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. 13 No. 03
w w w. a mo nline . in
11 February 2013
INTERVIEW
32 Pages
Pg 08
`50
Pg 14
“ERP Can Save 15-20 pc In Costs”
Booted Hatchbacks
Thiru Vengadam, MD & CEO, IFS Solutions India Pvt Ltd
The Sail sedan will see competition hotting up.
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ABS Race Heats Up Anand Mohan Mumbai
B
osch and Continental are burning the midnight oil to be the first to introduce two-wheeler single-channel antilock braking system (ABS) units in the Indian market. ABS on two wheelers is a fairly new feature with only the Honda CBR250R and TVS Apache RTR180 having it as an optional feature. Both these bikes use combined ABS systems, which means it prevents both wheels from locking during emergency braking situations. It is an ideal system but shoots up the cost of the bike. Our market’s price sensitivity does not allow manufacturers the luxury of providing combined ABS systems on smaller capacity motorcycles. That’s the reason why component majors Bosch and Continental are developing single-channel ABS units specifically for the Indian market.
Single-channel ABS dumbs down the system in a way, robbing it of its complete function of preventing both wheels from locking. Instead, the ABS is applied to a single wheel, essentially halving the effect. That translates to a lighter unit with fewer parts, making it cheaper. All that’s needed is a motorcycle with a hydraulic brake system. Both component majors see potential for success with this technology. They are working closely with OEMs to introduce variants that offer single-channel ABS as soon as possible. Balasubramanian, Deputy Managing Director, Bosch Chassis Systems India Limited said, “We are confident we will be the first to introduce single-channel ABS in the Indian market. Expect it sometime this year.” Continental revealed in December 2012 to Auto Monitor that prototypes of their ABS units were undergoing testing in collaboration with OEMs. The company is also looking at India
Growth Pangs DATA MONITOR Top 5 2W Makers Company
Dec-11
Dec-12
HML
521,922
527,375
Change 1.04%
HMSI
179,857
199,237
10.78%
Bajaj Auto
169,485
198,394
17.06%
TVS
146,747
144,561
-1.49%
Suzuki
26,539
33,313
25.52%
Top 5 2W Exporters Company
Dec-11
Dec-12
Bajaj Auto
94,214
99,956
Change 6.09%
IYM
11,686
22,360
91.34%
HMSI
11,465
18,275
59.40%
TVS
21,158
17,169
-18.85%
HML
18,354
14,240
-22.41%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
The projections of the AMP remain unfulfilled, and the duty structure of the auto industry leave much to be desired. Nabeel A Khan reports.
A
s the first month of the year concludes, the automotive industry continues to perform poorly despite a number of measures to create excitement in the market. Sales volumes remained weak in all segments. The industry keeps hope alive and expects new measures from the government to support it. The recent rate cuts announced by the Reserve Bank of India have raised hopes in the industry. “This cut is just the beginning and shows that the focus is on industrial growth and improving
the economy. This will be reflected in the coming months’ sales. However, for further strengthening we need more such announcements,” said Vishnu Mathur, Director General, SIAM. The RBI reduced the repo rate – the rate at which banks borrow money from RBI – by 25 basis points in its third monetary policy. RBI also cut cash reserve ratio (CRR) – the share of deposits banks have to keep with the central bank – by 25 basis points. Commenting on the move, Pawan Goenka, President, Automotive & Farm Equipment
Photograph: Bosch
Single-channel ABS will soon make its appearance on Indian motor bikes.
ABS prevents the wheels from locking, even when the road is wet.
as an export hub for single-channel ABS systems. Even if a small percentage of our 15 million plus two wheeler market adopts ABS systems, we have a major market waiting to be tapped. Single-channel ABS may not be as effective, but if it reduces braking distances and allows control over at least one of the two wheels during emergen-
cy braking, a major accident can be averted. The UN has marked 2011-2020 as the decade of action for road safety with a target to reduce road deaths by 50 percent. Two-wheeler riders are the most susceptible. This ‘something is better than nothing’ approach is a good place to start to improve motorcycle safety, but it should only be a start.
Sectors, Mahindra & Mahindra, said, “Over the past few months, economic growth has clearly bottomed out, and the slowdown in manufacturing is a concern. Today’s combo of a repo as well as CRR cut is a welcome announcement and hopefully will help revive investments in the core sectors which the economy needs. Coupled with the recent policy announcement by the Government, I see this as a good beginning.” The rate cuts will certainly allow the cost of capital to go down and eventually help the industry, since most cars in India are financed. However, the macroeconomic situation remains under pressure, and that is not a good sign. At 5-5.5 percent, the country is experiencing the lowest economic growth in ten years. “However, the global scenario getting better, so we may expect a better economic environment which will help India also,” said Rakesh Batra, Partner, Automotive prac-
tices, Ernst & Young.
Taxes and Excise Duties Yet vehicle makers continue to rely on government for help in kickstarting new initiatives to support them, such as restructuring excise duty. The Society of Indian Automobile Manufacturers (SIAM) called for a new excise structure which should be in tune with the gap in the Automotive Mission Plan (AMP). SIAM has recommended that the AMP be extended by 10 years to 2026, as it has been falling short in achieving its target by over $34 billon. “The recommendation has been accepted and work is on,” Vishnu Mathur said. However, he did not clearly state whether the revenue target will also be upgraded from $145 billion target till 2016. “We are working on it, it has to be seen if the revenue volume will also increase looking at the extension of it.” The industry has sought for
Contd. on Pg 17
EDITORIAL Knight In Shining?
N
othing can make a person or an industry feel low as the fact that everyone around seems to be feeling the blues. Facts and figures that keep emerging reveal less than the figures that were announced the previous time. The numbers are touching nadir. And the only bleak hope to rely on is the RBI, who the industry is hoping, will reduce interest rates hence encouraging buyers. Amidst all this, another knight in shining armour has emerged out of nowhere. At the inauguration of the fourday event ACMA Automechanika, Praful Patel, Minister for Heavy Industries and Public Enterprises, had an announcement that would bring about a sigh of relief. He said that he had promised to meet the Finance Minister P Chidambaram and he would “press for providing a stimulus, mainly for the automobiles sector to spur growth in the wake of economic slowdown”. Whether the stimulus will come or continue to lag is another issue. But one can imagine the hope in the eyes of the auto manufacturers who must have heard this then or later.
exclusive for the aftermarket industry. One of the auto sectors that was hitherto largely ignored. And not because no one cared. OEMs did their job of providing spares for the vehicles they sold. But with the rise in disposable incomes, and the fact that the luxury segment too is expected to grow by a larger margin, the scope for aftermarket products are increasing. It is no small wonder that plenty of companies from outside the country have something unique to offer owners that will buoy them to make grandiose their vehicles. And so while the industry is playing it cautious, they are aware that the best time to put their foot forward is now when the chips are down. Comments can be sent to jayashree.mendes@network18publishing.com
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While the ACMA Automechnika event is expected to grow in the future, it is for the first time that India has something
QUOTES Praful Patel, Minister for Heavy Industries and Public Enterprises, at the opening of ACMA Automechanika
P Balendran, Vice-President, General Motors India.
I will be meeting Chidambaram in the coming week. I think it is important that the country’s entire economy gets a stimulus because auto sector will automatically be a beneficiary of that stimulus.
The market continues to remain sluggish. It is expected to improve only when the interest rates comes down. As far as my expectation is concerned, the market is expected to improve only after the budget.
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CONTENTS
12
INTERVIEW “ERP Can Save 15-20 pc In Costs”
08
says Thiru Vengadam, MD & CEO, IFS Solutions India Pvt Ltd, as he aims to target Tier I, Tier II, and Tier III suppliers.
08 MIRA Aiding EV Development
12
UK auto consultancy MIRA Ltd. has been providing its engineering services to Indian OEMs through its JV with Caepro. Clients of MIRA-Caepro also have access to MIRA’s testing grounds in the UK.
14
CORPORATE A Treat For Enthusiasts
09
Mercedes-Benz India has launched a series of initiatives to reach out to customers and motoring enthusiasts.
09
Hot New Trend: Booted Hatchbacks
14
Chevy has launched the Sail sedan, and Honda plans to follow. The sedans, essentially enlarged versions of previous hatchbacks from the same manufacturers, will benefit all.
Hyundai Launches R210-7v
17
The R210-7v is being touted as a real value for money proposition for Indian construction equipment buyers.
Playing Safe
18
Patel Promises To Seek Solace For Auto Industry
19
Bosch and WABCO team up to promote vehicle safety in India.
Promises to meet Finance Minister P Chidambaram and press for providing a stimulus, mainly for the automobiles sector to spur growth in the wake of economic slowdown.
THE OTHER SIDE Now It’s Batteries On John Sculley’s Agenda
30
10
John Sculley, the man famous for having “fired” Steve Jobs from Apple, has invested in an Indian online tyre store Changemytyre.com through his VC firm
10 Anders Grundströmer, Scania CV India’s new MD
Grundströmer comes from the passenger car industry where he worked with SAAB for 15 years. He holds an an MBA and it was in 1992 he joined Scania and took up the challenge to develop Scania distributorship concept in Europe as Managing Director Scania Czech Republic and Slovakia in 2000. Business Unit between 2004 and 2008.
Auto Monitor
11 FEBRUARY 2013
INTERVIEW
8
“ERP Can Save 15-20 pc In Costs” Says Thiru Vengadam, MD & CEO, IFS Solutions India Pvt Ltd, as he aims to target Tier I, Tier II, and Tier III suppliers for his software solutions. He elaborates on how his Enterprise Resource Planning (ERP) solution differs from the competition, and how the supply chain can improve their efficiencies using IFS’ ERP, and gain a cost advantage. Excerpts from an interview with Jagdev Kalsi. How is your ERP system different from your competitors? Our system architecture is such that the applications are derived from a mother system. Suppose a supplier requires only 10-20 users on his ERP system, since he is a Tier2 or 3 supplier. He can use the same ERP system that an OEM with over 2000 users would use. So, we have the same system for all the different types of applications. The architecture is so scalable, it can efficiently operate irrespective of volume or number of connects or users. Nobody else has that. SAP has multiple software products, one for large companies, another for medium-sized ones, and yet another for small companies. These are not product variants, but different products altogether. They aren’t derived from mother product like ours. So what advantage does your system have over others? The advantage we have is that we have the same system for all, irrespective of what tier you are in, or what complexity you want to put in. Our software is one single application which has everything (about 80 modules). Its advantage is that any part of our application is same, unlike others’ where they have a core system with other purchased applications running alongside, hooked into them. So when you move from ERP to a CRM system,
in their case it’s different from the ERP. Project management system, document management system, workflow, HR, etc. are in-built in our system. So our target customers in the auto industry won’t need anything else apart from our system for all applications. Does it have a cost advantage as well? It will obviously give them a cost advantage. Our system is flexible and you need not buy all the 80 modules at one go. One can buy seven or eight modules from our range of 80 modules, and later buy more when required. Since it’ll fit in perfectly, like a building block, you can keep adding more. This is the most flexible approach. In others’ case, even if the software doesn’t get costly, the company will have to get hardware to put all the software into. It will further take a lot of time to configure as well. Software configuring and learning will take a whole longer time in that case. So time to install and benefit also gets more. What is the acceptance that systems like ERP have, especially in the supply chain? Indian manufacturing industry is still in infancy in terms of adoption of integrated IT systems. They all have distributed islands of information. There
is a long way to go before our companies can claim to be fully automated. We have implemented one for Toyota in Sri Lanka. Because OEMs are limited, our major focus is now on auto ancillaries. From a business point of view, all of them need it. But if you look at whether they can afford it, different companies are in different situations. Cash flow is also a common issue in the auto industry all over. Based on our global survey we feel the adoption of ERP systems will be more on the service management side than on manufacturing side. Manufacturing — they are somehow already doing it. Customers have got more to do with turnover time, servicing timings, etc., than a Kanban system in manufacturing. What kind of cost savings can a manufacturer expect in the long run after adopting such a system? G ener a l l y, c omp a n ie s achieve any where between 15-20 percent cost savings at the completion of implementation of ERP. The first project I took up was for M&M (back when I was with SAP), and they also had tractors and farm equipment, but at the end of three years, they initiated an internal study to see the return on investment. They had a significant benefit and decided to implement it in
Thiru Vengadam, MD & CEO, IFS Solutions India Pvt Ltd.
all their units. On an average, 15-20 percent is the savings in the first iteration of an ERP system. ERP implementation is not a one-time activity, it is a continuous improvement. What is the reason for your focus on the auto industry? We have 800 out of 2000 customers in the manufacturing industry, out of which 120-140 are from the automotive sector. In India, we are focused on five industry verticals, automotive and discreet manufacturing is
one of our focus areas. We want to go for automotive and discreet manufacturing only due to capacity constraints. There are other players for other industries. We don’t have the capacity to go after all of them. How much does the automotive sector contribute towards your business? Around 10 percent of global revenues of IFS come from automotive related industries. Our net global revenue in 2011 was 2.6 billion Swedish krona.
11 FEBRUARY 2013
Auto Monitor
NEWS
9
A Treat For Enthusiasts Mercedes-Benz India has launched a series of initiatives to reach out to customers and motoring enthusiasts. Anand Mohan reports.
M
ercedes-Benz India i naug u rated a specially created off-road test track at its Chakan facility where participants can be taught the basics of off-road driving in Mercedes SUVs. The German car major wants to increase involvement in the brand by organizing various events under its performance drive umbrella. Eberhard Kern, MD and CEO, Mercedes Benz India, commented, “Mercedes Benz is a performance brand, and has been committed to performance driving since the beginning of
motorsports. Being a performance brand, our engagements are not limited to race drivers alone but include motoring enthusiasts as well.”
Six different programs have been lined up: Young Star Driver Program: It’s a platform to spot and nurture young Indian motorsport talent in the age group of 15-25 years. Applications can be sent through the MB performance drive website, from which 50 candidates will be selected. The group will then be trimmed down to 12 participants at the Buddh circuit.
The three top performers will get to train in Germany, finally stepping up to the SLS AMG GT3 for the DTM championship and possibly F1. Star Off-Road Experience: Participants get to try out Mercedes SUVs at the purpose built off-road test track at their Chakan plant. Track Day Experience : Includes driving AMG cars at the Buddh International circuit. The event runs over two days where trained professionals will teach participants performance driving techniques. Inter nat iona l Dr iv i ng Experiences: Includes driving the entire range of MB cars on snow or embarking on a world tour that lasts 47 days and covers 17,000km AMG Driving Academy: With training by motorsport veterans in the nuances of performance
Being a performance brand, our engagements are not limited to race drivers alone but include motoring enthusiasts as well. driving in AMG cars from the Mercedes stable, it’s an ideal way to begin a career in motorsport. Star Drive Experience: An engagement that enables experience of MB cars and SUVs through specially created driving situations. At the off-road track at the plant, MB let the media sample the capabilities of its SUVs. It involved climbing up and down a 40 degree incline, axle twisters, and driving on a 30 degree incline.
Descending a 40 degree road, you activate the DSR switch and the Merc SUVs will give you a speed range of 4-18 kph. When set to 4 kph, you can easily cruise down the incline without the overhangs scraping, or feeling any discomfort. Climbing up is equally easy. The brakes hold on for about 3 seconds if you stop midway through the incline. You have to just dab the accelerator and the torquey SUVs slowly climb up the gradient without a fuss. Once you have negotiated the incline, you move on to the axle twisters. You can manually lock the differentials, making your way through a seemingly impossible path with ease. These events are meant to understand the capabilities of MB vehicles so that customers don’t just think about them as luxury vehicles, or just a way to get from point A to B.
Auto Monitor
11 FEBRUARY 2013
NEWS
10
Now It’s Batteries On John Sculley’s Agenda John Sculley, the man famous for having “fired” Steve Jobs from Apple, has invested in an Indian online tyre store Changemytyre.com through his VC firm, finds out Nabeel A Khan.
J
ohn Sculley, the man who has led two of the world’s best known companies – Pepsi Cola and Apple Inc, was recently in India to explore a new investment opportunity. After leaving Apple, Sculley has been mentoring and investing in new businesses as co-founder and Managing Partner of Inf lex ionPoint Acquisition Corporation. Inf lexionPoint recently invested in setting up an online tyre store -- Changemytyre. com. The e-commerce site is now looking at entering the automobile battery market. Changemytyre.com was started in India six months ago and the company plans to expand its operations to 19 cities and tie up with new dealers. Currently it has warehouses in five big cities in the country. “We are not sure if the battery business will be under the same site, or if a new brand will be introduced,” said Sculley. The company has already
made various successful ventures in e-commerce in the US. The most famous among them are Buy.com and Wirefly.com, which were later sold to acquirers. The company is also working on an IT supply chain in India, and hopes that the business will grow to $2 billion dollar in the next two years. The company aims at becoming the country’s largest distribution for at least 90 percent of the tyre brands in India. “The size of the replacement tyres market is 13 million tyres for cars, and 36 million tyres for two-wheelers. We hope to tap at least five percent of this market.” Neeraj Chauhan, founder and CEO of Changemytyre.com said. Arguing for the viability of an online tyre business in India, Chauhan said that it will be very tough for customers to find so many options in one place, apart from the competitive pricing and delivery facilities.
The size of the replacement tyres market is 13 million tyres for cars, and 36 million tyres for two-wheelers. We hope to tap at least five percent of this market. The main customer base for the company is expected to be the luxury segment, where margins are likely to be good, and customers easy to approach. “Most luxury car owners send their drivers for tyre changes, but with this online portal we can provide an insight about the price of the product,” Chauhan said. In the next two years they hope to clock a turnover of `500 crore. ChangeMyTyre.com offers alloy wheels and two-wheeler
bike tyres along with the various other four-wheeler options the portal already offers. It delivers purchases to all major cities and towns across India. It is in the process of rolling out a network of Changemytyre.com authorised fitment centres across India, where customers who have purchased tyres online can have their
tyres fitted. The brands available on ChangeMyTyre.com include Apollo, Continental, Goodyear, Bridgestone, Michelin, MRF, Nexen, Pirelli and Yokohama, among others. The site offers convenient payment options including credit cards, debit cards and netbanking, without any additional charges.
John Sculley, MP Inflexion Point & Co-Founder, ChangeMyTyre e-commerce business after they became mature –like www.buy. com , will you be selling this Changemytyre.com also? No, I am not to decide on this. My work is to make it a successful. I am not an expert on India. My role is to bring the capital in, to help in mentor and do the branding. What we do with it will depend on different factors.
What are the reasons for choosing Indian automobile industry as your investment destination? I have been coming to India every year. Some time even more once in a year for the last 17 years. I have been involved with BPO industry and spent lot of time in Bangalore. The business I am in North America, into two categories- one is supply chain specific to IT distribution. We consolidated $1.6 billion turnover in North America. We are working on similar strategy in India and ASEAN countries. We hope to get about a billion dollar turnover this year that will include through acquisition. We are going for massive acquisitions. We acquire companies transform them and sell them. I have been helping entrepreneur and financing them. We think the price model is going to be dramatically different here from the western middle class.
Smart phone today which is $500 will be $100, tab will be $100. We have a lot of experience in supply chain and working at a very low margins. What attracted you to enter the automobile tyre? What attracted me in tires is that, I know the two most successful tyre and batteries developers in the US. For example with hawkwire we started same numbers a few years ago and then sold it, I became very interested in these two products. If you look at the tirerack, this tiny numbers start in ecommerce.. in two year we were over 180 mn and then we sold the company at $ 780 million , now building MDlive we had a 1.3 million last year 26 million this year—87 million next year… once the formula … Since you sold your other
Automobile industry has great potential to grow here? What we intrigue in India is about, in addition to the , I had a trip in Bangalore for about 25 km. what we saw was terrible roads. So new cars come with tyre and the life of the tires on the Indian roads is not more than three years. So the replacement market is going to be important. Right now the replacement market for tires is lower than the world average its about 70 pc of the tires sold..even now auto industry is slowing down… We are not attracted by the growth in the automobile industry at this point of time because the numbers are still very small. We are focused on the things which are pretty much in our control . We are finding our business model which works. We have some stories which are compelling us. Once you get the right model it picks up this is ecommerce. We started e-commerce business which is largest seller of mobile –Wirefly.com in the US. We grew from nothing to $500 million in turnover in four years. So once you get model right in e-commerce, because its virtual you can scale up very fast. Things which were learning is that the profit for many of dealers cannot only be selling of the tires but installation of the tires also. We can focus on
the premium market. The time has changed from Desktop, it has moved to laptop and pad. E-commerce is also growing very rapidly. The population is very young and enthusiast. We see that major e-commerce site’s profitability in India is working well? It’s always different from what we have in the west. We had 3G, and advance technology, but here in India it is at the nascent stage. Once these technology comes up the future of e-commerce will further grow. The difference between 2G and 3G is incredible. So our point is that the experience of e-commerce with new technology is going to be dramatically different in India by 2014 compared with what is now. And this is not going to be only for automobiles or tires, there would be opportunity for the many kind of e-commerce products. Look at China in 2005, India is now where China was in 2005. I think, its highly likely that India is going to be as successful relatively as China may be a decade behind. Any plans to explore other medium of business in automobile in India? It would be a mistake to rule out anything at this point of time. What we do now is that we have the experience collectively of building and running business at very frugal cost expenditure than the physical distribution system. We understand this business. We understand the financing of this business. We have experience in virtual business not so much in India but at other places. If it is necessary and we see the opportunity to move in out of virtual
we will look at it. We have access to capital. At the moment we will start with virtual. As an investor, do you see automobiles as lucrative option? Yes, I think so. But our interest is not only the automobile business. We don’t want to be in automobile business, if you look at –we see where the money is made. And according to me the money is not made in automobiles anymore. The money is in accessories and service contract. I don’t know what the history is in India but our sense is that looking at the accessories, looking the service and replacement like tires, many be batteries. Looking at how the dealers can make money all those things is very attractive. What I am saying when the transformation is going on, there is big middle class and the opportunity is huge. Do you feel that tapping the opportunity in the servicing of automobile will be a good idea for you? We can see opportunity is there, then yes. But we don’t only see that there is a market but also we have to see that we can be successful in that. Beyond automobiles which are the sectors where do you look for investment in India? Anything, what is important to the emerging middle class. So it could be washers, dryers, air conditioners anything. It can be anything that has to deal with furniture, anything in the electronics specially dealing with the young people. We are pretty comfortable that in our IT –Supply-chain business minimum $2 billion turnover in the next two years.
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NEWS
MIRA Aiding EV Development UK automotive consultancy MIRA Ltd. has been providing its engineering services to Indian OEMs through its JV with Caepro. Clients of MIRA-Caepro also have access to MIRA’s testing grounds in the UK. Anand Mohan Mumbai
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ut in the West Midlands, right in the heart of the United Kingdom, is a one-of-a-kind 760 acre facility. At this facility can be found 24 purpose-built circuits, containing some 95 km of roads. The premises house engineering facilities built with the objective of developing vehicles for the future, subjecting them to all the foreseeable conditions a vehicle would have to endure. The facility is called MIRA. This independent testing ground is a platform for manu-
facturers around the world to develop vehicles with the help of services provided by MIRA Ltd. In India, MIRA Ltd. runs a joint venture (JV) with Computer Aided Engineering specialists Caepro, who together provide engineering and testing solutions to Indian OEMs locally with assistance from its parent in the UK. MIRA-Caepro’s Managing Director, John Roebuck, says, “Safety, durability, ride and handling, dynamics, electronics and control systems, and every development need a customer requires is available at MIRA-Caepro”. The company has no plans as of now to build a test facility in India,
Safety, durability, ride and handling, dynamics, electronics and control systems, and every development need a customer requires is available at MIRA-Caepro. they will only be providing engineering services. However, Roebuck says that they are looking at the possibility of tying up with facility providers in India so that MIRA-Caepro can do the testing locally. By having an engineering services branch set up in Pune, the company makes its services available locally, reducing turnaround time, improving communications and saving cost. The Indian JV is also working on electric and hybrid vehicle development with Indian OEMs. Roebuck declined to comment on the clients they are working with (although it’s not that hard to guess), but mentioned that interest has been high and that most major Indian OEMs have programmes they are working on. MIRA UK’s hybrid and EV division senior engineer Puneet Mathur says that MIRA can support pure EV and hybrid EV vehicle development. “It starts with gathering customer requirements, studying the market, and considering the usage, after which we begin simulations with the right powertrain configuration.” The next step is software development for electric vehicles that involves integration of the battery management system with the rest of the vehicle. Prototype development and testing follow at the facility in the UK. MIRA-Caepro will be increasing its workforce in India to about 25 engineers by this year-end to cater to different verticals of development in the automotive space. Considering that most Indian OEMs are developing new products and international OEMs are developing India-specific products, there seems to be plenty of scope for service providers like MIRA to thrive in the Indian market.
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11 FEBRUARY 2013
NEWS
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Hot New Trend: Booted Hatchbacks Chevy has launched the Sail sedan, and Honda plans to follow. The sedans, essentially enlarged versions of previous hatchbacks from the same manufacturers, will benefit all. Jagdev Kalsi New Delhi
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he three-box sedan has always been an Indian favourite. Apart from the large exterior dimensions, the boot or ‘dicky’ remains the most wanted feature that can skyrocket a car’s desirability quotient. Of late, the Indian market has seen a boom in the sales of booted hatchbacks, with almost all manufacturers angling for this segment. Chevrolet has now joined the race with a sedan sibling to their recently launched Sail U-VA hatchback. But unlike Maruti Suzuki, Tata, and Honda, Chevy has created a full-sized version of the hatchback instead of limiting the exterior length of the car to gain the excise benefits available to vehicles under four meters in length. Although the Chevrolet Sail sedan is 4.2 meters in length,
Chevrolet has still managed to price it attractively with the base variant priced at `4.99 lakhs exshowroom in Delhi, which is very much in the same league as Maruti Suzuki Dzire, which however has been kept under the four meter length limitation to save on excise duties. Lowell Paddock, President and Managing Director, GM India, attributes the competitive pricing to Chevrolet’s motto of achieving heavy localisation. He also highlighted the fact that the 1.3 litre SDE SMARTECH common rail diesel engine was developed by the GM Diesel Engine Technical Center in Turin, Italy, with the support of engineers in Pune and Bangalore to achieve a balance between cost, performance, and fuel efficiency specifically for the Indian market. The engine has an aluminium alloy DOHC cylinder head, lightweight pistons with graphite coated skirts, and low tension piston rings, to
keep the weight in check. While manufacturers such as Hyundai and Toyota are sceptical about starting diesel engine plants in India due to the unclear
diesel policies of the government, Chevrolet is already manufacturing diesel power plants in India. Putting to rest any speculation about the company’s game plan
changing with government policies, Lowell Paddock endorses the company’s decision as he believes that GM’s diesel plant in India is one of their most flexible
units, which can switch from petrol to diesel and vice versa easily, taking into account the demand for the power plants. However, three of Chevrolet’s best selling cars, the Beat diesel, the Tavera, and the Cruze, are all powered by diesel engines. Although the government has left the option of increasing the price of diesel to petroleum companies, it can only be in the range of 50 paisa per litre per month. The industry however believes the step is right, as it would create parity between petrol and diesel powered cars. Chevrolet is also looking to capture a bigger piece of the market by offering a 3-5-3 scheme, in which the customers will get a 3 year or 1 lakh kilometre (whichever comes first) standard warranty, a 5 year or 1.5 lakh kilometre engine and transmission warranty, and a 3 year or 45 thousand kilometre Chevrolet Promise, which is a free maintenance package. While the trend of booted hatchbacks began with the success of Maruti Suzuki Swift Dzire and Tata Indigo CS, Opel had tried to work on the same lines in the 90s with the Corsa and Corsa Sail, which didn’t do very well. Of late, though, the B+ booted cars have managed a better growth percentage than their hatchback counterparts, with a four percent YoY increase in sales in December 2012 (cumulative growth for Maruti Dzire, Toyota Etios and Tata Indigo), against the almost flat growth of their hatchback siblings. The trend of premium booted hatchbacks has been advantageous to manufacturers and consumers alike. “People are able to take the advantage of a three-box car and the manoeuvrability of a hatchback in the same package, which accounts for the consistent demand for these cars in the market,” said a Delhi based Honda dealer, who are themselves preparing to cater to a wider range of buyers when Honda brings out a booted version of the Brio hatchback, called the Amaze. Manufacturers benefit from rolling out more products, and more importantly, vehicles with varied body styles from the same platform with many common parts. These vehicles save on investment, and the cost burden can be reduced further by designing the car to avail excise benefits by reducing the length, etc. It also gives manufacturers a bigger portfolio, which allows them to cater to customers with different needs, and have a car available at every price point.
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NEWS
Hyundai Launches R210-7v Anand Mohan Mumbai
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yundai Construction Equipment India Pvt. Ltd. (HCEIPL), a subsidiary of Hyundai Heavy Industries, Korea, today launched its R210-7v excavator at the BAUMA CONEXPO SHOW 2013. The R210-7v is being touted as a real value for money proposition for Indian construction equipment buyers. The R210-7v is equipped with “mechatronics” for optimized fuel consumption and productivity, apart from offering lowest operating cost for 20-22 tonne class excavators. The seamless matching of workloads with power requirement saves 7-10% fuel per hour, and ensures enhanced earnings per dig. The machine is attractively priced in the Indian construction equipment market and is expected to generate an enthusiastic response from end users. Hy u nda i Con st r uc t ion Equipment also showcased its technologically advanced R210-9 excavator at the BAUMA
CONEXPO in line with their plan of migrating to the 9 series products. Both these excavators offer 7-10 percent fuel savings, with 8-14 percent improved productivity, resulting in higher earnings per dig apart from the promise of Hyundai reliability and low operating cost. Commenting on the occasion, Ki Young Kong, Managing Director, said, “I am delighted to offer the widest range of excavators from the real value for money proposition to the technologically advanced 9 series to our customers in India. We have been operating in Indian market since 2007 and it is a key market for us. The range caters to the growing needs of customers in various applications and markets in the Indian construction equipment space.” Dheeraj Panda, Head Marketing and Key Account Management added, “As per our study of the market, the 20-22 tonne class of excavators captures about 50 percent of the total pie of the Indian market. Hence through the launch of the R210-7v and R210-9, we aim
Eicher Forays Into Bihar
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E Commercial Vehicles Limited (Volvo Group and Eicher Motors JV) has inaugurated the modern and contemporary dealership of Eicher branded trucks and buses, Pawan Automotives Pvt. Ltd. at Begusarai, in Bihar. The 3S dealership (Sales, Service & Spares) facility is expected to strengthen the company’s resolve and commitment to provide sales and after-sales support to the rapidly growing customer base of Eicher in the Eastern part of India. Located at NH 3, Harpur Chowk, the facility is a well-equipped set spread across 17,000 sq ft. with contemporary tools and equipments. The service team at the new touch point has been trained at the Eicher training centre. Eicher has 250 touch points nationally with 20 touch points in the Eastern region and plans to continuously expand its foot print to reach closer to customers. Speaking on this occasion, G. Sekar (Senior Vice President – Sales & Marketing), said, “Our products are emphasized for customer orientation. Our efforts to provide value to customers have borne fruit with increased customer acceptance reflected in growing vehicle sales. Since Eicher products are fuel efficient, they are known for its overall low cost of ownership and the reason can be found in the ‘Eicher advantages’.” Also present on the occasion Sree Ramarao (Senior Vice President – Aftermarket) said that the focus is on improving customer experience at the dealerships. “We want to get closer to our customers and ensure that they are able to get their products serviced much easier and faster. We are continuously enhancing the standards of our distribution centers so that we provide best-in-class service and uniform customer experience.” Over the years, Eicher has ensured enhanced service coverage through: * Wide network of close to 250 dealer outlets across the country * Higher availability of parts * Mobile service vans with all dealers * 24x7 helpline.
to provide a wider range to our customers in this segment. Last year we touched the mark of 2400 machines across various segments with a growth rate of 23-24 percent, which is not only a testimony of customer delight but is also a strong vote of confidence from our customers about our products and technology.” The 9 series excavators provide stability, greater digging and crowd force, along with advanced hydraulics for improved controllability and smoother operation in arduous conditions like quarries and mines. One of the unique features of the 9 series excavator is the Data Download feature which enables customers to monitor progress of the excavator at site. Hy u nda i Const r uct ion Equipment (HEC) also plans to add more touch points to ensure quicker response to customer queries by way of additional 3S (sales, service, and parts) offices through its dealers. The company is also adding a few workshops through its dealers to offer solutions in the area of reconditioned aggregates to its valued customers.
17 Contd. from Pg 1 the extension not only because it was falling short of revenue, but also wanted the support offered under the plan to continue. Since the AMP was created in 2006, compounded annual growth rate (CAGR) for the vehicle industry till 2012 was over 14 percent, which has now fallen well below 10 percent. Even if the industry grows at 10 percent till 2016, the revenue of the automobile industry will be $111 billion by 2016 against the projected $145 billion. In FY12, the revenues of the automobile industry stood at $76 billion, which is $5 billion short of the AMP target. Taxes on cars in various states vary between 57 percent and 82 percent, which is another major area of concern. The industry badly needs a uniform tax, and is pitching strongly for a goods and services tax (GST) to be introduced immediately. SIAM has demanded a reduction in taxes (excluding small cars) to 22 percent from the current 75 to 82 percent, and a concessional excise duty structure of 10 percent on small cars and two-wheelers. They also want excise duty on chassis to
be reduced to 10 percent from the current 14 percent.
CVs and Diesel With moderate agricultural growth and sustained slowdown in Industrial activities, M&HCV sales declined by 20-22 percent. Future demand is weak on account of lower replacement volumes. With delays in resolution of the mining issue, mining bans in Goa and Odisha, and slow execution of National Highway projects, tipper demand is also very low. This is probably the worst hit segment. For a revival, vehicle manufacturers suggest activating the JNNURM and similar schemes for intercity buses. The government should also purchase vehicles for its institutions such as municipalities. SIAM also wants the government to offer incentives to banks financing Indian vehicles outside the country. “Clarity on the diesel policy is very important because investments have been kept pending. There have been signs of deregulation of diesel, but also speculation of levying tax on diesel. We need clarity on this,” Rakesh Batra said.
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11 FEBRUARY 2013
NEWS
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Playing Safe Bosch and WABCO team up to promote vehicle safety in India. Anand Mohan Chennai
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t’s often said that when you drive in India, you’re putting all your luck on the line. Safety is secondary to luxury, and in the price sensitive segments, the cost of the safety feature. To be competitive in the largest selling segments in the automotive industry, manufacturers do not offer even basic safety features like ABS (Antilock Braking System) and ESP (Electronic Stability Program), which are standard fitments in many countries the world over. Bosch India and WABCO India
teamed up recently to increase awareness of the effectiveness of ABS and ESP, and the status of these features in India compared to the rest of the world. By January 2014, compulsory fitment of ABS will be part of regulations in all the major countries of South America including Brazil, while in the US and Europe it has been compulsory for a while now. ESP became mandatory from September 2011 in the US and Canada; the EU will adopt it by November 2014, Australia by the end of this year, and Japan and Russia will get it by next year. By contrast, India reports a lowly 19 percent ABS installation
Bosch demonstrates ABS at work on the Swift Dzire.
rate on new cars and an abysmal one percent ESP installation rate. If that sounds bad, according to WABCO, ABS in commercial vehicles stands at around 10 percent and that includes retrofitting.
WABCO demonstrates ABS at work on the Tata Prima.
At the WABCO proving grounds in Chennai, WABCO and Bosch organized a Safety Drive, a demonstration of the
India reports a lowly 19 percent ABS installation rate on new cars and an abysmal one percent ESP installation rate. effectiveness of ABS and ESP in passenger cars and commercial vehicles. Balasubramanian, Deputy Managing Director, Bosch Chassis Systems India Limited said, “The ‘Safety Drive’ symposium is an initiative to garner the collective effort of all stakeholders who support the cause of improved vehicle safety in India.” He added that it is imperative that Bosch contribute towards making vehicles safer, and critical safety features become a mandatory part of
any vehicle that plies on Indian roads. WABCO too is pushing for increased used of ABS in commercial vehicles, citing an increase in accidents. P. Kaniappan, W hole-Time Director, WABCO India said, “With the rapid growth in traffic volumes and transportation routes throughout India, we are facing an alarming growth in the number and severity of road accidents.” Of the approximately three lakh M&HCVs sold last year, only ten percent had ABS installed. WABCO has developed an ABS system that can be retrofitted onto any bus or truck. Bosch says that unlike WABCO’s retrofitted ABS systems, Bosch doesn’t have a product for the aftermarket as things are more complicated in cars compared to CVs. Only if regulations are in place will there be a major increase in ABS and ESP applications. Until then, it is imperative that vehicle owners consciously opt for vehicles fitted with these life-saving features.
11 FEBRUARY 2013
NEWS
Patel Promises To Seek Solace For Auto Industry
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fter inaugurating the four-day long ACMA Automechanika show joi nt l y or ga n i se d by Automotive Component Manufacturers Association of India and Messe Frankfurt from Germany, Minister for Heavy Industries and Public Enterprises Praful Patel had something to tell reporters gathered there. He has promised to meet the Finance Minister P Chidambaram soon and press for providing a stimulus, mainly for the automobiles sector to spur growth in the wake of economic slowdown. “ I think it is important that the country’s entire economy gets a stimulus because auto sector will automatically be a beneficiary of that stimulus,” he said. Patel said, “I understand the Finance Minister’s dilemma. On one side, he has to raise the revenues and on the other side he has
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to maintain (growth) momentum. It is a delicate issue, I don’t want to speak on his behalf...” “But, certainly, the automobile sector needs some kind of stimulus package. How will it be done and which way is the best one that could be told after meeting the Finance Minister,” he added. In the wake of poor performance by the automobiles industry in the current fiscal, Patel said, there is a need to revive various other projects like infrastructure and power in the country, which are related to auto industry and can build the momentum for growth. Also, interest rates need to be brought down as it has also impacted the sector’s performance, he added. Passenger car sales in the country declined by 12.5 percent to 1,41,083 units in December last
year, the steepest fall in the last four months, due to high interest rates, rising fuel prices and overall slowdown in economic growth. During April-December 2012, the overall year-on-year growth in domestic sales was 4.57 percent. As regard to overall automobile exports, they declined by 2.92 percent to 21,86,834 units in during April-December 2012 compared to the same period last year. The Society of Indian Automobile Ma nufacturers (SIAM) has revised its sales forecast for passenger cars this fiscal to zero to one percent, as against an earlier forecast of 1-3 percent. To revive the sector, SIAM has suggested that the government reduce excise duty on cars other than small cars to 20 percent and said the duty on 10-13 seater vehicles should be at par with buses, that is 10 percent.
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Exide In Technical Pact With Jap Firm Shin-Kobe
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xide Industries Ltd has entered into an additional technical collaborative arrangement with Shin-Kobe Electric Machiner y Company Ltd, Japan. The initiative is expected to reap dividends through enhancement of quality of automotive batteries and cut back on warranty costs. The `5,000-crore lead acid battery maker is witnessing pressure on its margins largely due to slowdown in automobile sector. Exide had an existing technical collaboration w ith Shin-Kobe. However, Exide Managing Director and CEO T.V. Ramanathan, said that the current arrangement will pave way for introduction of “different” newer technologies against payment of royalty. It will lead to “implementing new manufacturing process” for automotive batteries, thereby ensuring higher productivity and quality, Ramanathan said. In both ways, the company should gain in terms of better cost economics. Asked if the new arrangement would lead to roll out of fresh products, he said that such opportunities will be looked into by the research and development wing of the company.
Quality gap
SIAM has revised its sales forecast for passenger cars this fiscal to zero to one percent, as against an earlier forecast of 1-3 percent.
Industry analysts feel that though Exide grew substantially in size over the last one-and-a-half decade, the company suffered from a
Industry analysts feel that though Exide grew substantially in size over the last one-and-a-half decade, the company suffered from a technology gap. technology gap. For long, it banked on the technology collaboration with Furukawa that was inherited through acquisition of Standard Batteries. The concern was expressed by former CEO S.B. Ganguly – who steered the company on growth path – while relinquishing office in April 2007. “I always looked up to the Japanese manufacturers on quality issues and I aspired for Exide to cross that benchmark. However, I regret we are yet to achieve that,” he said, when asked whether he had any regrets while hanging up his boots.
Latest initiative The first major push to mitigate the technology gap was witnessed in early 2012, when Exide roped in Pennsylvaniabased East Penn Manufacturing Co Inc, makers of ‘Deka’ branded lead acid batteries as technical collaborator. The company’s share price on Tuesday moved by less than one per cent, to close at `122.40, on the NSE.
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CitroÍn’s Car & LCV Fleet Fast Start To 2013
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GLOBAL
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itroÍn has started 2013 with an exceptional eet sales performance for both its car and LCV
ranges. In January, CitroĂŤn’s eet cars took 3.32 percent of the total eet sector with 2,740 registrations. This represents a year on year increase for January of no less than 19.39 percent, a signiďŹ cant increase compared to the market, which was up by just 8.41 percent. CitroĂŤn also delivered a strong showing from its LCV models. CitroĂŤn LCV eet sales were up by 10.16 percent to 1,627 registrations to take 9.89 percent of the LCV
Spearheading CitroĂŤn’s fleet car success is the DS range, which is going from strength to strength. market during the month. Market growth was also encouraging, with an increase of 10.12 percent compared with January 2012. Martin Hamill, CitroĂŤn’s Fleet Director, commented: “This strong eet sales performance going into 2013 is great news for CitroĂŤn and builds on the brand’s success in 2012, when it
CitroĂŤn Enters A New Era With TECHNOSPACE With the Xsara Picasso, C4 Picasso, Grand C4 Picasso and C3 Picasso, CitroĂŤn has built a real success story by asserting itself as one of the leaders in the compact MPV segment. Since 1999, the brand has sold almost 3 million Picassos. Now CitroĂŤn is entering a new phase in the sector by revealing the CITROĂ‹N TECHNOSPACE concept, which points to the brand’s future compact MPV that will be released from the second half of 2013. A demonstration of CitroĂŤn’s ‘CrĂŠative Technologie’, the new concept ushers in a new era with: s ! RECORD #/ EMISSIONS LEVEL OF G KM ACHIEVED THANKS TO THE new EfďŹ cient Modular Platform 2 (EMP2), which features efďŹ cient architecture and minimises weight. s -ULTIPLE TECHNOLOGIES FOR ENHANCED COMFORT INCLUDING A FULL touch driving interface with a high-deďŹ nition 12’’ panoramic screen. s 0REVIOUSLY UNSEEN PROPORTIONS THAT COMBINE COMPACT SIZE LENGTH M WIDTH M HEIGHT M WITH STANDARD SETting interior space and class-leading boot capacity (537 Litres VDA). s 3TRONG EXPRESSIVE DESIGN WITH DYNAMIC LINES AND HIGH TECH headlamps complemented by 3D-effect tail lights inspired by the latest CitroĂŤn concept cars. The concept will be revealed at the Geneva Motor Show. again outsold the eet market in both cars and LCVs. Today’s CitroĂŤn car range offers eet
CitroĂŤn LCV fleet sales were up by 10.16 pc to take 9.89 percent of the LCV market during the month.
drivers, at virtually every level, an economical, well equipped and environmentally responsible choice of vehicle. Spearheading CitroĂŤn’s eet car success is the DS range, which is going from strength to strength. At the same time we are also seeing tremendous sales performance from CitroĂŤn’s award-winning LCV range, which continues to appeal to all classes of business user from the sole trader to the largest eet.â€? Scott Michael, CitroĂŤn’s Head of Commercial Vehicles & Business Centre Programme, explains: “An important part of CitroĂŤn Fleet’s strong start to the year is the growing success of the CitroĂŤn Business Centre network. In January alone, the 77 strong Business Centre network managed to grow its business with SMEs by an incredible 12 percent.â€?
Demand For ‘Value For Money’ Used
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s the SMMT records a year on year rise of 5.6 percent in new commercial vehicle registrations for January 2013, leading vehicle auction company, British Car Auctions (BCA) is also reporting strong demand and rising values for used commercial vehicle sales. The latest data from BCA shows that the average values of a light commercial vehicle was ÂŁ4,669 in January - the second highest monthly ďŹ gure on record since the BCA Pulse Report was launched in 2005. Shortage of stock continues to be a key factor and reecting the fact that businesses are keeping hold of their vans for longer, average age at 56 months and mileage at 80,000 have risen by three months and ďŹ ve thousand miles respectively in the past year. There was strong demand across the widest range of commercial vehicles in January which Duncan Ward, BCA’s General Manager - Commercial Vehicles believes can be partly attributed to people starting up new businesses looking for vans. “The rise in average prices at the ‘value-for-money’ end of the market continues unabated and values for older, higher-mileage vans have stepped up signiďŹ cantly over the past two months. This is likely to be a side-effect of the tough economic climate. With continuing redundancies from retail to manufacturing, many people will be tempted strike out on their own and one of the ďŹ rst things they will buy with their redundancy money is a van.â€?
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11 FEBRUARY 2013
MACHINING
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EMO Hannover Showcases What role are the tools playing? A situation report from the 2012 Tool Conference in Schmalkalden, the meeting point for insiders from the metal-cutting sector.
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ne word, two figures and a punctuation mark are sparking plenty of animated debate, as did once upon a time the vision of Computer Integrated Manufacturing (CIM): we are talking about Industry 4.0, the new manufacturing concept with web-based networking. But what role are the tools playing in this context? A situation report from the 2012 Tool Conference in Schmalkalden, the meeting point for insiders from the metalcutting sector. The controversial issue of Industry 4.0 – some people are already dubbing it derisively CIMera 2.0 – was not on the agenda at the 10th Tool Conference in Schmalkalden. Nevertheless, the manufacturers and users of metal-cutting tools are not indifferent to the issue: when you take a closer look, you can already discover some tools with the right
stuff for Industry 4.0. As indeed the 200 conferees saw for themselves, both in the presentations and during a tour of the test bay and the laboratories of the GFE – Gesellschaft für Fertigungstechnik und Entwicklung Schmalkalden e.V. (Society of Production Technology and Development), who organized this symposium themed around high-precision tools.
When the Tool Transmits... The experts in Thuringia unveiled a mechatronic tool, for example, designed for retrograde machining of large boreholes, which uses telemetry to acquire the ongoing status of the tool during the metal-cutting operation. This tool, which acquires and transmits measured data, fits in neatly with the new concept known as the “Internet of Things,” in which basically all participants communicate with
each other just like on the conventional web. To quote GFE scientist Bernd Aschenbach: “The use of mechatronic tools with integrated sensor-monitored actuators can help to downsize the amount of work required for producing retrograde counterbores on large-size machining centres while retaining high levels of process dependability.” In order to reduce the costs involved, GFE has developed a prototype featuring standard electronic modules. What are called Hall sensors monitor the end positions of the hydraulic cutting drive, which are communicated to a base station. The BMBF’s (German Federal Ministry of Education and Research) joint project called Sensomikrosys goes one step further. What’s been created here is extremely small sensors that monitor in real-time machines
and tool compo-nents exposed to highly dynamic loads. These microsystems serve, for example,
to measure the forces acting in tools and clamping systems. For this purpose, the GFE had at the
Tool Conference in Schmalkalden showcased a test rig for dynamic load testing of tool clamping systems in machine spindles. Sensors of this kind can even be integrated into hand-held tools. Here, too, the term “Tools 4.0” is definitely apposite. “At the EMO Hannover 2013, we shall be seeing plenty of interesting tool and technology solutions incorporating concepts of this kind with sensors and actuators,” comments GFE’s Executive Director Prof. Dr.-Ing. Frank Barthelmä. “The basic idea of integrating machine functionalities into the tool is not entirely new, of course. But for machining jobs like systems for energy technology or components for large-size machinery, we have meanwhile arrived at quite different dimensions. The EMO is also going to show that besides the innovative content of technical solutions, users are more than ever going to be asking about their cost-efficiency.” Assistance systems is one of the watchwords at Komet Group GmbH from Besigheim. Its Managing Director Dr.-Ing. Christof W. Bönsch has deliberately adopted the term from the automotive industry. “Parking backwards is for many people a complex task. But there are assistance systems for it that solve the problem,” he explains. “The idea is to arrive at assistance systems in metal-cutting applications as well, designed to make life easier for us.” This is the functional thrust exhibited by the familiar systems for process monitoring, which detect tool wear and tear, for example, or improve the efficiency of the metal-cutting process with the aid of adaptive control systems.
Fingerprinting the Process In his view, there are even more possibilities: it would be conceivable, for instance, to create a process fingerprint, holistically covering machine dynamics, spindle behaviours, metalcutting forces and the clamping situation, and defined as a standard process. These “fingerprints” could be used in process acceptance-testing, after a production operation has been relocated, for example, or when starting up series production in the automotive industry (SOP). “When a gigantic plant is built in China, for instance, then the machines used there are ones that are running in Germany with established processes,” comments Dr. Bönsch in Schmalkalden. “Monitoring the system enables the fingerprint of a process to be created, and then used to implement a self-learning production process.” Here, though, he adds, the tool industry is still in the early stages of development work. Another issue relates to tool management. The expert from Komet is not talking here, however, about the administering and procurement of tools, e.g. by an outside service provider. “What I mean by tool management is complete-cover-
11 FEBRUARY 2013
Auto Monitor
MACHINING
23
Tool Industry Concepts age acquisition of all relevant data over a tool’s entire useful lifetime,” Bönsch says. “For this purpose, we have laser-printed
The code serves merely to identify the tool concerned, while the detailed information on important key figures
the entire tool lifetime, which is stored in a data cloud. This can even go so far as to enable a tool’s acquired process data to be
The controversial issue of Industry 4.0 – some people are already dubbing it derisively CIMera 2.0 – was not on the agenda at the 10th Tool Conference in Schmalkalden. Nevertheless, the manufacturers and users of metal-cutting tools are not indifferent to the issue. linked to each other. To quote Christof W. Bönsch: “In the cloud, I can file a complete tool history.” our tools with data matrix codes, which can be read using a simple scanner.”
comes from sensors, for example. Thanks to these features, an electronic system now acquires
Experts to Talk Critical Subjects at TITANIUM EUROPE 2013
I
n the Fabrication Panel, Alexandr Danovich, OSCAR Tube Production Group, plans to present the Ukrainian manufacturer’s history of seamless cold-drawn titanium tube production. Regarding future growth, he will analyze the impact of adding a VAR melting facility to control quality and assure traceability, in adherence with ISO 9100. Operating its own melt plant will also allow the firm to use readily available Ukrainian sponge. Richard Freeman, TWI Limited, UK, will describe recent developments in welding titanium alloys that improve productivity without quality loss; linear friction welding to construct preforms that reduce the necessary machining of forgings; high brightness laser welding and its impact on porosity and weld profile; and novel high frequency pulsed TIG and reduced splatter MIG welding. Understanding Ti-6Al-4V microstructural mechanisms during forging will be Christina Schmidt ‘s focus, Outokumpu VDM. When the metal is destined for rotating jet engine components the requirements for homogeneity and lack of inclusions, which depend on microstructure, are increasingly stringent. In their project, compression tests are used to develop microstructural models that enable transformations during single forging steps to be described and simulated. For the Emerging Markets Session, MariaPia Pedeferri, Politecnico di Milano, will discuss titanium’s metallurgical attributes, but related to tribologic behavior. Titanium alloy surfaces exhibit a high wear coefficient in dry sliding, poor wear resistance and limited load bearing capacity. Tests of a simple electrochemical anodizing process that changes the metal’s surface oxide film show it could reduce friction and increase wear and corrosion resistance. Jaka Klemenc, Akrapovic d.d., will examine progress in using titanium alloys for high performance automotive exhaust systems, where weight reduction and corrosion resistance are the prime benefits. He will report on differences between stainless steel and titanium alloy exhausts of the same design in vibration, sound quality and frequency, and heat dissipation. Military applications for investment cast titanium components will be explored by Sarah Mott and Bret Clayton, Precision Castparts. Titanium is a proven solution and investment casting yields complex, monolithic parts that lower material costs, increase strength and reduce finishing needs.
Learning from Google Komet has already come up
with a method for transferring a tool’s presetting data into the tool management system by simple scanning. But the company (best regards from Industry 4.0) aims to achieve a whole lot more. The goal is a cloud with a large quantity of process and tool data, serving as a foundation for a huge knowledge database, resting on assured statistical underpinnings. It will then be able to provide dependable answers to questions, e.g. on tools’ behavior during operation, or the nature of any machine malfunctions. But, says Komet, there are even more possibilities, since as larger and larger quantities of data are acquired the error rate will also fall. As evidence, Bönsch points to Google, whose huge performative capabilities are attributable to global networking and multiple usage. “Statistics play an important role in systems like Google,” says the expert. “When several billion search inquiries are received every day, then the few inquiries
that do not fit in precisely with the subject do not play any significant role.” This means the errors occurring are “statistically irrelevant.” Analogously, a corresponding knowledge database could also be created for tools. This still sounds a bit like science fiction. Some initial contours, however, will already be on show at the EMO Hannover 2013. Komet is not disclosing very much yet, but for Bönsch one thing is already certain as the new year begins: “The EMO is an ideal opportunity for us to showcase for the public the first industrial implementations of these ideas. We shall be exhibiting some initial mock-ups for the issues concerned, addressing specific job profiles of our customers. The major issues being covered in this context are assistance systems for communalising metal-cutting processes, and cloud-based tool management as an on-demand application”.
Auto Monitor
11 FEBRUARY 2013
GLOBAL
24
Ceat Inks JV With Bangladesh Co For Plant
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eat Ltd, the tyre manufacturer controlled by the RPG group has entered into 70:30 joint venture with Bangladesh’s leading business house A K Khan & Company to set up a tyre manufacturing facility in Bangladesh. To go on stream at the end of 2014, the new facility at an investment of Rs 360 crore by the joint venture to produce tyres for truck, light commercial vehicles and two and three wheeler tyres. The plant will have a capacity of 110 metric tonnes per day. As per the joint venture agreement, CEAT Ltd. will provide technical and business expertise & manage the JV company operations while A K Khan & Company Ltd. will bring in their vast knowledge of Bangladesh market besides providing the strength of their goodwill and local presence. Anant Goenka, MD, Ceat Ltd said,””This strategic partnership will enable us to establish a leadership presence in the Bangladesh market.””
Ceat Net Jumps Nearly 3-Fold In Q3 Tyre maker Ceat Ltd has reported nearly three-fold jump in consolidated net profit for the third quarter ended December 31, 2012 at `22.44 crore, propelled by higher sales volumes and lower raw material cost. The company had posted net profit of `8.12 crore in the yearago period. Net sales during the period under review stood at `1,238.5 crore as compared to `1,092.86 crore in the same period last fiscal, Ceat Ltd said in a statement. Commenting on the results, Anant Goenka, Managing Director, Ceat Ltd said: “We have been able to post a good profit during the quarter primarily due a decline in rubber price and good growth in sales volumes”. During the quarter, rubber prices came down by 78 per cent
to around `180 per kg, while the company’s sales volume grew by 13 per cent, he added. “Moreover, we also had a better product mix during the period with an increase in the passenger car tyre component,” he said, adding that the commercial vehicle to passenger car tyre ratio stood at 55:45 during the quarter as compared to 60:40 in the year-ago period last fiscal. Moreover, the company also crossed sales of five lakh motorcycle tyres per month in the months of October, November and December. During the quarter, the company said it had incurred an expense of `13.66 crore towards voluntary retirement scheme of its Bhandup unit (near Mumbai) where 188 employees opted for the offer.
It had also made an investment of Rs 10.96 crore in its Bangladesh subsidiary. Subsequent to the quarter end, it had entered into a 70:30 joint venture with A K Khan Company. “The plant is expected to be operational by the third quarter of FY’15. In the initial phase, it will have a capacity of 65 tonnes per day, which would soon be ramped up to 110 tonnes per day,” Goenka said. It will produce tyres for small commercial vehicles, light commercial vehicles and motorcycles. “We are looking to have a market share of 35-40 per cent in the next three to four year when the market (in Bangladesh) is estimated to attain a size of ` 1,500 crore,” he said.
This will be one of the largest manufacturing investment in
Bangladesh by an Indian company and it is the first large scale tyre manufacturing plant in Bangladesh. Salahuddin Kasem Khan, Managing Director, A K Khan & Co, said, “Besides catering to the growing local market, the plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world” CEAT Ltd is the f lagship company of RPG Enterprises and is one of India’s leading
tyre manufacturers and has a strong presence in both domestic & international markets. The company manufactures over 10 million tyres every year and enjoys a major market share in the light truck & truck tyre market. A. K. Khan & Co Ltd is one of the oldest business conglomerates in Bangladesh, operating since 1945. The Group engages in business through joint venture in the area of textile, telecom, logistics, hospitality sector amongst others.
Industry Sees Slowdown Across Segments Volumes for two-wheelers would be up about 5 pc, car volumes could have declined by 1 percent, and CVs by 40 percent.
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emand for commercial vehicles is very weak, while passenger vehicles are just about holding up, observes Nomura Equity Research in its Quick Note on the automobile industry based on sales volume data for January 2013. The brokerage estimates that overall industry volumes for twowheelers would be up about 5 percent, car volumes could have declined by about 1 percent, and commercial vehicles would have been down by around 40 percent in January 2013. W hile HMCL’s (Hero MotoCorp) volumes were also slightly better than estimates, Nomura points out that there is a need to check if there has been any increase in inventory. Tata Motors reported volumes which were significantly below Nomura’s estimates in all categories, and there may be a need to reduce estimates further. However, JLR retails in the US were up 25 percent yearon-year, which in Nomura’s view are strong numbers. JLR was helped by strong uptick in new Range Rover and Evoque sales. The weighted average promotional spend also decreased by 14 percent MoM (monthon-month) as the new Range Rover got retailed.
Auto Monitor
11 FEBRUARY 2013
REPORT
26
Electric Vehicles in India:
Challenges & Opportunities
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ndia’s population is expected to surpass that of China’s in 2030, making it the most populous county in the world. High economic growth rates and the impacts of globalization have concentrated prosperity in urban centers resulting in sprawl and automobilization. Within 15 years the population residing in urban areas is expected to double to over 700 million due to distressed rural to urban migration and other factors. This will place additional pressures on urban infrastructure, which is already overburdened. Projections indicate that by 2021 India will have the largest concentration of megacities in the world with a population exceeding 10 million. Out of a total of 88 cities, with a population of more than half a million in 2011, only 28 have any formal public transportation system. In most cases, the existing public transport systems are ageing and stretched beyond capacity, as the demand for public transport services outstrips supply, both qualitatively and quantitatively. As disposable income increases, a result of economic growth, those entering the middle-class are able to afford and prefer personal vehicles, as it is a symbol of upward social mobility, and also provides greater comfort, flexibility and convenience. In the absence of proper planning measures, the dynamics between increasing numbers of vehicles as well as a growing population wanting to use private vehicles for transport are likely to pressurize transport infrastructure, leading to inefficiencies as a result of infrastructural bottlenecks such as traffic congestion, gridlocks and slower train speeds. This would result in higher traffic management costs and greater energy consumption, therefore significantly increasing carbon emissions from transportation. The growth in motor vehicles is much faster than the population and faster than the GDP with 5 percent annual growth in motorcycles/scooter and 14 percent annual growth in cars. If current ICE uptake trends continue, developing countries like India are faced with unsustainable futures that are likely to
have negative triple bottom line impacts. Considering the stage of economic development in India, the country has a unique opportunity to develop sustainably by managing emissions growth, enhancing energy security and by supporting the creation of a world class clean-technology industry. The time is ripe to explore a range of potentially promising solutions to redirect the economy towards a path which is sustainable and secure.
Expected growth in CO2 emissions in India from different transport 2 modes [13]
Energy Security Beginning with economic liberalization in 1991, the consistent growth and globalization of the Indian economy thereafter, energy consumption in India has grown exponentially. Increasing urbanization, infrastructural development and concentration of economic activities in certain load centers have resulted in higher mobility fuelled by a rapid increase in number of vehicles and distances travelled. The growing demand for energy is being addressed largely though oil imports, where India is currently the 5 largest oil importer in the world. India simply does not possess adequate oil reserves to meet current and future demand. 72 percent of the oil consumed in India in 2007 was imported and this is projected to rise sharply to over 90 percent by 2030. High oil prices result in negative feedback loops that weaken stock prices and tighten fiscal conditions, thereby depressing economic growth in the long term. The growth of the Indian economy is impacted by the price of oil imports, which tends to be extremely volatile and sensitive to economic and political shifts. As a result of the global recession, oil prices rose to a record peak of INR 7,830 per barrel (USD 145) in July 2008 and the Brent Crude oil price hit INR 5,400 per barrel (USD 100) on 31s t January, 2011 due to the political upheaval in Egypt. The growth in demand for oil from BRICS (Brazil, Russia, India, China & South Africa) nations and other emerging economies coupled with a decrease in the discovery of new exploitable oil fields will push up oil prices up over the next few decades. This would further exacerbate the budget deficit,
Source: Transport Sector: Greenhouse Gas Emissions 2007, Central Road Research Institute, New Delhi, INCCA dampening economic growth. The transport sector is a key consumer of oil and oil products. More than 50 percent of the oil consumption in India occurs on account of transport-related activities . The World Energy Outlook has estimated that most of the increase in oil consumption by 2030 in India will be driven by light-duty vehicles, mainly passenger cars – growing at an annual rate of approximately 10 percent. A significant question to ask at this juncture is whether the world can continue generating a sufficient supply of oil in the coming decades to accommodate the rise in demand from emerging economies like India and China, without hampering environmental quality? Until recently Governments and businesses have ignored the phenomenon of ‘peak oil’. Peak oil refers to the ‘point at which the maximum rate of global oil extraction is reached’. However, there has been growing acceptance of peak oil in the public domain, where both Governments and businesses have been exploring alternative sources of energy supply, primarily renewable sources like solar,
Road Transport: CO e emissions by Fuel type – 2007 [12] 2
Source: Transport Sector: Greenhouse Gas Emissions 2007, Central Road Research Institute, New Delhi, INCCA
wind, hydro, geo-thermal and nuclear energy. The oil industry is beginning to realize that we have crossed “the era of easy oil, (and) in the future oil will be dirtier, deeper and far more challenging (to extract)”. Technologies that have the potential to phase-out oil dependent forms of transportation should be actively pursued to gauge their feasibility.
Climate Change Climate Change has emerged as one of the most pressing issues for Governments and policymakers. This issue has drawn unprecedented global collaboration between scientists and policy makers through the United Nations Framework Convention on Climate Change (UNFCCC) treaty that has been signed by 194 nations (as of May, 2011). According to the Fourth Assessment Report of the United Nations Intergovernmental Panel on Climate Change, ‘warming of the planet is unequivocal’ and it is very likely that the rise in global average temperatures is ‘due to the observed increase in anthropogenic greenhouse gas (GhG) concentrations’. The World Meteorological Organization (WMO) reported that 2010 was the hottest year on records since 1880, tied with 2005, and the difference was less than a margin of uncertainty. This is evidence of a warming trend that continues to be strengthened. Consensus among the scientific community tells us that we must reduce greenhouse gases by 50 percent by 2050 to prevent the worst impacts of climate change. Since the transportation sector is one of the largest and fastest growing sources of GhG emissions, decoupling growth in transport from increasing GhG emissions presents a clear challenge for policy makers in India. EVs, in particular, can have a significant impact towards cutting down demand for oil imports and reducing carbon emissions arising from road transportation, only if electricity is derived from hydro and renewable.
Road Transport Emissions
In India India is the fourth largest GhG emitter in the world. The transport sector is the fourth largest contributor of greenhouse gases in India with a share of 7.5 percent of the emissions in the country preceded by electricity generation (37.8 percent), agriculture (17.6 percent) and industry (8.7 percent). India has witnessed a 200fold increase in vehicle numbers between 1951 and 2011. Road transport is the largest contributor of GhG emissions and was responsible for 87 percent (123.5 Mt CO e) of the total emissions arising from the transport sector in 2007. Currently passenger 2 vehicles that include two wheelers and four wheelers are responsible for about 30 percent to 35 percent of the total road transport emissions (Exhibit 1). Over the next decade, the number of passenger vehicles on the road is expected to rise sharply, approximately 14 percent y-o-y. According to the IEA/ SMP transportation model reference case (using 2003-04 as the base year), emissions from passenger cars are likely to grow at 5 percent per annum in India. Even if engine efficiencies improve, the sheer growth in the number of vehicles on the road would lead to an absolute increase in GhG emissions from road transport.
Trends In Personal Road Transport The Indian road network is the second largest in the world, covering 3.34 million kilometers where as much as 80 percent of passenger traffic is carried by the roads. The high growth rates of the Indian economy have resulted in an unprecedented rise in disposable incomes and this has contributed towards a burgeoning automotive industry. With the Indian economy projected to grow at an average of 8-9 percent per annum over the middle term, the percentage of Indian consumers that are able to afford vehicles is likely to increase. Yet, India’s car per capita ratio (i.e. number of cars per 1000 persons) is the lowest among the world’s
Auto Monitor
five largest automobile markets, pegged at 18 cars per 1000 people. The share of public transport has been declining slowly as a result of the growth in private vehicle ownership, fuelled by expanding urbanization and affluence. Existing transport infrastructure has however, proven to be grossly inadequate to meet these demands. The reason for the same is reflected in a study conducted by the Ministry of Urban Development, Government of India and Wilbur Smith Associates. The study estimated that total intra-city passenger transport activities (passenger kilometers) across 87 cities, including state capitals and cities with populations greater than 0.5 million (2008), was growing at a rate of about 5.5 percent per annum between 2007-11 as compared to a population growth rate of about 2.6 percent per annum in the same period of time. It is estimated that the increase in passenger activities would continue to grow at an even higher rate of about 7.6 percent per annum between 2011 and 2031. The dynamic interactions between personal vehicle penetration, rising incomes, increasing affordability of cars and expand-
11 FEBRUARY 2013
REPORT
28 ing export opportunities is expected to position the Indian automobile industry for growth. The Indian automobile industry has recovered from the recession registering record sales in 200910 and it contributed almost 4 percent of India’s Gross Domestic Product and recent estimates suggest that the output of the industry is expected to reach 4 million units by 2013 supported by infra structural developments and favorable Government policies. The automotive market remains cost-conscious in India. The primary decision point for car buyers in India continues to be the upfront purchase price of vehicles, whereas fuel efficiency has historically been a secondary concern, though the implied effect is evident due to a preference for small and cheap cars. Having stated that, the luxury car market in India has shown compounded annual growth rate of 30-40 percent over the last 4 years. This statistic challenges the notion that the Indian consumer will remain predominantly price conscious in the long term. However, as fuel costs rise, we can expect increasing consumer importance and emphasis on fuel efficiency in purchase decisions.
Modal Shifts The rapid growth of demand for passenger mobility in Indian cities has not been matched by an equal increase in supply of transport infrastructure and services. This has resulted in the increased use of private vehicles across most urban centres accompanied by declining share of public transport systems. In addition, with expanding cities, the share of pedestrians, cyclists and nonmotorized transport users has also fallen. In India, the transportation sector is responsible for nearly 20 percent of the total energy consumption and is the second largest consumer of energy in the country after industry. A significant amount of road based passenger transport activities in the country are concentrated in cities. The on-road passenger transport activities in urban India are responsible for nearly 40 percent of the total energy consumption in road passenger transport sector. The current trends in urban transport, which are primarily a result of the inability of Indian cities to meet the increasing transport demand in a planned manner, have resulted in local problems related to conges-
Growth in passenger vehicles in India (mn) from 1981 to 2009
Source: MoRTH Yearbooks tion, deterioration of air quality, increase in number of road fatalities and accidents and loss in economic productivity. The congestion levels in many Indian cities have reached unmanageable proportions, the average vehicle speeds dropping down to as low as 10 km/hour in many cities. This leads to higher fuel consumption due to low speeds and vehicle idling. Considering an oil constrained future and the high
emission levels associated with the transport sector, it is therefore important to reduce the use of petroleum dependent private vehicles in the country. In the 1950’s and early 1960’s, private vehicles were less in number and road transport served as a mode complimentary to public transportation. By the late 1990’s the share of road transport in cities was as much as 80 percent in passenger traffic. The modal split has shifted in favor of road
transport, away from energy efficient modes like railways and buses that have a lower carbon footprint. For example, in Delhi the modal share of public transport has dropped from 60 percent in 2000 to 43 percent in 2008 [22]. This is a likely trend not only in most megacities but also Tier II and Tier III cities that are characterized by poor transport services and infrastructure. Only 20 cities in the country have an organized public bus service [23], which in most cases are inadequate leading to an increased dependence on personal modes of transport. The growth in personal vehicle ownership will continue to accelerate with increasing incomes, greater availability, as well as access to credit and decreasing vehicle cost, case in point being the Tata Nano which has enjoyed an increase in sales, 5.8 percent, over 2011-2012. There is a growing reliance on personal modes of transport (cars and two-wheelers) and intermediate modes of transport (taxis and auto-rickshaws) driven by the doubling of per capita incomes from 2001 to 2009. Over the same period the number of public buses has remained relatively constant considering a rise in population of approximately 125 million. This data suggests a growing trend towards a reliance on personal modes of transport due to the burgeoning middle class, a lack of urban planning and minimal investments by the Government towards improving public transportation. Bus services in particular have deteriorated because public transport service providers are unable to expand services, both in terms of number of buses and number of routes plying. The share of buses is negligible when compared to private/personalized vehicles in most Indian cities. Overcrowding of the public transportation system is particularly evident in large cities, where buses and trains carry more than twice their optimal capacity. As a result we have seen a massive shift towards personalized transport, particularly two-wheelers, and the growing use of intermediate modes such as taxis and threewheeler auto-rickshaws. At this juncture, it should be noted that the Government has drawn plans to improve local rail networks in urban cities by improving access and expanding existing capacity. Other urban transport planning initiatives include bus-rapid-transport-systems (BRTS), pedestrian zones, skywalks and cycling paths. Delhi, Mumbai, Kolkata, Chennai and Hyderabad are in different phases of planning or implementing light-duty metro rail services to complement existing modes of public transport. It is envisaged that these plans will have some impact on increasing the share of public transport. This research report has been brought together by Yes Bank and Teri. Auto Monitor will publish the concluding part in the February 18, 2013 issue.
11 FEBRUARY 2013
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THE OTHER SIDE
11 FEBRUARY 2013
Getting Personal with Anders Grundströmer, Scania CV India’s new MD.
If not in the auto industry, where would you be? I come from the passenger car industry, I worked for Saab. I started my career with Saab. Prior to that, I worked for a software company and was Managing Director between 1992 and 1995. There I developed software systems for Volkswagen and Scania in Sweden. What car do you drive and what do you dream of driving? In Stockholm, my family and I drive the Volkswagen Touareg and an Audi A3. In India, I drive the Toyota Innova. What’s your most recent indulgence? It’s mostly work. But in terms of indulgence, I am most interested in spending time with my family. I already have a vacation house in Archipelago in Stockholm. I also go skiing. If you look at me, I do need the exercise and I cannot do enough because I work too much and travel around plenty. I am basically a sports person and I have been playing soccer. And then business took over.
In Real Life Anders Grundstromer is an MBA who started his career at SAAB Car Division and worked there for 15 years. In 1992, he joined Scania. He took the challenge to develop Scania distributorship concept in Europe as Managing Director Scania Czech Republic and Slovakia in 2000, and later as Managing Director of Scania in Netherlands and the BeNeLux Business Unit between 2004 and 2008.
Illustration: Sachin Pandit
What are you currently reading? I am reading What is lean? It’s mainly to understand flows and how to rectify waste in flows and how to take away waste in flows. It’s a management book by a Swedish author. When you are not talking auto, what are your leisure activities? Sports, going to my vacation home in the Archipelago, boating if the weather allows. It’s now -21 degrees in Stockholm and so it’s not possible to go on the sea now.
What is the best thing to have happened to you in the last one year? I have been appointed as head of India operations. But personally, I have my health, and enjoy life. I find my job interesting. And I am glad that everyone at home is safe and sound.
Where was your last holiday? It was with the family in India, in Goa.
Any word of advice for budding car aficionados? One advice is to work more and have fun.
Regn. No. MH/MR/WEST/20/2012-2014. RNI No. MAHENG/2000/11414 Licenced to post at Mumbai patrika channel sorting office G.P.O. Mumbai 400 001. Date Of Mailing: 1st & 2nd Fortnightly Issue. Date Of Publication: 28th of Every Month
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