I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor
Vol. 12 No. 39
www.a mo n l i n e .i n
19 November 2012
24 Pages
` 50
INTERVIEW
FOCUS
NEW MATERIALS
Pg 10
NEWS IN BRIEF Volvo commits `2000 crore investment in India Anand Mohan Bengaluru
V
olvo Group will invest `2,000 crore in its Ind ia n operat ions in the coming years said President and CEO, Volvo Group, Olof Persson. The investment will be directed towards manufacturing, research and development and facilities for trucks, buses a nd const r uct ion equipment. This investment is in addition to the already a nnounced `1,800 crore that’s been self financed by V ECV towards modernisation of the Eicher range, the new engine plant, bus body plant, paintshop and test facility. Olof said, “By 2016, the engine plant will produce 100,000 engines, of which, 30 percent will be exported to Europe.” This indicates of a target of selling 70,000 units in the Indian market by then. He further stressed on frugal engineering in the Indian market, saying “it is an area we have developed and Eicher is also very good at.” The company is taking localisation one step at a time. The CEO said that once the engines are done, it will take up other components in a step-wise manner.
DATA MONITOR
“PERSONAL VEHICLE BUSINESS IS A NEW LEARNING FOR US” NK Rattan, COO, Tractor Business and President, Corporate Sales and Marketing, Force Motors
Pg 08
Scan this code on your smart phone to visit www.amonline.in
Car sales grows 23 percent, festive season lifts mood Nabeel A Khan New Delhi
P
ushed by festivity and new launches, the passenger car recorded the highest sales growth of 23.09 percent, since January 2011, in October at 172,459 units. Overall domestic vehicle sales have risen by 14.81 percent in October 2012 over October 2011, according to the latest data available from the Society of Indian Automobile Ma nufacturers (SIAM). However, industry experts feel that the excitement in the market may not last for long because of the vital factors like high interest rate and inflation. “The October figure does not give any sign of recovery of the market. This growth has come
because of the festive season as the OEMs have brought new models offered freebees and discounts. The market is continuing to be impacted by high interest rates and ‘liquidity crunch’ as well as rising fuel prices. These factors have added to the negative sentiments as far as numbers are concerned. However, there is no doubt that medium and long term growth of the automotive market in India is robust,” said Partner (Automotive) PriceWaterhouse, Abdul Majeed. SIAM had also recently done a negative revision of car sales growth forecast for the financial year to March 2013 to between one and three percent from an earlier 10 to 12 percent. Echoing to Majeed’s concern, Director General, SIAM, Vishnu Mathur said, “It would
be too early to read this as a sign of recovery of the market because high interest rates and fuel prices, uncertain economic environment and low consumer sentiments may continue to impact adversely. The real picture will be out by November sales.” In the period of April to October 2012, overall growth in domestic vehicle sales stood at around 5.26 percent over the same period last year. The passenger car sales grew by 2.84 percent compared to the same period a year ago. Majeed added that if in this financial year the industry maintains four to five percent growth that will be good enough. “I believe that till March it is going to be a challenging situation for the industry and the revival of the market may start in the next
Abdul Majeed
fiscal. Medium and heavy commercial vehicles sales are hit badly, so overall the industry is going to face some short term challenges. The slack will continue for the whole of FY12-13. This fiscal even a growth of four to five percent will be good enough,” Majeed said.
Oetiker to focus on localisation, scale economies Anand Mohan Mumbai
S
wiss clamps manufacturer Oetiker is targeting to grow by around 65 percent in the next fiscal led by higher sales and localisation driven competitiveness. It grew by around 10 percent this fiscal compared to the previous year.
Local Sourcing
Top 5 Car Makers Company
Oct-11
Oct-12
Change
Maruti
51,458
96,002
86.56%
Hyundai
33,001
35,778
8.41%
Tata Motors
28,575
29,951
4.82%
M&M
21,065
30,082
42.81%
TKM
10,762
12,281
14.11%
Top 5 Car Exporters Company
Oct-11
Oct-12
Change
Hyundai
15,324
23,006
50.13%
Nissan
10,038
5,882
-41.40%
Maruti
4,137
7,106
71.77%
Ford
2815
3371
19.75%
Tata Motors
730
271
-62.88%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
“Oetiker Group manufactures and supplies around 1.4 billion clamps per annum. Of that, 70 percent is supplied to the automotive industry. In India, we began production in 2009. Last year we made about 22 million units, this year, we are at about 24-25 million clamps, and next year, we are targeting to touch around 40 million units,” Country Head, Oetiker India, Ashwani Keswani. Around 80 percent of Oetiker India’s sales come from its key product stepless ear clamps. These clamps are made from slit steel that the company was importing from Europe until recently as the raw material-slit steel- was not
Stepless clamps manufacturing at the Oetiker plant Ashwani Keswani, Country Head, Oetiker India
available in India. Last year, the company spent around one million Swiss francs in installing a slitting and oscillating machine that has recently become operational. This has helped in local sourcing of steel, making them cheaper to produce. The company had a four month inventory, a buffer, Keswani said, “is a safety and a contingency buffer, should anything go wrong with the new
machine, I have four months of inventory. This is something that a customer will like in us that we have a buffer since the process is new. Slowly, we will bring down our inventory. Localising the slit steel has also brought our production costs down.” The company is looking to introduce a new product for the aftermarket segment next year. For that, the company is setting up a new production
line. The challenge in this segment, Keswani said, “is that it is too disorganised. But with organised players coming up like Carnation, TVS service and Bosch service, we will be able to cater to this market.” He added that, “Bosch already uses Oetiker clamps so we automatically become their first choice.” Oetiker expects sales of three million clamps from the aftermarket segment by next year.