Aftermarket - September 2011 by Infomedia18

INDIA’S FIRST MAGAZINE FOR THE AUTOMOTIVE AFTERMARKET

Vol. 1 No. 3 September 2011

64 Pages `50

Lucas Indian Service:

The Retail Connection

EXTRA MILE

Shaman Motors

CUTTING EDGE

Advanced diagnostic solutions

INTERVIEW

Ramchandra Rao, ED, Eaton Brought to you by

Auto Monitor

EDITORIAL Collaborative approach essential

oderation in vehicles sales is expected to continue for some more time due to increase in interest rates and low sentiments due to uncertainties in different economies around the world. However, there is no caution on negative growth since the demand for individual mobility is firm and the buyers are only postponing their purchases temporarily. Similar situation prevails in the used cars sales too. With vehicle population increasing more so in the rural areas, there is an immense opportunity for entrepreneurs in the aftersales service business. This is also due to the fact that there are limitations for OEMs in expanding their service network as it is practically impossible to cover every nook and corner of the country. Multi-brand third-party service centres for all segments of vehicles can fill the gaps seamlessly. Firstly, it will benefit the vehicle users due to proximity of service centres. Customers expect the service centres to be close to residential localities just for the sake of convenience. Secondly, the multi-brand third-party service centres can offer quality repairs and services for even new generation vehicles that demand diagnostic and other state-of-the-art equipment. These service centres can match the OEM authorised service centres primarily due to technical capabilities and the scale of operations. Thirdly, it will protect the end users from buying counterfeit products. Multi-brand third-party service centres will be profitable for a couple of reasons. These service centres can bank on standardisation of tools, equipment and space. On an average, more than 80 percent of the tools for each and every segment of vehicles are common. Therefore, it works on economies of scale as well as optimisation of resources. Moreover, the manpower utilisation will also be better since the availability of talent pool is key. According to industry estimates, the vehicle dealerships currently employs about eight lakh people, for both selling and servicing the vehicles. And in the next five years it is expected to grow by at least four folds. Though the rural population will come in handy to fill the gap, training is crucial as the service centre needs skilled hands. Collaborative efforts amongst authorised service centres and the multi-brand third-party service centres will help to plug the gap in every aspect. Wishing you much pleasure reading. Do send us your feedback.

T. Murrali t.murrali@infomedia18.in

SEPTEMBER 2011 AFTERMARKET

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AFTERMARKET SEPTEMBER 2011

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NEWS

CONTENTS NEWS 6

Michelin to expand dealership network

A well trained technician is an asset: Bosch

10 Talbros seals aftermarket with Ezy Drive 12 Metafab introduces new garage equipment 13 SKF evaluating presence in servicing business 15 AI’s aftermarket solutions to help fleet operators 24

COVER STORY 26 Lucas Indian Service: The Retail Connection Lucas Indian Service is firming up its foray into car retail accessories under the brand Carplus

Lucas Indian Service:

<PM :M\IQT +WVVMK\QWV REARVIEW 24 Experts’ shield car owners with advantages

INDIA’S FIRST MAGAZINE FOR THE AUTOMOTIVE AFTERMARKET

56 Vol. 1 No. 3 September 2011

64 Pages `50

Lucas Indian Service:

<PM :M\IQT +WVVMK\QWV

EXTRA MILE Shaman Motors

CUTTING EDGE

INTERVIEW

Ramchandra Rao, ED, Eaton

Advanced diagnostic solutions

Brought to you by

FOCUS 37 Rubber supply mismatch may hit profitability of tyre makers

AFTERMARKET SEPTEMBER 2011

CUTTING EDGE 56 Advanced electronic diagnostic solutions for vehicles

Auto Monitor

Cover Design Mahesh Talkar

NEWS

Michelin to grow dealership network; add tyre plus outlets Abhishek Parekh

ichelin is looking to renew its focus on passenger car and commercial vehicle radials with a wider distribution network and customer education. It is looking to expand its reach, particularly in Tier II and III towns and cities, by enrolling more dealer partners and points of sale. The French tyre manufacturer has around 750 exclusive and non-exclusive dealers across Tier I and II cities primarily for selling passenger car tyres. The company is looking to grow this network in double digits over the coming months. The company has two retailing formats—Tyre Plus (a multi-brand and multi-product servicing outlet) and Michelin Priority Partner (MPP) outlet (a multi-brand tyre outlet). The former is Michelin’s global format and encourages dealers in most locations to not only be multi-brand tyre dealers, but also have other products and services including wheel alignment, balancing, batteries servicing and fitment and other aftersales solutions for end customers. On the other hand, MPP is a relatively basic format with tyres and some related services offered to customers. Both formats are constrained by the location and size of the outlets and partners may add or reduce the services offered while operating under given constraints.

AFTERMARKET SEPTEMBER 2011

Chandan Thakur, National Sales Manager Michelin India

“We are facing hurdles in terms of acceptance of tubeless tyres in several product segments (tyre sizes) as the market is still evolving and customers are getting educated on the benefits of radials,” said National Sales Manager, Passenger Car, Michelin India, Chandan Thakur. He added that the mass segment (12,13,14 and 15-inch tyres) for compact and mid-size sedan is seeing good demand and is likely to continue to grow in the coming months. Increasingly, customers are looking to go for a change in tyres even before the normal life span. Moreover, most customers are not particular about the OE fitted tyres in a vehicle and opt for a different tyre brand to meet various objectives like performance, comfort, reliability and safety. The French tyre maker launched Primacy LC and Pilot Stock 3 in the comfort and per-

formance range respectively. The tyres are meant to enhance the fuel efficiency of the vehicles as well as provide performance and comfort due to adoption of latest treading technologies and tyre design. “Like any other serious player in the tyre manufacturing, we are looking to grow our presence in the mass market segment with latest technology products at competitive price. But I cannot provide further details at this stage,” said Thakur. According to Thakur, most manufacturers have moved on to offering tubeless tyres as an OE fitment in the passenger car segment. This is particularly true for Tier I cities where the rate of acceptance of tubeless radials is higher due to greater availability as compared to Tier II and Tier III cities. Radial tyres are increasingly preferred due to ride comfort, longer lifecycle, safety and economy of usage among other factors. “Barring a few segments in the passenger vehicles and small commercial vehicle segment, most personal and small good transportation vehicles have moved to radials and the trend is likely to accentuate in the coming months,” said Thakur. Michelin has presence in the OE segment with customers like Honda and Mercedes. However, the company derives a majority of its volume and revenue share from the aftermarket business in India.

NEWS

Dr M Ponnavaikko, Vice Chancellor, SRM University (fourth from left); S Muralidharan, VP & Head, Automotive Aftermarket, Bosch (second from right) along with other officials at the training centre

A well trained technician is an asset: Bosch

n a bid to impart training to aspiring engineers and technicians to enhance their competency levels for better employability, the Bangalore headquartered Bosch and the Chennai-based SRM University (SRMU) recently announced the launch of SRMU— Bosch Joint Certiﬁcation Training Centre. The training centre has several machines and equipment including vehicle diagnostics, and will impart training to undergraduate, post graduate, polytechnic, vocational school students and nearby industry personnel to make them

AFTERMARKET SEPTEMBER 2011

more competitive in the automotive industry. The course modules offer an efficient combination of hardware and teaching methods as industry-oriented training in the field of automotive technology as per the Bosch concept. Successful candidates will be awarded a joint certification from Bosch and SRMU. The automotive component manufacturer will also train the faculty for the centre at its Bangalore and other facilities to enable them to impart training as per industry requirements. Both the parties have equally invested in the `22 lakh project.

“Absence of relevant skills is the single largest handicap in India today. Training programmes like this will help enhance the employability of the students. Our industry knowledge, expertise in the automotive sector and technology capabilities has helped us win the trust of our customers. We believe that a well trained technician is an asset to the business and hence we have taken a step ahead and are working towards empowering the budding talent in the industry,” said Vice President and Head, Automotive Aftermarket, Bosch, S Muralidharan.

NEWS

The company has provided service training for more than 30 years to automotive vehicle manufacturers, TAFE colleges and its own service organisations. “The establishment of this centre will help us leverage our partnership with SRMU to empower the aspiring engineers and technicians match the industry standards in terms of skill set,” he said. The Vice-Chancellor of SRMU, Dr M Ponnavaikko said, a recent study by the Tata Institute of Social Sciences (TISS) stated that a majority of the students pursuing higher education were not industry-ready. The survey also mentioned that only 25 percent of them were employable. NASCOM report also conﬁ rmed it, he said. Recalling the former President of India, Dr Abdul Kalam who said, ‘India does not have a problem of unemployment but un-employability.’ Ponnavaikko said this was due to the widening gap between industries and institutions. If institutions want to improve the employability of their graduates, they have to focus on

Documents being exchanged at the function

reducing the important skill gaps through improvements in curriculum, teaching methods and industrial training. “The institute-industry interaction is realisable only when the industries enter into academic collaborations with the institutions, establishing an industrial environment in the University campus to expose the staff and the students to the industrial practices. The current initiative of Bosch with SRMU is the right model for bridging the gap between the industry and

S Muralidharan explains the company’s diagnostics equipment to Dr M Ponnavaikko & university faculty members, at the training centre

institutions to make the graduates employable,” he said. Muralidharan said the joint certification programme will not be confi ned to the aftermarket division of Bosch alone; instead it will look at the company as a whole since the education and training are vital for the automotive industry. “We will not have any direct advantage; it will be a part of corporate social responsibility initiative of the company,” he said. Bosch is a technology provider and its expertise does not confi ne only to mechanical engineering but also across several streams including electrical, electronics and communications. To a question whether SRMU would extend the services of this centre to other streams of engineering, Ponnavaikko said the company along with the group companies of Bosch is planning to offer similar programmes to students of few other streams of engineering including mechatronics and electronics. In this way, the university can leverage the inherent potential and tangential relationships amongst different modules of engineering, he added.

SEPTEMBER 2011 AFTERMARKET

NEWS

Talbros seals aftermarket with Ezy Drive Shambhavi Anand

ith a view to enhance driving and riding comfort and increase the ease of ﬁtment during a repair, Talbros Group, which is popularly known for its steering and suspension components, automotive component manufacturer, launched two new products for the automotive aftermarket. The two new products are a clutch assembly for passenger cars and a sealant for sealing and gasket applications under a new brand name, Talbros Ezy Drive, creating the scope to introduce more products under this brand name in the future. The sealant, known as Talbros Dyna Bond, is a high grade RTV sealant for sealing and gasket applications. It has been designed to give outstanding performance in typical automotive and industrial gasketing applications including valve covers, oil pans, water pumps, rear axle housing and sealing ﬂanges. It is non-corrosive and can withstand high pressure, can be shaped into any form instantly and cures fast. “Both the products will be available across the nation. Initially we shall be delivering power and drive comfort to all new generation vehicles. This will gradually expand to touch other segments of the automotive industry,” Chief General Manager, Sales and Marketing, Munish Malhotra said. The company which is a supplier to some of the largest OEMs in the country like Ashok Leyland, Bajaj Auto, Cummins Group, VE Commercial, Escorts Group, Force

AFTERMARKET SEPTEMBER 2011

Motors, General Motors, HeroMoto Corp, Hyundai, John Deere, Mahindra and Mahindra, Maruti Suzuki, Suzuki, TAFE, Tata Motors, Tata Cummins, Simpsons and international corporate like Afﬁ nia, Carraro, Dana, General Motors, Kubota, JCB India, Nissan Micra—is known for its quality. It is also a single source supplier to Mahindra Navistar and Fiat India. The component manufacturer also supplies to tractor manufacturers like Sonalika and New Holland Fiat. Daimler is the latest addition to Talbros’ client list in India. The group has manufacturing units spread across the nation. Out of the 13 manufacturing units that the group owns some of them are located in Gurgaon, Faridabad, Chennai, Pune, Uttarakhand to name a few. It has a research and development centre equipped with testing facilities. Owing to the increasing demand the group has set up two new plants—one in Pune and the other in Orgadam, near Chennai. The group has also ramped up its production capacity by around 30 percent in order to be able to meet the demands of its OEM and aftermarket business. The new plants, which have commenced production recently, are producing steering and suspension parts. The component manufacturer had set up another

Talbros EzyDrive clutch assemblies

plant in Sitarganj (near Rudrapur) last fi nancial year. This plant produces gaskets for the three major OEMs in Pantnagar, namely Tata Motors, Ashok Leyland and Mahindra and Mahindra. Talbros started its journey in the year 1956 by manufacturing automotive components like gaskets. Today, the company is renowned for the automotive components like steering and suspension components, gaskets, stampings, rubber products and forgings. The group has several joint ventures and collaborations with global players like Federal Mogul from USA, Nippon Leakless Corporation from Japan, Affi nia Group from the USA and most recent being Presswerk Krefeld (PWK), Germany. It exports to countries like the US, UK, Argentina, Italy, Thailand, and Japan among others. “We are open to new export destinations in case an interesting opportunity comes our way,”stated Malhotra. In the last financial year the group touched a turn over target of `1,550 crore. It expects to perform better this year.

NEWS

Metafab introduces new garage equipment Nabeel A Khan

A range of products by Metafab

etafab Engineers, with its forte in hydraulic lifts, is planning to expand its garage product portfolio in the four-wheeler segment further. It has recently started manufacturing post lifts for fourwheelers and introduced garage equipment for agriculture equipment also. In this process, the equipmentmaker is setting up a new factory spread over one acre in Faridabad (NCR) for the production of post lifts. The new unit will be inside its existing plant. The company is currently producing around 10 to 20 units of lifts per month on a trial basis, but will increase to 400 lifts per month once the new facility is available. Metafab has already invested over `eight crore on the new unit, which will be in operation in a couple of months. The main target customers for the new product range will be those who buy such equipment from China. It will directly connect with the distributors who sell the Chinese products in India. The products will be priced competitively with comparable Chinese products as it has made many strategic modiﬁcations to cut the costs, which which includes a cut in marketing expenditure. It is also developing new products like automated bike washers with steam as a main force to compensate the water scarcity. Water is precious and this machine will convert it into steam, then re-condensing it back to water. The company is primarily

AFTERMARKET SEPTEMBER 2011

manufacturing garage equipment for the two-wheeler segment with around 300 different products. Its product range includes lifts, motorbike pneumatic handles, waste oil collector, battery

The new factory will be inside its existing plant. The company is currently producing around 10 to 20 units of lifts per month on a trial basis, but will increase to 400 lifts once the new facility is available. Metafab has already invested over `eight crore on the new unit, which will be in operation in two months

charger and spark pluck cleaners. Currently, it makes 400 bike lifts per year. Though the consumption of electricity of its equipment is already less, to reduce it further, the manufacturer is develop-

ing new actuating units and is considering bringing back hydronuematic lifts. It is also working on increasing the number of distributors. Presently, it has 70 district level distributors and it will add 60 more in this ﬁscal across India. Looking at the increasing presence of super bikes with the entry of companies like Harley Davidson and BMW, the opportunity in the big bike segment has increased. In order to encash this opportunity,it has developed new lifts for these kind of super bikes. It also plans to introduce garage equipment for ATV bikes, which are in demand in the places like Bangalore and Pune. In the last three months, it has produced over 58 types of garage equipment, which includes both for two- and four-wheelers and hopes to make revenue of around ` 20 lakh from this segment. They are growing at around 30 percent every year. The company clocked a turnover of `33 crore in FY11 and projects it to reach at `ﬁve crore in FY12.

NEWS

SKF India evaluating presence in vehicle servicing business Abhishek Parekh

KF India is evaluating ways to enhance its presence in the spares and vehicle servicing business. It has been contemplating on entering vehicle servicing business. Such a foray may come about in the commercial vehicle servicing side but company ofﬁcials insist that any such initiative on vehicle servicing is at a very preliminary stage and may take a very different form altogether. Tie-ups with authorised service stations and third party garages are being enhanced in the coming months. It is in the process of evaluating a partnership model for having a presence in vehicle servicing business or any other model suitable in the evolving market scenario. The key consideration is what value could be offered to customers under any partnership or self-started initiative. “There are a number of electrical or electronics related faults occurring in a vehicle and this may be a major opportunity for any player like us to offer expertise to customers, perhaps in partnership with another company,” said Director, Automotive & Textile Business Units & Pune plant, SKF India, Ranjan Kar. He added that the unorganised nature of the vehicle servicing infrastructure points to various opportunities even as customers are beginning to demand higher service standards and quality assurance. Though SKF Group has been

Ranjan Kar, Director, Automotive & Textile Business Units & Pune plant, SKF India

selling certified automotive components in various other markets, including India, it is not present in vehicle servicing business in any of these markets. The need to evaluate entry into servicing business has been prompted by the unorganised nature of the market as well as growing vehicle population and rising demand for quality and certified service infrastructure. The company has recently started a certification programme for mechanics for technicians in various aspects of automobile servicing. This initiative is aimed at raising the standards of service in automobile repair workshops and service stations. “Garages are playing an important role in organisation of the automotive service business. The reliability of service rendered is critical, whether it is available from authorised service station or third party garages,” said Kar. Service centres has to be available

at the arms length, especially for commercial vehicles. The company sells products including brake pads, steering and suspension systems components. These components are not manufactured by the company but are certiﬁed for quality assurance purpose. The initiative is not only helping the company grow its business, but also in organising the aftermarket business. SKF is one of the leading suppliers in the areas of bearings, seals, mechatronics, services and lubrication systems. The company’s service offer includes technical support, maintenance services, engineering consultancy and training. It has three manufacturing facilities in Bangalore, Pune and Haridwar and services its customers through its strong channel partner network. It manufactures the entire range of bearings for all vehicle segments within the automotive and engineering sectors.

SEPTEMBER 2011 AFTERMARKET

NEWS

Automechanika celebrates 40th anniversary

eading industrial exhibition organising company Messe Frankfurt is celebrating the 40th anniversary of its international trade fair brand—Automechanika. Messe Frankfurt is Germany’s leading trade fair organiser with Euro 448.3 million in sales. Frankfurt continues to be the home venue, a ﬁ xed star and a strategic orientation aid for the sector and, last year, it attracted 4,471 exhibitors from 181 countries and 155,000 visitors. Close to 80 percent of the exhibition space for the next Automechanika from 11 to 16 September, 2012 has already been sold. According to the company, the ﬁ rst Automechanika opened its doors in Frankfurt AM Main on 18 September, 1971. At that time, nobody predicted that the trade fair would develop into the leading business platform for the supplier industry, the workshop sector and the trade. And it was the industry that generated the initial impulses for the new event. The trade associations, especially the Federation of the German Motor Vehicle Trade (Zentralverband Deutsches Kraftfahrzeuggewerbe e V-ZDK), were not deterred by the cancellation of the Frankfurt Motor Show (IAA) and instead called for an event for the automotive parts and accessories suppliers who were also represented at the IAA. Around 500 companies and 75,000 visitors from 63 countries came to Frankfurt for the première. The participants were delighted and the results were

AFTERMARKET SEPTEMBER 2011

Glimses of Automechanika 2010

encouraging. Accordingly, it was decided to hold the new fair in the years between the IAA shows. Today, Automechanika is not only one of the leading fairs organised by Messe Frankfurt, but also the preferred international trade-fair brand. In addition to Frankfurt, the event is held at eleven venues worldwide such as Moscow, Shanghai, Bangkok, St. Petersburg, Dubai, Mexico, Buenos Aires, Kuala Lumpur, Madrid, Istanbul and Johannesburg. The Messe Frankfurt Group has a global network of 28 subsidiaries, ﬁve branch ofﬁces

and 52 international sales partners, giving it a presence for its customers in more than 150 countries. Events ‘made by Messe Frankfurt’ take place at more than 30 locations around the globe. In 2010, Messe Frankfurt organised 87 trade fairs, of which more than half took place outside Germany. The company’s exhibition grounds, featuring 578,000 sq mt, are currently home to ten exhibition halls and an adjacent Congress Centre. The company is publicly owned, with the city of Frankfurt holding 60 percent and the State of Hesse 40 percent.

NEWS

AI’s aftermarket solutions to help ﬂeet operators to optimise proﬁtability T Murrali

hennai-based Automotive Infotronics, the 50:50 joint venture between Ashok Leyland and Continental AG, will be focusing on aftermarket also while it consolidating its business plans covering three areas—Human-Machine Interface (HMI), connectivity and sensorics. Chief Executive Ofﬁcer, Automotive Infotronics, Dr Aravind Bharadwaj said the cluster with body controller, a multiplexing system developed for one of its clients, Ashok Leyland for its U-truck platform will be out in October. This will be the vehicle manufacturer’s unique electronic architecture. According to him, the instrument cluster is not just a unit that gives information like speed, temperature and pressure, but actually a data centre. “Our cluster has a USB drive, which can even help retrieve logged-on data for about 30 days. It also has gear shift advisory system helping the driver to drive the vehicle for optimal performance. These inputs help the ﬂeet operator to understand the drivers’ driving habit and take corrective action,” he said.

Aravind S Bharadwaj, CEO, Automotive Infotronics

To a question whether these systems can be retrofitted and be a potential product for the aftermarket, Bharadwaj said the company has already proved it by fitting multiplex systems in few buses in APSRTC fleet. This is part of JNNURM’s compliance requirements. When asked if the company would look at providing similar solutions to passenger cars, he said, “nothing prevents us from catering to passenger cars but CV is out bread and butter. For instance the telematics can be used in radio taxis to enhance performance. We would like to be Continental’s Centre of Excellence in CV segment in the region,” Products developed by AI he added.

Last year, the company introduced ‘Flex CAN (Controlled Area Network) Cluster’ for the European market. Flex CAN cluster is designed by Automotive Infotronics and manufactured and sold by Continental in the European and other matured markets. It is a flexible instrument cluster designed for off-road applications (tractors, snow-mobiles etc). The cluster is based on CAN and is flexible enough to be modified for different OEM applications based on specific demands from the customer. Multiple variants of the original design had already been created, he said. Yet another product that the company has commercialised and currently working on upgrades is ‘Engine Control Panel’ for gensets manufactured by Ashok Leyland. This is an integrated instrument panel monitoring engine parame-

SEPTEMBER 2011 AFTERMARKET

NEWS

Products developed by Automotive Infotronics form part of several vehicles including the U-Truck of Ashok Leyland

tres like temperature, pressure, fuel level, the RPM and the total number of hours the engine has run. In addition, it also safeguards the engine as the cluster can be pre-programmed with remote start and stop applications. With power cuts prevailing across the country and the vehicle service centres trying to optimise the existing resources to enhance proﬁtability, attendant-free gensets including the one manufactured by Ashok Leyland are in great demand. After commercially releasing the telematics and multiplex systems, the company sees tremendous opportunities in a vehicle as different systems within the vehicle need to communicate with each other for the overall performance. However, the challenge is to establish the communication at the least possible cost, while maintaining the customers’ expectations and ensuring safety. With the vehicles getting more complex, driven by regulations as well as increasing expectations from the end-user in terms of enhanced driving comforts and economical aspects including proﬁtability, the manufacturers have no options but to provide the requirements at a competitive cost. Elaborating on the strategy,

AFTERMARKET SEPTEMBER 2011

Bharadwaj said the company, in the case of HMI, is looking at developing an ‘Indian driver workplace’ covering the entire aspect of the drivers’ requirements. The system that the company develops will help the driver to be very alert while being more productive, eventually helping the fleet operator to derive better profitability. “While developing products we had looked at passenger and fleet operators. However, the driver, who spends his time in the vehicle, also needs to be taken care of. We have enough data that provides the number of times the driver has to shift gears in a day ending up in severe fatigue. Therefore better ergonomics is essential. Besides, the controls have to be in close proximity to him for improved performance. This is our objective in developing driver workplace” he said. Secondly, the venture will look at ‘connectivity’ as its focus area since the communication between the vehicle and the outside world is essential for improved transport economics and better maintenance of vehicles. The company is currently developing ‘low cost telematics on-board unit, which will be launched in fi rst quarter of next year. Combined with multiplex

system the whole unit, in future, can offer several benefits to almost all the stakeholders in the business since it not only tracks but also indicates the driver / fleet operator on the defects in the vehicle. Besides, it also alerts the service centre about issues like the spare parts requirements and so on. Instead of the vehicle going to the service centre for diagnosis, the system enables the garages to reach the end customer and provide the solution. This prognostic approach will help avert major breakdown thereby upping the uptime of vehicle substantially. In addition, it will also help the vehicle manufacturers with tips to take corrective action, if necessary, arising out of common problems. These facilities will significantly enhance the operating economics of the fleet operators, he said. Besides, it will also support the service centres to optimally utilise the service including the inventories. Thirdly, it will look at ‘sensorics’ as electronics is integrated in almost every component of the vehicle. “The body controller is the gateway, which controls all the other electronic controllers. Similarly the telematics controller can just be another node in the body controller,” he said.

NEWS

TVS Logistics powered to assemble Ashok Leyland gensets

VS Logistics Services (TVS LSL) inaugurated its logistics assembly facility at Sholavaram, about 40 km north of Chennai recently. The facility was inaugurated by Managing Director, Ashok Leyland, Vinod Dasari in the presence of the Managing Director, TVS Logistics, R Dinesh. This will be a dedicated and full-ﬂedged assembly facility for the power solution business unit of Ashok Leyland, to assemble genset engine power-packs in the range of 10 to 2,000 KVA capacity for both domestic and export markets. According to the business model, Ashok Leyland will sup-

ply engines and radiators to TVS Logistics, which will provide endto-end supply chain solutions by ensuring infrastructure, procuring child parts, assembling, packaging, material handling solutions and logistics solutions for the assembled genset engine powerpacks as per OEM’s requirements. This arrangement would also mean that TVS Logistics will be a single-point of contact for Ashok Leyland for assembling the genset engine power-packs. With an initial investment of `2.5 crore, the plant will have the capacity to assemble 14,500 units per annum. The 70,000 sq ft facility has the infrastructure to scale

up to 30,000 units. Strategically located near the Ennore Port and well-connected by road to the cities of Bengaluru and Kolkata, the facility will assemble different power-packs and is expected to meet Ashok Leyland’s sales requirements for the next three years. Dinesh said, “This facility is a milestone for us as very few supply chain companies globally have the capability to provide end-toend supply chain solutions which include taking ownership of the sub-assemblies. Thanks to our acquisitions in the US and UK, we are now able to offer this service in India.”

With an initial investment of `2.5 crore, the plant will have the capacity to assemble 14,500 units per annum. The 70,000 sq ft facility has the infrastructure to scale up to 30,000 units Dasari said the association with TVS Logistics will help the company to offer greater value to its customers through customised power solutions meeting their speciﬁc requirements at a reduced delivery time. “Our power solution business is growing robustly in tune with the domestic genset market that is shortly expected to touch two lakh units per annum,” he said.

AFTERMARKET SEPTEMBER 2011

NEWS

SPX to increase footprint Shambhavi Anand

PX Service Solutions, which provides engineering, manufacturing, distribution and customer support services to all segments of the vehicle service market, intends to strengthen its aftermarket portfolio in India. The company has a major part of its vehicle service business for OEMs in the country and is looking to launch new products for the aftermarket in the next 12 months under three key product lines—multi-brand diagnostics, workshop equipment and air conditioning repair and recycling systems. Apart from these three major categories, there might also be other product launches as well. “The Indian customer is no less busy than the one in the US. They do not have time to sit in a workshop for long hours or bring their vehicle to a garage more than once for the same problem. Such products will reduce the time of repair and will signiﬁcantly increase the reliability of repair. A good amount of our focus has been on the OEM business. But as the car parc grows, a reliable, mature and organised aftermarket will also grow. We intend to increase our footprint in this segment,” Managing Director, SPX Service Solutions India, Tony Sharma said. Another reason for the company’s focus on the aftermarket segment is the increasing complexity in even the entry level cars like the Nano. “The vehicle complexity is going up. It is not uncommon to have multiple controllers even on low-end vehicles. This increases the

need for diagnostic and specialty tools,” President, SPX Service Solutions (Global), Tanvir Arfi said. A lot of products from SPX are proprietary to its OEM customers and their dealerships. But it also has diagnostic systems, shop Some aftermarket products by SPX equipments, special purpose tools which it manufacbally available products cannot tures and sells under its own brand be brought to the Indian market name. Currently, the OEM busiwithout customisation. Here, we ness contributes 65 percent of are trying to modify the globally its total vehicle service business popular products suited for India worldwide and aftermarket conmarket to match the local requiretributes just 35 percent. ments,” Sharma said. Diagnostics is the driving Apart from customising, the business for SPX and is also its local R&D centres are also working focus for the future. SPX has on several diagnostic development helped vehicle manufacturers projects for OEMs, design work, like Ford, Nissan, Jaguar Land development of special purpose Rover, Renault, Honda, and Harley tools and inexpensive multi-brand Davidson among the global playscan tools for aftermarket. It ers and Maruti, Tata Motors and intends to bring these products to Mahindra & Mahindra among the the market by next year. Indian manufacturers design proAnother interesting project that prietary diagnostic systems for the Indian market can wait for is their dealerships. For aftermarthree dimensional wheel alignket, the company will make their ments. “It has a three dimensional own brand of diagnostic systems technology with two cameras at to help diagnose multi- branded affordable price for multi brand cars. Keeping the price sensitivgarages,” Arfi said. ity of the Indian market, these The company is looking for systems will be available at comorganic as well as inorganic petitive prices. expansion, suitable tie-ups and In its research and developpartnerships for expanding in the ment centres based in Chennai, Indian market. The $ seven billion Pune and New Delhi, the comcompany earns $ one billion from pany is working on several vehicle service business. It expects interesting projects aimed at the to significantly outpace the growth Indian car market. “The gloof the automotive industry.

SEPTEMBER 2011 AFTERMARKET

NEWS

3M opens car care store in Chennai Akmal Rahman B

Photograph: Akmal Rahman B

anufacturer of car care products, 3M, has recently opened its ﬁ rst exclusive store in Chennai following its retail expansion. This will be the company’s fourth store in the country, following one in Pune and two outlets in Bangalore. The company offers a wide range of car care products including car-detailing services and a range of treatments that are designed to maintain the car irrespective of its age and condition. The 3M Car Care products (a division of 3M India) and solutions were introduced in India in 2002, after its success in the US, China and other parts of Asia. The store has been set-up under a franchise

agreement with an independent service provider. “We are planning to setup 15 more stores this year and aiming for 100 stores across the country in next three years,” said the National Manager for Franchise Business, 3M India, Vishesh Nigam. The store is spread over a 2,000sq ft area, will offer car-detailing services for its exteriors, interiors, underbody and engine performance. The exterior services include UV protection, exterior beautiﬁcation, minor scratches, swirl removal and surface enhancements. These treatments help to protect and ensure that the beauty of the car exteriors last longer, without any periodic attention. The interior service package includes interior protection and treatments to kill germs, clean and

Vishesh Nigam, National Manager, Franchise Business, 3M India

AFTERMARKET SEPTEMBER 2011

condition the carpets, upholstery, vinyl, plastic, and rubber surfaces and give a durable and enriched appearance. The underbody service comprises anti-corrosion and rust protection treatments, which help in long-term protection against corrosion, protection of internal body panels, frame rails and other inner cavities that are not physically accessible, but are prone to corrosion. The store also offers engine performance rejuvenation for both diesel and petrol engines to restore power, performance, fuel economy and efficiency by removing carbon deposits from intake valves and combustion chambers. The cost of service ranges between `100 to `25,000, from single seat cleaning to complete car. What’s more, it also sells car care products like additives, cleaners, flushes, battery terminal coats, lubricants for car performance. The company provides unique products like aerosol-based foam upholstery cleaner. The sprayed foam wipes away taking dirt and stain with it, while keeping the upholstery relatively dry. It is also planning to introduce 3M anti-bacterial interior cleaner developed in India. The company has been a part of automotive aftermarket business and it is supplying its products to car dealerships and body shops across India since 1996. Many OEMs have officially approved 3M car detailing services. Currently about 1,000 car dealers are enrolled in it cars detailing programme, offering its services to car owners across all makes and models.

NEWS

Eicher opens 3S dealership in Rajkot

icher Trucks and Buses (ETB), inaugurated its new dealership, Apco Autosales based in Rajkot, which is situated in the Saurashtra area of Gujarat. With the opening of this new dealership, ETB now has 41 dealerships in western India and 210 dealerships pan India. ETB is a business area of VE Commercial Vehicles (VECV). The new dealership, which is a 3S facility (Sales, Service & Spares) spanning over 36,000 sq ft, has a state-of-the-art fully equipped setup, with contemporary tools and equipment. The professionally trained team of Apco Autosales has also undergone training at the Eicher Training School in Pithampur, Indore. The new dealership is part of DGC Group (Dholakiya Group of Companies), which is a prominent business group of Gujarat, primarily dealing in automobile business and is also the dealer of Eicher Trucks and Buses at Ahmedabad and Himmatnagar. While addressing the gathering, CEO, VE Commercial Vehicles, Vinod Aggarwal, said, “We are happy to partner with Apco Autosales. The opening of the new dealership will further strengthen Eicher’s resolve and commitment to provide sales and after sales support to the rapidly growing customer base in western India”. “The new 3S facility with its state-of-the-art equipment and best in class operating standards will help us enhance customer experience and ensure that our customers are able to get their products serviced faster and

with much ease”, added EVP-Sales, Marketing and Aftermarket, VECV, Somnath Bhattacharjee. The dealership inauguration was attended by a large number of customers from all over Gujarat, ﬁ nancers and other invitees. Many customers were handed over keys of Eicher Trucks and Buses during the inauguration by Vinod Aggarwal. ETB is making strong inroads into heavy duty trucks segment of 16T-40T with ’VE‘ series of

The new dealership is a 3S facility spanning 36,000 sq ft and has a state-ofthe-art fully equipped setup, with contemporary tools and equipment. The team of Apco Autosales has also undergone training at the Eicher Training School in Indore fuel efﬁcient heavy duty trucks. Launched during Auto Expo in 2010, the VE series Eicher HD trucks have received a good response from the market with its promise of delivering enhanced value to the customers. Market share of Eicher’s heavy duty trucks’ in Gujarat is increasing and with this new facility, it will keep the

The inauguration of the Rajkot dealership

momentum going. The Eicher range of commercial vehicles are known in the market for their low overall cost of ownership and the reason for this can be found in the ‘Eicher advantage’. At the core of the ‘Eicher advantage’ is the vehicle’s highly rated fuel-efﬁciency. Additionally, , all Eicher CVs are also known for their right cargo body sizes, good ability to take the gradients as well as for low maintenance and longer life. These are well supported by an ever increasing network of dealers. Service coverage is being enhanced by the following measures: • Wide network of over 200 dealers across the country • Higher availability of parts • Mobile service vans available at all dealerships • 24x7 helpline with an all-India helpline number Also speaking on the occasion Mehul Dholakiya of Apco Autosales said “We feel honoured to partner ETB and with our experience and deep understanding of Gujarat market, we would do our best to provide our customers best in class service.”

SEPTEMBER 2011 AFTERMARKET

NEWS

Mahindra Navistar opens Kozhikode dealership

ahindra Navistar Automotives has recently opened a state-of-the-art Sundaram Automobiles—its new dealership in Kozhikode. While inaugurating the dealership, the Managing Director of Mahindra Navistar Automotives, Nalin Mehta said, “This is a moment of pride for us; we have already sold more than 1,300 trucks across the country within a short span of time and gained tremendous conﬁdence and appreciation from our customers. We have created a world class manufacturing plant in Chakan, Pune for trucks with an investment of `950 crore and are creating a modern distribution network in the country as the one here in Kozhikode, to cater to the growing needs of customers.” The dealership will also feature a well-equipped workshop, prompt spare parts availability, mobile

The dealership will feature a well-equipped workshop, prompt spare parts availability and trained staff to enable their customers to get a hassle-free experience service vans and highly trained staff to enable their customers to get a hassle-free experience. Kozhikode is an important market for transportation industry—not only for Kerala but for the entire southern India. According to him, the company commands about 50 percent of LCV market share in Kerala and hopes to emulate the success with HCV range. The Senior Vice President, TVS & Sons, and Director of Sundaram Automobiles, S V Nana Rau, said that the company has earned a name for itself through custom-

Inauguration of Sundaram Automobiles

er service in its various business and the dealership of Mahindra Navistar will provide a great opportunity of replicating the same high standards by leveraging its deep understanding of Kozhikode market. “Together we will help our customers outperform,” he said. TVS has been representing Mahindra LCV range in Kerala for over 30 years through its showrooms and workshops located across the state. Soon it will launch additional outlets for HCV in Kochi and Thiruvananthapuram, he said.

Trucks by Mahindra Navistar

AFTERMARKET SEPTEMBER 2011

NEWS

Akmal Rahman B

ong Chiang Piston (YCP), a Taiwan-based manufacturer of automotive pistons is planning to enter the Indian automotive aftermarket with its wide range of products. In a recent interaction with Aftermarket, Sales Manager, YCP, David Chen said, “We see a huge market for our products in the Indian market. To establish it, we are looking for wholesalers for distribution and promotion of our products for both heavy vehicles and passenger cars.” YCP is already supplying its products to many countries like the US, Peru, Argentina and Brazil. To create and develop its brand image in India, the company is participating in trade shows with a broad product portfolio. It also believes that this initiative will provide a platform for the company to enter the Indian market. “We are participating in many exhibitions around the world and especially in India to ﬁ nd some potential customers,” he said.

The company will be operating directly from Taiwan until it sets up its office in India. When asked about setting up a manufacturing plant in India he said, “If the market is good and the volume is large, may be we will set up a factory in India in the coming years.” According to him, it will be difficult for the company to compete in the Indian market, but he believes that with quality, delivery time, service and cost efficient products, YCP will sustain its position here. The company has two brands called YCP for pistons and Tiger for other auto accessories. It is currently manufacturing products like pistons, wheel covers, bumpers, grilles and hoods for Honda, Mitsubishi, Nissan,

Photograph: Akmal Rahman B

Yong Chiang enters Indian aftermarket

David Chen, Sales Manager, YCP

Toyota Ford, Ashok Leyland, Mazda and Maruti Suzuki. The company is looking forward to supplying it products to OEM’s in India. As an entry level, it wants to start its business by selling it products in Indian aftermarket. “We can manufacture components for any cars—it depends on the demands of our product in the market,” he said. The company has registered a turnover of about $3.5 million in 2010 and expecting to register $5.5 million in next two years by foraying into the Indian market.

A range of components manufactured by YCP

SEPTEMBER 2011 AFTERMARKET

REARVIEW

Experts’ shield car owners with advantages

Shambhavi Anand

I Vikram Khanna COO, Auto Services, Windshield Experts

AFTERMARKET SEPTEMBER 2011

t was back in the year 1999 that the glass product supplier to major automobile manufacturers, Asahi India saw an opportunity in windshield replacement business. The idea of providing repair and replacement service for automotive glass was conceptualised in the form of Windshield Experts’ and the ﬁ rst store, known as the WE store, was set up in the National Capital Region (Bikaji Cama Place) in 2001-02. While many would have thought a specialised business in windshield repair and replacement was too optimistic an opportunity, the company experts proved them wrong by completing 10 years in the business successfully. Today, the company has 59 service centres in 33 cities across the nation and does 4,000 replacement jobs every month. It earned a revenue

of around `30 crore in FY11. “Most OEMs have identiﬁed laminated glass as the 13 most critical components in an automobile for safety in case of an accident, followed by the steering column, air bags and other parts. The automotive aftermarket is a place where a lot of unethical practices take place both in terms of products used and the quality of workmanship. We bring convenience, ethical and safe practices and good quality products to the customers as we believe that the segment we are targeting seeks such practices,” COO, Auto Services, Windshield Experts’, Vikram Khanna told Aftermarket. Presently, the company’s main service is auto glass repair and replacement. The company has also started replacing wipers as it is recommended to change the wiper blades during the replacement of a windshield. Also the

REARVIEW

wiper blades cost only one-twentieth of the cost of the shield, so most people prefer to change it rather than letting it cause damage to the shield. Another critical product during glass replacement is the glue used. Known as Urethene, the glue gives adhesive strength to glass and prevents the driver/passengers from being ejected out of the wind shield in case of an accident. To deliver quality services at the convenience of customers, the staff has to be well trained. Currently, most of the training happens onthe-job. But the company is in talks with a training partner for developing off-site training curriculum for all levels of employees. The programme will most probably start by the last quarter of FY12. It believes in offering the services through convenience of location for the customer and fast turnaround time. It has 20 stores across the NCR, which Khanna believes is “not adequate, though a fair number”. “We want to offer our customers the advantage of proximity. No one wants to travel long distances just to get their windshields replaced,” he added. To add to the convenience of the customers, the company has started a mobile service. Be it the

customers’ workplace or their homes, they can book the services and get it done at their doorsteps. Currently, the mobile services can be availed mostly during the working hours, however, in case of appointments ﬁ xed prior, services can also be provided early morning and late evening. Another convenience, which is very important from customers’ perspective, is cashless service. “It is predominantly an insurance driven business. We have pan India tie-ups with most of the insurance companies in the private and the public sector. Our coverage, from insurance standpoint, is 88 percent,” Khanna said. Windshield Experts’ is based on the business model of European automotive glass repair and replacement company Belron and is currently into the automotive glass repair and replacement of light vehicles (passenger vehicles, light commercial vehicles, multipurpose vehicles). With the car parc for this category increasing in the country, the opportunities seem to be growing rapidly. The company expects to have 5.4 million replacement jobs in a year by 2020 in India. “With the increase in the number of vehicles, the size of the replacement market will

increase and so will the opportunities for us,” Khanna added. Belron is believed to have replaced 11.7 million automotive glasses worldwide last year. Talking further about the opportunities, Khanna said that there is a general perception that the windshield is replaced only after an accident, which is not true. It can get damaged due to other reasons also and might need replacement. The ratio of the two is almost 50-50. It plans to educate customers about the same. Non-accidental glass replacement holds immense potential. The company would like to increase its presence in these areas. To provide a faster turnround, the company is working on improving its backend processes. This involves developing portals in collaboration with the insurance partners. This portal will enable the company in accessing customer information instantly and getting real time approvals from insurance companies to carry out a job after the customer has put a request. The company has a clear future plan—it wants to increase its proximity to the customers by increasing the density of stores in the existing cities, provide a faster turnaround and remain focussed on glass repair.

WE offers services at the convenience of customers with trained staff

SEPTEMBER 2011 AFTERMARKET

COVER STORY

Lucas Indian Service:

The Retail Connection

T Murrali

hennai headquartered Lucas Indian Service (LIS), a specialised aftermarket player—focused on auto electrical and diesel injection systems in the country—is ﬁ rming up its foray into car retail accessories under the brand Carplus. The pilot project, introduced a little over a year ago, is ringing in positive signals for the company to help ﬁnalise its plan in this area of business. The company feels that the response from the two dedicated showrooms in Gurgaon and

AFTERMARKET SEPTEMBER 2011

Photographs: Mexy Xavier

COVER STORY

Ludhiana is encouraging and it is now trying out several options to reach out to the discerning customers. As part of its initiative, LIS has opened a counter in a departmental store in Delhi a couple of weeks ago. This move is expected to help the company to understand the customers’ expectations in terms of reach and convenience besides, the availability of the range of products, said the President, Lucas Indian Service, Sandeep Abbi. Talking to Aftermarket, he said, “This is a pilot project, an experiment to see how we can go about it in a big way. It is in the nascent stage and we are trying to understand the retail business. Retailing is different from the normal aftermarket sales and service support business, since it involves vehicles and accessories. Right now, we are going through the learning curve in understanding what the customers look for—the accessories purchasing pattern of both new vehicle owners and the old ones. Opening a smaller format, in the departmental store, is again a learning process to understand whether we should have standalone stores or be part

Sandeep Abbi, President, Lucas Indian Service

of a mall or a departmental store. The idea is to offer a unique and different buying experience to the customers. They can touch and feel the products and have a different experience as far as car accessories are concerned.” Abbi said that at this point of time, these outlets are owned by the company and going forward, when it wants to expand in a big way, it might look at franchise model also. “We have a roadmap, which basically envisages us to look at about 120 outlets over a period of ﬁve to seven years. This is contingent on us ﬁ rst having our learning and business model in place,” he said. It will escalate once the learning is completed in about a year or so. The company will be focussing on the entire range of cars. Normally, in high-end cars, a lot of

accessorisation has already happened. And so it is really at the A, B and C segments of cars that require accessories. And to support the requirements, Carplus deals with the complete range of accessories—from infotainment to security systems, navigation, upholstery, interiors and exteriors. It also deals with different brands. Besides, the retail outlets carry out several services including anti-rust treatment, wheel balancing and such things. The two retail outlets have speciﬁc bays where the customers can see the work in progress from an air-conditioned lounge. The retail store also deals with tyres for passenger cars. Asked if LIS would extend a similar concept to two-wheelers, he said, “We may consider at a later stage but at this point of time we would like to focus on passenger cars and multi-utility vehicles.” The network that LIS has established over a period of time is largely oriented towards dealing with electrical and fuel injection systems of automobiles. And the entire value chain is aligned to that. Therefore the company will be largely conﬁ ned to these two

SEPTEMBER 2011 AFTERMARKET

COVER STORY

segments as it feels that there are still many unrepresented avenues within auto electrical and fuel injection systems. However, there are certain items including high performance lamps and HIDs that are currently dealt with by Carplus, which might come in as part of the company’s distribution network, he said. Lispart already deals with these kinds of products including halogen lamps, and it will only be a natural movement for the company to expand the product portfolio. The entire aftermarket businesses of Lucas-TVS and Delphi-TVS is overseen by LIS. It sees tremendous synergies amongst different business divisions such as Lucas-TVS (auto electrical), Delphi-TVS (diesel fuel injection system), Lispart (outsourced auto parts) and Lucas (batteries, ignition coils and switches). The core business of the company is to provide sales and service to auto electrical components manufactured by Lucas-TVS and diesel injection systems made by Delphi-TVS. “We have specialised in auto electrical and diesel injection systems.

AFTERMARKET SEPTEMBER 2011

And we are looking to expand in adjacent areas of business. For example, we have recently tied up with lubricant company—Top1 of the US, to distribute its products all over the country except south India. This is basically for exclusive distribution of synthetic and semi-synthetic lubricants and not the mineral-based lubricants. Although the market is largely towards mineral-based lubricants, the new generation vehicles and quality conscious customers see merit in going for the synthetic lubricants. We would not be playing the volume game. However, it could become the mass market in the future. It’s a strategic move for us,” he said. The company will be catering to the requirements of motorcycles, passenger cars and diesel segment in both cars and commercial vehicles. Later on, it hopes to cater to industrial lubricants too, he added. Under the brand ‘Lucas’, the company sells ignition coils, switches and batteries. Except for batteries, the other two products are manufactured by LIS. It has been supplying ignition coils to the earlier generation of Maruti

vehicles. With the change in technology the company has now been catering to aftermarket requirements of those vehicles. Besides, it also deals with switches that are primarily meant for starter circuits. In addition, it also outsources batteries and sells under ‘Lucas’ brand. This is a small part of its operations. Asked if the company will look at expanding its product portfolio, he said the range of switches may expand. The company directly sells its batteries through its dealerships. Besides, it also sells to OEMs who in turn rebrand and sell as genuine parts. Today, the company has a network of over 2,000 dealers covering close to 700 towns and cities. About two wheelers he said, “We are already in two-wheelers through some of our products since Lucas-TVS is catering to two wheeler segment. Also we now handle lubricants.” Under Lispart it has some spare parts for this segment and this is the area where the company is hoping to strengthen further. “Over the last few years we have started building a portfolio for more two-wheeler parts,” he said.

COVER STORY

Auto electrical and ﬁ lters are the areas where the counterfeit is more. The industry estimate is around 30 percent, however, he feels that it should be more in the auto electrical and ﬁ lters. New generation vehicles with advanced technologies become a natural barrier for the counterfeit. The company has three mobile units with auto electrical and fuel injection test equipment, to hold campaigns and also to train the people in the outlets. Each unit caters to one of the three regions—north, east and west. The southern region is catered through the TVS group companies themselves, he said. Lucas Care, which was launched few years ago to cater to the passenger car users, is now oriented towards the institutional customers on preventive maintenance. This is because of rigorous demand in this segment.. The company deals with over 10,000 parts and it has developed an inhouse software to manage the supply chain from the manufacturers till the part is delivered to the end customers. The software built within its IT systems with certain principles works on

the basis of supply chain management. It helps the company to integrate with its suppliers and subsequently to distributors and dealers. Since retailers are smaller entities, they do not have the capability of holding a wide range of parts. The software developed by

Distribution LIS extensively covers the country through its four regional ofﬁces located at the main metros and 23 branches equipped with warehousing facilities. LIS has 350 service dealers and 40 company-owned workshops through which, it sets the benchmark for servicing. the company helps in replenishing the stocks at the earliest possible time, he said. The company has 23 branches with warehousing capabilities. It is currently building ‘Central Warehousing’ units in Chennai and Puducherry, which will become part of the larger supply chain management.

LIS has 350 service dealers and 40 company-owned workshops through which, it sets the benchmark for servicing. The company-owned outlets will play a significant role in imparting training to the service dealers. LIS maintains the history of vehicles and even if the vehicles move from one city to the other, the service history can be retrieved to facilitate easier service. With the vehicle parc and variety increasing, there will always be growth in the aftermarket business despite the fact that the life-span of the spare parts is significantly increasing. Besides, the increasing awareness of preventive maintenance will also spur the demand. According to him, some categories that fall under the replacement cycle and the aftermarket, will also move from repair to reconditioning. When asked about remanufacturing, he said that LIS is already into this in a small way on starters and common rail systems. “These are in very early stages for us to understand on how the processes are to be handled. As we go through our learning, we would definitely look at expanding,” he said.

SEPTEMBER 2011 AFTERMARKET

Photographs: Joshua Navalkar

EXTRA MILE

Retaining customers Abhishek Parekh

S Amar Sheth Second generation dealer and Director, Shaman Motors

AFTERMARKET SEPTEMBER 2011

tarting out as a Fiat dealer in the late nineties, Shaman Motors has already evolved into a distinguished luxury car dealer in Mumbai with brands like Mercedes Benz, Volkswagen and Honda. Second generation dealer and Director, Shaman Motors, Amar Sheth, has his priorities in place when he says that he aspires to create a dealership, which is a preferred partner for customer and employees and not necessarily the top seller of the brands on its roll.

Claiming to have minimal attrition, he adds that the all policies and initiatives are taken by him and his team to ensure that customers are retained, for their lifetime! He has been trying to achieve this objective through three showrooms of Honda, and one each of Volkswagen and Mercedes-Benz in addition to a used car outlet. A customer gets to choose from a used car costing couple of lakh to a premium marquee costing over a crore. â&#x20AC;&#x153;Catering to the luxury segment customers is very different from selling cars in the high volume segment.

EXTRA MILE

The difference is very apparent in the types of programmes and promotions that are offered to our customers compared to those offered to a customer in the high volume segment,” said Sheth. He added that dealing with the luxury segment is about catering and exceeding customers’ aspirations (not expectations!). The key aspect in this business is to provide the experience that takes the customers to a different orbit. He has been good at forging relationship going back to his days as a Fiat and Ford dealer in Mumbai. In fact, the architect and designer who have helped design all the showrooms for the three brands, had been angry customers of the Fiat Uno. Dealing with luxury cars has its typical set of challenges: bringing novelty to the business to retain and keep customers happy. He asserts that it is easier said than done. “The segment is evolving so fast that whatever initiatives are taken up by any dealer quickly become norm and basic minimum that customer comes to expect. As aspirations are met, a new set of aspirations take their place. Keeping up with this evolution is a challenge for any luxury product dealer,” said Sheth. He elaborated that relationship plays a key role in

the luxury goods segment, especially cars, as customer of a luxury car rarely visits the showroom and, more often than not, he has a pretty good idea of the product already. One of the biggest challenges facing any big city dealer or high volume dealer is the rising cost of real estate in cities across the country. “It is very clear to me that the rising cost of infrastructure (land and establishment) and manpower is likely to change the way all dealers conduct their business. This will happen sooner in case of metros like Mumbai,” he added. Elaborating further on this point, he said that dealerships will have to change the way they conduct their operations by aiming for signiﬁcantly higher turn-around of vehicles coming in for servicing by running service bay round the clock. Such changes have already started to take shape and will only get accentuated in the coming years. The dealership workforce would have to get attuned to these changes. Another major challenge is attracting well groomed and motivated people to enter and remain in the automobile dealership business in the face of competing career choices including retail, airlines and hotel management to name a few. Manpower is not a major concern for Sheth at this stage. He attributes the relatively better position on this front compared to fellow automobile dealers to employee-friendly work culture and ‘measured’ growth. In addition to growth opportunities available to employees internally, Shaman Motors also runs inhouse training and knowledge sharing programmes. The key focus of the training is on soft skills and motiva-

A well performing employee can earn even twice the amount of his/her base salary

tion. A well performing employee is encouraged to work across brands and can earn even twice the amount of his/her base salary through the incentive structure. “We are not looking to be the top dealer for any or all of the brands we represent, as achieving such an objective would only come with its own set of issues. We are looking to be the preferred dealer for customers and employees and want to retain both these group of stakeholders for a long time to come,” elaborated Sheth when he was asked about his aspirations. The more relevant criteria on which he measures his success are customers’ upgradation, repeat sales and customer referrals. Sheth is evaluating getting further penetration in selling luxury products, not necessarily another luxury car brand. He is also quick to point out that though competition has been growing in the premium luxury segment with Audi and BMW having a good run in the country, these brands are growing from a very low base. “We have established a relationship and trust with customers, which can help us further expand our reach across product segment,” said Sheth. But immediate priority is to consolidate the presence in the three existing car brands and possibly go to newer locations.

SEPTEMBER 2011 AFTERMARKET

IN CONVERSATION

‘We intend to grow our presence in

clutches and engine valves’ Eaton is a global leader in automotive valves and also has a major presence in trucks, construction equipment and industrial equipment segment. It is a relatively younger player in the aftermarket segment in India having established its presence around three years ago. Executive Director-India, Automotive Division, Eaton, Ramchandra Rao speaks to Abhishek Parekh on the company’s journey thus far and its vision for the future. Since how long have you been operating in the aftermarket in India? It has been around three years since we have begun establishing our network here. What are the other products or systems in your global portfolio having good prospects here? Apart from locking differentials, which can have a good potential as in many other South East Asian countries, there are some products that are suitable for the Indian market. We are looking to enhance our presence in the medium and heavy duty clutch segment though I would be unable to provide more details about the strategy for that product. So we are looking to grow product range and reach in differentials and clutch range. What is Eaton’s strategy for products and services to the aftermarket customers in India? Eaton operates in essentially two product groups: automotive and trucks, globally. The automotive product group mainly comprises engine valves, locking differentials, super chargers, valve actuation systems and plastic products or components. In the truck segment, we manufacture and sell transmissions, hybrid systems for buses and

AFTERMARKET SEPTEMBER 2011

IN CONVERSATION

clutch systems. In India, we manufacture and sell medium and heavy duty transmissions and engine valves. We also have a presence in locking differentials for automotive segment and medium and heavy duty clutch systems in the truck portfolio. Eaton is globally the largest engine valve manufacturer. We intend to grow our presence in a major way in the aftermarket for clutches and engine valves in India as these products have a high degree of wear and tear and need to be replaced at regular intervals. How evolved is your distribution network in India for some of the aftermarket products? We do not sell directly to the end customers (for instance, ﬂeet owners) but make an effort to have a network of distributors or wholesalers who do not deal in a competing product or product range. We have enrolled around 40 distributors currently, primarily for selling engine valves. The distribution network in India for most players in the aftermarket is a little different from that observed in developed countries. Typically, distributors and even retailers of part groups for say, chassis systems, engine parts or exteriors are concentrated in particular locations. Also, there are numerous separate or combined outlets for batteries and tyres. We have a well entrenched distribution network in the western, eastern and the northern parts of the country and are beginning to establish major presence in the south as well. Our distribution strategy is geared on two basic principles: ensuring that our products occupy the best available shelf space and has a recall value with the mechanics or retailers.

What are the key aspects to ensuring a reliable distribution network? Availability of spares with retailers and top of the mind recall plays a critical role in this process. This availability is complemented by efforts of our sales representatives, who are assigned with the task of understanding customers’ requirements and converting prospective demand into sale of Eaton products. Is counterfeiting a major issue that you are tackling? Given our limited size and market presence, we have not yet encountered a major threat from counterfeits. Moreover, counterfeiting affects most players in the aftermarket but it needs to be detected faster. We can only address it if we can detect it. I feel adequate care in packaging and labelling is one of the better ways to tackle this menace. But given the fact that we are not a very large player in the Indian aftermarket, we are not adversely affected by this menace as yet. What are the major challenges for growing your presence in the aftermarket segment? The key challenge is access to market and customers. It is very critical to identify key locations for catering to different vehicle segments like trucks, buses, passenger vehicles and construction equipments. Most markets are geographically concentrated around certain key locations and it is critical to identify those and get access to distributors or retailers there. The second challenge is to offer value prepositions at various price points. If this is not adequately addressed, then there is a danger of getting into a quagmire of prices, discounts, incentives to

distributors and retailers. We have been able to capture around 15 percent marketshare in the product groups in which, we are present in India overall. I must add that we are not present in the two-wheeler valve business, either in the OEM or in the replacement and that is a major market from which we are absent. How do you sense the market evolution in India and what does it mean to you? I sense two distinct macro level changes happening in the aftermarket in India. As the overall quality of systems and components improves and technology evolves to a different level, it will get increasingly difficult for a large number of mechanics or technicians to service all aspects of any vehicle. This will lead to a consolidation of servicing capabilities to a restricted set of service providers, whether authorised or unauthorised. Such a consolidation based on sophistication of vehicle technologies and capabilities or specialisations will imply that an aftermarket player would need to reach these locations rather than go after the entire available market at a much higher cost. So instead of making effort to reach out to towns and cities in northern Maharashtra, it would be better to focus only on reaching out to the Ahmednagar cluster and so on. GST (Goods and Services Tax) would also have a major impact on our distribution strategy since the flow of goods will be smoother and streamlined than what is currently the case. The more the sophistication coming into the workshop or service infrastructure, the higher the level of automation in the back office at distributors and retailers. What’s more, the more evolved retailing concepts are a given and already happening.

SEPTEMBER 2011 AFTERMARKET

STUDY

The

‘Delhi Effect’ Puneet Kulraj

istribution companies have always been wary of wholesalers in their distribution chain. Ideally, companies want selling agents in their distribution chain who also act as true distributors; who are willing to continually service a defi ned territory for selling and collections in small lots. However, the stark reality for many distribution companies is the dominant presence of wholesalers who buy in large bulks and sell them to the lowest bidder without any territory allegiance. When wholesalers dominate the distribution chain, it leads to territorial confl ict and pricing competition for the same brand making it more of a commodity, rather than a brand. The problem of wholesalers is largely confi ned to one major market—the Delhi wholesale market. The Delhi market tends to sell about 15 percent to 20 percent of the entire country’s sales for most auto spare part companies, while it accounts for maybe about eight-10 percent of the country’s consumption. No doubt, the sales manager

AFTERMARKET SEPTEMBER 2011

in-charge of most companies based in Delhi do not tend to have many friends. While he is always on targets, his colleagues continually rant about Delhi material sold in their area. The effect is not just limited to nearby territories, but the distributors across from Salem to Silguri, Kutch to Kovalam and Ranchi to Raipur—all complaining of ’heavy inﬁ ltration‘ of Delhi material into their area.

‘Delhi Material’ Let us try to understand this phenomenon of ’Delhi material’— how come the goods from Delhi travel to the length and breadth of the country and are sold in another distributor’s area? A retailer’s business model is quite simple to understand: Sell at MRP and try to maximise on the proﬁt. The only way to maximise on the proﬁt is to buy cheap and ensure that the total costs (purchase and transport) should be the lowest rate possible. Logically, a retailer should buy from a distributor located closest to him (the transportation charged would be the least). But when a Salem-based retailer bypasses his

STUDY

Puneet Kulraj, Founding Partner, Vector Consulting Group

closest distributor and opts for a distributor based in Delhi, there can be only one conclusion—he is getting a cheaper deal from Delhi. You would know of course that the cost of transportation from Delhi would be substantially high compared to getting it from the local distributor. It can mean only one thing: the cost at which he buys from Delhi is substantially lower. How is it possible that when both the distributors (Salem and Delhi) get the same margin from the company and yet their selling prices are so different that a Delhi seller can undercut the Salem seller, even after compensating the substantially large transportation costs? You probably know the

answer, but if you do not, let me introduce you to the protagonist of this piece: the Delhi wholesaler.

The Delhi Wholesaler Found in locations like Kashmiri Gate, Chawri Bazaar and Punjabi Bagh, operating out of pigeonholed cubicles that serve as an ’ofﬁce‘, the wholeseller is extremely well connected (multiple telephones off the hook simultaneously) and is a speculator to the core. He can put the traders on Wall Street to shame with his knack for ’rolling‘ stocks and money for the thinnest of margins. Spend a few hours in any of the trading hubs, look past the incredulous sights of entire engine blocks

or gearboxes being carried around overhead in wicker baskets, and you will see deals being struck on phones and slips of paper—the essence being two things: quantity and percentage points. Yes, this is the environment where hardcore trading at its fundamental raw level will never cease to amaze you. The Delhi trader, knows only one thing, and that is to ’roll‘ his money as fast as possible and the best weapon in his hands—price! The business model is simple and in two parts: buy large quantities at cheap prices and sell them cheaper still. The ﬁ rst part is executed very well with the sales or territory manager who sees this as an easy way to meet his numbers

SEPTEMBER 2011 AFTERMARKET

STUDY

and actively get the best discounts from his company.

‘Sell Cheap’ Once this is done, the second part is easy—sell cheap. How cheap is cheap? Well, legend has it that sometimes some of the traders sell at a price below what they buy for, and they make their money by selling the cardboard outer packing cartons that the goods come in! They have little or no overheads, sometimes holding no stocks at all and delivering goods straight from the company’s depot to the customer—the famous “bill toship to” phenomenon. Now this is inventory turns at its cut-throat best. Good for the wholesaler, good for the Delhi sales manager and good for the retailers in Salem, Siliguri and Gandhidham. They can buy the stuff at such a low rate that it not only takes care of transportation all the way from Delhi, but also beats their local distributor. Those who can buy the quantities for this to work, do it all the time. It forces the local distributor to drop his prices too in a desperate attempt to maintain his volumes. However, what does this do for the company? It creates a market that is strife torn, with one distributor undercutting the other, prices being ruled by speculators, spikey sales leading to uneven distribution resulting in surplus stocks in one part of the country and creating shortages in other parts that are left open for competition. Imagine, for all the brand building, advertising, the 4Ps of Kotler, the fate of the product is decided by the wholesaler who, based on the quantity he has been able to corner, and the price that he has got, puts out the ruling price

AFTERMARKET SEPTEMBER 2011

of the day “aaj ka bhav” for the product. Thus, so vitiated can the environment become that some companies experience a severe back lash from their other distributors and even face desertion. But due to dominant sales of Delhi market, companies find it very difficult to bite the bullet. If one has to stop the sales to the Delhi wholesale market, it means an immediate drop in volumes— what happens to the targets? No doubt companies, particularly the auto spare parts, have learnt to live with this confl ict forever. Is there a way to get out of this mess without affecting the sales target even for the immediate term? To answer the question, one needs to understand why real distributors never dominate the supply chain. The answers lie with the companies itself. Most companies operate on

Found in locations like Kashmiri Gate, & Punjabi Bagh, operating out of pigeonholed cubicles, the wholeseller can put the Wall Street traders to shame with his knack for ’rolling‘ stocks for the thinnest of margins the push mode. They tend to sell in one big lot towards the month end, spiced up with attractive discounts, while overall availability at a SKU level suffers throughout the month. The pressure of high unwanted inventory, forces many selling agents to always look for fastest way to get rid of the inventory. Over the years many selling agents, particularly in the Delhi region, have used

it to their advantage rather than complaining against the system. Any person who acts as real distributor suffers very badly—on one hand he does not get good availability to continually service his market with small lots, and on the other hand, he has fight off the wholesalers in his territory. If companies want to take advantage—they have to help make distribution a lucrative business, which means they should have ability to continually service small requirements of the distributor throughout the month. But how can they do that when they have their sales target and their forecasts actually go haywire: they have to push the inventory. The only way out is to get out of the push mode to a pull mode. They have to move to a model of supplying as per consumption, which in turn will help distributors earn high ROI and invest more in the market. Once the distributors start earning high ROI and company sale per real distributor starts going up, they can convince many of the wholesalers to get converted to distributors. If many are not willing, at least, they will gather courage to replace them with real distributors. Implementing a pull-based paradigm shift requires significant changes right from production planning to sales planning and relationship with distributors. It requires significant collaborative efforts to create a whole new world with real win-win principles. Sounds much better than staying in conflict! (The author is the Founding Partner of Vector Consulting Group (www.VectorConsulting.in). He can be contacted at puneet@vectorconsulting.in. Views expressed are personal.)

FOCUS

Rubber supply mismatch may hit pro tability Abhishek Parekh

yre manufacturers have been wilting under the pressure of rising natural rubber prices, adversely affecting profitability. Even as most tyre manufacturers have announced growth in sales in the last fiscal as well as the fi rst quarter of this fiscal, they are struggling to remain profitable. Apollo Tyres sees the gap between the growing demand for natural rubber and dwindling supplies to increase to ‘alarming’ proportions of around one million tonnes by year 2020, according to the company’s latest annual report. It further

SEPTEMBER 2011 AFTERMARKET

FOCUS

points out that the natural rubber market had been characterised by rising prices and a shortage in supply. The prices hit as high as $6,768 a tonne in February this year. The tightness is likely to last till 2018. A large number of today’s productive plantations had come up in the 1980s. Most of these will require massive uprooting and replanting between 2012 and 2018. Combined with this is the spectre of dramatic climate change, where the past few years have seen unprecedented rains and even ﬂooding in the two largest natural rubber producing countries of Thailand and Indonesia. This is likely to lead to major demand supply mismatches in the coming months. The company is working on multiple fronts to address the situation. Apart from accelerating research to substitute natural rubber in the tyres, the company has also entered the area of rubber plantations to secure future supplies. On the other hand, it is hopeful of making most of the upcoming demand for tyres with signiﬁcant capacities coming onstream this calendar year. The company’s Chennai plant will reach its planned capacity towards the end of this year. The company’s annual report further points out that the June quarter saw India’s growth rate in passenger sales outstrip that of China. As China starts to slow down, India will take its preeminent position; not just in the automobile industry but across various sectors. The rising cost of raw materials has begun to bite most frontline tyre manufacturers even as demand continues to show robust

AFTERMARKET SEPTEMBER 2011

The rising cost of raw materials has begun to bite most frontline tyre manufacturers

Apollo Tyres sees the gap between the growing demand for natural rubber and dwindling supplies to increase to ‘alarming’ proportions of around one million tonnes by year 2020 according to the company’s latest annual report. The tightness is likely to last till 2018 growth across all vehicle segments. Ceat announced an operating loss of `25.04 crore for the quarter ended June 2011 as against `32.9 crore operating profit. The company net loss increased to `41.9 crore in the fi rst quarter this fiscal as compared to `13.87 crore net profit in the fi rst quarter in the last fiscal.

The company standalone revenues for the last fiscal stood at `3,751.62 crore as against `2,989.98 crore in the previous fiscal. The operating profit in the last fiscal decreased to `106.73 crore as compared to `277.59 crore in the previous fiscal. The net profit decreased to `22.28 crore as compared to `161.03 crore in the previous fiscal. JK Tyres’ net sales grew to `1,401.67 crore in the fi rst quarter this fiscal as compared to `1,163.49 crore in the first quarter of last fiscal. The operating profit in the first quarter reduced to `40.04 crore as compared to `50.8 crore in the first quarter, last fiscal. The net profit in turn went down to just under a crore rupees as against `19.53 crore in the first quarter last fiscal. It was similar story for the largest tyre manufacturer MRF, which announced net sales of `2,573 crore in the first quarter, this fiscal as compared to `1,925.4 crore, but its operating profit reduced to `140.3 crore as compared to `154.98 crore.

FOCUS

Lacklustre auto sales causing concerns among ﬁnanciers, dealers Abhishek Parekh

ustomers adopting a ‘wait and watch’ attitude and even down trading to smaller vehicles, is causing a concern among auto fi nanciers and even auto dealers. Additionally, most banks, auto fi nance companies and even dealers lament meek response from buyers. “It might help banks and auto finance companies if we (financiers and vehicle manufacturers) sit together and figure out attractive schemes and initiatives to help push up sales in such a market. I do not see a major upturn in vehicle sales, with a limited upturn in upcoming festive seasons including ‘Navratri’ and ‘Diwali’,” said Executive Vice President, Auto Loans, HDFC Bank, Rajan Pental. He added that though customers are looking forward to new launches in the coming months, they are essentially adopting a ‘wait and watch’ policy with most choosing to defer purchases. Additionally, he also pointed out that the phenomenon of increased preference for diesel vehicles in the recent months on the back of expanding fuel price differential is causing concern as vehicle manufacturers are unable to produce a sufficient number of diesel cars leading to deferment or cancellation at customers’ end. Dealers and auto financiers are not benefiting, despite larger ticket size or sale value, from the increased preference for diesel vehicles. “Customers are put off by

long waiting periods. Though manufacturers are trying to address this situation, the scenario is worsening over the recent months and has hurt dealers and ﬁnanciers alike,” said an ICICI bank ofﬁcial. He added that the interest rate scenario is uncertain and is beginning to hurt vehicle sales. Pental added that the festive season beginning with Onam in Kerala has not been encouraging from the vehicle sales perspective. Even as vehicle manufacturers are looking for solace with several other festive seasons including Ganesh Chaturthi, Navratri and Diwali over the next couple of months, the sales are unlikely to take a major upturn, going by current indications. Moreover ‘serious’ buyers are more likely to increase the cash component in vehicle value (implying lower loan amount) and even buying entirely on cash. This has always been

the case when interest rates climb higher, but holds particularly true in current times with several lower cost options like the Nano or the Ford Figo. Increasing prosperity in rural areas due to higher grain procurement and other agricultural improvements has meant robust tractor sales and opportunities to fi nance tractors, according to an official from Mahindra Finance. But CV sales, which is relatively less affected by interest rates, has been showing signs of softening in certain segments. Banks as well as vehicle fi nancing companies are looking for support from vehicle manufacturers by devising and promoting special schemes targeting increased sales at dealership levels, joint effort at pushing sales in Tier III and smaller towns as well as easier terms in the current high interest rate scenario.

SEPTEMBER 2011 AFTERMARKET

EVENT

PaintExpo 2012 to boost latest painting technologies Optimising Processes

Glimpse of a previous PainExpo

or companies with inhouse painting facilities as well as job-shop coaters, increasing material and energy efﬁciency in coating processes are top priorities. Appropriate solutions will be presented at the fourth edition of the PaintExpo, whose exhibitor list already includes at least 230 companies. The exhibition programme at the leading international trade fair for industrial coating technology, which will be held at the Karlsruhe Exhibition Centre from 17 through 20 April 2012, ranges from pre-treatment to quality control. Regardless of the industry sector for which metals, plastics, glass, wood and other materials need to be coated—strong demand for improved efficiency and, at the same time, enhanced quality and ecology is being felt in all market segments. Increased flexibility is an additional issue

AFTERMARKET SEPTEMBER 2011

which concerns companies with in-house painting operations. On one hand, this involves smaller and smaller manufacturing lot sizes in many areas. On the other hand, painting systems are in demand which can be flexibly expanded and set up for various processes. Companies with inhouse painting operations and coating job-shops will ﬁnd solutions to these challenges at the PaintExpo. Registered participants come from the ﬁelds of equipment and application technology—and nearly all of the market and technology leaders are included in the exhibitor list. As a result, the upcoming event will not only encompass the world’s most comprehensive offerings for liquid painting, powder coating and coil coating, it will also present innovative developments and new trends in all of the sectors represented at the exhibition.

In order to reduce energy and material consumption, efforts are being made to decrease the number of steps required when coating parts made of metal and plastic in various industry sectors One of the solutions to this problem involves primerless liquid painting systems. These make it possible to replace the conventional three-coat system consisting of primer, base coat and clear coat with a two-coat fi nish. This results in more demanding requirements for the surface of the substrate, and thus for pre-treatment as well. Nano-technology is playing an ever greater role in paint production as well, amongst others the nano sol-gel process. Applications for these paint systems include, for example, the application of transparent, highly scratch-resistant protective coatings on high-gloss anodised, decorative aluminium parts. The significance of UV paints continues to grow as well—for plastic as well as metal substrates. In the field of solventbased paint systems, the trend is moving towards higher and higher solid content levels in order to reduce the solvent percentage. An optimised application technique which assures greatest possible transfer efficiency is a prerequisite for reduced material consumption. This is made possible by paint guns and high-speed rotary atomizers with a spray jet, which is matched to workpiece geometry for better quality and fi nishing.

AUTO POINT

Rise in farm credit to push mechanisation levels in agriculture sector Revati Kasture Head, Industry Research, CARE Research Vishal Srivastav Analyst, CARE Research

he government of India is committed towards increasing the production and efficiency levels in the agriculture sector and has recognised improvement in farm mechanisation as one of the important factors that would push the efficiency levels in agriculture. The movement called ‘Green Revolution’ started in1960, laid down significant steps towards development of the agriculture sector that included concessional credit for buying tractors, which consequently boosted tractor demand. Furthermore, rise in the awareness levels, substantial improvement in agricultural credit disbursements combined with increase in the income levels has fuelled the growth in tractor demand. CARE Research estimates that the overall tractor population has increased from around 0.15 mil-

lion units in 1970 to around 4.2 million units in FY11 and its penetration level has increased from around one tractor per thousand hectares in 1970 to around 29 tractors per thousand hectares currently.

Tractors drive mechanisation levels The rise in tractor penetration also improved the mechanisation levels signiﬁcantly in agriculture sector. CARE Research estimates the share of mechanical and electric power in overall power used in agriculture sector has increased from 83 percent in FY01 to 86 per hectare in FY06 and further is estimated to have increased to around 90 per hectare in FY11. The share of tractors in mechanisation devices which is the primary driver inﬂuencing the rise in mechanisation in agriculture sector has increased from around

SEPTEMBER 2011 AFTERMARKET

AUTO POINT

Tractor penetration 35

5.0

4.0

2.0

15 10

1.0

FY11

FY01

FY91

FY81

0.0

FY71

Units (in mn)

25 3.0

Tractor population (LHS) Penetration per thousand hectares (RHS) Source: CARE Research Estimates

48 percent in FY01 to around 60 percent. in FY11.

Tractor industry remains buoyant After surpassing hiccups in FY09, the tractor industry was back on the roll in FY10 registering a strong growth of 31 percent. The growth momentum continued in FY11 as the industry observed a healthy rise of around 22 percent in its domestic unit sales. Healthy monsoons in most parts of the

country, rise in minimum support price (MSP), favourable farm credit scenario coupled with shortage of agricultural labourers owing to the rise in employment opportunities in rural areas through National Rural Employment Guarantee Act (NREGA) led this growth.

West-India to drive growth Improving irrigation facility and good monsoons in the last four-ﬁve years have boosted agriculture produce and consequently tractor demand in western India.

Trend in tractor domestic sales 0.60

35% 30%

Units (in mn)

0.50

25%

0.40

20% 15%

0.30

10%

0.20

5% 0%

0.10

-5%

0.00

-10% FY05

FY06

FY07 FY08 ( ) Tractor sales LHS

Source: CMIE and CARE Research

AFTERMARKET SEPTEMBER 2011

FY09

FY10 FY11 ( ) Growth RHS

Maharashtra was among the highest growing tractor market during the last five years. CARE Research foresees the high growth momentum to continue in the western region as Maharashtra and Gujarat are expected to witness a healthy growth scenario in the coming four-five years. Low penetration levels, increased farm income and increasing demand from infrastructure activities would drive this growth. During the last two-three years, the demand in the southern regions have been adversely affected by floods in Andhra Pradesh (AP) and Karnataka which are the two major tractor markets in Southern India. However, CARE Research believes that the lower penetration levels combined with rising coverage of non-banking fi nancial companies (NBFCs) in agriculture credit would lead to improvement in credit availability and thus boost the tractor demand during the next five years. Historically, the northern region has dominated the tractor demand. Punjab, Haryana and western UP have the highest tractor penetration levels in India. However, during the last two years, floods resulting in crop loss have subdued the demand growth to some extent in this region. CARE Research expects growth in tractor demand to slow down in these regions in the next four-five year period. Eastern UP, which is among the largest agriculture belts in India is expected to drive northern India sales owing to low level of penetration. CARE Research foresees the replacement demand, increased infrastructure activities and shortage of farm labourers owing

AUTO POINT

Trend in repo rates during last two years 8.0 7.5

per cent

7.0

Trend in power contributed by tractors

Har

Pun

6.5

6.0

30 20

5.5

Guj

Him

South

Jar East Chh

Ker

Ass

Raj Mah West

Kar

4.5

India average

MP J&K Utt

5.0

North

Expected growth scenario next 4-5 years

4.0

to creation of various alternative employment opportunities through NREGA to push the tractor demand in Northern regions at moderate levels in the next ﬁveyear period.

Large Investments Expected Strong recovery in tractor demand during FY10 & FY11, after a bleak performance in FY09, raised the utilisation levels of all the key players considerably in FY11. Gauging the huge opportunities in the domestic market, almost all major tractor manufacturers have announced expansion plans for the next two-three years. It is estimated that around `1,800-2,000 crore has been lined up towards investments in capacity expansion and product development in the next two-three year period. CARE Research foresees the industry growth levels to come down from the current levels as the utilisation rates are expected to drop for the next two years. However, modest rise in domestic sales coupled with healthy export growth would

Jun-11

A r-11

Feb-11

Oct-10

Source: CMIE and CARE Research

Dec-10

Au -10

Apr-10

Jun-10

Feb-10

Dec-09

Oct-09

Au -09

Jun-09

Low

High

Low

High

Low

High

Low

High

Source: CMIE and CARE Research Note: Har: Haryana, Pun: Punjab, UP: Uttar Pradesh, MP: Madhya Pradesh, J&K: Jammu and Kashmir, Utt: Uttarakhand, Him: Himchal Pradesh, Bh: Bihar, Jar: Jharkhand, Or: Orissa, WB: West Bengal, Chh: Chhattisgarh, Ass: Assam, TN: Tamil Nadu, AP: Andhra Pradesh, Kar: Karnataka, Ker: Kerala, Guj: Gujarat, Mah:Maharashtra, Raj: Rajasthan

be able to maintain the utilization rates at healthy levels.

Demand Towards Tractors CARE Research estimates, large tractors (greater than 41HP) would

CARE Research estimates the share of mechanical and electric power in overall power used in agriculture sector has increased from 83 percent in FY01 to 86 per hectare in FY06 and further is estimated to have increased to around 90 per hectare in FY11

continue to drive industry growth and register a rise of around 11-12 percent during FY11-FY16 period. Continued buoyancy in southern and western markets due to lower penetration levels and increasing demand from non-agriculture application would drive this growth. Mid-size tractor segment (31-40HP) which dominates indus-

try demand is expected to witness marginal growth of around threefour percent on CAGR basis, while the demand for small tractor segment (less than 30HP) is estimated at a CAGR of ﬁve-six percent during FY11-FY16. Cannibalisation mainly from large tractor segment is expected to pull down the growth levels of mid-size tractor segment in coming years.

EBITDA To Benefit The growth in the top line of the tractor industry is expected to percolate to the bottom line, as margins in FY12 are estimated to witness a marginal rise of around 10-20 BPS. Although the rise in input prices kept the industry margins under strain in FY11, CARE Research foresees input prices to marginally soften in FY12, beneﬁting the industry margins by some extent. (The report is prepared by CARE Research, a division of Credit Analysis & Research. Views expressed are personal.)

SEPTEMBER 2011 AFTERMARKET

SPECIAL REPORT

Product specific dealership network

The dedicated dealership network could provide a better connect with the customers

Nabeel A Khan

ata Motors recently announced plans to set up dedicated dealerships for its range of vehicles including the ‘micro’ car Nano, new generation utility vehicles like the Aria and the Safari as well as passenger cars. The company plans to set up 300 dedicated dealerships for the Nano (in addition to more ‘innovative’ sales outlets) and another 100 outlets for its utility vehicles (UVs), including the Aria and the Safari, by the end of this ﬁscal, according to a company ofﬁcial. Ashok Leyland-Nissan is evaluating setting up a dedicated dealership network for it recently launched LCV—the Dost. M&M already sells its SUV—the Scorpio—through a dedicated dealership network in certain locations and has established a separate network for its passen-

AFTERMARKET SEPTEMBER 2011

ger car- Logan (now rechristened Logan Verito). Industry experts are of the opinion that given the economic and cultural diversity in the country, it may be an opportune time for vehicle manufacturers to evaluate the feasibility of product specific dealerships. The dedicated dealership network could provide a better connect with the customers and help dealers in targeting specific set of customers in specific locations depending on the economic, demographic and other social parameters. “In the global markets, you really don’t have such a huge difference in the big and small cars (or their customers) like we have in the Asian market. Also depending on the products, vehicle manufacturers have separate locations for the vehicle which are fast moving and others kind of vehicles. But I would see this

(product segment-specific dealership) more relevant for the Indian conditions, looking at the diverse customer profi le here,” India Leader for Automotive Practice, PriceWaterhouseCoopers, Abdul Majeed told Aftermarket. Tata Motors currently has around 250 odd full-range dealerships. After the dealership network restructuring exercise, the company would have three kinds of sales outlets catering to customers for the Nano, UVs and passenger cars. Few select dealers would continue to offer the complete range of its products/ models. Dedicated passenger car dealerships would be opened this fiscal, but the company is yet to decide on the number of such outlets. In the course of this fi scal, Tata Motors will transform some UV-specific dealerships and full-vehicle range dealerships

SPECIAL REPORT

to passenger car sales outlets. Analysts are of the opinion that the change of course could have been driven by the ‘alarming’ fall in sales of its Nano. The company’s passenger vehicle sales dropped across categories, with sales of Nano declining by 64 percent to 3,260 units in July this year. The company posted a 14.30 per cent rise in commercial vehicle sales at 40,798 units in the domestic market.

Industry players are of the opinion that it is no longer sufficient to have a good product/ model portfolio. Growing competition and widening model line up implies that the vehicle manufacturers also needs to communicate to the customer, offer products at suitable locations and gain confidence of the customer. India is a huge country with rural pockets, urban pockets with diverse set of customers within these pockets of scarcity and affluence. CMD, Carnation and Former MD, Maruti Suzuki, Jagdish Khattar observes, “This is something new and let’s see how it

works. I don’t know if they (Tata Motors) will also have dedicated after-sales service. Yet, I think a dedicated dealership may help in spiking up the sales.” It is felt that a dealership having premium as well as other sorts of products, all under one roof, will divert attention of the customers while having one segment product range can help the dealership to offer the customer right product. However, not every player is yet falling for this gameplan. Maruti Suzuki does not buy this opinion that dedicated dealerships can gain additional customers or help serve customers in more focussed manner. “We don’t see much viability of having product or segment-speciﬁc dealership”, Chief General Manager (Marketing), Maruti Suzuki, Shashank Srivastava told Aftermarket.

SEPTEMBER 2011 AFTERMARKET

STUDY

EV report on India market released by Deloitte

D Kumar Kandaswami Senior Director & India Manufacturing Leader, Deloitte, Touche Tohmatsu India

AFTERMARKET SEPTEMBER 2011

eloitte Touche Tohmatsu’s Global Manufacturing Industry Group recently released a report titled ‘Gaining Traction: Will Consumers Ride The Electric Vehicle Wave?’. Senior Director and India Manufacturing Leader of Deloitte Touche Tohmatsu India, Kumar Kandaswami stated that signiﬁcant technology barriers have to be overcome to give the consumers the driving experience that they want and at a price point that would be close to that of the vehicles with Internal Combustion Engine (ICE) before EVs are mass produced. Though a large section of the passenger vehicle customers including those from the educated and the afﬂuent are willing to consider buying Electric Vehicles (EVs), the

actual buyers with the current generation of technology would be in the range of three to ﬁve percent by 2020, according to the report. “Electric vehicles are no longer just an idea in the minds of car buyers. They are willing to consider the EV as a practical commuting option. While this is good news for manufacturers of EVs, it must also be recognised that there are a number of barriers that they have to cross before this interest to consider electric vehicles translates into sales for them,” Kandaswami said. As per the report which is based on a survey conducted across 17 countries including India, China, Japan, Europe and USA covering 13,500 respondents, the majority of potential consumers are likely to be educated and from urban locations.

STUDY

India seems to have an almost equal number of male and female potential buyers unlike some of the more developed markets where male buyers tend to be signiﬁcant. Interestingly, the early adopters are likely to be from the afﬂuent sections as compared to the middle income groups in the developed economies. A third of Indian customers expect to purchase the EV for around `four lakh and another third willing to go up to `seven lakh. This would correspond to the prices they would pay for their conventional cars with ICEs. Clearly, there is unwillingness to pay a premium for clean technology, as is found to be the case in most markets, he said. The acceptable purchase price varies between 20 and 50 percent of the annual income of the early adopter segment, except in the case of Europe where the respondents are willing to go

as high as 75 percent of the segment’s annual income. The report further stated that the respondents expect the manufacturers of the government to deal with additional development or manufacturing costs. Overwhelmingly, respondents disagreed with the notion of paying a premium for technology that is clean and can mean energy independence. In the case of China and India, about 20 percent of the customers would be willing to pay about ten percent more as premium. Further, there is anxiety in the minds of customers who expect the EV to deliver a range that is about four times what they report as their average commuting distance. In addition, the manufacturers have to overcome the challenge of charging time. About half of the customers would expect this to be two hours or less. In addition, there

is an expectation that the charging infrastructure is in place. While fuel price increase may not be the only factor that drives customers to buy EVs, it is a fact that they have a mental benchmark of 130-150 percent of the current fuel prices that will make them consider electric vehicles. Moreover, fuel efficiency of vehicles can also influence the pace of adoption. A little over 70 percent of the respondents said they would consider the EV if the fuel prices crossed `85 per litre. Conversely, 74 percent of the respondents are less likely to consider buying an EV if the ICE cars were to deliver 32 kmpl. While the notion of EV is appealing and the point of change seems to be in sight in terms of customer readiness, significant technological barriers have to be overcome in order to achieve mass adoption of EVs, he added.

SEPTEMBER 2011 AFTERMARKET

SPECIAL REPORT

Major fall in insurance rates detrimental to growth Abhishek Parekh

he falling cost of motor insurance policies, though attractive for end customers in the immediate term, may be detrimental for the growth of the motor insurance segment and for customers as well, in the long term. Fair and reasonable pricing of risk is a key factor in any segment of the insurance industry and players are putting this business sense aside in order to garner a marketshare. The detarifﬁ ng of the motor insurance segment has led to a drop in tariff by around 30 to 40 percent across policy horizon, according to Senior Vice President, Motor Insurance, IFFCO Tokio, Abhay Kumar. The key cause of concern, according to Kumar, is that the rates of comprehensive motor insurance are falling beyond ‘reasonable’ level with complete disregard to the associated risks. This is leading to free falling tariff scenario that is detrimental for the motor insurance segment as a whole and could lead to higher cost for customers in the long term. “The primary concern seems to be marketshare acquisition and nothing beyond that in some of the market segments,” added Kumar. There is a limited scope for innovative product offering or product differentiation in the current scenario of price war, as the end customer is mainly focussed on two key aspects while buying motor insurance: price and service quality. The quality of service is one of the major issues likely to turn into a differentiating factor deﬁ ned by how easy or smoothly can claims be settled and policy acquired. The process of buying a new policy and renewal needs to be streamlined for most motor insurance providers, in order to get to the next phase of growth. Moreover, a large number of existing two-wheeler

AFTERMARKET SEPTEMBER 2011

Abhay Kumar, Senior Vice President, Motor Insurance, IFFCO Tokio

buyers and owners would be graduating to purchasing four-wheelers as prosperity level rises and product offerings get widened. Hence, the growing passenger car sale is likely to be the major focus area for IFFCO Tokyo in the coming years. The company is focussing on growing its presence through multi-pronged approaches, including presence at automobile dealerships as well as direct selling network or agents. Most passenger car buyers continue to maintain and drive their car for around eight years and any insurance company has to be in regular touch with a customer for all of these eight years, if it has to make a mark for itself. Most of the customers would be in touch with dealers or authorised service centres for the three or four year warranty period, but is likely to go out of the dealers’ loop post the warranty period on the vehicle. An insurance company needs to build up multiple channels to ensure that the customers stays in contact and renews his/her policy. The company is a joint venture promoted by Indian Farmers Fertiliser Co-operative (IFFCO) and its associates, The Tokio Marine and Nichido Fire, which is one of the largest insurance companies in Japan. The Indian promoter’s contribution is 74 percent, while Tokio Marine has contributed 26 percent through Tokio Marine Asia. Tokio Marine has been awarded as Asia’s General Insurance Company of the year (2008) by the prestigious Asia Insurance Review. It has a widespread network of more than 170 ofﬁces across the country and many more in the pipeline for the coming year.

Photographs: Bhargav TS

SPECIAL REPORT

Vehicle parts recycled in an organised way

Vehicle Recycling: An eco-friendly method of reusing car scrappage Bhargav TS

ast year, it was reported that sales of new cars have increased by around 30 percent in India. Although people are constantly upgrading their cars to newer models, there are still a signiﬁcant number of vehicles being used for more than 15 to 20 years that are scrapped by the unorganised sector and have serious consequences for the society and ecosystem. Currently, scrapped vehicles are cut and sold by low-tech units in the unorganised sector and operate with low recoveries. Also, crude techniques are implemented that pollute the environment to a great extent. There is an urgent need to upgrade the old technology and processes and to set up modern facilities with greater capacity to deal with the expected increase in volumes of vehicles due for scrapping.

Need For GARC To address these issues, the Ministry of Heavy Industry in collaboration with the

Society of Indian Automobile Manufacturers (SIAM) has installed a recycling and demonstration centre in Global Automotive Research Centre (GARC) in Chennai, which was executed by National Automotive Testing and R&D Infrastructure Project (NATRiP). During the inauguration of the facility, Captain NS Mohan Ram, Chairman of SIAM said, “The modern scientific recycling unit like this reduces global warming and greenhouse gases. With efficient recycling, India can recover over 1.5 million tonnes of steel scrap, 180,000 tonnes of aluminium scrap and 75,000 tonnes each of recoverable plastic and rubber by 2020.” The recycling of parts and materials from motor vehicles is not new in the industry. For a long time, metal parts in particular have had a value, either in terms of reuse or recycling. When a car reaches the end of its useful life, it is usually passed on to a vehicle dismantler. The dismantler will extract the potential environment polluting materials such as operating fluids and batteries, and then sell the hulk on to a shredding operation to break the hulk in

SEPTEMBER 2011 AFTERMARKET

SPECIAL REPORT

to ﬁst-sized parts. Ferrous metals are then removed by magnetic separation and non-ferrous metals are sorted both mechanically and manually.

Composition Upgrades In modern vehicles, the composition of the car has improved substantially over the years. For example, ferrous metal content has decreased signiﬁcantly as lighter and more fuel-efﬁcient materials such as plastics have been incorporated into the vehicle design. Around 76 percent of the weight of the average car is metal, most of which comprises steel sheet. As mentioned earlier, the overall metal content of cars has declined rapidly over the past 20 years accompanied by an increase in the proportion of non-ferrous metals such as aluminium and magnesium. Currently, around 98 percent of the metals in cars could be recycled by the steel industry and re-smelting plants in the production of new steel and secondary metals such as aluminium and copper.

The Plastic Edge Plastics used in the car industry have risen considerably. Two decades ago, the average plastic content was 8.5 percent and today, the plastic content is around 11 percent. Plastics are used for their distinctive qualities, such as impact and corrosion resistance, in addition to reduce weight and cost. Due to its lightweight properties, the use of plastics can lead to considerable energy savings, for example, if a car weighs 1.3 tonnes without plastics, it consumes approximately an additional 1,000 litres of fuel during its life compared to a car weighing 1.1 tonnes with plastic. Despite

AFTERMARKET SEPTEMBER 2011

Vehicle parts recycled in an unorganised way

the relatively high recycling rate for End of Life Vehicles (ELVs), the proportion of plastics from ELVs being recycled is extremely low. One reason for this is the wide variety of polymer types used. Identification, by marking components at production or by improved sorting technologies, will be vital if the practice of recovering plastic parts is to become viable. One of the few plastic parts currently being recovered from ELVs is battery cases, accounting for 5,000 of the 14,000 tonnes of automotive plastics. The most common automotive plastics types are polypropylene (PP), polyethylene (PE), polyurethane (PU) and polyvinylchloride (PVC). PP accounts for approximately 41 percent of all car plastics (common in bumpers, wheel arch liners and dashboards), and like PE and PU (most commonly used in seat foam and gear knobs), which can be easily recycled. The operating fuels of the vehicle is the another major concern during vehicle recycling—the effects of inappropriate treatment of fluids removed during servicing are also significant. Increasing amounts of engine oil are being recovered and recycled however

lubricating oil has the greatest pollution potential.

Regulating Resources Most of the waste oil collected for recovery is processed (by removing excess water and filtering out particulates) and used as a fuel burnt in heavy industry and power stations. However, stricter emission limits and fuel quality controls resulting from environmental legislation could mean a reduction in the amount of waste oil used in this way. The recycling rate for car batteries is estimated to exceed 90 percent. However, a signiﬁcant number of batteries are still not recovered and recycled (for example, many scrap cars still contain batteries when they are shredded). A revision of the existing battery legislation is currently being undertaken. Currently, there are no regulations in India to deal with the disposal of ELVs. Two-wheelers which account for 80 percent by number are particularly important in India. The recycling centre at Chennai is a model unit and can expect many centres like this pan India.

(L-R) Dilraj Singh Gandhi, Principal Consultant, Consulting, PricewaterhouseCoopers; Mark Drabenstott, Secretary General, Global Coalition for Efficient Logistics; Prof KV Thomas, Minister of State for Consumer Affairs, Food & Public Distribution; R Dinesh, Event Chairman & JMD, TVS & Sons; Mike Nithavrianakis, Deputy High Commissioner, British High Commission & KV Mahidhar, Head, CII Institute of Logistics

Warehousing infrastructure: Key to faster logistics growth

he CII Institute of Logistics organised a twoday conference on ‘Building Warehousing Competitiveness: The Key to Logistics Success’ on 28 and 29 July, 2011 in Chennai. More than 300 delegates attended the conference from various industries. The Minister of State (IC), Ministry of Consumer Affairs, Food & Public Distribution, Government of India, Prof KV Thomas, inaugurated the conference. The two-day conference discussed various measures such as upgrading the Indian logistics industry in terms of technology and resolving the infrastructure as well as regulatory issues with a focus on warehousing. Delivering his inaugural address, the minister said that the Union Government has plans to create a Special Purpose Vehicle (SPV) to undertake studies on foodgrain storage handling and transportation. Besides, the Planning Commission is also conducting a comprehensive study to suggest measures for the development of a modern storage infrastructure to boost the growth of the warehousing sector; the centre has also introduced a negotiable warehouse receipt system in the country. The minister added that with a view to providing the much-needed renovation to the warehouses, the diversiﬁcation of services have been initiated on a

AFTERMARKET SEPTEMBER 2011

wide scale aimed at improving the agro-supply chain. “The efficiency of the private sector and the fundamentals of the public sector can be combined and the risks can be shared,” he said. The logistics market is valued at `5.6 trillion in 2010 and it is likely to touch around `17 trillion by 2015. The two-day event, had around eight exhibitors including Coign Consulting, Chep India, Indospace, TCI, and TVS Logistics. Participants from several segments including the officials of Tamil Nadu Warehousing Corporation, Voltas, Fenner, Blue Star, Ashok Leyland, Harley Davidson, TAFE, TVS Lucas, Delphi and Godrej were present. On the fi rst day, there were three sessions during which, speakers from various industries talked about their experience with warehousing. The session bought forth issues like transformation of warehouses from end-to-end distribution, regulatory issues faced in the warehousing sector and warehousing for aftermarket applications. On the second day, the conference covered issues like managing fi nished goods inventory, essential infrastructure, technology and advanced systems for warehouse management.

Warehousing Potential Warehousing accounts for about 20 percent of the domestic logistics market and is expected to grow

SPECIAL REPORT

at a rate of 35-40 percent annually, displaying high potential for growth over the next few years. “It is imperative for the sector to not only modernise but also adopt best practices to achieve a worldclass infrastructure platform,” Event Chairman & Joint Managing Director, TVS & Sons, R Dinesh said while addressing the event. British Deputy High Commissioner, Mike Nithavrianakis, spoke about warehousing competitiveness in the UK and said that commercial opportunities were enormous and both countries should address the significant opportunities for mutual benefit. In order to identify efficiency of the Indian logistics sector, CII has inked an agreement with Switzerland-based non-profit organisation GCEL last December. Through this initiative, the CII and GCEL will undertake a study on the efficiency of the Indian logistics industry and the various ways to help develop the industry, as it involves a large amount of trade. During the event, Principal Consultant, PricewaterhouseCoopers (PWC), Dilraj Singh Gandhi released an exclusive report titled ‘Building Warehousing Competitiveness’, prepared by CII-Institute of Logistics and PWC. Addressing it, he said, “From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions that improve efficiencies. In this report, we have tried to encapsulate our analysis on the warehousing services in India, their current challenges and future opportunities and discuss ways to improve and make warehousing more efficient.”

In the past few years, the space and size of the warehouses in automotive industry are growing as it is developing at a rapid pace in India. Manufacturing companies are facing difficulties for managing the warehouses due to the unprecedented growth. The transition time for the supply chain has also reduced compared to few years ago, as the technology is implemented from taking orders, distributor confi rmation for releasing the dispatch to invoice processing—all these creates pressure on warehouses. To overcome these complications, it is necessary for warehouses to modernise, as the pull-push and internal processing is becoming much faster. According to the President, Chep India, Pranil Vadgama, another challenge in the supply chain in India is the huge volume of the inventories as the industry is growing. To overcome this, collaborations in the supply chain via equipment pooling will help the companies to drive the efficient flow of materials and information.

Regulatory Issues The event also discussed the regulatory issues on warehousing, Director, Cogin Consulting, Arif Siddiqui, spoke about the leveraging the regulatory framework to optimise growth opportunities in the sector and other issues in the warehousing industry. The conference also discussed warehousing for aftermarket applications. Addressing the issues, the Group Head, Mobis India, Mukund Srinivasan spoke about the pan India opportunities in warehousing and added that creating multiple warehouses will help

the companies to take the product closer to the customer, which will help in delivering the product much faster and more easily—this method is called as ‘depot to customer network’. Other key factors for aftermarket warehousing are that it should have RFID (Radio Frequency Identification) technology and bar coding with TDS (Tax Deduction at Source) so that it will be able to improve warehousing operations faster. “Just having a warehouse management system with ERP (Enterprise Resource Planning) but without properly designed warehouse automation can become a major constraint” said the Chief Operating Officer, TVS logistics, KB Nagaraju. According to CII-Institute of Logistics and a PWC study, the dynamic market requirements have made it imperative for Indian warehousing players to overcome challenges and maintain, improve and sustain competitiveness. Various measures such as skill development, policy initiatives and government measures, IT adoption and increased investments in the sector can be effective in increasing the competitiveness of the Indian warehousing players. However, this journey can be smoothened and simplified if the challenges and concerns are addressed with collaborative efforts among all stakeholders including the government and its agencies, policy-makers, entrepreneurs, investors, logistics service providers, manufacturers, farmers and sellers. The mutual integration among them will rewrite the success story for the logistics and warehousing industry.

SEPTEMBER 2011 AFTERMARKET

CUTTING EDGE

Microﬁnishing:

The process of perfection Milind D Kelkar

the stationary needle bearing to com-

resorting to more and more

press the non micro-ﬁ nish surface.

varied and stringent parame-

The needle bearing thus rolling over

ters to be satisﬁed by surface ﬁnishing in

the brinnelled low spots, causes an

a bid to meet noise and pollution norms

undesirable clicking noise. a metal surface as a result of machin-

which can be achieved by grinding, is

ing operation will reveal tool marks,

sufﬁ xed by the word ‘Microﬁnished’ to

fragmented metal and chatter. When

ensure 200,000 KM warranty from the

a metal or steel part is machined, the

same part.

surface becomes fragmented and also annealed if a heat generating grinding

that automobiles transported to the

process is used. This type of surface

west coast from Detroit, had a much

will not support high bearing loads. It

higher rate of wheel bearing noise,

can cause poor performance or bear-

such as chatter and clicking than did

ing failure.

the cars sold closer to Detroit. It was

AFTERMARKET SEPTEMBER 2011

An examination of the texture left on

eg a mundane ﬁnish like 0.4 Microns Ra,

In the mid-1930’s, it was discovered

tions of the shipping carrier caused

esigners of auto parts are

as well as decreased warranty claims,

Milind D Kelkar MD, Grind Masters Machines

The weight of the vehicle and vibra-

Loads are equally distributed if

discovered that the bearing races

the shaft bearing journal have cor-

(which were only ground) brinnelled

rect geometry and surface texture.

during shipping due to the constant

Roughness on a bearing journal breaks

vibration of the railroad carrier.

up the supporting oil ﬁ lm and allows

CUTTING EDGE

the surface to contact each other and cause pre-mature wear. Waviness in roundness geometry is referred to as Chatter or Lobing and it is another factor which increases the bearing loads. The combination of roughness and waviness geometry are most detrimental to bearing life. Newer more fuel-efﬁcient smaller engines produce higher bearing loads than engines produced a decade ago. Engine test studies have shown that

Microfinishing IMPCO spent half a century to

some bearing surfaces with slight

develop the process that enables man-

cross hatch ﬁ nish speciﬁcations help

ufacturers to accurately remove the

engines maintain maximum hydrody-

amorphous material layer and thus to

namic oil ﬁ lm on journals, but oil seal

control surface ﬁ nish, bearing ratio,

surfaces generally do not require cross

geometry, and even size of bearing jour-

hatch ﬁ nishing. A cross hatch ﬁ nish

nals. The patented IMPCO Generating

on an oil seal may cause a vane-type

Bearing Quality (GBQ) process is used

pumping action to pump oil past the

by manufacturers responsible for nearly

seal. An oil seal with a straight- line

90 percent all crankshafts produced in

ﬁ nish is much more effective. Roughness average (Ra) surface measurement are nearly always shown on engineering drawings where sur-

Auto part designers are resorting to increas-

face ﬁ nish is speciﬁed, but it is not the

ingly varied & stringent

only surface measurement that indi-

parameters for surface

cates a good bearing surface. Ra can be misleading. Both the surfaces shown in sketch below have same

ﬁnishing in a bid to meet noise and pollution

Ra value, but surface with ﬂat areas

norms and to decrease

makes a better bearing surface with

warranty claims

good oil retention. Bearing ratio Tp is extremely important since it illustrates the

North America. GBQ Microﬁnishing has

amount of bearing area one can expect

been proven to assure efﬁcient, trouble-

from a surface.

free, long-term performance.

Grinding operations of crankshaft

The worldstar series by IMPCO

main bearings and connecting rod

is a benchmark for production

journals, camshaft lobes and bearing

machine tool reliability & automak-

and transmission shafts will produce

ers worldwide ﬁ nd this essential in the

bearing journals with many differ-

production of long life, high perform-

ent types of errors, including errors in

ance engines, both gas & diesel with

roundness, waviness, chatter, taper,

minimal warranty costs. Grind Master

barrel, hourglass, etc. Even though

Machines is an exclusive Licensee of

a bearing journal has optimum surface ﬁ nish, the hydrodynamic oil ﬁ lm

IMPCO in India & China. (The author is Managing Director,

cannot be maintained if any of these

Grind Master Machines. Views expressed

conditions exist.

are personal.)

A range of microfinishing machines by Grind Master Machines

SEPTEMBER 2011 AFTERMARKET

CUTTING EDGE

Advanced electronic diagnostic solutions for vehicles

ctia Muller, a French specialist in manufacturing electronic diagnostic and mechanical testing solutions for vehicle inspection centres and car repair centres, has developed Bilanmatic 10 000Mx, a test lane employing the latest technology for increased levels of work efficiency and productivity. The test lane ensures low maintenance costs even in adverse operating conditions, optimal serviceability of facilities and comes with an easy installation option for an entirely new, independent production line. The Bilanmatic 10 000Mx features: a can-bus, which allows efficient communication between test chassis and the console thus improving accuracy in measurement procedures, a 22” flat screen of excellent graphic quality, a USB port to provide fast and easy connections for peripheral

AFTERMARKET SEPTEMBER 2011

test equipments. The test lane is also conﬁgured for remote assistance, a new service which enables engineers to access test lane from a distance for instant settings update. The lane may be split into

The Bilanmatic 10 000Mx test lane ensures low maintenance costs even in adverse operating conditions, optimal serviceability of facilities and comes with an easy installation option for an entirely new, independent production line several test bays, allowing simultaneous testing of multiple vehicles: 16 possible users via 16 infrared remote controls (patented by

Muller Bem). The lane is perfect for drive-through testing. The Bilanmatic 10 000Mx is part of a comprehensive range of electronic diagnostic devices, car repair equipment and test lanes provided by Actia Muller. The range meets the most stringent demands of all key players in the global market. Leading car manufacturers, vehicle inspection networks and automotive service players opt for Actia Muller in their day-to-day business. Actia Muller has established its presence in India with Actia India and is looking forward to the launch of its vehicle inspection equipment in India as part of an initiative to ensure driver safety nationwide. The company’s test lanes have already been deployed in the country, one of which is at the Rishab Motors Hyundai dealership in New Delhi.

PRODUCTS

Tyre pressure indicators

igital tyre pressure indicators offered by Elak are accurate instruments for checking tyre pressure in two-wheelers, cars, trucks, etc. These pressure indicators are meant for automobile showrooms, wheel alignment centres, petrol pumps, transport corporations, automobile service centres, tyre showrooms, etc. The tyre pressure indicators are meant to replace the existing analogue type indicators currently used, which do not give accurate reading due to zero error and also due to wear and tear in mechanical components. Technical speciﬁcations include: accuracy of ±1 PSI; measuring range 0-150 PSI; super bright LED display (25 mm); dimensions 28 cm (H) x 17 cm (W) x 9 cm (D); weight 2 kg; operation at 220 V AC; and ﬁtting of 1/4 BSP nuts for connecting regular and coiled hoses.

Fasteners

BC Industrial Fasteners have developed fasteners that are useful for mopeds, scooters, motorcycles, tempos, cars, motors, buses, trucks, as well as in automobile industries. The components are Philips star punch & slotted machine screws, rivet self-tapping screws, nuts, washers studs, Allen screws, grub screws, BSP, BSPT, NPT, tapper plugs, copper packing washers, carriage bolts, NIB bolts, square head bolts, T-bolts, coach bolts, solid dowel pins, tapper pins, grooved pins, external/internal threaded pins, spring dowel pins/roll pin cotter pins, etc. These fasteners can be supplied as per IS, BS, JIS, DIN, ISO, ASTM standards and as per customers’ drawings or samples. Threads are in mm size coarse & fine pitch, BSW, BSF, UNC, UNF, BSP, 4-12 no of size, NC/NF threads and STS screws 2-14 no. The finishing is olive green, blackened, bright zinc (silver & blue shades), yellow zinc, cadmium, nickel & natural finish self colour. Applications are in buses, tractors, car body division, mopeds, motorcycles, scooters, automobile industries.

Elak Pvt Ltd, Chandigarh 160002. Tel: 0172-265 0308, Fax: 0172-265 5318 Email: info@elakindia.com, Website: www.elakindia.com

ABC Industrial Fasteners, Mumbai 400 072.

Corrosion-resistant paints

Halogen lamps

tar Paint & Oil Industries offers Rubberex acid, alkali, chemical and corrosion-resistant paints that are based on a highly stable rubber hydrocarbon compound of uniform quality, which gives a highly durable and anti-corrosive protective coating. These are fast air-drying paints with which the coating obtained is of excellent hardness elasticity and free from pores. Due to the chemical inertness, the paints shield the effects of water, moisture, stream, acid fumes, alkalis, salt vapors and transitory wetting organic solvents on metal surfaces. Applications include: protection from effects of acid fumes, industrial pollution and corrosion on steel structures and pipelines in reﬁ neries and petroleum complexes, stresses (Kate) of overhead roofs in sugar and chemical plants, suspension springs of motor vehicles, ship body from salty sea conditions, etc.

Tel: 022-2847 0806, Fax: 022-2847 0705, Email: response@abcfasteners.com, Website: www.abcfasteners.com

hoenix Lamps offers a broad range of halogen lamps for 2and 3-wheelers, passenger cars, commercial vehicles and off-road applications. The lamps are E1, E4 and DOT compliance. Additionally in India these lamps are approved by Automotive Research Association of India (ARAI). The lamps are offered as standard lamps, xenon blue, all season, dark blue and blue white lamps. Lamps with different wattages as high-performance lamps (+30%, +60%), & extra life lamps are also offered. The most widely used lamps are dual ﬁ lament lamps, namely H4 and HS1 lamps. H4 lamps are generally used in 4-wheelers and commercial vehicles, whereas HS1 lamps are used in 2-wheelers. These lamps are available in 12 V and 24 V with different wattages and life.

Star Paint & Oil Industries, Mumbai 400 023. Tel: 022-2265 2243, Fax: 022-2265 3201 Email: info@starpaintindia.com, Website: www.starpaintindia.com, Certiﬁcation: An ISO 9001:2000 Certiﬁed Company

Phoenix Lamps India Ltd, Noida 201 301. Tel: 0120-4012222, Fax: 0120-2562943, Mob: 09250507110, Email: halonix@halonix.co.in, Website: www.halonix.co.in SEPTEMBER 2011 AFTERMARKET

PRODUCTS

Switch tape equipment

Vehicle tracking systems

admatrac Electronics offers switch tape equipment that are used to find out the speed, acceleration of vehicles by using the time logged v/s preset distance. The logger is microprocessor-based having an alphanumeric display and a keypad for making entries. Parameters to be programmed are test-type, number of switch tapes, distance between switch tapes and number of laps. Once programmed the equipment is ready to conduct the test. The time is recorded to the 2nd decimal place and the parameter in m/sec² or km/ hr is displayed instantly. An audible beep from the logger signifies the end of the test and the results can be viewed again for each distance per lap after which the data may be erased. Until erased, the data remains in the non-volatile memory of the logger. The equipment also has a provision for mock testing of the set-up before commencing the actual test. Technical specifications include: size of the logger -8” (L) x 4” (W) x 1.75” (H); operating voltage -12 V DC external source; current consumption -600 mA (max); size of switch tape -0.04 m (W) x 1 m (L); memory size -2K non-volatile; and time recorded (least count) -0.01 sec.

Dadmatrac Electronics Pvt Ltd, Gurgaon 122 016. Tel: 01274-634 1459, Fax: 01274-634 1459 Mob: 098104 94100, Email: admin@dadmatrac.com Website: www.dadmatrac.com

Tel: 022-2412 4540, Fax: 022-2414 9659, Mob: 09867000456 Email: response@kusamelectrical.com Website: www.kusamelectrical.com Certiﬁcation: An ISO 9001:2000 certiﬁed company

Tractor parts

Halogen lamps

ractors (including also the earthmoving machines) components encounter low speed-high torque loading for longer periods of time. These are subjected to intense variations in loading, poor engine cooling due to low travel speeds and frequent stop-start conditions. This induces extreme thermal and mechanical stresses in tractor engine parts, and only the proper foundry and machining practices can produce a tractor part that is robust enough to survive the elements and the harsh ﬁeld operating conditions. Garima Global does it with guaranteed precision.

Garima Global Pvt Ltd, Mumbai 400 053. Tel: 022-4037 8888, Fax: 022-6756 8999 Email: email@garimaglobal.com Website: www.garimaglobal.com Certiﬁcation: An ISO 9001:2008 certiﬁed company

AFTERMARKET SEPTEMBER 2011

usam Electrical Industries offers KusamMeco’s vehicle tracking systems (model KM-VTU01) that are suitable for many applications, such as vehicle security, fleet management, BPOs, etc. With the superior sensitivity GPS module on broad, the systems can easily get a fi x even in urban canyon condition. Unlimited number of vehicles can be tracked & six individual zones can be monitored at the same time on the same screen. The vehicle tracking systems can track the vehicles using GPRS as well as SMS. SMSes can be sent using panic button to pre-defi ned numbers in case of emergency from the vehicle. Applications are in bank vehicles, emergency vehicles (ambulances/police vans/fi re brigades), private taxi services, public transport systems, logistics, fleet management, individual vehicle monitoring, BPOs (drops & pickups), school buses, etc.

Kusam Electrical Industries Ltd, Mumbai 400 015.

hoenix Lamps offers a broad range of halogen lamps for 2- and 3-wheelers, passenger cars, commercial vehicles and off-road applications. The lamps are E1, E4 and DOT compliance. Additionally in India these lamps are approved by Automotive Research Association of India (ARAI). The lamps are offered as standard lamps, xenon blue, all season, dark blue and blue white lamps. Lamps with different wattages as high-performance lamps (+30%, +60%), & extra life lamps are also offered. The most widely used lamps are dual ﬁ lament lamps, namely H4 and HS1 lamps. H4 lamps are generally used in 4-wheelers and commercial vehicles, whereas HS1 lamps are used in 2-wheelers. These lamps are available in 12 V and 24 V with different wattages and life.

Phoenix Lamps India Ltd, Noida 201 301. Tel: 0120-4012222, Fax: 0120-2562943 Mob: 09250507110, Email: halonix@halonix.co.in Website: www.halonix.co.in

PRODUCTS

Automotive oil seals & O-rings Hydraulic lifting platforms

pex Precision Agencies offers a wide range of automotive oil seals and O-rings manufactured by Functional Oil Seal Industrial Co Ltd, Taiwan. The range includes: general use seal to high pressure seals with ﬂange seals, side lip seals, triple or more lips seals, shock absorber seals, outer direct lip seals, wiper seals, muddy seals, PTFE lip seals, convoluted lip seals, with back-up ring seals, felt lip seals, leather lip seals, split seals, bore cover seals, axial lip seals, unitised seals, valve stem seals, clutch seals, bearing cover seals, air-conditioning compressor seals, bonded washer seals, ring packing seals and gamma ring seals.

Apex Precision Agencies, Mumbai 400 088. Tel: 022-2551 6158, 2555 0900 Fax: 022-2556 4987 Email: hemani@bom3.vsnl.net.in Website: www.apexmachatronics.com

Spring steel circlips

enith Industrial Products have developed external and internal spring steel circlips, E-clips, snap rings, C-rings, spring washers, ﬂat sections, square sections double coil type spring washers, external and internal star washers, disk fan lock washers, bearing washers, wave washers, disk spring washers, knurled washers, push-on washers, belleville washers and safety washers. These can be supplied as per IS, BS, JIS, DIN, ISO, ASTM and GOST standards or as per clients’ samples or drawings. Material grades include En-9, En-42J, brass, SS-304 & 316 grade. Applications are in machine tools, engineering industries, textiles, automobiles, electrical & electronics, pump & valves and home appliances, as well as in other service industries.

Zenith Industrial Products, Mumbai 400 072. Tel: 022 2847 8806 Fax: 022-2856 0705 Email: zenith@zip-india.com Website: www.zip-india.com

ruck-mounted hydraulic lifting platforms from Vanjax Scales are available with scissor type lifting mechanism. These lifting platforms are ideal for lifting loads to the required height levels on the machines, ramps, storage racks, etc. Loads are evenly balanced on the table. Strong steel base and upper frames are free from torsion. Scissors arms are self-guided on rollers with ball or taper roller bearings. Hydraulic cylinders can be actuated by manual pumps or power racks with either AC or DC supply. Hydraulics is designed for continuous operation. Lifting and lowering can be done at a constant speed. The overload protection value is inbuilt in the hydraulic circuit. Other safety features can be incorporated as per customers’ requirements. The hydraulic lifting platforms have all-steel fabricated structures with wheels of suitable size. They are available in standard capacities ranging from 500 kg to 5,000 kg and special purpose non-standing tailormade to individual customer’s requirements up to 25 tonnes.

Vanjax Sales Pvt Ltd, Chennai 600 098. Tel: 044-4282 1000, Fax: 044-4598 5700 Mob: 09789976611, Email: info@vanjax.com Website: www.vanjax.in Certiﬁcation: An ISO 9001 certiﬁed company

Dome nuts

riends Engineering Works offers dome nuts that are available in different dimensions. These dome nuts are manufactured using good quality raw materials so that they are resistant to chemicals and temperature variations. The dome nuts are extensively used in automotive industry for ﬁ xing the wheels, steering columns and exposed car body parts. Technical speciﬁcations include: M-5 to M-16, 3/16” to 5/8”.

Friends Engineering Works, Ludhiana 141 010. Tel: 0161-2673622, Fax: 0161-2673623 Mob: 09872464194 Email: few@sify.com Website: www.fewnuts.com Certiﬁcation: An ISO 9001:2000 Certiﬁed Company

SEPTEMBER 2011 AFTERMARKET

ADVERTISERSâ&#x20AC;&#x2122; LIST

PgN o. Advertiser...........................................Tel................................. E-mail ............................................Website

BIC ..... ADEA Awards........................................+91-22-30034650...........prachi.mutha@infomedia18.in ...... www.adea.in

7......... Anand Automotive Ltd .........................+91-11-26564542 ...........arpita.bhatia@anandgroupindia.com .... www.@anandgroupindia.com

3......... Bosch Limited ......................................+91-80-22999269 ..........sanjay.chakravarty@in.bosch.com .... www.boschindia.com

51 ....... Engineering Expo .................................+91-9819552270 ............engexpo@infomedia18.in .............. www.engg-expo.com

9......... Federal Mogul ......................................+91-124-4784530 ........customercare.india@federalmogul.com ... www.federalmogul.com

BC ...... Litel Infrared Systems Pvt Ltd ..............+91-20-66300636 ..........sales@litelir.com ............................ www.litelir.com

5......... Madhus Garage Eqpts ..........................+91-80-26660656 ..........madhus@madhusindia.com .......... www.madhusindia.com

45 ....... Maha India Automotive Testing Equip...+91-11-40601464 ...........raj.rengarajan@maha-india.in ...... www.maha-india.in

41 ....... Naman Electronics ...............................+91-79-22900186...........namanelectronics@gmail.com ...... www.namanelectronics.com

17 ....... Subros Ltd ............................................+91-11-23414946 ...........pmehra@subros.com ..................... www.subroslimited.com

FIC ...... Sushma Industries ...............................+91-80-28397463...........marketing@sushmaindustries.com .... www.sushmaindustries.com

Q Our consistent advertisers

(UTTARAKHAND)

AFTERMARKET SEPTEMBER 2011

PRODUCT INDEX

Product ................................................................................Pg N o.

Product ................................................................................Pg No.

AC service equipment ........................................................... 5

Gear pumps .......................................................................... 3

ADEA - Automotive Dealership Excellence Awards ............... BIC

Goetze p istons ...................................................................... 9

Alternatives........................................................................... 3

Halogenl amps...................................................................... 56

Automotive air-conditioning................................................. 57

Halogenl amps...................................................................... 58

Automotive oil seals & O-rings ............................................. 59

Heatings olutions.................................................................. BC

Automotive p arts .................................................................. 57

Horns .................................................................................... 3

Automotive p roducts ............................................................ 7

Hoses & tubes ....................................................................... 17

Automotive r elays ................................................................. 57

HVACs & evaporators ............................................................ 17

Batteries ............................................................................... 3

Hydraulic lifting platforms ................................................... 59

Bottle cap torque testing systems......................................... FIC

Instant drying/curing technology for water-based colour .... BC

Brake p ads ............................................................................ 3

Lightings ............................................................................... 3

Brake testing equipment ...................................................... 5

Lubricants............................................................................. 3

Bus A C ................................................................................... 17

Motor testing systems ........................................................... FIC

Clutch plates & cover assemblies .......................................... 3

Nitrogen inďŹ&#x201A;ators ................................................................. 41

Collision repair systems ........................................................ 5

Pressure sensors & indicators ............................................... FIC

Compressors ......................................................................... 17

Relays ................................................................................... 3

Computerised wheel aligners ............................................... 41

Spark p lugs ........................................................................... 3

Condensers ........................................................................... 17

Spot welding equipment ...................................................... 5

Cooling m odules ................................................................... 17

Spring steel circlips ............................................................... 59

Corrosion-resistant paints .................................................... 56

Spring t esters ........................................................................ FIC

Crimp testers ........................................................................ FIC

Starter motors ...................................................................... 3

Cylinderl iners....................................................................... 57

Switch tape equipment......................................................... 58

Diesel smoke meters ............................................................ 41

Tensile t esting ....................................................................... FIC

Dock levellers ....................................................................... 57

Testing & safety technology.................................................. 45

Dome n uts ............................................................................ 59

Torque tool testers................................................................ FIC

Exhibition - Engineering Expo .............................................. 51

Torque .................................................................................. FIC

Fasteners .............................................................................. 56

Tractor p arts ......................................................................... 58

Filters.................................................................................... 3

Tyre changers ....................................................................... 5, 41

Force & torque gauges.......................................................... FIC

Tyre inďŹ&#x201A;ation e quipment ...................................................... 5

Force ..................................................................................... FIC

Tyre pressure indicators ....................................................... 56

Force/pressure calibration & testing equipment .................. FIC

Vehicle tracking systems....................................................... 58

Four gas analysers ................................................................ 41

Wheel a ligners ...................................................................... 5

Fuel injector cleaners ........................................................... 41

Wheel balancers ................................................................... 5, 41

Gas a nalysers ........................................................................ 5

Wiper b lades ......................................................................... 3

Gasoline systems .................................................................. 3 FIC : Front Inside Cover BIC : Back Inside Cover BC: Back cover

SEPTEMBER 2011 AFTERMARKET

AFTERMARKET SEPTEMBER 2011

1230434

JUNE 2010

Over Apr.-June (10-11)

Apr.-June (11-12)

% Change

12%

2000703

1254197

Avg. Mthly. Prdn. (2 Months) in F.Y.

2010-11 Apr.-June

2246020

1361245

2047740

2201165

Passenger Car

Avg. Mthly. Prdn. (2 Months) in F.Y. 2010-11 Apr.-June

June 10 (Prodn.)

June 11 over

12%

1373538

JUNE 2011

% Change

Truck/Bus