraulic floor portable (manually towable) cranes in light and heavy duty types. They have all steel fabricated frames, and are available in st andard capacities ranging from 1,000 kg upto 2,000 kg, or tailor-made to individual customer’s requirement upto 5,000 kg. Highly suited for automobile garages and tool rooms, these portable hydraulic floor cranes are capable of versatile uses in almost all indust rial est ablishments small, medium or large.
Vanjax Sales Phone : 0091- 44 - 4282 1000/ 2625 5300/ 2625 4875 Fax: 0091- 44 - 4598 5700 info@vanjax.com gmsales@vanjax.com
Vanjax Hydraulic Workshop Presses Available In Capacity 12 tonne (vxhwp-51201) and 20 tonne (vxhwp52002), they have been found to be most useful for both installing and removing/dismantling bearings / pinions / bushes, as well as various other bending or st raightening jobs in auto servicing garage workshops.
Vanjax Sales Phone: 0091- 44 - 4282 1000/ 2625 5300/ 2625 4875 Fax: 0091- 44 - 4598 5700 info@vanjax.com gmsales@vanjax.com
Bottle Type Jack VANJAX Sales, offers a complete range of equipment for automobiles as well as two-wheelers servicing garage workshops. Besides bottle jacks from two tonne upto 50 tonne required by individual motorists or for heavy earth moving machineries. The Chennai-based company also offers hydraulic trolley (floor) jacks for small, medium and large garages from two tonne upto 10 tonne, hydraulic equipment for repairing damaged cars due to accidents and many other useful items indispensable for every garage owner whether small, medium or large.
Vanjax Sales Phone : 0091- 44 - 4282 1000/ 2625 5300/ 2625 4875 Fax: 0091- 44 - 4598 5700 info@vanjax.com gmsales@vanjax.com
Pneumatic Control Valves DARLING Muesco India offers globe st yle pneumatic control valves that are available for any control application. Built to take the punishment imparted by many processes, including extreme pressure drops, these valves are backed by the most respected name in the valve indust ry. In addition to the standard models, also available are valves to customer specifications. The range of control valves includes globe type, angle type, ball type, butterfly type, diaphragm type, etc. The control valves are available in pneumatic diaphragm act uator, single-phase elect ric act uator, three-phase electric act uator, pneumatic rotary act uators in case of ball and butterfly valves. Range of material selection for valve body/bonnet and trim are available to suit specific application valves in different model and are available up to 1500 class in flanged end butt weld and socket weld connect ion. Special trim form, such as low noise trim, anticavitation trim and reduced trim are available in almost all models of the control valves. Varieties of accessories are also available to compliment the working of control valves.
Darling Muesco (India) - Ahmedabad - Gujarat Ph: 079-2583 2578, Fax: 079-2583 4392, Mob: 09327477602 Email: sales@darlingmuesco.com, Website: www.darlingmuesco.com
DECEMBER 2011 AFTERMARKET
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PRODUCTS
Clim Spray
Bike Washing System
CLIM Spray is effect ive in cleaning the air inside the vehicle. The solution purifies the air, dest roys bad smells on the covered surfaces (carpet, seats and roof lining etc), and perfumes discretely inside your vehicle. Simple, the complete treatment takes less than 15 mn due to its automatic diff usion mode.
SWITCH over to modern, state-ofthe-art washing of two-three wheelers. Junk the primitive tap-pump-pipenozzle ensemble. Bike Washers’ long arm nozzles and 100 bar water jet dislodge dirt from every crevice.
Phone : 91 4 422 505 000
Wheel Balancers
Metafab India Phone: + 0129 - 4026897 / 4027897, +0129 - 2239211 / 2234410 / 2230276 E-mail: metafabindia4w@gmail.com, metafabindia@gmail.com Website: www.metafabindia.com
The High Street Collection
PROFESSIONAL wheel balancer with 15.5” TFT monitor suitable for 10”-24” rim dia and maximum 65 kg wheel weight. • • • • • • • • • • • • •
Suitable for Car and LCV wheels TFT Monitor Static (Single plane) and Dynamic (Two plane) balancing Simultaneous display of Inner and Outer plane results Two modes of measurement - Normal & Fine Five modes of Alloy wheel funct ions Self checking, on-line ERROR display facility Dimension setting in “INCH” or “MM” Unit conversion in “grams” / “ounces” Self calibration Automatic distance input mechanism Mid-centering device for positioning and Rim accuracy Quick change lock nut to ensure fast mounting & removal of wheels • Automatic start with wheel guard closure • Unbalance recalculation without wheel run on input parameters change
THE High Street Collect ion offers genuine Haiton Leatherin a range of textures and colours that are high on design and richness. It’s all it takes to transform your interiors to one that speaks high fashion. You can be the designer. It’s your car. So choose what you’d like to have inside. In addition to the wide range on offer, Haiton also allows you the freedom to create your own concepts. Mix & Match and choose the colour, texture and design of your liking and they will fashion it for your car. It’s personalisation like never before.
Manatec Model No : WB-VL-65 Phone: Ph: +91 413 2248926 /Fax : +91 413 2243222 E-mail : sales@manatec.net / exports@manatec.net
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AFTERMARKET DECEMBER 2011
Hilton Furnishing Solutions Mobile:+91 95661 11551 E-mail: info@haitonautomotive.com
PRODUCTS
Tyre Changers
Seat Covers
THE side swinging mounting arm enables the user to install it near the wall occupying very less space. The specially designed bead breaker handles rims very gently and safely.
THE Platina 900 series seat covers are solvent free, which makes them eco friendly. The topcoat is made of water-based lacquer to make it skin friendlier and coated with lacquer to improve the life of the seat cover. The new series of seat cover has properties like anti-fungus, antibacterial, UV resistant, fire retardant and perforated providing free airflow. The PVC based vinyl leather provides a dry feel and nonwoven fabric helps to get the cool feel for the backing. It is all side st retchable like leather which help to expand the seat cover and give good comfort. The thickness of the material used for “Platina 900” series seat covers is 1.8 mm compared to normal PVC, which is 0.9 mm and the seat cover comes with st rings to provide a perfect fit.
• Suitable for Car and LCV Tyres • Side swing mounting arm • Pneumatic Twin Cylinders for fi rm clamping • Four jaw self centering chuck • Alloy wheel plast ic protector • Bead breaking by pneumatically operated cylinders • Clockwise and Anticlockwise rotation of turn table using Elect ric Motor • Built-in FRL (Filter, Regulator and Lubricator) • Motorcycle adopter (Optional)
Manatec Model No: TC-XL-40 Phone: +91 413 2248926 Fax : +91 413 2243222 E-mail : sales@manatec.net / exports@manatec.net
Electric Fuel Pumps THE funct ion of the fuel pump is to propel the fuel tank to the engine. Valeo completed its mechanical fuel pumps range by launching more than 230 new elect ric fuel pumps part numbers. The new Valeo fuel pumps offer includes all fuel pump technologies on the market. The elect rical fuel pumps completely immerged in the tank offer many advantages: - Better lubrification - Less noise and vibrations - Improved refrigeration The number of passenger vehicles equipped with elect rical fuel pumps has been rising exponentially since the introduction of this technology and represents the majority of vehicles on the car park today. This new market represents a sales opportunity for independent professional repairers.
Valeo Phone : 91 4 422 505 000
Choudhry Enterprises Phone : +(91)-(11)-23910142/ 65159723 Mo : +(91)-9717032558/ 9313208022 Email: autokame_choudhry@yahoo.com / autokamecarseatcovers@yahoo.co.in
Car Covers THE company is engaged in manufacturing and exporting of car covers. Their car covers are manufactured with very high quality fabric which is highly durable and longer life. They offer premium quality silver color car body covers for all variants and models of the cars. These car covers protect your car from the sun, rains, ultraviolet rays, dust and scratches.
Choudhry Enterprises Phone : +(91)-(11)-23910142/ 65159723 Mo : +(91)-9717032558/ 9313208022 Email: autokame_choudhry@yahoo.com / autokamecarseatcovers@yahoo.co.in
DECEMBER 2011 AFTERMARKET
59
PRODUCTS
Euro III / IV Compliant Heat Exchanger Leading the way in Euro III/Euro IV migration
ALKRAFT’S high performance radiators and intercoolers are among the first in India that comply with Euro III/Euro IV (BS III/BS IV) emission norms. Their products feature unique core designs that are made using super-long-life alloys for enhanced corrosion resistance and st ruct ural durability. The special designs enhance heat transfer performance, thus enabling cleaner combust ion, lower carbon emissions and better overall performance. The wide range of core configurations cover all automotive applications, and enable them to successfully migrate to Euro III and IV standards without effect ing major changes to design parameters.
Alkraft Thermotechnologies Phone : +91-44-26258750 / 90 Fax : +91-44-26258770 Email: info@alkraft.com
Charge Air Coolers ALKRAFT has designed and manufactured high performance intercoolers ever since it produced the first Aluminium intercooler in India. Their capabilities cut across different technologies and design variations like extruded tubes, tube with inner fins, plate and bar construction, drawn cup charge air coolers, and specially engineered high temperature plastic header tanks. The higher heat dissipation capacity and better performance to weight ratio of our intercoolers enable better fuel efficiency. They are also among the first in India to comply with Euro III and Euro IV emission standards. The intercoolers cover a range of diesel applications including: • Passenger cars • Utility vehicles • Light, medium & heavy commercial vehicles • Off-highway vehicles including road machinery and earth moving equipment • Compressors & power generation equipment
Alkraft Thermotechnologies Phone : +91-44-26258750 / 90 Fax : +91-44-26258770 Email: info@alkraft.com
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AFTERMARKET DECEMBER 2011
PRODUCTS
Electrohydraulic Servovalves PARKER Aerospace designs and manufact ures the highly reliable Jet-Pipe-based elect rohydraulic servovalves (EHSVs). These EHSVs are used to control position, velocity, and force in a variety of hydraulic, fuel systems, and engine control applications for aerospace and derivative markets. Features include: reliability (single inlet fi rst stage); contamination-resistant; low sensitivity to vibration & shock; stability; null bias stability; low maintenance; servo-controlled second stage; wide dynamic range; dry torque motor; and reduced life cycle cost. Applications are in commercial transports, military fighters & transports, helicopters, unmanned air vehicles, launch vehicles, missiles, main gear & nose wheel steering systems, auto brake modules, engine control, etc.
Parker Hanni n India, Navi Mumbai, Maharashtra Tel: 022-6513 7081, Fax: 022-2768 6841 Email: parkerind@parker.com, Website: www.parker.com
Mini Pumps ROTOMAC Industries manufactures and offers domestic multi-purpose mini pumps. The doubled-walled stator design eliminates need for universal joints or coupling rods. These pumps are available in cost-effective, portable-closed coupled (motorised) design or bare shaft design for flexibility of use of drives, for eg, mechanical speed variators, diesel engines, etc. They can be adopted for solar power motors. The mini pumps are suitable for metering, dosing with 90 to 95 per cent accuracy. They are ideal pumps for the European market, especially UK. Domestic applications include cellar drainage, septic tank cesspit emptying, garden sprinklersystems irrigation, water supply sampling from wells, streams and rivers. Industrial applications are general-purpose pumps for diesel, lubricating oil, water-based inks, vegetable oils, plating solutions, other non-aggressive chemicals, non corrosive liquids with medium viscosity, for eg, fuel oil, thin molasses, fluids with suspended solids, for eg, dirty water from cesspools, domestic water transfer, hot water circulation.
Pneumatic Tyre Spreader THE air powered tyre spreader (pedestal base) is designed for clamping, spreading and lifting car tyres during repair. One can also do tyre inspection cutting, buffing with dust extract ion, insert tubes and patching.
Metafab Engineers (India) Model No: car tyre spreader Mt-850-pts-I Phone: + 0129 - 4026897 / 4027897, +0129 - 2239211 / 2234410 / 2230276 E-mail: metafabindia4w@gmail.com, metafabindia@gmail.com Website: www.metafabindia.com
Check Valves FLUDEN check valves offered by Fluid Power Engineers are used in hydraulic systems to check the flow in one direct ion and allow flow in the opposite direct ion. These valves are const ructed in MS body and poppet, spring and spring retainers. They are available in sizes of 1/4” BSP, 1/2” BSP, 3/4” BSP, 1” BSP and 1½” BSP at different creating pressure range of 5, 1.5, 3 and 5 bars and tested at 315 bars.
Fluid Power Engineers, Ahmedabad, Gujarat Tel: 079-2289 1665, Fax: 079-2289 1666 Mob: 09426068483 Email: info@fluden.com, Website: www.fluden.com An ISO 9001:2000 Certified Company
Pressure Reducing Valves FLOCON Systems manufact ures and offers pressure reducing valves that are automatic control valves designed to reduce a higher inlet pressure to a lower constant outlet pressure regardless of fluct uating flow rates and/or varying inlet pressure. These valves are pilot controlled, hydraulically operated, diaphragm act uated globe valves in either the oblique (Y) or angle pattern design. Valve differential pressure powers the diaphragm act uator open or closed.
Rotomac Industries (P, Kanpur, Uttar Pradesh Tel: 0512-269 1704, Fax: 0512-269 1706 Email: info@rotomacpump.com Website: www.rotomacpump.com
Flocon Systems, Dist Thiruvallur, Tamil Nadu Tel: 044-2792 2819/2990, Fax: 044-2792 2390 Email: flocon@vsnl.net, Website: www.floconsystemsindia.com
DECEMBER 2011 AFTERMARKET
61
PRODUCTS
All-Purpose Foam Cleaners Automotive Batteries Pidilite offers Cyclo MaxClean all-purpose foam cleaners that contain specialty detergents, which clean and restore colour and appearance. With deep-cleaning foaming act ion these foam cleaners work as great as spot carpet cleaners. Boosted with orange oil the foam cleaners are natural cleaners and have a pleasant citrus fragrance. They remove bad odours from the seat, covers, and carpets. Cyclo MaxClean foam cleaners can be used on plast ic, vinyl, carpet and fabric. It is available in packaged form of 624 gms.
RR Indust ries offers a wide range of automotive batteries (DIN 44) that are manufact ured from high grade quality raw materials. These batteries can be customised as per customers’ specifications. The automotive batteries are widely known for their durability and quality. These can be availed at indust rial leading price (claims the company).
R R Industries, Bengaluru 560 021. Pidilite Industries, Mumbai 400 059 Tel: 022-3308 7000, Fax: 022-2835 7700 Email: pil@pidilite.com, Website: www.pidilite.com
Tel: 080-23126827, Mob: 09448437845 Email: info@rrmicrobatteries.com, Website: www.rrmicrobatteries.com, Certification: An ISI 9001:2008 Certified Company
Stacker Parking Systems Kamex Mechanised Parking offers stacker parking systems for two cars. The parking systems are equipped with a single platform, allowing long-term parking on the upper level and short-term parking on the lower one. For use of the upper platform vehicle from the lower parking space is removed. These systems are suitable for medium & large buildings and these can also be installed into existing buildings. A lengthwise or breath wise arrangement may be selected according to the condition of the site. Hydraulic cylinders are used for lifting the pallet. Pallets are made using 2 mm thick galvanised steel to prevent deflection. The pallets are provided with stopper to prevent movement of cars during pallet movement. Over-travel limit switches are fitted to prevent over-travel of the pallets. Emergency stop switch is installed inside the operating level. If the switch is activated in emergency, the power is cutoff the main motor and all operations are stopped.
Kamex Mechanised Parking, Jaipur 302 018 Tel: 0141-6511501, Fax: 0141-2707856Email: contact @kamexparking.comcontact @kamexparking.com, Website: www.kamexparking.com
Industrial & Automobile Keys Jagat Engineers offers indust rial and automobile keys of all types, like square, flat and parallel, woodruff, Gib-head, etc, as per IS:2048, 2292, 2293, 2294 and 2710, in DIN06881 to 6888, ASTM and BS-46, part I. Sizes range from 3 x 3 mm sq to 50 x 28 mm flat parallel keys with all sides ground to required tolerance and well chamfered with all over for ease of assemble for 10 mm to 300 mm shaft key ways. The keys are used for transmitting loads in elect ric motors, pumps, couplings, pulleys, valves, textile machineries, agricultural machineries, chemical plants, machine tools of all types and other rotating parts. Woodruff keys are used in compressors, two-wheelers, three-wheelers, cars, trucks, tractors and gearboxes in all types of machineries. Special keys are made from stainless steel, EN-24, EN-19 materials for shock loading transmissions apart from standard EN-8/9 keys with high tensile tested steel material. Maintenance purpose kits are also available for quick repairs and breakdown jobs. On page 15 of the October 2011 issue, the name of the company Mahle has Jagat Engineers, Vadodara 390 010 been incorrect ly mentioned. The error Tel: 0265-264 2347, is deeply regretted. Fax: 0265-264 3347
Corrigendum
62
AFTERMARKET DECEMBER 2011
ADVERTISERS’ LIST
Pg No. Advertiser...........................................Tel................................. E-mail ............................................Website
53 ....... ADEA Awards........................................+91-22-30034650...........prachi.mutha@infomedia18.in ...... www.adea.in
19 ....... ARO Equipments Pvt Ltd......................+91-124-4585400...........vmalik@aroequipments.com......... www.aroequipments.com
11 ....... Bosch Limited ......................................+91-80-22999228 .................................................................. www.boschindia.com
6......... Confederation Of Indian Industry .......+91-124-4013871 ........... rachna.jindal@cii.in ..................... www.autoexpo.in
27 ....... Eastman Cast & Forge Ltd ....................+91-161-2511440............efcl@eastmanhandtools.com
4,8 ...... Engineering Expo .................................+91-9819552270 ............engexpo@infomedia18.in .............. www.engg-expo.com
BC ...... Federal Mogul ......................................+91-124-4784530 ........customercare.india@federalmogul.com ..... www.federalmogul.com
49,51 .. Federation Of Automobile Dealers Associations ..+91-11-23320095 ...........fada@airtelmail.in ......................... www.fadaweb.com
45 ....... KYB Asia Co Ltd ....................................+91-9871687888 ...........anup73@sify.com ........................... www.kyba.co.th
BIC ..... Lubrizol Advanced Materials India Pvt Ltd ..+91-22-66027800 .........Estane-SA@lubrizol.com .............. www.lubrizol.com/engineeredpolymers
3......... Madhus Garage Eqpts ..........................+91-80-26660656 ..........madhus@madhusindia.com .......... www.madhusindia.com
21 ....... Shriram Pistons & Rings Ltd ................+91-11-23315941............aarti.anandan@shrirampistons.com
FIC ...... Sushma Industries ...............................+91-80-28397463...........marketing@sushmaindustries.com www.sushmaindustries.com Q Our consistent advertisers
DECEMBER 2011 AFTERMARKET
63
64
AFTERMARKET DECEMBER 2011
1361334
Sept. 2010
Over Apr.-Sept. (10-11)
Apr.-Sept. (11-12)
% Change
2010-11 Apr.-Sept.
(6 Months) in F.Y.
Avg. Mthly. Prdn.
(6 Months) in F.Y. 2011-12 Apr.-Sept.
Avg. Mthly. Prdn.
Sept. 10 (Prodn.)
Sept. 11 over
3%
1268024
1299871
(-)11%
1209257
Sept. 2011
% Change
Truck/Bus
Category
7%
2091044
2236418
(-)3%
2255104
2187247
Passenger Car
(-)2%
127185
124573
3%
132018
136251
Jeep
20%
473293
566686
6%
515008
546959
L.C.V.
2%
231379
236562
(-)5%
219578
208172
Front
6%
152971
162156
(-)7%
158503
147299
Tractor Rear
(-)1%
77256
76602
(-)10%
66092
59784
Trailer
1%
21601
21802
(-)36%
25898
16590
Adv
8%
15105
16270
(-)5%
15523
14793
Otr
17%
960289
1125055
5%
1037464
1094099
Scooter (2 Wheeler/Moped)
24%
566532
704938
13%
664276
750109
Scooter (3 Wheeler)
9%
3498551
3821862
2%
3570885
3653029
Motor Cycle
CATEGORYWISE TYRE PRODUCTION SEPTEMBER 2011 AND COMPARISONS
12%
50007
55933
(-)2%
57494
56331
Industrial
10%
9533237
10448728
0%
10079177
10079920
Total
DATA
170813
Sept. 2010
Over Apr.-Sept. (10-11)
Apr.-Sept. (11-12)
% Change
27%
40%
86915
145916
Avg. Mthly. Prdn. (6 Months) in F.Y.
2010-11 Apr.-Sept.
121946
184643
(-)7%
124072
115735
Passenger Car
Avg. Mthly. Export (6 Months) in F.Y. 2011-12 Apr.-Sept.
Sept. 2010 (Exports)
Sept. 2011 over
19%
202582
Sept. 2011
% Change
Truck/Bus
Category
(-)6%
7310
6878
257%
3070
10961
Jeep
29%
107826
139486
61%
105618
169961
LCV
84%
687
1266
45%
849
1234
Front
(-)19%
2891
2349
(-)24%
4952
3774
Tractor Rear
6%
142
150
100%
0
591
Trailer
95%
9414
18313
246%
4209
14557
Otr
125%
3100
6968
(-)51%
4275
2093
Scooter (2 Wheeler /Moped)
38%
43552
60039
59%
42278
67400
Scooter (3 Wheeler)
13%
61770
69840
(-)5%
69467
65853
Motor Cycle
31%
7934
10356
52%
7871
11938
Implement
CATEGORYWISE TYRE EXPORTS SEPTEMBER 2011 AND COMPARISONS
(-)4%
9151
8798
(-)55%
23833
10804
Industrial
30%
486608
631032
21%
561307
677483
Total
DATA
DECEMBER 2011 AFTERMARKET
65
PRODUCT INDEX
Product ................................................................................Pg No.
Product ................................................................................Pg No.
A/C service equipment.......................................................... 3
Lighting equipment .............................................................. 11
ADEA - Automotive Dealership Excellence Awards ............... 53
Lubricants............................................................................. 11
Aftermarket components ..................................................... 27
Motor testing systems ........................................................... FIC
Air-conditioning equipment ................................................. 19
Pistons & pistons rings ......................................................... 21
Alternatives........................................................................... 11
Pistons .................................................................................. BC
Auto Expo-2012 .................................................................... 6
Pressure sensors and indicators ........................................... FIC
Batteries ............................................................................... 11
Relays ................................................................................... 11
Bottle cap torque testing systems......................................... FIC
Socket observers ................................................................... 45
Brake pads ............................................................................ 11
Spark plugs ........................................................................... 11
Brake testing equipment ...................................................... 3
Spot welding equipment ...................................................... 3
Clutch plates & cover assemblies .......................................... 11
Spring testers ........................................................................ FIC
Collision repair systems ........................................................ 3
Starter motors ...................................................................... 11
Crimp testers ........................................................................ FIC
Tensile testing machines....................................................... FIC
EngineeringExpo exhibitions ................................................ 4
Thermoplastic polyurethanes............................................... BIC
Exhibitions ............................................................................ 4
Torque gauges ...................................................................... FIC
Filters.................................................................................... 11
Torque tool testers................................................................ FIC
Force & pressure calibration & testing equipment ............... FIC
Torque .................................................................................. FIC
Force gauges ......................................................................... FIC
Tyre care equipment ............................................................ 19
Gas analysers ........................................................................ 3
Tyre changers ....................................................................... 3
Gasoline systems .................................................................. 11
Tyre ination equipment ...................................................... 3
Gear pumps .......................................................................... 11
Wheel aligners ...................................................................... 3
Horns .................................................................................... 11
Wheel balancers ................................................................... 3
Industrial products ............................................................... 27
Wiper blades ......................................................................... 11
Lifting equipment................................................................. 19 FIC : Front Inside Cover BIC : Back Inside Cover BC: Back cover
66
AFTERMARKET DECEMBER 2011
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From boats to planes to passenger cars, Estane TPUs will offer you solutions to keep your business moving. In the transportation industry, Estane速 Thermoplastic Polyurethanes are widely used for their excellent properties such as flexibility over a wide temperature range, optical clarity, flame retardancy, adhesion to various substrates, superior abrasion resistance and extreme durability. For more information email us at Estane-SA@lubrizol.com or visit our web site.
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息 The Lubrizol Corporation 2011, all rights reserved. 速 Estane is a registered trademark of The Lubrizol Corporation.