Auto Monitor - 16-31 August 2011

Page 1

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. 11 No. 15

w w w.amonl ine.in

16-31 August 2011

INTERVIEW PRICE HAS BEEN AN P IIMPORTANT FACTOR F Frank Ryan, VP, Sales and Marketing, Top1 Oil Products Company T

ELECTRICAL & ELECTRONICS SPECIAL Pg 08

Pg 15-33

120% 100% 80%

6% 33%

9%

36%

45%

60% 40%

67%

58%

46%

20%

` 50

AUTONOMICS DIESEL CAR SALES TO MORE THAN DOUBLE BY 2015-16

0% 2005-06

2010-11 Petrol

Diesel

Pg 14

2015-16 CNG

IPCL expands capacity, forays into aerospace

NEWS IN BRIEF Munjals unveil new brand identity

H

ero Honda (now Hero MotoCor p), w h ich recently unveiled its new corporate identity and logo in London, is planning to set up two new manufacturing plants in south and west India. The com-

pany, which introduced two new products (110 cc-Maestro and 150 cc-Impulse) under its new brand, said it will soon tie up with a European fi rm for technology support for its future product platforms. It has identified 30 countries for exports.

HM launches SCV ‘Veer’ at `3.3 lakh

H

industan Motors (HM) launched Veer, a 0.8tonne Small Commercial Vehicle (SCV)at a recent company AGM. The SCV is priced at `3.3 lakh (ex-showroom Kolkata) and is built on the ‘Ambassador’ platform. The vehicle is available in both diesel (BS III) and CNG (BS IV) versions, in two models—Veer and Veer LX.

Abhishek Parekh Mumbai

I

nvestment & Precision Castings (IPCL), a Bhavnagarbased investment castings major, is in the process of completing its capacity expansion process even as demand from automotive sector is beginning to get more ‘manageable’. The company has developed a vacuum castings process in order to make a major foray in the aerospace segment. “Developi ng l ig ht weig ht components is a bigger concern in the aerospace as compared to automotive and hence there is a limited scope for investment castings-based components in that segment. However, the gestation period in aerospace is long and thus, it will be a while before we can observe a major off-take in vacuum castings,” said Chairman, Investment & Precision Castings, PA Subramanian. He added that the company is hoping to evolve as a long term supplier to the aerospace segment as the segment demands high value

D Domestic Sales Sector

Jun-10

Jun-11

Change

PV

181,464

189,000

4.15%

CV

52,627

62,009

17.83%

3W

38,868

40,550

4.33%

2W

934,975

1,071,425

14.59%

TOTAL

1,207,934

1,362,984

12.84%

Sector

Jun-10

Jun-11

Change

PV

37,432

44,892

19.93%

Exports

CV

5,419

6,962

28.47%

3W

20,426

32,565

59.43%

2W

139,077

169,446

21.84%

TOTAL

202,354

253,865

25.46%

precision components and this implies that the competition in the segment would be limited. The demand from automotive sector is looking uncertain as vehicle sales have remained fl at for these past few months. It may take a while to revive the sales of the cars and commercial vehicles. Also, the company is making an effort to tap the potential for exports and may not be affected significantly by the downturn in the domestic market, he elaborated. The company is in the process of expanding its capacity by around 15 to 20 percent in this fi scal to cater to its key customers like Maruti Suzuki and Bajaj Auto. “We were unable to cater to the growing demand from overseas customers in Europe, as the domestic demand in the last fi scal was very high. We are hoping to cater to domestic and overseas customers even as we expand our capacity,” added Subramanian. He added that the demand from the company’s biggest customer Maruti has been high and the company is evaluating various logistical and other solutions to

PA Subramanian, Chairman, Investment & Precision Castings

meet the demand in most cost effective manner. IPCL is one of the leading manufacturers and suppliers of investment castings in India. It was set up by Bhavnagar’s Tamboli family in 1975 under technical collaboration with the US-based Arwood International. In 1983, the company entered into a technical collaboration with Germany’s Furstlich Hohenzollernsche Huttenverwaltung (now known as Zollern Group). Two years later, it signed another agreement with Japan’s Associated

Foundries Engineering for producing large piece weight investment castings. The company is currently the leading supplier of investment castings to automotive, engineering and making a concerted bid to enter the aerospace segment. It manufactures a wide range of investment castings including complex investment castings in a wide range of material specifications and piece weight up to 150 kg. The company has also acquired additional technologies enabling it to produce its own ceramic cores and ceramic moulds. Its Bhavnagar facility is a highly automated manufacturing line with dedicated production lines for customers and its current capacity is around 1,500 metric tonnes per annum. The anticipated growth in the automotive segment may imply that the company will continue to derive majority of its revenues from the automotive sector. The company’s consolidated revenues for year ending March 2011 stood at `68.25 crore and its net profit stood at `3.18 crore.

DCM increases capacity to match demand Nabeel A Khan New Delhi

* Source: SIAM/ ** all sub segments considered

64 Pages

Top gear: Share of diesel cars to increase faster over the next five years

CM Engineering, a grey iron castings manufacturer for engines, is expanding its capacity at Ropar plant to produce additional 75,000 tonnes at an investment of around `250 crore. Currently, the company is utilising over 90 percent of its existing capacity. The current capacity of the plant is about 65,000 tonnes and it has produced around 58,000 tonnes in the fiscal ending March 2011. The company is on the verge of getting the requisite approval from various government departments/ authorities including the Ministry of Environment and hopes to get all the clearances soon. The company states that its growth will be restricted by around 15 percent due to the capacity constraints this fi scal year. However, it hopes to grow by around 30 percent annually, once its additional capacity is available.

“It will take around 18 months to get the foundry started and then possibly, it will take a couple of years to break even at least. It is a very high investment and slow return business, so obviously the efficiency of the existing foundry is critical,” Managing Director, DCM Engineering, JK Menon told Auto Monitor. The construction of the new plant will start around October this year and the plant will start commercial production in January 2013. In FY11, the company registered a growth of 30 percent to touch `410 crore against the previous year. DCM was initially planning to set up its plant in Chennai. However, during recession, it put all its plans on hold. When it saw signs of recovery, the company resumed a fresh study and realised that Chennai is a market where it should eventually go. However, since the customers in the north and the west had suddenly increased capacity, it decided to fi rst expand in Ropar, near Chandigarh within

JK Menon, Managing Director, DCM Engineering

its existing facility by 2008-09. Consecutively, the company has a 40-acre industrial plot in Chennai where it will start construction after completing its expansion in Ropar. Menon, explaining the reason for deferring the expansion in Chennai, which is the hub for a commercial vehicle manufacturer, said, “For us, the biggest volume of orders in CV segment can come from Ashok Leyland and fortunately now, Ashok

Leyland has put up a plant in Pantnagar (Uttrakhand). This plant is expected to have production on a large scale and will require at least 50,000 tonnes of casting, and the most convenient way for them would be to look for a supplier from this region rather than sourcing from their vendor in the south.” Currently, it is installing two new fully automated settling machines at an investment of `four crore that will increase the quality of the casting apart from increasing the volume. At present, DCM is primarily in to making grey iron castings. It is adopting a new technology—‘Compacted Graphite Iron’ for future requirements. While talking about the profit margin crisis, Menon said, “Being a foundry, the rise in the cost of fuel and transportation impacts us and the only way to be profitable is to introduce a cost cutting measure. Last year, we could not take up this initiative, however, we are now focusing on reducing the wastage of material inside the plant.”


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