Auto Monitor - 16-31 March 2011 by Infomedia18

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 w w w. a u to m o n i to r. co . i n

INTERVIEW INDIA YAMAHA MULLS OPTIONS TO DEVELOP SCOOTERS, NEW BIKES FOR INDIAN MARKET S

164

170 160 150

153

140 130

124

120 110

Basic raw material index

2011-12 P

2010-11 P

2009-10 E

Pg 08

2008-09

100 2007-08

Jun Nakata, Director, Sales and Marketing, India Yamaha Motor J

56 Pages

2006-07

16-31 March 2011

2005-06

Vol. 11 No. 05

` 50/-

AUTONOMICS RISING INPUT COSTS TO KEEP OEM MARGINS UNDER Pg 14 PRESSURE

‘Reform-oriented Budget’: Industry

NEWS IN BRIEF Nissan expands dealer network Nissan Motor India has announced the opening of seven new dealerships across the country to achieve maximise customer outreach, in line with its growth strategy and long-term commitment to India. The new dealerships are located in the cities of Karnal, Agra, Goa, Kolhapur, Vadodara, Secunderabad and West Delhi. With this Nissan’s dealership strength has risen to 30 across 14 states in the country. The company plans to shore up this figure to over 100 dealers by 2013.

Ashok Leyland expands operations in Punjab, HP Ashok Leyland has expanded its operations in Punjab and Himachal Pradesh with the inauguration of four dealership outlets. With this, the company now has eight dealerships in Punjab along with 126 service bays and six dealership outlets in Himachal Pradesh. The Mohali dealership outlet also marks the company’s 350th customer touch point across the country. These represent significant steps by Ashok Leyland towards the development of the Punjab and HP markets with customers now assured of after sales support in both these states. The company has trained over 16,000 mechanics and nearly 5,400 retailers across the country.

DATA MONITOR

Team Auto Monitor

he Indian automotive industry has welcomed the Union Budget as there was nothing uttered by the Finance Minister that would significantly hamper the growth prospects. The industry attributed it as a ‘Reform-oriented Budget.’ Both the Society of Indian Automobile Manufacturers (SIAM) and Automotive Component Manufacturers Association (ACMA) expressed satisfaction over the thrust imparted to infrastructure development and upgradation of the rural economy that is expected to trigger off growth in the automotive sector, especially commercial vehicles. SIAM President Pawan Goenka said the Finance Minister had sent a clear message to the industry by announcing the setting up of a National Mission for Hybrid and Electric Hybrid Vehicles. The fi scal measures for promoting such vehicles including introduction of 10 percent excise duty for fuel cell and hydrogen vehicles, exemption to specified parts of hybrid vehicles from basic customs duty and countervailing duty along with five percent excise duty, would incentivise the development, manufacturing and sale of hybrid and electric vehicles in the country. ACMA President Srivats Ram

Sector

Apr-Jan-10

Apr-Jan-11

Change

1,556,845

2,039,032

30.97%

407,392

534,622

31.23%

360,469

430,793

19.51%

7,613,144

9,671,800

27.04%

TOTAL

9,937,850

12,676,247

27.56%

Exports Sector

Apr-Jan-10

Apr-Jan-11

Change

HHML

369,180

358,583

-2.87%

BAL

34,923

61,393

75.80%

TVS

136,861

224,498

64.03%

HMSI

938,268

1,292,696

37.77%

IYM

1,479,232

1,937,170

30.96%

* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL

was optimistic about the unveiling of the roadmap for Direct Tax Code (DTC) with a defi nite date - April 2011 for its implementation and the introduction of the Constitutional Amendment Bill in the current session of Parliament for General Sales Tax (GST). Implementation of GST would help in creation of a ‘One-India’ market, and bring transparency in taxation issues. While lauding the absence of a hike in excise duty rates on automobiles, former CII President and Managing Director, Ashok Leyland, R Seshasayee expressed worry over the fi scal and reve-

nue deficits. ‘Many of the growth dampeners like monetary policy that is likely to get tightened further, rising commodity prices, skill shortages, inadequate supporting infrastructure and the like still remain,’ he said. The new proposal on completely knocked down imports that would exclude all vehicles with pre-assembled engines and transmissions from availing of a concessional import duty of 10 per cent, has created some confusion amongst vehicle manufacturers. The rise in credit availability for rural areas from `375,000 crore to `475,000 crore would

Global cars challenging from design perspective Our Bureau Mumbai

Domestic Sales

Finance Minister Pranab Mukherjee

lead to demand creation in rural areas, felt SIAM Vice President, S Sandilya. However, this could also raise food inflation and had to be keenly watched. President, Federation of Automobile Dealers Associations (FADA) Nikunj Sanghi hailed the increase in weighted deduction for research and development from 175 percent to 200 percent as it would go a long way in enhancing R&D and engineering capability in the country. According to credit rating agency ICRA, the increased outlay on road transport would favourably impact companies involved in road construction. But the proposal to increase the ad valorem export duty on all types of iron ore from five percent (fi nes) and 15 percent (lumps) to a uniform rate of 20 percent would adversely impact the profitability of iron ore exporting companies. However, the good news is that it would benefit domestic steel companies. The import duty reduction of both stainless steel scrap (2.5 percent to nil) and ferro nickel (five percent to 2.5 percent) would cut producers’ cost of production, paring up margins. A step up in personal disposable incomes owing to an escalation in the minimum tax limit by `20,000 is expected to push up passenger car demand especially for small cars and two-wheelers.

Automobile designers have to work under constraints and also bring out the best that a brand can offer customers. This implies simple and straightforward communication to the customers, said Senior Designer, Volvo, Grammaticopoulos Nicolas in an exclusive chat with Auto Monitor. He was recently in India to participate in masterclass design contest as a jury member as well as a speaker in the panel discussion on ‘Indian Subcontinent: a myriad opportunities for designers world over’ recently held at DSK Supinfocom International campus near Pune. He has worked as an automo-

bile designer for Volvo for the past sixteen years. Having worked for twelve years as an exterior designer and as an interior designer for four years, his has been closely associated with S40 interior facelift, C70 exterior, and S80 exterior in addition to ideating and conceptualising on vehicle interiors, occupant and pedestrian safety and other related issues in automotive designing. He is currently working on interior design. ‘One of the key challenges for any automobile designer is to balance aesthetics and attraction to provide simplicity and utility in a vehicle. This task becomes even more challenging as OEMs are increasingly looking to have global models, which are sold in different countries with varying aspiration-

al levels and cultural sensitivities,’ he adds. Additionally, working with these constraints on a compact car could be very challenging but rewarding experience as such an exercise could test the very limit of a designer imagination. The C30 is the closest that Volvo, now owned by Chinnese automobile major Geely, has to a compact car and it may be a long while before the Swedish car maker works on a more compact car. Volvo core attributes of comfort and safety remain hallmarks of its brand identity. Nicolas elaborates that in his case, interiors and exteriors of a car has to be designed keeping in mind occupant and pedestrian safety as one of the critical parameters. He adds that designers

Grammaticopoulos Nicolas (centre)

have to be increasingly comfortable with working on digital tools for maximising imagination and output without extensive use of prototypes. ‘The crucial change going forward would be efficiency in the designing process with more extensive usage of digital tools,’ he said. According to him, environments and the laws are much tougher than ever before for the automobile industry.

CONTENTS CORPORATE AG Industries expands four-wheelers speciality safety products range

Auto Ignition to supply next-gen starter motors

Akzo Nobel’s SRR cuts down time, enhances profitability

AG Industries is expanding its business of speciality safety products for four-wheelers segment by setting up a new 4,000 sq metres plant in Manesar

Auto Ignition is introducing gear-reduction starter motors and shifting its Faridabad facility in the National Capital Region to Prithala near its existing facility

Akzo Nobel Automotive & Aerospace Coatings has launched a new concept - Sikkens Rapid Repair (SRR) in India to cater to vehicle refinishes market

3M India to upgrade body, paint solutions

3M India is shoring up its training initiatives in body and paint repair services through tie-ups with Toyota Kirloskar Motors and ITIs

AIMC to start assembly of paint pumps, electrostatic spray guns

Anest Iwata Motherson Coating Equipment will start assembling paint pumps, electrostatic spray guns and paint pump agitators at its Noida plant

Dynasole to expand capacity, increase vendors

Paint booth manufacturer Dynasole Industries is planning to expand its capacity in order to meet the demand from the domestic as well as the export markets

Lanxess eyeing growth from auto sector, moves to Jhagadia

Lanxess is in the process of relocating its production facilities for leather chemicals, material protection products and Rhein Chemie products to new site in Jhagadia

INTERVIEW

GLOBAL WATCH Former GM in $51M deal to settle cleanup claims

Toyota targets annual sales of ten million vehicles

BMW ActiveE to roll out in North America by the end of this year

Chrysler to build Fiat 500 in Mexican plant

THE OTHER SIDE

The remnants of old GM have agreed to a $51 million settlement to resolve additional environmental claims — including at many Superfund sites

Toyota is aiming for annual sales of 10 million vehicles by 2015 even as it acknowledges that overly rapid growth was at the root of its recall fiasco

BMW used Geneva Motor Show floor to showcase the latest version of the electrified 1-Series ‘BMW ActiveE’ to be rolled out in select markets by the end of 2011

Chrysler may be looking at building a second Fiat model at the US company’s factory in Mexico

08 16

Jun Nakata, Director (Sales and Marketing), India Yamaha Motor ‘There is no regulation of water-based automotive paints in India’

Managing Director, ATS Elgi, Harjeet Singh Wahan hopes to leverage the emerging opportunities in the aftermarket, especially paint and refinishes segment, in a big way

Sandeep Khosla

Associate Vice President: Sudhanva Jategaonkar

Sales Co-Ordinator:

Akshata Rane

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Auto Monitor

Marketing & Sales CEO-Publishing:

Nakata is hoping to build Yamaha as the leading motorcycle company in India by developing products that emanate both charm and reliability at a competitive price

Auto Monitor

16 - 31 March 2011

CORPORATE

AG Industries expands four-wheelers speciality safety products portfolio Nabeel A Khan New Delhi

G Industries, a leading manufacturer of plastic injection moulded components and a major supplier to the Hero Honda, is now expanding its business of speciality safety products for four-wheelers segment by setting up a new 4,000 sq metres plant in Manesar. Currently the company is a Tier-II supplier of safety bag cover (air-bag cover) and seat belt to Maruti Suzuki, Ford, Honda Siel and Tata Motors through Autoliv in India and other market. The company also exports these safety components to China for Suzuki as Tier-II. ‘We see immense oppourtunity in four-wheel safety products. In order to increase the volumes of supply of these products to our main clients - Autoliv and Takata, we are setting up a new plant in Manesar,’ Managing Director, AG Industries, Geeta Anand said. The new plant is expected to be operational by the end of this year. AG Industries is investing `35 crore in the upcoming Manesar

plant excluding the cost of the land. However, it will keep its key business of moulding and polyurethane painting for twowheelers also growing and for the same the company is looking

to introduce a regulation which will make safety bags mandatory in every cars. Hence the company is optimistic about grabbing an enhanced share from the upcoming opportunity. It now manufactures around 12,000 units of safety bag covers and seat belts a month and is expected to double the volumes as the Manesar plant starts production in full swing.

Geeta Anand, MD, AG Industries

for another piece of land to set up one more plant at an investment of `70 crore. The company set up its fi rst plant in Gurgaon in 1993 with two machines and now it has over 100 machines and four facilities. The company has estimated to touch a turnover of `550 crore in FY11. Safety bag has been predominantly used in luxury cars but the government is expected

‘We also supply in the aftermarket for Hero Honda. We are thinking about supplying to others (motorcycle manufacturers) also in the aftermarket,’ Anand said. The company is looking forward to work with the ‘good foreign companies’ which are coming here and looking for some kind of support. The com-

pany has a number of foreign players especially Japanese coming to them. Currently it gets only five percent of the total revenue from safety air bag and seat belt business while 95 percent from two-wheelers moulding and polyurethane painting. The company is aiming for around 80 percent of revenues from the specialty safety products. It is also planning to enter into full assembly system for four-wheelers air-cleaner and manifold systems and aggressively looking for partners to kick start these new ventures. It will also have an integrated tool room for the safety bags at the new plant. Weighing the opportunity in the agriculture equipment AG Industries is also in talks with a Swedish company and an Australian fi rm to supply tool manufacturing assemblies and plastic components. However, the company declined to divulge further details about the deal. It was in talks with Daimler to supply them plastic products for their LCVs and other vehicle segments but the proposal

got shelved. Recently it commissioned a plant in Bawal, Haryana for polyurethane painting. It is now looking at a ramping up production of this product line. ‘Over 80 percent of the products moulded are to be painted as well,’ Anand explained. When asked about the impact of split in Hero Honda Motorcycles, Anand denied any impact saying ‘their motorcycles have been in short supply for past two-three years and our number never lessened even when they announced that (split). We have been supplying to Hero Honda and we will continue.’

On the cards zTwo plants are in the offing

- for specialty products and moulding zTotal investment of over `100 crore in two plants. zTo ramp up production of polyurethane painting at Bawal plant. zTalks are on to diversify into manufacturing agriculture equipment.

JBM Group to set up two new plants, eyeing expansion to cater to growing demand Shambhavi Anand New Delhi

BM Group is setting up two greenfield plants in Bangalore and Sanand for its two group companies -JBM Ogihara Automotive India (JOAI) and JBM Auto. JOAI is a joint venture between Ogihara and JBM Group to manufacture steel stamping and subassembly of auto parts and cater to the needs of Toyota Kirloskar Motors. JBM Auto manufactures tools, dies and moulds for several customers. The group is also planning to enter into new alliances with some international players.

Nishant Arya, Executive Director, JBM Group

Speaking to Auto Monitor about the new plants the

Executive Director, JBM Group, Nishant Arya said, ‘The new plant

in Bangalore will mainly cater to the requirements of Toyota Kirloskar while the other in Sanand will address the needs of Tata Motors.’ The group already has 33 plants spread across the country in various regions including Delhi, Gurgaon, Faridabad, Noida, Haridwar, Pune, Nashik and Chennai among others. On the investments Arya said, ‘the total investment that we have made in the new plants is around `120 crore,’ with both the plants sharing equally. The two projects are in the initial stages and the commencement of production will take some time. JBM Group which has around 13 companies in its fold spe-

cia lises in manufacturing several components including sheet metals parts, skin panels, welded assemblies, jigs and fi xtures, exhaust systems, fuel neck fi llers, wheel assemblies and four-wheeler axels. The group has no immediate plans to diversify into newer products or segments. Apart from setting up new plants, JBM is also spending heavily at its existing plants. ‘We are producing around 75,000 different components annually and plan to increase the product range significantly in a year’s time,’ Arya said. In addition to the investments to set up two new plants, the group in planning to invest `50 crore at its plant based in Chennai which supplies parts to Nissan Motors. ‘The Chennai plant basically serves Ford and Nissan and with the launch of Micra the demand has increased,’ Arya said. JBM also plans to invest `200 crore in one of the group companies’ Jay Bharat Maruti based in national capital region. In addition, the group is also planning to invest `50 crore at its Pune plant, which caters to needs of several customers including M&M, Volkswagen and GM. The group has grown close to 40 percent in the last fiscal and has targeted to touch the turnover of `4,500 crore in this year. JBM Group which already has more than 20 alliances both national and international with companies like Daiwa Excel, Japan, MA, CLN Group, Italy, Metal One Corporation, Japan, Maruti, Tata Technologies, Ashok Leyland to name a few is also eyeing some more alliance with Japanese and European companies in the near future. ‘We have plans for forming new alliances in a span of four to five months,’ Arya said.

Auto Monitor

16 - 31 March 2011

INTERVIEW

India Yamaha mulls options to develop scooters, new bikes for Indian market India Yamaha, the wholly owned subsidiary of Japan’s Yamaha, is gearing up to launch new products to cater to the needs of the ever growing Indian market. In an exclusive interview with Auto Monitor, Director, Sales and Marketing, India Yamaha Motor, Jun Nakata, hinted at developing gearless scooters for the Indian customers. The Indian market can also wait for some new bikes from Yamaha in near future. Shambhavi Anand Yamaha has been gaining prominence in the Indian twowheeler market. How has been the year 2010 for India Yamaha? The last year has been good for us. We have been able to meet our targets in terms of sale. We sold 2.5 lakh units in 2010. C a n you tell us about the growth of your company in the last f ive years? Like the 2010, the past few years have also been good. We sold 1.3 lakh units in

year 2008 and around two lakh units in 2009. How do you see the company growing over the next five years? What is your current marketshare and plans for the next five years? In the next five years we plan to increase the market share of the company. Our current share in the motorcycle market of India is just three percent. We want it to grow upto atleast ten percent in the next three years. We are hopeful of achieving

this target as the two-wheeler market in the country especially the motorcycle segment is already huge and also growing very fast. It offers huge potential. What is your outlook for the two-wheeler industry? The Indian market segment has immense potential. It is growing very fast. Even if people have cars they keep motorcycles. This

Scooters India (HMSI) might concentrate on the lower segment though I am not sure… As far as the customer choice is concerned, I don’t see a very big change in the market. Both Hero and Honda have created brand image for themselves and I guess customers trust both. As far as fi nding opportunities for us is concerned, competition will increase but I really don’t know.

Gearless Scooters are doing good numbers – do you have any plan? We are developing new products according to the demands of the Indian customers in future. We did some survey and found this segment promising. We think there is a demand for gearless scooters in the Indian market and hence are preparing some products on similar lines. But I won’t be able to give more details about the development at this point of time.

ensures increase on the demand side and it is ever increasing. The ownership ratio of motorcycle is as high as 24 percent in the Indian market as compared to the five to 15 percent in other countries like Malaysia, Thailand or Mauritius.

What are the opportunities you see in the changing scenario of Indian two-wheeler industry? Honestly speaking, I do not know how much will the market change because of the split between Hero and Honda. But I do think the competition will be tougher for all the players now. I think Honda Jun Nakata, Director, Sales and Marketing, India Yamaha Motor Motorcycles and

market. Till now our main focus has been the urban market but we have realised the potential that the rural India can offer and therefore we now want to reach the rural market. You are present in top-end of the two-wheeler segments – will you continue to stay in this segment or focus on others also? Our current focus is to increase our market share. We will also develop new products according to the demands of the customers in future. We are going to introduce top-end products in India and then work our way down the pyramid to lower segments.

Bajaj is concentrating on the commuter segment. The commuter segment in India is very big. In future we may also consider producing bikes of lower segment. But right now that is not our focus. We are concentrating more on gaining the market share in the segments where we are already present.

Can you tell us about current dealer network and your plans? We are trying to map the network of our competitors and get in to areas where we are not present. Of course, this will depend on the kind of demand in those areas also. We have a target of setting up at least 200 Yamaha Bike Stations (YBS) and 250 small dealerships mainly in rural areas, which will be called Yamaha Bike Corner (YBC).

What are the challenges you see in the Indian two-wheeler market and how do you propose to address these issues? Our main challenge is to increase our market share. In order to increase our share in the market we plan to develop the appropriate model depending on the demand of the customers. We will also expand our dealer network especially in the rural

How has India Yamaha fared in the export market? What your plans for the future? We are exporting to the African countries and also to some countries in Central America. FZ and R15, our sporty bikes are the most popular models in the export market. Last year we exported around 1.5 lakh units and this year we plan to export at least two lakh.

EDITORIAL Budget ensnares auto industry

he auto industry has unanimously expressed satisfaction on the Union Budget 2011 due to the thrust it imparted to infrastructure development and upgradation of the rural economy that will eventually propel automotive sector. Th is is just a subtle indicator of the industry sentiment as the Finance Minister refrained himself from tinkering with standard rates of customs duty, excise duty and service tax at the existing levels. It is also due to the commitment on GST, roadmap for the Direct Tax Code and setting up of a National Mission for Hybrid and Electric Hybrid Vehicles. Any attempt to increase excise duty and service tax would have fuelled the inflation further. The ruling party has played it up well taking into the account the impact of series of scams and the forthcoming elections. The Government’s green initiative is laudable as it will stimulate the development and manufacture of hybrid and electric vehicles. However, it will take substantial time for the industry to really leverage on the options that the mission is going to offer. On the fl ip side the Government has ensnared the OEMs while attempting to create more opportunities for the component industry. For the fi rst time the Government has come out with a defi nition for CKD kits, which states that engine and transmission/gearbox are not part of the ‘kits’ and these are fully built units. Therefore the CKD kits that had hitherto been attracting 10 percent customs duty will suffer 60 percent as in the case of CBU. By doing this the Government has completely knocked down the prospects CKD imports. One can argue that while it hampers OEMs, it gives enough opportunities for the component industry in the form of supporting the component requirements of engines and transmissions. The question is whether the volumes suffice!

Though the growth rate in motorisation in the country is at its peak for some time now, the numbers are nothing to write home about. The density of passenger cars in India is 12 per 1,000 people, which is abysmally low even when compared with our Asean peers. The used car market, which is still in the nascent stage, is still predominantly in the unorganised sector. However, the business is set to boom due to inflow of vehicles on account of shrinking life cycle of passenger cars - from about 15 years a decade ago to about five years now, at least in the cities and towns. Today the major revenue for garages comes from paint and refi nishing vehicles. And most of the organised players in this space offer quick repair service, which is a money-spinner. It is understood that quick repair concept along with paint and refinishes will be the focus areas for garages as well as the equipment manufacturers in the future. And this is the stimulant for more players to get in to the organised multi-brand service centres and used car retail outlets. Alongside, several allied services have sprung in the recent past. And paint and refinishes seem to lead the pack due to visible growth and this has been the impetus for us to make this issue in your hands as a Focus issue on Paints & Refinishes. You will fi nd some interesting stories including Akzo Nobel, Anest Iwata, ATS Elgi and 3M. In addition you will also find a report on the recently concluded Geneva Motor Show.

T. Murrali t.murrali@infomedia18.in

IMAGE of the fortnight

FORTNIGHT’S QUOTES ‘We will equip them to make decisions in their marketplace, near their customers’ Akio Toyoda, President, Toyota on shifting power to regional operations from headquarters in Tokyo

‘We think we’ll be able to reach volumes that will facilitate a confident decision about US manufacturing’

‘Introduction of DTC by April, setting up of National Mission for Hybrid and Electric Vehicles are welcome decisions’

Johan de Nysschen, president of Audi of America

Karl Slym, President & Managing Director, GM India on the Union Budget

‘Every single time you make a merger, somebody is losing his identity. And saying something different is just rubbish’

‘Motorcycle ownership is much higher in the Indian market compared to other Asean countries’

Carlos Ghosn, Renault-Nissan CEO

Auto Monitor Editorial Team Editor T. Murrali Features Editor Shobha Mathur Principal Correspondent Abhishek Parekh Senior Correspondent Nabeel A Khan Correspondent Shambhavi Anand Contributing Editors Sirish Chandran Bertrand D’Souza

Jun Nakata, Director, Sales and Marketing, India Yamaha Motor

Design & Photography Chief Photographer Mexy Xavier Asst. Art Director Varuna Naik Senior Designer Mahesh Talkar Scanning & Colour Correction Ravikumar Potdar, Ravi Salian, Sanjay Shelar Production Team Dnyaneshwar Goythale, Vikas Bobhate, Pravin Koyande Photographer Neha Mithbawkar, Joshua Navalkar

Send in your feedback and comments to: The Editor AUTO MONITOR, Infomedia 18 Ltd, 4th Floor, Prakashdeep building, 7 Tolstoy Marg, New Delhi – 110001. Ph: +91 11 6630 3282, Email: automonitor@infomedia18.in

Ashish Chordia, Director, Porsche India, Rajiv Jeyabalan, MD, Porsche Chennai Centre and Mohamed Rahman, Sales Director, Porsche India

Porsche opens retail outlet in Chennai German luxury car-maker Porsche hopes to sell 500 cars in India this year and plans to introduce new cars including hybrids. The company sold 130 units last year and till last month it received confi rmed orders for 217 units. After inaugurating Porsche Centre Chennai, Director, Porsche India, Ashish Chordia unveiled the latest version of Cayenne SUV, which is priced between `59 lakh and `2.5 crore. Incidentally it is the largest selling model accounting for more than 60 percent. The German car manufacturer currently retails Boxster, Cayenne, 911 and Panamera in India. This Chennai outlet is the fourth in the country after New Delhi, Mumbai and Hyderabad. Soon it will have retail outlets in Kochi, Ahmedabad, Chandigarh, Pune and Kolkata.

Auto Monitor

CORPORATE

Auto Ignition to supply next-gen starter motors Nabeel A Khan New Delhi

uto Ignition, the company that owns the brand Auto-Lek, is introducing gear-reduction starter motors and shifting its Faridabad facility in the National Capital Region to Prithala, about 17 km from its existing facility. The company, which is India’s leading manufacturer and exporter of heavy-duty auto electric components, will also open an R&D facility here. It supplies to a number of OEMs including Mahindra and Mahindra and Tata Motors. The new plant coming up in a ten acre plot in Prithala will augment the capacity for the company by about 50 percent. It will be investing `35 crore towards shifting the plant. The existing plant had space constraints and to address this issue the company is shifting the plant to a new location. Besides, it wanted to set up a new R&D lab in addition to ramp-

16 - 31 March 2011

ing up the production capacity. ‘The plant with a new R&D facility will be operational next month. Once this new facility is operational then we will be able to ramp up our production to ten lakh units each of starters and alternators,’ Managing Director, Auto Ignition, GK Chandna told Auto Monitor. At the new facility the company will increase the focus on process automation. Currently it produces 5.5 lakh units of starter motors and same quantity of alternator from the existing three-acre facility in Faridabad. It is also looking at setting up facilities abroad to further strengthen its international market. As of now it earns 20 percent of the revenue from export to all the major markets in the world. The company expects to touch a turnover of `200 crore in FY 11 compared to `160 crore registered last year. Auto Ignition is also in talks with a Japanese company for a tie-up/partnership and would

GK Chandna, Managing Director, Auto Ignition

be able to fi nalise the deal in a couple of months. The company hopes that with the proposed partnership it will be able to enter into international market aggressively by leveraging the network of the new partner. It is also hopeful that the new tie up will ramp up the growth rate of the company as well. The company is also hopeful of increasing opportunities in the domestic market as it feels that the import from China will come down as they no longer maintain the low price and quality. ‘If you see in the last six months the products from China has recorded a price hike of around five percent,’ Chandana observed. The company had set up a facility in China in the past but had to close it due to some unfavourable results. The company went through tough times due to rapid increase in the prices of the raw materials but R&D coupled with value engineering helped it sail through the rough phase. The other sigh of relief which this company could experience during the rise in the commodity prices like –copper and steel, is the support from some OEMs in many forms. Even recently when the commodity prices were rising the company could get compensation from some of the OEMs. But looking at the continuity of the price increase of the input materials, support from the OEMs alone cannot help it survive for long time. Therefore it is moving towards introducing a more cost effective -gear reduction motors.

Rane TRW embarks on new business Our Bureau Chennai

n a strategic move the Chennai headquartered Rane TRW Steering Systems (RTSSL) has forayed in to manufacturing and marketing power steering fluid under the brand name Power Cruze. Joint venture between the Rane Group, India’s leading auto component manufacturer, and

vation to the end customer to have superior efficiency in power steering, easier handling and obtain extended life. ‘RTSSL is geared to explore newer opportunities in the auto component space as performance demands in the automotive industry continue to increase and automakers strive to deliver higher performance and improved efficiency,’ he said.

PD Leela Ram, VP-Business Development, RTSSL, R Parthiban, President, RTSSL, Harish Lakshman, MD, RTSSL, PB Rajan, VP-Marketing, RTSSL

TRW Inc of the US, RTSSL is a market leader in hydraulic power steering systems in the country. This is the fi rst time in India that a power steering manufacturing company is diversifying into the allied product. It is also the fi rst of its kind initiative of Rane group. RTSSL manufactures hydraulic power steering gear, vane pump and reservoir and with the new product it hopes to establish a direct connect with the consumer. At the launch the Managing Director, Rane TRW, Harish Lakshman, said the objective of foraying in to this business is to deliver market driven inno-

In the initial phase the company will roll out its premium power steering fluid for commercial vehicle applications. It plans to extend to passenger cars in due course. The new business venture envisages a successful continuation of its distribution network and authorised service centres it has set up for its aftermarket. To start with the company will outsource manufacturing of the fluid. It will set up its own manufacturing facility. The company hopes to sell about one million litres in the first three years. The market size of power steering oil for commercial vehicles is estimated at eight million litres annually.

Auto Monitor

16 - 31 March 2011

AUTONOMICS

Rising input costs to keep OEM margins under pressure

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25-27 percent in 2010-11. While the LCV segment will continue to grow 18-20 percent amid healthy freight demand, MHCV segment growth will stabilise at 13-15 percent. Vehicle prices between December 2010 and April 2012 will not increase beyond 4-6 percent. Moderating demand and intensifying competition across automobile segment will restrict manufacturers to limit price increase. For instance, the number of models in the small car segment, which comprises 80 percent of the car sales, has increased to 25 in 2010-11 from 11 in 2004-05. Thus while volumes in this segment have grown at a CAGR of 15 percent, sales per model have increased by only 0.6 percent. Note: Revenues and margins are calculated across a set of leading 6 automobile players Given our estimates on demand and prices, the automobile industry’s revenue growth will remain firm at 20 percent in 2011-12 as compared to a 32 percent growth in 2010-11. However, CRISIL Research expects margins of automobile players to remain under pressure in 201112, owing to a sustained rise in basic raw material prices, moderating demand amidst rising competition. Further, supply constraints with auto component

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Vehicle prices between December 2010 and April 2012 will not increase beyond 4-6 percent. Moderating demand and intensifying competition across automobile segment will restrict manufacturers to limit price increase

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Steel prices are estimated to increase by 13 percent in 2010-11 and by a further 6-7 percent in 2011-12, on the back of a corresponding rise in coking coal prices and recovery in demand. Prices of coking coal, a key input for manufacturing steel, rose sharply in the fourth quarter of 2010-11 on account of the floods in Australia, a major producer. Rubber prices (a key input for tyres) breached historical highs and rose by 65 percent in 2010-11 as floods in Thailand led to a demand-supply gap. Average rubber prices are expected to be 12-15 percent higher in 2011-12, as compared to 2010-11 levels. Domestic aluminium prices increased by 17 percent in 2010-11 on account of stronger demand. The uptrend is expected to continue in 2011-12 as well.

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The basic raw material index for the automobile value chain has touched a 6-year peak in the fourth quarter of 201011. Prices of key raw materials -steel, rubber and aluminium- have risen sharply owing to supply constraints, driven by natural calamities/ strong demand. While floods in Thailand and Australia have led to sharp spike in prices of rubber and coking coal respectively, strong demand has aided the rise in aluminium and steel prices. CRISIL Research believes that the increase in prices of key raw materials will keep the basic raw material price index higher by 7-8 percent across the automobile value chain in 2011-12 over a 22 percent rise in 2010-11. The trend in prices of key raw materials is as follows:-

els, due to a rise in fuel prices and vehicle fi nance interest rates, coupled with intense competition among players. • The passenger cars and utility vehicle segment is expected to grow by 14-16 percent in 2011-12, as compared to a 30 percent growth in 2010-11. Rising cost of ownership with higher interest rates, fuel prices and increase in vehicle prices will lead to moderation in demand growth. • Growth in the two-wheeler industry is also expected to be lower at 12-14 percent, as compared to a 27 percent growth in 2010-11. While moderation in growth in motorcycle segment is linked to rising ownership cost, continued supply constraints would impact growth in the scooters segment. • In line with the moderation in IIP growth, the commercial vehicles segment is also expected to grow at 16-18 percent in 2011-12, as compared to

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Costs of basic raw materials for automobile players poised to rise sharply

Vehicle price hikes to be limited as demand moderates, competition intensifies In 2011-12, automobile demand growth is expected to moderate from 2010-11 lev-

2005-06

Rising prices of key inputs – steel, rubber and aluminium – will continue to pressurise profitability of automobile manufacturers in 2011-12. Demand growth will moderate, led by rising fuel prices and vehicle fi nance rates. Intense competition will also diminish players’ ability to hike vehicle prices. As a result, they will not be able to fully offset the increase in input costs. CRISIL Research therefore expects operating margins of automobile manufacturers to decline by 20-40 basis points in 2011-12, over and above a 260 bps decline in 2010-11. The margin pressure would be more pronounced in the two-wheeler and passenger car & UV segments, while the commercial vehicle segment’s margins would remain stable.

Q3 06-07

Hetal Gandhi Team leader, CRISIL Research

Q2 06-07

Sridhar Chandrashekhar Head, Automobiles, CRISIL Research

CRISIL Research’s basic raw material index maps key raw materials used across auto segments by assigning segment-specific weights to their prices. This helps us to track the impact of change in raw material prices on the cost incurred by each segment (adjusted for value addition).For instance, in the commercial vehicle segment value chain steel and rubber account for 72 percent and 8 percent of total raw material costs respectively. Similarly, for the two-wheeler segment; steel, aluminium and rubber have a weightage of 50 percent, 15 percent and 10 percent, respectively. Thus, the impact of change in basic raw material prices would be varied across automobile segments.

0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0

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manufacturers are also limiting ability of automobile manufacturers to bargain on contract prices. Thus, they will not be able to fully offset the rise in basic raw material costs and increase in other operating expenses. Consequently, operat i ng ma r g i n s of automobi le manufacturers will continue to be under pressure in 2011-12. They are expected to decline further (by 20-40 bps) in 2011-12, over and above a 260 bps fall in 2010-11. The margin pressure would be more pronounced in the two-wheelers and passenger cars & UV segments, while the commercial vehicle segment’s margins would remain stable due to better capacity utilisation. (Please note that the views expressed here are those of CRISIL Research and not of CRISIL’s Ratings division. CRISIL Research operates independently of and does not have access to information obtained by CRISIL’s Ratings Division.)

CRISIL Research Estimates: CRISIL Research’s basic raw material index maps key raw materials used across auto segments by assigning segment-specific weights to their prices. This helps us to track the impact of change in raw material prices on the cost incurred by each segment (adjusted for value addition).For instance, in the commercial vehicle segment value chain steel and rubber account for 72 percent and 8 percent of total raw material costs respectively. Similarly, for the two-wheeler segment; steel, aluminium and rubber have a weightage of 50 percent, 15 percent and 10 percent, respectively. Thus, the impact of change in basic raw material prices would be varied across automobile segments..

Auto Monitor

16 - 31 March 2011

PAINT INTERVIEW AND REFINISHES

FOCUS ON PAINT AND REFINISHES

There is no regulation mandating the use of water-based paints as in developed countries ATS Elgi, with its large manufacturing base in Coimbatore and its service networks spreading across 62 locations in the country, hopes to leverage the emerging opportunities in the aftermarket, especially paint and refinishes segment in a big way. Managing Director, ATS Elgi, Harjeet Singh Wahan says the company has an edge in terms of after sales service over imported paint booths. In addition to painting equipment ATS Elgi deals with lube, wash, lift, body shop repair equipment, wheels, tyre inflators, gas analysers and special equipment like simulators for Maruti Driving Schools. He elaborates on the company’s plans for the paint and refinishes segment. T Murrali Can you tell us about the products you are dealing with – for Paint and Refi nishes? We manufacture and deal in the complete range of products for the body shop where the painting and refi nishing is done in a garage. These products are paint booths, welders, crash repair system, panel repair system, pneumatic sanders and paint guns. Do you manufacture all the products in-house? We manufacture paint booths

and some part of the crash repair systems. For the other products we have tie-ups with leading manufacturers in the world – specialists in that field and we represent in India. As and when the volumes grow we have an agreement with the overseas manufacturers to start manufacturing these equipments in India. Tell us about the uniqueness of your product; are they targeted at OEMs or only at garages or both?

The products are mainly designed and manufactured for the garages. But we are open to suggestions and improvements suggested by the car OEMs. We have a monthly meeting with each car OEM and during this time products design and its applications are also discussed. The designs used by us not only ensure long life of the product, but also lower power consumption. This is especially true in the case of paint booths which are highly power intensive machines. We mostly serve the garages and small portion to the OEM’s training centres and plant use. Is there any special initiative for your paint booth customers? We have been dealing with paint booth for the last nine years and we have more than 1,500 installations now. Currently ently we make about 200 units every ery year. The special initiative that we have taken is to give our customers an option to get their eir paint

customer at a very nominal investment. We have joined hands with an Italian partner to supply ‘Quick Repair Kits’ to the Indian garages. This concept is catching up fast due to higher productivity and revenue generation. This can be done by putting Paints and refinishes are equipments like prep stagoing to be the focus area tion, infra red dryer, dry for workshop in the coming sanding system, panel repair systems, plastic repair kit & years with population paintless dent removal kit. booth refurbished by us. After working for about seven years the paint booth needs some maintenance. We can only do this as we make paint booths out of panels only with polyurethane foam.

explosion in cars

This will increase life by about another ten years. These kinds of services cannot be carried out for booths with glass wool panels. What are the emerging trends in paint and refi nishing vehicles and how ATS Elgi is gearing up to address the issues? Today the major revenue for a workshop comes from paint and refi nishing vehicles and this can be divided into three categories – major damage, medium damage and minor damage accounting for 10 percent, 20 percent and 70 percent respectively. Workshops have started focusing on ‘Quick Repair’ of minor damage, which is a money spinner and is available to a

Tell us about the new technologies that you are working on? We are working on the future requirements of paint booths for the water-based paints which are slowly getting introduced in this country. This is mainly to reduce the pollution caused by the solvent based paints. Though there is no regulation mandating the use of water-based paints as in

Harjeet Singh Wahan, Managing Director, ATS Elgi

developed countries, some of the car manufacturers have moved to this technology considering regulation sooner or later. Going forward, what are the new opportunities you see in this segment? Though there may not be any new products entering this market in the near future, yet improving the productivity of the body shop will play an important role. We are working on design improvements for each of the products manufactured or traded by us so that the outputs can be substantially improved. Paints and refi nishes (part of body shop activity) are going to be the focus area for workshop in the coming years with population explosion in cars in the Indian market. This gives room for major investments by garages in this area as well as thrust by the OEM’s. This activity gives bottom line to the Garages. In order to gear up the growth and harness major share we are working with foreign sources to bring new technological products.

16 - 31 March 2011

PAINT AND REFINISHES

Auto Monitor

Akzo Nobel’s SRR cuts down time, enhances proﬁtability T Murrali Chennai

n a bid to offer technological solutions to the burgeoning car refi nish market, Akzo Nobel Automotive & Aerospace Coatings, which is known globally for its technical expertise in providing solutions to the vehicle refi nish industry, has launched a new concept - Sikkens Rapid Repair (SRR) in India recently. As this concept has been successful in emerging markets including China, it was adapted to address the needs of India customers. The concept is fast picking up and recently SRR has been approved by Tata Motors. ‘The fi rst OEM approval for SRR reinforces Akzo Nobel’s position as a solution provider and preferred supplier,’ said Managing Director, Akzo Nobel Car Refi nishes, Divyendu Pundhir to Auto Monitor. Growth of automotive industry has been a major driver of the car refi nish segment, which has been evolving over a period of time. Automotive industry has been on constant upswing over the last decade and the focus in India has moved from low cost products to high efficiency products. Eventually the bod yshops are also looking at efficient systems to reduce the turnaround time for repairs along with enhancing capacity. At the same time there has been a sea change in car owners’ expectation due to their exposure to the best technologies in the world. The car owner today is looking at fast and hassle free repairs which are as good as the OEM paint fi nish. ‘We expect the SRR concept to spread more rapidly in the car refi nishes industry and to cross more than 100 units in India soon. A concept like SRR reinforces Akzo Nobel’s commitment to fi nd tomorrow’s answer today,’ said Pundhir. SRR works on a single cell production process, which is primarily an arrangement of all necessary resources at one place, enabling the users in improving quality, speed and cost of the repair process. It addresses the minor and medium repair jobs resulting in delivery to customers within 24 hours. According to the General Manager (Marketing), Akzo Nobel Car Refi nishes, Hitesh Mehta, ‘this is fi rst of its kind, out of the box concept designed to deliver customer delight. SRR already has more than 30 customers in the fi rst year of operation.’ The benefits for the owners include minimal space requirements, addresses bottlenecks and capacity concerns , lower cost as a result of focused approach to small repairs, avenues to generate new business by up-selling to service traffic and single window solution since it one-stop-shop package. In addition it improves customer satisfaction enabling the bodyshop owners to get more footfalls. Besides, it paves the way for sustainable way of doing business as it utilises less energy and resources. For the car owners, it means faster delivery and high quality job at affordable prices. Bodyshops in India which were the early mover in opting for SRR program have shown better

results in their operations in less than six month, Mehta said. Ravi Suri, who owns Whitefield Honda in Bangalore and the fi rst customer to opt for this program, said the company was able amortise the investments in less than fi ve months. ‘We are impressed with the concept as there is a lot of opportunity to earn money. There are many people who are not willing to claim insurance. Moreover, they do not have the time to invest for their car repairs. SRR is ideal for handy situation.’ Yet another customer, Mandovi Motors in Bangalore was also amongst the early movers in opting SRR. General Manager (Service), Mandovi Motors, Dhavak Kumar said SRR consid-

erably reduced the turnaround time by enabling car delivery on the same day and help ease con-

gestion at the body shop. Akzo Nobel, headquartered in the Netherlands, is a business

leader in coatings and chemicals industries. It has operations in more than 80 countries with 60,000 plus employees worldwide. The company is in to car refi nishes, decorative, marine and protective, packaging, industrial and powder segments. In India, the company started its operations in the car refi nishes industry in 1997. Akzo Nobel Automotive & Aerospace Coatings operates under five brands Indian market – Sikkens, Lesonal, Duco PU, Autocoat BT and Vektor PU, catering to customers from vehicle refi nish, commercial vehicles and industrial segments. The company has one of its production facility in Mohali and its International Research centre in Bangalore.

Auto Monitor

PAINT AND REFINISHES

16 - 31 March 2011

3M India to upgrade body, paint solutions Shobha Mathur Bangalore

M India is shoring up its training initiatives in body and paint repair services through tie-ups with Toyota Kirloskar Motors and ITIs. The initiative would upgrade the quality of repair in the aftermarket by churning out trained technicians. The company is strengthening its presence in the unorganised sector by offering product solutions in polishing and sanding to roadside repair shops for enhanced productivity and less labour intensive repair. The company has also fi led for patenting a green dust-free solution that sucks up dust by upto 99 percent as part of its refi nishing initiative. Known as the dust-free ventura kit, it leverages the ventura technology for removal of dust. It is harnessed at the sanding stage for cleaning the environment. General Manager (Automotive Aftermarkets Division), 3M India, Subodh Jindal told Auto Monitor that 3M was the fi rst company to partner with body shops in India for imparting skills in various processes of vehicle denting and repair work. Meanwhile, 3M has a target of reaching out to about 12,000 roadside garages over the next four years, having tapped about 2,000 repair outlets over the last two years. According to Jindal, about four years ago, roadside garages were

undertaking repairs in complete violation of product rules and safety of passengers. Now they could access better repair solutions. The company has tied up with about 2,000 dealers in the aftermarket for providing collision repair solutions in their body shop.

Aftermarket Service Getting the vehicle ready for painting and subsequently undertaking the refi nishing and dent removal is their forte. The company’s abrasives lineup is an important tool for both the refi nishing and car care detailing businesses. The company also has a separate industrial abrasives division that caters to the requirements of various industries. ‘Fillers are produced at our Indian facility and are especially for India,’ pointed out Jindal. The company helps workers to perform the job better at dealerships so that the repair is as good as an OE finish. He elaborated that cracks in plastic car bumpers could be now repaired instead of replacing the entire bumper. Bumper parts being non-biodegradable were able to retain their strength after repair. The process was also 70 percent more cost effective. ‘A mix of a special putti sits on the crack and reinforces the solutions on the plastic bumper,’ said Jindal. The company’s strength lies in leveraging technology platforms like abrasives, specialty materials and chemi-

cal compounds in the automotive aftermarket for exterior paint refi nishing. The company holds numerous patents in specialty materials and attributes its success to their micro-application process in the markets it operates in. Each year, it fi les 500 product patents globally. About 99 percent of the paints used in the aftermarket are solvent-based. Besides, 3M offers re-fi xing solutions for glass that pares up the productivity and safety in terms of process improvements in body shop. Another department where 3M has a presence is in car care detailing spanning mechanical, accessories and washing products through 1,000 OE approved dealerships. It also has three franchisee outlets with two at Bangalore and one in Pune for car care.

According to the Division Manager of Car Care Division, Ninad Gadgil, 3M holds a 60 percent share in this segment with about 3,500 applicators deployed at different dealerships. Treatments encompass exterior, interior and anti-corrosive jobs. 3M prides itself on eliminating scratches with abrasives. A recently launched 3M Trizact abrasive with a micro-replicated surface contains very fine abrasive particles and ensures better finish.

Quality Focus Rubber and plastic parts in the car are cleaned through various dressers. An ala carte of products for engine coating was launched a year ago by the company. These can be sprayed on the engine to protect it from corrosion and deterioration.

Out of the 1.2 lakh car care treatments per month that 3M handles at its dealerships, interiors constitute the majority at 45,000. For the seat, a premier interior enrichment foam product that was innovated in early 2010 enables service bookings to be taken even at a late hour in the day. For the vehicle underbody, some new products in the anti-rust category are under patent registration. Gadgil said that 3Ms strength lay in surface refi nement and in offering a permanent solution for scratches through its abrasive technology. Exterior products and abrasives are manufactured at its US and European plants with shampoos, dressers and all-purpose cleaners for interiors that are water-based manufactured in India from its global formulations. The company has five manufacturing facilities in the country of which two at Pune produce aftermarket products. An upcoming R&D centre at Bangalore is likely to innovate products for India and the Asia Pacific region and is expected to go on stream in the second quarter of FY’12. Another innovation centre is on the cards at Delhi as well. The car detailing industry is worth `150 to `200 crore with 3Ms share of business standing at 50 percent. It has a similar share in the `200 crore non-paint consumables market too.

Anest Iwata Motherson to start assembly of paint pumps, electrostatic spray guns Nabeel A Khan New Delhi

nest Iwata Motherson Coating Equipment (AIMC) will start assembling paint pumps, electrostatic spray guns and paint pump agitators at its Noida plant. The move comes with a view to reduce the production cost and increase the market share in India and other SAARC countries through competitive pricing. ‘We will start assembling paint pumps, electrostatic spray guns and paint agitators at our Noida plant by June this year and we hope this will give us an edge over other players by offering more competitive price structure and eventually fetch a larger share in India and SAARC countries,’ President, AIMC, Sanjiv Agrawal told Auto Monitor. The relationship between Samvardhana Motherson Group and Anest Iwata of Japan began in the year 2000 when both the companies signed their first JV -Anest Iwata Motherson, for manufacturing of compressors. Presently this JV manufactures compressors not only for the Indian market but also a range of compressors for the world market from its two facilities located in Noida.

Marketing Alliance The relationship grew stronger with a second JV – Anest Iwata Motherson Coating Equipment (AIMC) in 2006 for marketing of

ny launched its products in Sri Lanka in December 2010. ‘Anest Iwata Corporation has over 70 percent market share of spray guns in quality conscious market like Japan. Our core strength is automisation technology and 80 years of experience in spray painting equipment. The same global quality has been introduced to the Indian market. We endeavour not only to provide a high quality product but also provide consultation for total paint coating solutions,’ Sanjiv Agrawal said. The product range already introduced in India includes spray g uns, paint pumps, accessories like agitators, tanks and paint pressure regulators. AIMC has an estimated market share of 30 percent in the top pyramid of spray guns for the industrial finishing market in India Spray gun from AIMC; (inset) Sanjiv Agrawal, President, AIMC and over 10 percent share of paint pumps in the same segscaling up of the economies. ment. AIMC customer base With the good growth trend in spans a spectrum of industries the Indian market it hopes the including automobile manufacsegment would grow well in the turers, auto ancillaries, leather, coming years. AIMC is expanding furniture, metal working and its footprint in the SAARC region plastic industries among others. starting with Sri Lanka followed With the growing market AIMC by Bangladesh. The compapaint coating equipment in India and SAARC region. This marketing JV of AIMC, within a span of four years is moving on to assembly operations in India. The third venture in this series was ‘Air Factory’ which specialises in air energy audits and providing complete air solutions. AIMC currently markets its coating equipment in India, Sri Lanka and planning to enter Bangladesh and other SAARC nations in the near future. The company will think about further localisation of the product range depending on the

expects to double its turnover in two to three years. The company expects to touch a total turnover of `10 crore in FY 11. The company has been able to capture around 30 percent (around 4,000 units yearly) of the total market share for spray gun in India and plans to set up a plant in India if the volume increases to at least 14,000 units yearly.

Newer Solutions, Apps Anest Iwata Motherson Coating Equipment (AIMC) is actively propagating new concepts in India with the help of Japanese experts. This year AIMC will be introducing painting robots integrated with complete painting equipment and knowhow for small plastic parts which can improve the FTT (fi rst-timethrough) of painted components from a current average of 70 percent in manual painting to over 90 percent. This gives tangible economic advantages to the painted plastic parts manufacturers and job workers. The competitive edge comes from its knowledge of painting as the origin is spray guns and not just robots. An increased FTT rate will also cut down on the paint wastage which will entail less harm to the environment. Driven by the technological support, Anest Iwata provides a product range solution for almost every application. The range spans spray guns for heavy industrial applications to small artistic applications with an

air-brush which is one of the preferred ones in the world. AIMC offers a comprehensive range of solutions for the refi nish segment including specialised guns for primer, base coat, clear coat and touch-up applications. Anest Iwata aims at reducing cost to customers by improving paint transfer efficiency and at the same time reducing paint wastage. ‘We have also patented LVLP (Low Volume Low Pressure) technologies that save paint consumption by 20-30 percent. Achieving high automisation and high quality of fi nish at very low volume of air and at low air pressure, it is not only cost effective for the customer but also saves the environment,’ he said. This ‘green technology’ ensures that not only lesser paint-waste goes into the air but there is a significant saving in compressed air required to atomise the paint, which in turn reduces power consumption. According to the company even the paint pumps are designed in such a way that they require very small amount of solvent for cleaning the equipment during colour changeover. Anest Iwata is also working with the paint companies to come up with more environment friendly solutions. One such step is developing good spray guns and equipment for water based paints. With the increasing environmental concern and awareness water based paints are being increasingly used in India also.

16 - 31 March 2011

PAINT AND REFINISHES

Auto Monitor

Dynasole to expand capacity, increase vendors Shambhavi Anand New Delhi

yderabad based paint booth manufacturer, Dynasole Industries is planning to expand its capacity in order to meet the demand from the domestic as well as the export markets. The company, which manufactures paint booths for both passenger vehicles and busses, also intends to export to Europe. ‘We had tripled the capacity to about six units a month in 2005. But the demand for our products in the domestic market increased so much that we were not able to export. Our current expansion plans will aim to cater to the needs of the export market as we plan to make up to 25 units per month,’ said Managing Director, Dynasole Industries, AM Rao.

Manatec paint booths target auto garages

uducherr y-based manu fact u rer of ga rage equipment, Manatec has been functioning as a trading entit y, importing paint booths from China for the last four years and marketing them in India. Out of the five paint booths that the company sells a month the majority are targeted at the aftermarket.

Growing Demand According to a company official the paint booths marketed by Manatec are of a basic variety. Costing around `six lakh per unit the key clients for the company’s paint booths include Maruti Suzuki and its authorised dealers. With the growing demand for paint booths from the aftermarket to upgrade quality of automotive fi nish, Manatec is targeting sales of about seven units per month in FY’12. According to the official, the company’s paint booths sport an automation level of 50 percent with more advanced booths in demand globally.

Design Integration For instance, some new technologies in paint booths include the fast colour changing powder coating booth that is designed to handle a large variety of colours without any mechanical cleaning tools or entering the booth. Similarly, AdvanceCure is the solution for accelerated drying of water-based colours by turning the booth into a convection oven. By correctly integrating the booth design and paint sludge system, it is also possible to enhance the booth efficiency and reduce downtime and maintenance. Ma n ate c m a nu f ac t u re s wheel aligners, wheel balancers, two post lifts, gas analysers, smoke meters, head lamp aligners and digital air tire inf lators. Buoyed by rising export orders, a new greenfield manufacturing facility is coming up near Puducherr y and would produce aligners and balancers on a mass scale. The company currently exports to more than 50 countries.

Dynasole, which exports spray booths to Muscat, Dubai and Nigeria, is also planning to increase the number of its vendors in order to expand its capacity of production. Currently it uses compressed rockwool slab

in the paint booths. In order to augment the structural strengths the company is planning to use rock wool-lamella in future. The company manufactures paint booths of various types such as spray booth, combi-

booth (paint booth attached with a drying oven), paint boothcum-baking chambers and paint booths suitable for water borne paints. The company’s equipment are used by several OEMs including Volkswagen, Mercedes

Benz India, Tata Motors (Lucknow and Sanand), and Maruti Suzuki. Toyota Kirloskar Motors and Volvo India have recommended the paint booths manufactured by Dynasole, he said.

Auto Monitor

PAINT AND REFINISHES

16 - 31 March 2011

‘Water borne paint booths are in DuPont expanding its aftermarket bouquet demand’: Rai Automotive Shobha Mathur Chennai

Shambhavi Anand New Delhi

oatings major DuPont India has recently been approved as a supplier for refi nish coatings by Honda Siel Cars as the vehicle manufacturer has commenced conversion of around ten dealer body shops from solvent to water borne paints.

ai Automotive Systems, a Delhi based trading company which deals mainly in body and paint shop related products, is planning to expand its network in order to cater to the rising demand in paint booth business. The company sees massive opportunity in the eco-friendly, water borne paint booths, which is the latest trend in the segment. ‘With the OEMs insisting on the usage of water borne paints, we see the demand for water borne compliant paint booths rising sharply. This is the latest trend in the market and will create lot of business opportunities. To cater to the rising demand we are planning to expand, both in terms of product portfolio as well as network,’ General Manager, Rai Automotive, Rishikesh Sahay said.

International Collaboration Application of water based paints is more critical than other paints, especially in a country like India as there are different climatic conditions. Water borne paints require stronger air force to dry than the conventional paints. Paint booths with infra red rays can also be used instead of air to dry such paint. According to Sahay, annually the company sells more than 25 paint booths in the premium segment, which are as expensive as `18 lakh, and a much higher number in the cheaper range of `five to `seven

Growing Customer Base

Water borne paint booth of Blowtherm

lakh. The company expects these numbers to rise faster in future. Established in 2003 Rai Automotive trades in products related to paint booth and body shop such as, sanding equipment, polishing system, dust extraction systems, drying systems, spraying systems. It imports these products from its international allies like, Blowtherm in Germany, ITR in Sweden, and Space from Italy among others.

The company sees massive opportunity in the ecofriendly, water borne paint booths, which is the latest trend in the segment The main clients of the company in the passenger vehicle segment are Maruti, Tata Motors, Toyota, Honda, Hyundai Motors,

Ford, GM, Mercedes, BMW, Porsche, Audi and in commercial vehicle segment Ashok Leyland and Tata Motors. Besides, few companies including Force Motors and Volvo in the commercial vehicle segment approve the company’s products. Apart from OEMs, Rai Automotive is a supplier to individual garages also. ‘The entry level market holds immense potential when it comes to paint and refinishing,’ Sahay said.

Entry-Level Products About the entry level market, t he Genera l Manager (Technology), Rai Automotive, Zenith Thomas said, ‘With the OEMs concentrating upon 2S facilities (Service and Spare) rather than 3S (Sales, Service and Spare) there will be a number of smaller players in the market leading to an increase in demand of lower priced products.’

The company has already been meeting the total requirements of Mercedes Benz and half of Toyota Kirloskar Motors’ a f ter ma rket requ i rement s. At present, two of TKMs service centres are running a pilot project leveraging water borne paints but the carmaker has initiated conversion of ten more of its body shops across the country to these coatings. By 2012, TKM is targeting complete conversion of all its aftermarket body shops to use of water borne colours and DuPont is eyeing fresh business potential in this segment. Volkswagen has also introduced water borne colours in its after sales service. Though DuPont is not yet a supplier to V W, it is optimistic of clinching a deal from the German carmaker as well.

Water Borne Paints ‘We expect all carmakers to convert to water borne colours by 2015 as the trend towards use of water borne paints has spun off since the last two years. It is expected to gain further momentum as regulations for their use

come into place in India,’ said a company official. About 80 percent of the solvents are replaced with water in water-based paints that enable curb on emissions. A deterrent, however, for the manufacturers is a 10 percent hike in cost as paint refi nish booths have to be fitted with extra dryers and blowers for the paint drying process.

Regulatory Framework The absence of a regulatory framework on the level of volatile organic compounds (VOC) to be maintained in the paint pigment has put a question mark on use of water borne colours in India, at present. VOC has significant vapour pressure and can affect environment and health. Hence, in Europe, strict regulations exist on the level of VOC in solvents with 420 gms per litre the prescribed limit. Currently, all water borne coatings of DuPont are imported from its German plant under the brand name Standohyd. The company is now mulling the launch of a new product ChromaxPro that would widen its water borne bouquet further.

Training Centres DuPont has four training centres in metros pan India and is targeting another two going forward. Company officials claim that it has about 50 percent market share in the paint refi nish market that they plan to sustain in FY’12 as well. Water borne paints constitute just one percent of the Rs 250 crore organised paint refi nish market at present.

Auto Monitor

PAINT AND REFINISHES

16 - 31 March 2011

Sellowrap to set up new facility in Chennai Our Bureau Mumbai

ellowrap is setting up a new facility in Chennai to cater to the requirements of customers located in Southern India. The new facility is around 8,000 sq metres and twice the size of the company’s existing facility in Pune and is being set up with an investment of around `22 crore. Sellowrap supplies protective doors, blow fi lms, plastic moulded components by processing foams and adhesive tapes at its facilities in Pune and Bawal, Haryana. The company is mainly a tier-II manufacturer and its product fi nd application in thermal insulation, heat resistance, shock proofs, fi ltration, packaging, seals, sound insulations, rust proofi ng and plastic moulding. The machines installed range

Saurabh Poddar, Director, Sellowrap Industries

from 110 tonnes to 660 tonnes processing capacity and can provide business worth around `40 to 45 crore from Pune facility. ‘We are looking for additional business from Volkswagen, Fiat and Tata Motors among other customers and are looking for additional business from automotive and

white goods segment,’ said Director, Sellowrap Industries, Saurabh Poddar in a recent interaction with Auto Monitor. All three facilities combined puts the company in a position to notch revenues of around `80 to 90 crore over the next couple of years even as Chennai facility

Plastic component inspection and assembly being carried out at the Pune facility

goes into full production by the end of next fi scal. ‘The demand from automobile sector is likely to grow by 20 to 25 percent over the next couple of years but beyond that infrastructure development including roads and ports has to be upgraded for sustainable growth in the long term and there

is little development to show that we are headed in that direction,’ Poddar added. Sellowrap joined hands with Mitsui & Co to manufacture foamed PP/PE based products including bumper core, f loor spacers, tool kits, side impact bars, door trim pads, sunvisor cores, head rest pads, parcel shelf supports among other interior and exterior products for passenger cars and commercial vehicles. Sellowrap has 67 percent stake in Sellowrap India with balance stake held by the Japanese partner. The JV has a technical tie-up with Kaneka Corporation, Japan. ‘We entered into the JV with Mitsui to have an early mover advantage in the market for products relating to pedestrian safety norms, which were expected to be implemented few years back but may now be implemented by only 2013 or beyond,’ said Poddar explaining the rationale for entering into JV with Mitsui. He added that newer cars are likely to have the latest equipments and systems from comfort, regulatory requirements and safety perspective as most of the recently set up automobile manufacturing facilities in the country export significant proportion of their production to developed and developing countries. ‘The major hurdle we are facing in order to evolve as a systems supplier to local and global automotive OEMs is that we fi nd it difficult to attract and retain suitable people for managing our growth. We are in the process of addressing the issue from long term perspective,’ elaborates Poddar. He added that manpower issue is tricky to handle as additional facilities like canteen, transportation and other incentives leads to additions in overall cost structure, which may be counterproductive in the long term. Some of the key customers for Sellowrap Industries and Sellowrap India include Volkswagen, Maruti Suzuki, GM, M&M, Nissan, Renault, Tata Motors, Magna, Lear in the automotive sector and LG, Haier, Sharp, Videocon in the white goods segment. These customers are serviced from two existing facility located in Bawal in Haryana and Ranjangaon near Pune. Sellow rap’s consolidated turnover last fiscal stood around `37 crore (including Sellowrap Industries and Sellowrap India) while Sellowrap Industries notched up a turnover of around `22 crore. Poddar is targeting a turnover of around `70 crore in this fiscal on a consolidated basis as his new facility in Chennai goes on stream. All facilities have been certified for QMS with ISO/ TS 16949, ISO 14001 & OHSAS 18001.

Auto Monitor

PAINT AND REFINISHES

16 - 31 March 2011

Cleaner and efﬁcient solutions for parts and surface cleaning in manufacturing T he goal of industrial parts and surface cleaning is to assure the necessary degree of cleanliness for downstream processing or fl awless functioning. Actual requirements vary significantly. But regardless of whether very simple or highly demanding cleaning tasks are involved, it’s also always important to complete them as efficiently as possible. Just how this can be done will be demonstrated at parts2clean in Stuttgart from the 25th through the 27th of October, 2011. The Leading International Trade Fair provides a complete overview of processes, procedures, media and measures for cost-efficient cleanliness in accordance with specified requirements in man-

ufacturing and MRO processes. Whether injection nozzles, implants, turbines, micro-parts or electronics components are involved – in nearly all industry sectors, manufacturing companies are required to fulfi l significantly stricter requirements for parts cleanliness. On the one hand, this leads to increased cleaning costs. To be on the safe side, the solution of choice is frequently “as clean as possible”. But economic efficiency, and thus the company’s competitive edge, usually suffer as a result. Parts and surface cleanliness is playing a more and more important role in the field of maintenance, repair and overhaul (MRO) as well. In many cases, manual cleaning work is still common in this area.

Apart from the lack of reproducibility and reliable results associated with this process, it also results in high costs. In the areas of industrial manufacturing as well as MRO, costs can be reduced and results can be optimised through the use of an appropriate cleaning concept which is matched to the specified requirements. This, however, necessitates knowledge regarding the performance capabilities of the various cleaning processes and how they can be used in an optimised fashion. As a technical trade fair with the world’s most comprehensive offerings for parts and surface cleaning, parts2clean provides this know-how, and will be held at the Stuttgart Exhibition Centre (Germany)

from the 25th through the 27th of October, 2011.

Requirements-Oriented Cleaning in the Manufacturing Process

Depending upon the degree of completion within the manufacturing process, cleaning tasks vary in parts production from rough or intermediate, right on up to microcleaning. However, the respectively relevant parameters such as component geometry, material, degree of contamination and cleanliness requirements are usually known. In consideration of the respective technical and economic aspects, this makes it possible to select the best possible solution from the great variety of available processes. For example, this could

be a wet chemical process which makes use of an aqueous cleaning agent or a solvent. These are used frequently as a decentralised solution for intermediate cleaning, for example immediately after a machining process. Amongst other advantages, the mixing of various processing media is thus avoided as a result, which may lead to later cleaning problems and, consequently, higher costs. Advances in the field of cleaning media allow for increased economic efficiency, environmental compatibility and shorter processing times. Media treatment also influences cleaning process quality and costs to a considerable extent. Effective filtration and separating systems (e.g. oil traps, particle filters, membrane filters and water treatment) contribute to extended bath service lives and reduced disposal costs. Cleaning technologies such as high pressure water jet systems and dry cleaning methods including CO2 and plasma cleaning, as well as blasting and vibration processes, are frequently used for cleaning individual parts. They generally provide for high degrees of automation, which simplifies in-line cleaning within the production process. Depending on the task, combinations of various cleaning technologies can also be taken advantage of, for example where functional surfaces need to cleaner than the rest of the workpiece for a downstream manufacturing step.

Cleaning in MRO Processes – a Constituent of Maintenance and Repair Where cleaning processes in the field of MRO are concerned, maintaining or restoring the appearance, functionality and efficiency of machines and equipment is at the centre of attention on the one hand. On the other hand, contamination, as well as functional or protective coatings, i.e. carbon deposits or paint, have to be removed from parts and components. General conditions such as accessibility and composition of the respective type of contamination are not always known. The selection of a suitable cleaning process is not only rendered more difficult as a result, there are also fewer requirementsoriented solutions available for cleaning tasks in MRO processes. Available processes which allows for efficient cleaning in this area include, for example, dry ice blasting, dry steam compressed air cleaning, cleaning with saturated water vapour and ultrasonic cleaning. Special cleaning agents are available for the implementation of wet chemical processes. These technologies often make it possible to clean components and systems without any dismantling and reassembly. Furthermore, negative influences on employee health and the environment, as well as damage to the components to be cleaned and surrounding attachments (i.e. scratches, deformation or excessive wear), which frequently occur during manual work procedures, are avoided. In addition to information offered by the exhibitors, the parts2clean expert forum, held in German, provides lots of knowhow regarding parts and surface cleaning in production and MRO processes.

16 - 31 March 2011

Auto Monitor

CORPORATE

AN EVENING TO REMEMBER! Jury

Dilip Chenoy MD & CEO National Skills Development Corporation

Vida Dâ&#x20AC;&#x2122;Souza Director - Business Excellence The Indian Hotels Company

Sachin Khandelwal Senior General Manager ICICI Bank

Revati Kasture General Manager & Head - Research CARE Ratings

The second edition of Automotive Dealership Excellence Awards (ADEA) for recognising top dealers across the country for 2010 held on February 26, 2011 was a grand success. Co-organised by Auto Monitor and the Federation of Automobile Dealers Associations (FADA), ADEA is the premier platform for recognising excellence in automotive retail. We bring you the glimpses of the awards ...

T Murrali Editor Auto Monitor

Auto Monitor

ADEA POST SHOW

16 - 31 March 2011

Speeches

It gives me a great deal of pleasure and satisfaction that this activity, initiated last year jointly with Auto Monitor, is being carried forward with added zeal and zest, as the number of nominations received for various categories suggests. The idea behind institution of these awards is to bring forth the best practices in auto retail

Winning an award is something that is extremely motivating for anyone to work harder. It not just improves an individual quality of work but also induces others in the same field to strive harder in order to get to the winner’s position. Hence, an

In any business, the last mile connectivity decides whether the deal ends up in a smile, or, it is miles apart from the smile. Irrespective of the brand, quality and features of the vehicles, the manufacturers are recognised and rewarded, based on the experience that the customers get, at the point of sale, which is the retail out-

so that these best practices could be replicated by others. At the same time, the recognition encourages the award winners to aim for higher goals and to set new benchmarks of excellence for themselves. The awards recognises not only the excellence in business but also the pioneering efforts in community service. The objective of having Green Initiative, Safety Initiative and CSR Initiative awards is to create awareness that any business cannot survive or sustain in the long run in isolation. A dealership or, for that matter, any business draws its sustenance from the environment it operates in and cannot sustain for long unless the business enjoys the goodwill & patronage of all stakeholders. It is our endeavour and ambition to make the ADEA awards the ‘Oscars’ in auto retail dealership management.

Sandeep Bafna of Fortpoint Automotive and Dr Ranjna Bansal of Ashok Auto Sales receiving CSR Initiative awards from Liam Donnelly, Managing Director, Arval India

Nikunj Sanghi, FADA President initiative like ADEA by Auto Monitor and FADA will not only help the winning dealerships gain recognition but also help raise bar for the entire industry. This is the second year of ADEA, as we are absolutely overwhelmed with the response. As a part of this initiative I feel extremely proud to do my bit for this industry. Our magazine Auto Monitor has been serving this industry past ten years and pledges to continue in its endeavour. It is indeed a wonderful feeling to be amidst a bunch of winners. I believe that each and every dealership is a winner in their own right as they have won growth and prosperity for the entire automobile industry with their efforts.

Saneep Khosla, CEO - Publishing, Infomedia 18 felicitating the best three-wheeler dealer Rishabh Sanghi of JS Fourwheels

Deepak Mokashi, Vice President, Hero Honda felicitating representative of Laxmi Sales & Service for the aspiring CV dealer of the year

Sandeep Khosla, Chief Executive Officer –Publishing, Infomedia 18 let. The link that the customer establishes with the vehicle manufacturer is through the dealers. And unless the dealers perform well, OEMs cannot witness volumes and profitability. India has become the global launch pad to launch vehicles. Now a days, most of the vehicles launched in the country are of global standards. Alongside, dealerships are also getting their standards enhanced. Manpower is matched to the emerging requirements. However, with the increasing cost in terms of creating infrastructure and maintenance, the dealership face more challenges now-a-days. At the same time vehicle manufacturers are also facing huge challenges due to increasing manufacturing cost and competition. Therefore it calls for a new thinking to make things better for both OEMs and dealers.

Deepak Mokashi felicitating Sunil Talwar, MD, Talwar Auto Garages as the best CV dealer of the year

T Murrali, Editor, Auto Monitor Binod Agarwal (R) taking award on behalf of Shree Automotive from Dilip Chenoy, MD & CEO, NSDC

Automotive Dealership Excellence Awards winners gathered on the podium

Arun Malhotra, Sr VP, M&M felicitating the best two-wheeler dealer of the year Guru Kripa Auto’s representative Pratyush Duclani

Sandeep Khosla, CEO, Publishing, Infomedia 18 (L) felicitating the aspiring three-wheeler dealer of the year Bagga Link Service’s Managing Director, Prem Bagga

Arun Malhotra, Sr VP, M&M presenting the award for the aspiring two-wheeler dealer of the year to FADA President, Nikunj Sanghi on behalf of Nimar Motors

16 - 31 March 2011

Auto Monitor

ADEA POST SHOW

Winners Award Category

Description

Two-Wheelers Guru Kripa Auto, Dhanbad

Dealer of the year

Nimar Motors, Khargone

Most aspiring dealer of the year

Three-Wheelers

Ravi Pisharody, President, Tata Motors felicitating the aspiring four-wheeler dealer of the year TR Sawhney Motors’ representative at the ADEA

JS Fourwheel Motors, Alwar

Dealer of the year

Bagga Link Service, New Delhi

Most aspiring dealer of the year

Four-Wheelers Alankar Auto Sales & Service, Patna

Dealer of the year

TR Sawhney Motors, New Delhi

Most aspiring dealer of the Year

Commercial Vehicles Talwar Auto Garages, Hyderabad

Dealer of the year

Laxmi Sales & Service, Bargarh

Most aspiring dealer of the year

Award for Sales Satisfaction

Ravi Pisharody, President, Tata Motors felicitating the best four-wheeler dealer of the year Alankar Auto Sales & Services’ Narendra Kumar at the ADEA

Shankar Motors, Patna

Awards for Safety Initiative

Award for Service Satisfaction

Bimal Auto Agency, Bangalore

Shree Automotive, Kolkata

Kamal Auto Industries, Kota M/S Anamallais Agencies, Coimbatore

Award for Employee Satisfaction KPF, Bellary

Awards for CSR Initiative Ashok Auto Sales, Agra

Award for Green Initiative

Fortpoint Automotive Cars, Thane

Kalyani Associates, Madurai

Panel Discussion NK Rattan of Honda Motorcycles & Scooters presenting the Sales Satisfaction award to Shankar Motors’ Mohan Himatsingka at the ADEA

Ashit Jain (L) of Kamal Auto Industries felicitated by Abhay Kumar, VP- Retail Underwriting & Product Development, IFFCO-TOKIO for the best Safety Initiative of the year at the ADEA

The panel discussion on ‘Addressing the growth aspirations of automobile dealers in India’ held on February 26, 2011 as a part of the Automotive Dealership Excellence Awards was a captivating interaction among panel members. The discussion brought out several new facets to the overall debate on the dealership business including new dealership formats, location based factors influencing sales and other issues having impact of volumes. Chief Executive Officer & Managing Director, NSDC, Dilip Chenoy was of the opinion that new formats of dealership along with improving road infrastructure could lead to higher volumes for some dealers located in certain parts of the country. He added that there is scope for offering many more services in the existing dealership infrastructure. He also felt that significant investment in terms of time and effort as well as expenses needed to be incurred on training manpower for dealerships for sales and services. Kailash Gupta of Commercial Automobiles agreed and added that though dealerships have good opportunities in the after sales and services, there is significant collective effort required from OEMs and dealers for deeper penetration in the semi urban and rural areas. OEMs voices on the panel including

Deepak Mokashi of Hero Honda and Ravi Pisharody of Tata Motors reflected on the manpower scenario plaguing the growth of the dealership business by affi rming that getting quality manpower remained a challenge for dealers as well as OEMs. Mokashi also added that empanelling quality dealers, who can handle large volumes in case of two-wheelers, is emerging as a major challenge for manufacturers. Overall the quality and delivery commitment for most dealers has significantly improved over the last decade and younger people are getting into the dealership business. Attrition, lack of appropriate skill set, rapidly evolving technology at service level were some of the issues that were discussed and deliberated upon. Speakers sought to draw lessons from other sectors for charting the next stage of growth for the dealership business. Generational change taking place in the dealership business took centre stage in the panel discussion during the later part. As the floor was opened for interactive discussion between panel members and audience, many distinguished guest from dealership fraternity as well as OEM raised issue concerning automobile sales, customer experience, quality of after sales services as well as brand management.

Abhay Kumar, VP, IFFCO TOKIO presenting the award for the Safety Initiative of the year at the ADEA

SP Shah, Director General, FADA addressing the gathering

L Murrali Krishnan of Kalyani Associates receiving Green Initiative award from Liam Donnelly, MD, Arval

DR Dogra, MD, CARE Ratings presenting the Employee Satisfaction award to the representative of KPF

Auto Monitor

VIEW POINTS GLOBAL WATCH

16 - 31 March 2011

Budget 2011 impact on Indian Automotive sector Keval Doshi

he overall sentiment in the automotive sector post-budget 2011 has been relatively positive. However, the fi ner details of the budget makes one ponder whether outlook for the Indian automotive sector is really positive? The green-themed budget 2011 provides special emphasis to hybrid and electric vehicles by granting concessions on indirect taxes and duties on their components. This should help in bringing down the cost of ownership for such vehicles and help in conservation of environment. However, this being recent technology, the immediate effect on the sales volumes needs to be seen. Considering the recovering economy Government’s support was expected for the auto sector which has grown at 30 percent for last two years. However, nothing has been done. Further, the corporate tax incentives available to the EOUs have not been extended. This will affect the entire auto value chain – specially the OEMs and component suppliers. No measures have been taken to drive up exports by the domestic auto players. Levy of MAT at 20 percent on SEZ units will also significantly affect the auto players operating in SEZs. No tax or duty concessions were announced for increasing demand of existing vehicles. Maintaining status quo on peak rates of customs and excise duties may not be enough

to help the auto industry to grow at the same pace. Other policy initiatives such as permitting mutual funds to accept foreign subscription are likely to help capital flows and ease liquidity. However, this will help capital infusion only by way of equity and will not help leveraging capabilities of the auto industry.

Transfer Pricing Indian auto players having overseas subsidiaries can heave sigh of relief as dividends received from their overseas subsidiaries shall now be taxed at 15 percent instead of 33 percent. However, there is a catch wherein such dividends shall be taxed at 15 percent on a gross basis vis-à-vis existing regime of taxing the same at 33.22 percent on a net basis. This move may not benefit highly-leveraged Indian auto players. Further, nominal reduction in effective tax rate for domestic companies from 33.22 percent to 32.45 percent and for foreign companies from 42.23 percent to 42.02 percent on account of reduction in surcharge to five percent and two percent respectively, is a welcome move. With both inbound and outbound investments by the auto players, transfer pricing is one area which will continue to impact the sector. The budget proposes to change the variation between transfer price (TP) and arm’s length price (ALP) from five percent of the TP to a percentage of TP as the Government may notify, which will lead to

uncertainty. Further, the transactions with persons located in a notified jurisdictional area (NJA) would come within the purview of transfer pricing provisions. These transactions would be subject to adverse tax implications in absence of adequate documentation/ justification and subject to higher tax withholding. On other proposals indirectly affecting the auto industry include a slew of measures announced in the budget for aiding development of agriculture sector and rural areas, increased thrust on road infrastructure and marginal increase in income-tax slabs for individuals. However, issues such as completion of a majority of the infrastructure projects on time, land acquisition, etc still needs to be resolved. Marginal increase in personal tax slabs would be offset by the reigning inflationary pressures. Further, no incentives were announced for the dedicated freight corridors which are supposed to provide necessary thrust to the manufacturing and allied industries. Increased focus of the government on defence sector is expected to aid major auto players and OEMs in defence vehicle segment. Auto industry is a capital intensive industry having a strong value chain. Growing fuel prices is fast becoming a global concern. Specific measures such as rationalization of duties on key commodities such as fuel, steel, rubber, etc backed by access to low cost capital, faster duty refund mechanism, better

working capital cycle, etc would have ensured necessary impetus to the auto industry. However, no relief has been announced on this front.

CKD Units The Cenvat credit related proposals made by the FM are likely to adversely impact the margins of auto companies, with the scope of claiming credit on inputs and input services getting further restricted. For manufacturers or importers availing significant services from outside India, there could be a marginal impact on the cash flow situation as well, with the introduction of Point of Taxation Rules 2011, which deems the time of provision of service to be the date of provision of service or date of invoice or date of payment, whichever is earliest. There has been no change made to the CST rates applicable to the sector. One of the key issues thrown up by Budget 2011 for the Auto sector is the introduction of a defi nition of Completely Knocked Down (CKD) unit for the fi rst time, as an explanation to a customs notification. There is a difference of 50 percent in the basic customs duty rates applicable to motor vehicles imported as a CKD unit vis-à-vis vehicles imported in any other form, and the proposed defi nition in its current form could lead to an increase in customs duties payable on imports by many auto companies. To add to the woes of industry, this proposed definition appears open to multiple interpretations and thus, could

lead to classification related litigation. The industry is already in close discussions with the authorities to address the issue on a priority basis. A welcome change has been the grant of partial excise duty refund of two percent on small cars cleared for use as taxis, although similar refund available on large cars has been significantly reduced from approximately 12 percent to four percent. The introduction of self assessment mechanism under customs is also likely to benefit the industry by reducing procedural compliances.

Service Stations There are various other indirect taxes related budget proposals which would impact the auto sector, such as widening of scope of taxable authorized service station services, and availability of Cenvat credit on accessories cleared with vehicles as well as replacement parts goods for free warranty purposes, and the industry is gearing up to implement such changes. The auto makers are now keenly tracking the developments on introduction of GST, as the proposed regime is expected to significantly reduce the indirect tax burden on the sector and give further boost to consumer demand. (Author is Tax Partner, Automotive Practice, Ernst & Young. The views expressed are personal)

Auto Monitor

16 - 31 March 2011

CORPORATE

Palﬁnger’s stiff boom cranes to be assembled in India for Asian, Middle East markets Shobha Mathur Chennai

s part of its strategy to penetrate the truckmou nted cra ne market in India where not too many major players call the shots, Palfi nger Cranes India (PCIL), has recently rolled out its stiff boom crane offering. According to Managing Director, Palfi nger Cranes India, Subhamoy Ghosh, the product is a truckmounted crane for undertaking lifting, loading and handling operations and can be used by construction, cement and steel industries. Stiff boom cranes are mounted on trucks and can be transported along with the load to a distance, for unloading purposes. A 100 percent subsidiar y of the Austrian, Salzburg-headquartered company, Palfi nger set up a small assembly unit at Chennai last yearend with an annual capacity of 200 units. The truck-mounted cranes would have 95 percent localisation content with hydraulics and steel structures procured from local suppliers to make the crane cost effective. Only machined components would be imported from Europe. While the fi rst variant is of eight metric-tonne capacity, two more variants with higher capac-

ity are lined up for launch during this calendar year. The assembly plant would eventually manufacture about four products and

The company has invested about `eight crore, funded by the parent company, in its new 4,000 square metre assembly unit

would be the company’s second assembly plant in Asia after China. The company has invested about `eight crore, funded by the parent company, in its new 4,000 square metre assembly unit for setting up fi xtures and machinery. Fresh investments are expected to flow in for expansion of capacity and for establishing a full-f ledged manufacturing facility in the country over the next couple of years, if volumes warrant. Palfi nger is also planning to launch Demo Trucks in the country to demonstrate their utility. The concept of truck-mounted cranes, though not new to India is not very well established as in European countries. Palfi nger has introduced the stiff boom crane for the fi rst time globally and the Indian unit has plans of exporting it through its Asia Pacific sales network to China,

Vietnam, Thailand, Malaysia, Indonesia, Philippines and other East Asian countries. ‘Palfi nger’s global strategic vision is on ‘innovation-internationalisation-flexibility’ and the India strategy focuses on being flexible towards customer’s demand in terms of product specification or price aspiration,’ remarked Ghosh. Possibilities of exporting these truck mounted

30 percent lower than knuckle boom cranes is more popular in Asia. In India Palfi nger would have to compete with the Chowgule Group that has a collaboration with the Furukawa Unic Corporation of Japan for producing the Unic brand of straight boom cranes. Besides, there are a few other local players in the market. The company is expected to save about 45 percent in lieu

cranes to Middle East and African countries and as part of f u l ly built trucks through Indian truck manufacturers is also being explored. In Europe and the US, sophisticated and high technology truck-mounted cranes are preferred for different applications while the stiff boom crane that costs almost Subhamoy Ghosh, Managing Director, Palfinger Cranes India

Andhra Pradesh attracts auto industry T he second edition of the International Bus and Special Vehicles Expo 2011 kicked off to a grand start in Hyderabad with about twenty vehicle manufacturers showcasing their buses and special vehicles. Key participants at the expo included Tata Motors, Volvo Buses, SML Isuzu, Force Motors, Eicher Commercial Vehicles among others. The exhibition had on display the latest state-of-the-art developments in the bus segment and offered networking opportunities for bus, coach and special vehicles fraternity.

Mobile Classroom, that can be leveraged for skill development and training, especially in the rural areas. Also on display was Isuzu’s latest model of a sleeper coach while Volvo showcased its ‘Intelligent Transmission’ technology that it plans to rollout soon.

Public Transportation

Andhra Pradesh Minister for Major Industries, J Geeta Reddy cutting the ribbon

Investment Destination Andhra Pradesh Minister for Major Industries, J Geeta Reddy remarked at the inauguration that the state offered a distinctive advantage to the auto industry due to its central location, availability of large technical pool, proximity to the auto hub and accessibility to both domestic and international markets. The Minister called upon prospective investors to consider the state as the destination for setting up manufacturing facilities while assuring the state government’s full support to the sector. T he A nd h ra P radesh I ndu st r ia l I n f r a st r uc t u re Corporation (APIIC) is develop-

Bus and Special Vehicles Expo‘11 in Hyderabad

ing exclusive Automotive Parks near Toopran and Chevella near Hyderabad and at Naidupet in Nellore District. These would promote automotive manufac-

turing clusters in the state. A highlight of the expo was Tata Motors hybrid bus that was displayed for the fi rst time. Also showcased at the event was a

E xecut ive D i r e c t o r, Association of State Road Tr a n spor t Under t a k i ngs, Sudhakararao Uppada pointed out the need to promote road connectivity to rural India and to develop a public transport system with state-of-the-art technologies. Highlighting the steady growth in medium size vehicles, Chairman, Vehicle Classification, Sales Reporting & Analysis, Society of Indian Automobile Manufacturers and Managing Director, Volvo Buses, Akash Passey said that with its rich pool of engineering talent, excellent testing and R & D facilities the state was well poised to scale greater heights. The International Bus and Special Vehicles Expo 2011 is supported by the Ministry of Heavy Industries and Public Enterprises, Association of State Road Transport Undertaking and Department of Transport, Government of Andhra Pradesh.

of import duties on import of completely built units into the country due to the establishment of its assembly unit. Palfinger already imports the knuckle boom crane from its Austrian plant and has sold 45 units in India since 2007. Other imported products include the hook loader but these attract a 27 percent duty plus a 10 to15 percent transaction and associated cost. The company is now eyeing growing opportunities in the domestic truck-mounted crane market that is likely to nudge 2,000 cranes in five years from the existing 700 units. Palfi nger has a network of 10 dealers pan India that it plans to spike upto 16 by the fi rst quarter of next year. Its manpower strength would also witness an uptick from the existing 45 employees to around 65 by 2011 end, as product volumes pare up. Palfinger an international manufacturer of hydraulic lifting, loading and handling systems, leads in the production of truck-mounted cranes. Earlier, Palfi nger had a tie up with the Dubai-based ETA Star Group for three years for distribution of their products in India that was discontinued last year. Recently, Palfinger India entered into an agreement with TVS for distribution of their truck-mounted crane portfolio ranging between 0.4 meter tonne and 116 meter tonne in Tamil Nadu, Andhra Pradesh, Karnataka and Kerala.

Henkel raises price for adhesives

enkel is implementing a price increase for its adhesives business citing rising raw material costs. Increase amounts will vary based on market segment and technology. On average, the price increases will range from 10 to 25 percent. The price increase is attributable to ongoing escalation of raw material costs over the last 15 months, especially affecting natural based feedstock, oil and natural gas based products. Continual spikes in global demand, coupled with capacity constraints in primary chemical, and resin feed stocks, have further tightened supply, have driven raw material prices upward. For this reason, further price increases will become necessary. Henkel feels compelled to take this step in order to further ensure delivery of the same high quality product and service standards expected by its customers. Henkel operates worldwide with leading brands and technologies in three business areas: laundry & home care, cosmetics/ toiletries and adhesive technologies. Founded in 1876, Henkel is present in the consumer and industrial businesses with wellknown brands such as Persil, Schwarzkopf and Loctite. Henkel employs about 48,000 people and reported sales of Euro15.09 billion and adjusted operating profit of Euro 1.86 billion in fiscal 2010.

Auto Monitor

16 - 31 March 2011

CORPORATE

Lanxess eyeing auto sector, moves to Jhagadia Our Bureau Mumbai

erman chemical major Lanxess is looking at growing demand from the automotive sector to power its growth in India. In a recent interaction, a top company official pointed out that the automobile industry is showing robust growth triggered by a burgeoning middle class and demand for passenger cars and two-wheelers. The automotive industry is expected to grow by about 12-14 percent in 2010-2012. In addition, the government has an ambitious project of expanding and strengthening the highway infrastructure of India, he added. The company is in the process of relocating its production facilities for leather chemicals, material protection products

and Rhein Chemie products in Madurai to the company’s recently-opened site in Jhagadia, Gujarat. The company recently kicked off major part of its operations at the Jhagadia facility. The Jhagadia facility would be fully operational by the end of this year. On relocation from existing facility near Madurai, a recent company release pointed out that Lanxess is taking adequate precaution to safeguard its interest as well as that of the local community. The company has twelve employees on its payroll at the Madurai plant with most other employees belonging to Penar Speciality Products, its partner at the Madurai facility. The contract for the Madurai site expires in June this year. Lanxess has invested around Euro 60 million (around Rs350

crore) at the new facility and other initiatives in India. Production facilities for rubber chemicals and ion exchange resins are already in operation since 2010 at the new site and a high-tech plastics facility will be operational by 2012. According to a company presentation, increasing mobility is likely to generate more demand for tyres. Radial tyres rely on highperformance synthetic rubber to achieve their superior qualities. The company manufactures a wide range of rubber chemicals, high-performance rubber and technical rubber products to cater to these demands. The presentation further pointed out that the buoyancy of the tyre market has led to major tyre manufacturers including Bridgestone, Apollo, MRF and Michelin undertaking capacity expansions.

Lanxess’s chemical complex at Jhagadia, Gujarat

For Rubber chemicals business unit in India, around 60 percent of the customers are from the tyre industry and the rest from non-tyre applications including conveyor belts and industry hoses. Indian customers largely consume natural rubber but there’s

distinct progress towards consumption of synthetic rubber, particularly by automobile and other industrial goods manufacturers. Globally, synthetic rubber is consumed to the extent of around 60 percent and natural rubber accounts for the remaining portion, which is declining. The usage of natural rubber has been stagnating as new plantation of rubber takes around six years to bear fruit. Moreover, the company official point out that natural rubber has lesser applications, as compared to synthetic rubber, mainly limited by its properties. The company is looking forward to a major opportunity in the radial tyres segment. Estimates suggest that the Indian market is dominated by tyres for large vehicles like buses and trucks, which contributes to nearly 60 percent of the turnover of the tyre market. Presently the estimated radialisation of truck and bus tyres is around 12 -15 percent. The company is one of the leading producers of regular butyl rubber and halogenated butyl rubber, which are used for making the inner tubes of bias tyres and the inner liners of radial tyres respectively. It markets a wide range of high-performance synthetic rubbers to cater to the Indian rubber industry needs, both tyre and non-tyre segments. Butyl rubber is a synthetic rubber characterised by high impermeability to air. Halobutyl rubber, a specialty rubber polymer, is used in the manufacture of innerliners – the innermost layer of radial tyres for car, truck, bus and aircraft tyres. Synthetic rubbers fi nd application in the tyre industry due to their ability to take dynamic loads and resistance to heat and abrasion. Other technical rubber products fi nd applications for non-tyre applications in the automotive industry like window profi les, seals, belts, hoses and various other moulded products. Lanxess increased its shareholding in Gevo to 9.1 percent with an investment of $17 million. Colorado-based Gevo focuses on renewable chemicals and advanced biofuels. Both companies have signed an agreement that gives Lanxess certain exclusive rights to purchase biobased isobutanol from Gevo, while Gevo receives an exclusive fi rst right to supply Lanxess with specified quantities of biobased isobutanol over a ten-year period. This arrangement is still subject to the parties’ completion of a definitive off-take agreement, which is presently in negotiation. It also recently acquired the material protection business of Sw it zerland’s Syngenta making the German chemicals major a leading suppliers of biocides for construction materials.

16 - 31 March 2011

CORPORATE

Auto Monitor

16 - 31 March 2011

Auto Monitor

STUDY

Passenger vehicle industry: Proportion of diesel driven cars to increase in medium term

The growth momentum of FY10, continued in the fi rst nine months (April-December 2010) of the current fi scal as industry posted a strong rise of 29.8 per cent on year on year basis. Sustained economic buoyancy and healthy liquidity scenario drove this growthassenger vehicle manufacturers also responded positively with slew of new model launches. Industr y witnessed new entrants like Volkswagen and Nissan in the voluminous yet highly competitive compact car segment launching models suiting Indian conditions. However, recent increase in fuel prices especially petrol combined with rising inflation may dent consumer confidence by some extent in near future.

Tapering Consumer Confidence De-regularisation of petrol prices from second quarter of FY11, has given autonomy to oil companies for setting petrol prices in tandem with global crude oil prices. During last six months, there have been six occasions of revision in petrol prices, which has led to around 16 percent rise in petrol prices during this period. Hence, the worries for petrol vehicle owner have intensified. Whereas, there has been just a 4.5 per cent rise in diesel prices during the same period as the diesel prices have not yet been de-regulated by the government. CARE Research studied that the average fuel cost per km for diesel driven vehicles came to around `1.7 per km as compared to petrol driven vehicles, which was `3.5 per km during January 2010. This is mainly because the retail price of petrol is higher than diesel and the mileage of petrol driven vehicles are comparatively lower than diesel driven vehicles. However, owing to de-regularisation of petrol, the fuel cost for petrol driven vehicles currently have spiked to `5.3 per km, whereas the cost for diesel driven vehicles have increased marginally to `2.3 per km. Though the prices of diesel driven vehicles are almost 15-20 per cent higher than the comparable petrol driven option, higher fuel efficiency owing to latest technology advancements in engine combined with lower fuel price provides a trade-off for diesel driven vehicles. CARE Research studied that when travelling distance is more than 30 kms per day, operating diesel driven vehicle becomes more economical than petrol driven vehicle even after factoring the higher EMI outflow. Therefore, if a person has a daily running of 50 km an approximate saving in diesel vehicles would be `60 daily. Going forward, CARE Research expects the share of diesel driven

as diesel is a primary fuel used in vehicles to increase in the overall transportation sector and upward pie of Indian passenger vehicle revision in diesel prices pushes segment. With nearly 90 percent inflation northwards, hence comof new sales in utility vehicle segplete ment are de-reguof diesel larisation variants, The average fuel cost per in diesel the km for diesel driven vehicles prices in dieselisaunlikely tion trend comes to around `1.7 per in shortis now km as compared to petrol term. catching vehicles, which was `3.5 per CARE up strongResearch ly in km during January 2010 estimates passenger diesel car segvehicles to account for around ment also. Moreover, rising one-third of new sales in passendifference between petrol and ger vehicle segment in next two diesel retail prices are encouragyears, from current level of ing more and more buyers to opt around 28 per cent. for diesel vehicles. Furthermore,

Cost comparison between diesel and petrol cars 800 700

Diesel

Petrol

600 Rs / day

Break even @30kms

500 400 300 200 100 0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 Kms / day

Note: I. The calculation of mileage, EMI and other operational cost are compared between passenger car models with similar specifications in diesel and petrol versions

Source: CARE Research

16 - 31 March 2011

CORPORATE

Auto Monitor

News in Brief Tyrestore to introduce equip to measure tyre tread depth Si remu l l Hi racha nd’s Tyrestore at Chennai is introducing a tyre tread diagnostic tool (TAC-Scan) to measure tyre tread depth and tyre health. Tyrestore would now be able to more correctly recommend the correct time to change the vehicle tyre based on a computerised report providing diagnostics on each tyre with action recommendations for repair or maintenance needed on the vehicle or tyre. TAC-Scan, detects tread problems before the human eye can see them. The diagnostic equipment is used to monitor tread condition and to trend tread wear. It identifies critical out of spec tires, and recommends suspension alignment improvements. This scanner has been used in motor racing over the past five years and uses a special laser/software combination called the Tread Analysis Condition Scanner.

First Automall inaugurated in Chennai Shriram Transport Finance Company recently inaugurated the country’s fi rst Automall in Chennai. The Automall aims to serve as a one-stop destination for trade of pre-owned trucks. Apart from the trading of pre-owned trucks the owners will also be able to explore fi nancing and insurance options as also minor and major repair facilities. The mall will also have a computerised touch screen kiosk, which will be a virtual truck bazaar, providing information about used commercial vehicles available for sale, and simultaneously facilitates registration of individual buyer’s requirements. The company plans to have fi fty such facilities strategically located on important highways of country covering a pan India population of commercial vehicle highway users.

Essar Steel opens marketing office in Spain Essar Ste el re c ent l y announced that it has opened marketing offices in Valencia in Spain and Milan in Italy, as a part of its strategy to strengthen its distribution network. Essar Steel already has a steel service centre in West Midlands in UK with an annual capacity of 500,000 tonnes. The company, which has presence in Canada, India, the USA and Indonesia, has a capacity of global steel production capacity of 14 million tonnes per annum (MTPA).

Figo to enter Mexico and other markets Ford India will export the Figo to over 50 markets including Mexico, North Africa, Middle East and Carribbean. The company claims to have sold 75,000 units in India since it was launched in 2009. ‘We will send fi rst shipment of 1500 completely built unit (CBU) cars to Mexico which will include both diesel and petrol variant in two weeks ( by 23rd March)’ President and Managing Director, Ford India, Michael Boneham told Auto Monitor. The company plans to export Figo, the one of the fastest selling cars, to North Africa, Middle East and Carribbean in the beginning of April 2011. The company termed it as the fi rst Indian manufactured car to be sold in Mexico. The company has already been

selling Figo in South Africa and Nepal since July 2010 and so far they have exported over 10,000 units to these markets from its Chennai assembly plant. The company has already ramped up its production capacity into a double shift and it may explore a three shift option if the demand is increased, Boneham said.

Statfield launches Charjet premium Statfield, a liquid painting / powder coating provider, recently launched the Charjet Premiun model to identify of fault-areas and thus facilitates faster repair to reduce down time. It helps to set various parameters electronically and no manual interference is needed to monitor these parameters. Statfield offers two and a half years’ warranty, including warranty for the cascade, which is the

heart of the system. Statfield is the only company offering a warranty on the cascade in the market. Charjet Standard model without the diagnostic tool is also available. Both models share the same technical features and specifications and efficiently deliver the best finish in all conditions. The equipments are safe as energy of high voltage generation is very less. Yashprabha Group, the representative of Statfield in India, has operations in four verticals: electronics, engineering, bioenergy and infrastructure. The group operates with four brands – Minilec, Intech, Statfield and Mint Biofuels.

Moog provides motion control to Daimler facility Moog Industrial Group, a leading provider of fl ight simulation and leading-edge testing systems to the automotive and aerospace

markets, has provided the high-dynamic motion control system portion of the new Daimler AG driving simulator. The system is installed at Daimler’s new driving simulator centre, which is part of the Mercedes-Benz Technology Centre, in Sindelfingen, India’s biggest engineering and manufacturing trade Germany. The new fair - Engineering Expo Chennai was inaugurated by driving simulator Sunil Kumar Kaul, Sr GM, Fenner India, R Selvaraj, centre in Sindelfingen President AIEMA and V Arumugam, GM, NSIC on 11 March 2011. Around 200 exhibitors from a host of contains different industry verticals participated in the event showcastypes of simulators all ing some of the pioneering engineering solutions. More optimized for specific than 20,000 people visited the expo. test situations includMoog. As part of the Mercedesi ng re s e a rch, Benz Technology Centre, the assessment and training. This cendriving simulator is an integral tre includes both fixed base driving part of research and development simulators and a ride and comfort activities. simulator previously delivered by

The second edition of Automotive Dealership Excellence Awards has raised the benchmark for the Indian automotive retail. Held at The Leela Kempinski, Mumbai, on February 26, 2011, the event witnessed participation from leading manufacturers and dealers. To catch the glimpses of the awards log on to www.adea.in ADEA Winners

For further details, write to prachi.mutha@infomedia18.in or call +91-22-3003 4650

16 - 31 March 2011

Auto Monitor

EVENTS

Geneva Motor Show marked desire to innovate

Mark Carbery

y defi nition, motor shows present the best and most positive side of the automotive business, the Salon de l’Automobile in Geneva more than most. Switzerland has no automotive industry to speak of, so unlike the other major European events in Paris and Frankfurt the focus is less on the manufacturing and economics and more on the metal. At this year’s Salon, held earlier this month, the gap between hard realities and mere hope seemed greater than ever, and bridged by the same dazzle and glitz as in less economically challenging times. If the event is an indicator of industry sentiment then that sentiment is primarily a laudably positive desire to design, innovate and manufacture its way out of a tiresome and protracted economic downturn. But the business is not in robust good health, and hot air will not help navigate it out of the doldrums. The world automotive map currently provides a very uneven picture. Europe is not showing signs of the sort of rebound being experienced in the USA, and is in a different world from the booming markets of Asia – in fact China is one of the few real positives for European carmakers at the moment, offering premium brands profitable business to offset inevitable losses at home. European sales have fallen for the last three years, including a five percent slide in 2010, and are likely to drop by around two percent again this year. And now there’s the additional worry that unrest in the Middle-East will tip rapidly rising fuel prices over the edge, and threaten what stability exists in the European car market. Much of the industry’s considerable talent is being directed into electrification, yet EVs and alternative powertrains were almost a sideshow in Geneva. Yes, the technology was there on pretty much every stand of any note, but – rather ironically at a time when the first wave of mainstream EVs are finding their way into showrooms - there was little trumpeting and they were not the focus of conversation as they have been for the previous couple of years. Toyota showed a 2012 hybrid version of the Yaris city car and also a Prius MPV concept, while Honda had a battery-only concept version of its Jazz, a Yaris competitor. Ford gave a European debut to a 2013 hybrid version of its C-Max minivan, as did Audi with a hybrid Q5 SUV, but it was easily missed among the vast Audi line-up. Volvo showed its new V60 wagon in plug-in diesel hybrid from, ready for sale next year. And Kia had the show’s lowest-emitting internal combustion-engine car, the 85g/km CO2 diesel Rio compact, sitting meekly at the back of its stand. One of the outright stars

of the show, VW’s retro-campervan concept, offered serious EV credentials but was noted more for its iPad interface and styling. At the other end of the scale, China’s Warren Buffet-backed BYD showed a range of batteryonly and hybrid models ready for market but with retro-throwback rather than retro-cool styling: the low cost-base of Chinese EV technology may be key to global EV volumes, but Western markets will not be seduced by cars as dull as these. As much attention was paid to BMW’s Vision ConnectediDrive roadster – a concept demonstrating networking and infotainment technologies - as to all of these EVs put together, including BMW’s own ActivE, a version of the 1-Series with the drivetrain destined for use in its i sub-brand range of electric vehicles due to launch in

2013. In fact most conversation at Geneva centred on word that Ford is hedging its bets on EVs, and the need to standardise EV technologies and parts in order to achieve a price point which will allow volumes to reach critical mass – at the moment EVs like Nissan’s Leaf and Mitsubishi’s i-Miev retail in Europe for the equivalent of close to US$40,000, even after early-adopter government incentives. In the context of a motor show, however, the application of EV technology to exotic, luxury models was bound to attract disproportionate attention. This was largely down to RollsRoyce, which debuted an electric Phantom boasting the world’s largest car battery, but significantly Porsche unveiled a hybrid production version of its Panamera sedan, and Tata’s Land

Rover gave a debut to the Range Rover-e, a diesel hybrid version of the Sport model scheduled for sale in 2013. It was the same among the models with conventional powertrains, with exotics stealing the show. VW, announced that it that it has taken a stake in specialist carbon-fibre business. Another interesting development was at Ferrari, whose FF, a replacement for its 612 Scaglietti grand tourer, has been moulded into a larger, full-four-seater with a tailgate and decent luggage area. It is also four-wheel drive. Most notable were Kia and Hy undai, whose remarkable recent success in Europe is being increasingly reflected in their product offerings. Hyundai unveiled the i40 wagon, looking like a genuine alternative to a VW Passat or Honda Accord. Kia debuted both a new Picanto city

car and an attractive Rio compact which replaces a dowdy, yesteryear design. These will sit alongside the fresh and contemporary-looking Venga and Cee’d, both also B and C-segment offerings, as well as the Sportage small SUV. How Kia will position and differentiate these uniformly excellent but overlapping models is a problem but one which other carmakers would like to have. Shorter-term, in the mature European market even sharply rising oil prices will not be sufficient to push buyers into electric cars, because of their price and limitations. So producers of small, efficient internal combustion-engine vehicles like Fiat and Kia remain well-placed... (The author is an auto commentator based in Europe. Views expressed are personal.)

Auto Monitor

GLOBAL WATCH

16 - 31 March 2011

Former GM in $51M deal to settle cleanup claims

he remnants of old GM have agreed to a $51 million settlement to resolve additional environmental claims — including at many Superfund sites, according to US Justice Department said. The money is on top of $773 million settlement to clean up 89 sites in 14 states, including 47 sites in Michigan. The new deal settles old GM’s environmental liabilities at 34 sites in 11 states, including Michigan, and will help the Environmental Protection Agency cover the costs of some cleanup work. The new settlement covers six sites in Michigan worth about $5.2 million. But the government will receive less than $51 million — since $15.1 million is in cash — and the rest will be satisfied by the government’s receiving

stock and warrants in new GM. The value of those financial instruments will be less than face value. Based on prior Wall Street estimates of what creditors may receive, the government may recover around $30 million of the $51 million settlement. Metro Detroit sites covered include the Dearborn refi ning site, where EPA has a claim for $130,000 against old GM.

Contamination Dearborn Refi ning owned and operated a waste oil refi ning and oil processing facility at the site from the 1940s until 2005. Many companies sent used oil, waste oil and wastewater contaminated with oil there. Also covered is the Springfield Township Dump Superfund site in Oakland County, where EPA has a $211,108

claim, and the Reclamation Oil Company site in Wayne County,

where EPA has a $253,642 claim. One of the largest claims is

Exhibit at the prospering manufacturing hub of Automobiles & Auto Components

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For booking and sponsorship enquiries contact:

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for $4.2 million for the Flint West site or what is known as the ‘Chevy in the Hole Site’ at 300 North Chevrolet Avenue in Flint. It is a 130-acre site adjacent to downtown Flint, which was a key manufacturing centre and is surrounded by neighborhoods. Another site in Genesee County is the Forest Waste Disposal Superfund site, where EPA has $495,460 claim.

Tax Appeals The settlement covers $89,000 claim in connection with the H. Brown Company Superfund Site in Walker. The public will have 15 days to comment on the settlement, before US Bankruptcy Judge Robert Gerber decides to approve it. New GM was created in July 2009 by the government-backed sale of the Detroit automaker’s good assets as part of $49.5 billion US government bailout. The company left behind tens of billions of dollars in debts and obligations. Tax appeals fi led by GM have resulted in more than $8 million in lost revenue for local governments in the Flint area since 2010. The Genesee County Equalization Department says most property and equipment appeals pursued by GM have been settled without going to the Michigan Tax Tribunal. Taxable values have been cut by more than $250 million.

Chevrolet Cruze Local officials tell The Flint Journal they’ve been bracing for the loss of money. Some GM assessments hadn’t been appealed in two decades. The city of Swartz Creek paid $308,000 to settle tax disputes with GM. The city manager says the refund was anticipated and set aside. Despite the drop in property values, GM remained the largest taxpayer in Genesee County in 2010. In an unrelated development, work will resume at the company’s Northeast Ohio plant following last week’s shutdown caused by a fi re at an auto parts plant in Michigan. Tom Mock of GM says shifts will begin at the Lordstown plant near Youngstown after significant progress has been made by Mag na International, whose interior parts plant near Howell, Michigan, caught fi re. The fi re burned about 25 percent of the factory space and two large holes in the roof and forced GM and Mazda both to stop making cars at some plants. The Lordstown plant makes the popular Chevrolet Cruze small car.

16 - 31 March 2011

GLOBAL WATCH

Auto Monitor

Toyota targets annual sales of ten million vehicles

oyota is aiming for an auto industry fi rst by reaching annual sales of 10 million vehicles by 2015 even as it acknowledges that overly rapid growth was at the root of its recall fiasco, according to a report in the Associated Press. Toyota President Akio Toyoda gave the ten million figure while outlining the company’s ‘global vision’ in his first major strategy announcement since the recall crisis that hit a year and a half ago. The Japanese automaker reported worldwide sales of 8.42 million vehicles last year — 30,000 more than GM’s 8.39 million. Toyota dethroned GM as the world’s leading automaker by vehicle sales in 2008 — a position GM held for 76 years. Speaking at a Tokyo hotel, Toyoda said the automaker wants to make millions of customers happy, and even denied he was giving a numerical sales target. He repeatedly emphasised goals like quality controls, customer satisfaction and solid profits. Toyota, which makes the Prius hybrid and Lexus luxury models, hopes to achieve an annual operating profit of one trillion yen ($12 billion) ‘as soon as possible,’ even if the yen remains strong and vehicle sales drop by 20 percent, Toyoda said. The company is forecasting operating profit of 550 billion yen ($6.6 billion) for the fiscal year ending March 31. Toyoda said the vision was based on what the carmaker had learned from its quality problems and the sales hammering from the global financial crisis of 2009. Vice President, Industry Trends and Insights, TrueCar. com, Jesse Toprak said the vision was too short on specifics such as model plans and marketing strategies, given the recent gains of rival US automakers as well as South Korea’s Hyundai. ‘It was a little bit too wishy-washy. We need to see more concrete examples of what needs to be done,’ he said in a telephone interview. ‘There was a lot of wishful thinking.’ Still, Toprak said reaching 10 million in annual vehicles sales was not impossible for Toyota — as long as it came up with more exciting model designs and successfully puts the quality doubts behind it. Since late 2009, Toyota has announced recall after recall, covering a wide range of defects, including faulty floor mats, sticky gas pedals and glitches in braking software, ballooning to more than 14 million vehicles globally. The company paid the US government a record $48.8 million in fi nes for its handling of three recalls. Toyota faces dozens of lawsuits from owners in the US, including fatalities allegedly linked to defects. Recently, US regulators closed their ten month investigation, clearing Toyota of electronic flaws and fi nding mechanical problems covered by the recalls took care of the unintended acceleration cases. The company has said quality problems emerged as it went through a period of rapid growth. Toyoda said the automaker’s board of directors will be reduced to 11 from 27, but the number of executives overseas will be boosted to 15 from 13, to make for quicker decision-making and to be more responsive to regional needs. In an unusual personnel move, Toyoda’s predecessor Katsuaki Watanabe — seen as a key figure in the go-go growth that predated

the quality lapses — will resign from the board of directors as part of the management streamlining. The resignation will be effective after a shareholders’ meeting set for June. Past presidents have stayed on longer, and Watanabe’s predecessor Fujio Cho remains on the board. Toyota will also empower its regions, including North America, which will centre around development and production of the Camry sedan, to better cater to their needs, he said. That appeared to answer to criticism about how Toyota had been initially slow in responding to the quality problems, worsening the image damage that followed. The automaker will also focus more on emerging markets for new growth, aiming for 50 percent of its sales from those nations, up from the current 40 percent. It said

green vehicles are another pillar for the future, planning to launch 10 more hybrid models by 2015. Toyota announced two new, bigger versions of its hit Prius hybrid — station wagons that are set to go on sale in Japan next month. The five-seater version will also go on sale in North America later this year. The seven-seater, packed with a new lithium-ion battery, will go on sale in Europe as well next year. Prices and mileage haven’t been announced yet. ‘I want Toyota to make good cars that will make everyone smile,’ Toyoda told reporters. He said each region will work harder when achieving sales growth to ensure that quality is not compromised. He stressed Toyota was not chasing numbers. ‘I was just answering a question,’ he said, when pressed about why he had given the ten million vehicles

number. Another big change from past visions, where the numbers game was big, was that the latest was written in English, which Toyoda said was the world’s international language. Toyoda often switched into English during the presentation, using phrases like ‘smiles from customers around the world,’ and ‘our commitment to quality and constant innovation.’ ‘This vision is about what kind of company we are, our values and the road to what kind of company we want to be,’ Toyoda said. The company said global sales of its hybrid models have topped 3 million vehicles on the back of brisk demand for the Prius. The automaker has sold more than 3.03 million gasoline-electric hybrid vehicles worldwide since 1997 when Toyota rolled out the fi rst Prius in Japan, it said. The

Prius, the world’s fi rst mass-produced hybrid car, alone accounts for 72 percent of Toyota’s global hybrid car sales. Last year, Toyota sold 7.53 million vehicles worldwide and 690,000 of those were hybrids. More than 60 percent of Toyota’s hybrid sales come from abroad, with the rest in Japan. In North America, Toyota’s hybrid sales have surged to 1.15 million vehicles from just 5,790 in 2000. Toyota’s hybrid sales far outnumbered those of rivals. Honda said it has sold around 610,000 hybrid cars worldwide. Nissan, which began hybrid vehicles sales in Japan late last year, said domestic hybrid sales totalled 1,900 vehicles as of February. Nissan launched sales of hybrid vehicles in North America in 2007. But the company said figures for hybrid sales in the region were not available.

Auto Monitor

GLOBAL WATCH

16 - 31 March 2011

International auto round-up EUROPE

AMERICAS

BMW ActiveE to roll out in North America by the end of this year

Chrysler to build Fiat 500 in Mexican plant

After ActiveE Concept in the 2010 Detroit Auto Show, BMW used Geneva Motor Show floor to showcase the latest version of the electrified 1-Series. The BMW ActiveE, following in the footsteps of the Mini E before it, will begin rolling out to select markets by the end of 2011. According to a company statement, ActiveE will make its North American debut this April at the New York International Auto Show and will be available for lease on a limited basis beginning this fall in the metropolitan markets of Los Angeles, San Diego, San Francisco, Sacramento, New York and Boston as well as the state of Connecticut. BMW has powered ActiveE with a plethora of liquid-cooled SB LiMotive batteries.

Chrysler may be looking at building a second Fiat model at the US company’s factory in Mexico. According to a Bloomberg report CEO, Sergio Marchionne, as part of a celebration of the start of Fiat 500 production at Chrysler’s Toluca plant, said that the same plant will also make the electric version of the 500, and some of the small cars assembled there will be exported to China. Chrysler is considering using its Saltillo, Mexico, plant to build commercial vehicles. The company has also initiated dialogue with the local government. While there is no decision regarding the investment, it would not be less than the amount spent on the 500.

Rolls Royce unveils electric version of Phantom Rolls Royce unveiled the electric version of its top-of-the line Phantom model at the Geneva Motor Show to gauge market potential. At this point, the electric Rolls Phantom 102EX is only an experimental model as the company assesses customers’ opinion on alternative technologies. The Phantom electric is powered by the world’s largest car battery, which weighs roughly 1,400 pounds. The automobile has a range of 125 miles. Rolls-Royce’s parent company, BMW is exploring a number of hybrid and all-electric solutions, the BBC reports.

Renault reveals two new concept cars in Geneva Renault reveals two new concept cars -Captur and R-Space at the Geneva Motor Show– as the brand gradually unveils its new approach to design, a cornerstone of its Renault 2016 - Drive the Change plan. The Renault Captur concept car which made fi rst appearance here is powered with 1.6L twin turbo Energy dCi 160 engine system that generates 158 hp and 380 Nm of torque. The car is connected to dual clutch EDC transmission which facilitates the car to accelerate from 0-100 km/h in 8.0 seconds and hit a top speed of 131 mph. The Captur car continues the design theme that was fi rst revealed on DeZir concept. The features of the car consist of hard convertible roof, LED lighting units, matt-fi nished accents, and 22-inch wheels. The R-Space is powered by a 900cc turbo three-cylinder. It develops 109bhp and heralds the new TCe range coming to Renaults in 2012. The 0.9 has direct-injection and stop start. Renault claims it mixes the performance of a 1.6, yet produces just 95g/km of CO2 and averages 76mpg. The concept car mates the engine to a twin-clutch gearbox.

Rolls-Royce-Daimler confirm bid for Tognum Rolls-Royce Group confi rmed that, together with Daimler, it is in discussions about the possibility of acquiring the majority stake of Tognum, a German heavy-duty engines manufacturer meant for tanks and ships, in equal shares. Daimler already owns a 28.4 percent equity interest in Tognum. Gaining control of Tognum, which Daimler used to own, would give the two companies the world’s second-largest maker of high- speed diesel engines for the marine, energy and defence industries after Caterpillar. Daimler, the world’s second- largest maker of luxury vehicles, has been piling up cash as demand for Mercedes-Benz cars soars.

Hyundai introduces i40 European audience Hyundai unveiled three new models to a European audience at the 2011 Salon International de L’Automobile in Geneva. Hyundai’s all-new, Europe-specific D-segment model, the i40 made its debut at the auto show. The i40 was designed and engineered at Hyundai’s R&D headquarters in Russelsheim, Germany, to meet the demands of European retail and fleet buyers. The i40 features 1.7-litre U-II diesel engine emitting as little as 113 g/km of CO2 – a best-in-class figure. In addition, the Nu 2 litre petrol engine makes its debut, delivering higher torque, improving fuel economy, reducing emissions.

Ford recalls pick-up trucks over fuel leaks Ford Motor recalled about 35,000 pickup trucks and crossover vehicles in the US and Canada because of possible fuel leaks and electrical shorts in these models. These leaks and electric shorts could lead to fi re. According to a report by AFP, the carmaker would recall about 25,000 2010 Ranger pickups and more than 9,000 trucks and crossovers to fi x a software problem that could lead to an electrical short and overheating, potentially causing a fi re. The recall also involves 2011 model years of the Ford Edge and Lincoln MKX crossovers and the Ford F150, F250, F350, F450 and F550 trucks. No fi res or injuries had been reported in the Ranger recall, which involves pickups built from mid-October 2009 through mid-May 2010.

GM offers interest free financing GM is offering interest free loans to customers who buy models made in 2011. The announcement came after the company increased discounts and incentives to lead all major automakers’ US sales gains last month. According to a Bloomberg report, the company will offer the loan for 72 months on the Chevrolet Impala sedan, as well as for 60 months on the Malibu sedan, HHR wagon, Traverse sport-utility vehicle and Silverado, Colorado, Buick Enclave, GMC Acadia SUV and Avalanche pickups. GM raised discounts 12 percent from a year earlier to an estimated $3,732 per vehicle last month, the most among major automakers and 45 percent more than the average.

Saab cars appoints new Executive National Director Saab Cars North America announced the introduction of a new Executive National Sales Director, James Sweeting, who spent 24 years with American Honda Motor in various sales and marketing posts, according to a Bloomberg report. The announcement came as Saab embarks on its biggest-ever product offensive with four all-new products since 2010. Sweeting will lead sales efforts in Saab’s largest market, North America. He will report directly to Saab Automobile Executive Director, Global Sales & Aftersales and interim COO SCNA, Matthias Seidl. Over the course of the next few months SCNA aims to announce a permanent COO.

Chassis maker Spartan Motors buys fire truck firm Spartan Motors, which makes chassis for fi re trucks, RVs and other vehicles, said it has acquired fi re truck maker Classic Fire, according to a report in the Associated Press. Classic Fire makes mini-pumper trucks, tankers and brush fi re trucks, as well as light rescue vehicles. It generated $10 million in revenue last year. Spartan Motors, based in Charlotte, Michigan, said the acquisition gives it coverage in more market segments and at different prices, allowing Spartan ‘to better meet the price points required of an industry challenged by weaknesses in municipal funding.’ It also brings the company pump technology and fi re truck expertise, Spartan said.

ASIA Shanghai GM recalls cars over faulty fuel pipes Shanghai GM, a JV between GM and Shanghai Automotive, is to recall 232,931 cars in China. The recall is over faulty fuel pipes that could make cars catch fi re. It involves 133,074 units of 2-litre and 2.4-litre Regal sedans made between 18 September and 14 October 2010 and 99,857 units of 2.4-litre Lacrosse sedans made from 20 April 2009 and 14 October 2010. The problem with the fuel pipes could cause them to crack at the joints under extreme conditions and the engine could fail to start or stop working, the report cited. According to the report oil leaks could also start fi res, China’s General Administration of Quality Supervision, Inspection and Quarantine said. The carmaker will also recall 2,806 Cadillac CTS cars imported into China from March 21 to repair faulty track bars.

China Chery Auto begins selling cars in Australia China’s Chery Automobile aims to sell 5,000 cars in Australia this year and plans to double its outlets in the country within two years, according to a Reuters report. Chery would begin selling A1 and T11 models and plans to introduce the A3 model in June. It will introduce more models in Australia in the future, making it one of Chery’s most important export destinations. Chery is one of a growing army of Chinese automakers, including SAIC Motor and Geely Automobile Holdings that hope eventually to be global players. Chery shipped 91,986 vehicles overseas last year, equivalent to 13.5 percent of its overall sales, mostly to emerging markets

in eastern Asia, Latin America and the Middle East. Another Chinese automaker that has made initial inroads into Australia is the Great Wall Motor.

Nasim increases Peugeot 207 export to Thailand Nasim, the official distributor of the Peugeot brand in Malaysia, will be increasing exports of the new 207 to Thailand soon, the Malay Mail reported. The company is currently ramping up production of the Malaysian-made 207 and will begin exporting the popular sedan to Indonesia in March. CEO of Nasim, SM Nasimuddi announced the company’s latest export plans during a visit by Marc Barety, France’s ambassador to Malaysia, to the Naza Automotive Manufacturing (NAM) plant in Gurun, Kedah, the report said. Besides Thailand and Indonesia, it will soon begin exporting the 207 to other markets in the region such as Brunei and Sri Lanka as well as right-hand drive markets in Africa. Nasim will produce 60,000 units of the T73 over a five-year period from 2012 to 2016 with some 60 per cent to be exported to other right-hand drive countries in Asean as well as markets outside the region. Nasim was recently awarded by Peugeot for the Successful Industrialisation and Commercial Launch of the 207 at the Peugeot 2011 Convention for Worldwide Distributors in Valencia, Spain.

Daimler, BYD’s new JV approved The Shenzhen BYD Daimler New Technology Company, a half joint venture between Daimler and Chinese automobile manufacturer BYD, was officially granted a business license by Shenzhen’s Market Supervision Administration recently, sina.com.cn reported. The company will specialise in development of a brand new electric vehicle to make its official Chinese debut in 2013. A new brand will be created for the car, which will be property of both Daimler and BYD, the report said.

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Getting the best deal for wheels Car Finance: Thanks to the wide presence of various public as well as private sector banks in India, fi nancing a car has become much easier and trouble-free. Since the coming of age of organised and institutional auto fi nance in India, companies are offering auto loans at surprisingly competitive rates. Additionally, these products are rightly customised with novel service offerings and subsidies.

EMI Calculation Pankaj Patel

or most human beings, buying a new car comes as a major stepping stone in their lives. Sentimental values aside, the whole process of buying a car, right from deciding the car model to taking the delivery, can be overwhelmingly stressful. Apart from the rather inane issues involved, such as the colour of the car, the accessories etc, there are more serious aspects that need to be looked into more carefully. Sorting out fi nances, insurance, taxes, and getting a good (if not the best) deal from the cut-throat dealers add a bit of sadistic pleasure to the whole ordeal. Like the wise ones say: knowledge is wealth, and having a few car buying tips and techniques up your sleeves is not going to hurt. Here are few things that might help you out in your hour of need.

Finding the best car loan that works for you is rather easy. Naturally, you should incline towards a loan that provides lowest rate of interest and extended loan tenure. However, do not make a decision solely based on the EMI amounts; also consider how much is entirely forfeited by you in the total loan term. Banks can reimburse up to 90 percent of the rate of the new car you are buying. It is a known fact that public sector banks provide lower interest rates compared to the non-banking funding fi rms, but paperwork can be tedious and some may even ask for a co-guarantor. And defi nitely they will take more time for loan processing. Also, nowadays, interest rate and loan eligibility is based on your SIBIL score, the higher the better. You can check your CIBIL score by applying to them at: http://www.cibil.com/d2c/. Another factor which should be taken into account is the pre-

payment penalty clause, should one decide to close the loan account earlier (for example, if you have taken a 5 year loan but decide to buy a new car after 3 years and sell the old one). Check online, you will get the best rate; also there are many websites that allow you to compare the interest rates, processing fee and pre-payment penalties.

Insurance It is critical that you work out the EMI details carefully before you sign the loan documents. Also, the down payment you make at the time of your car purchase determines the EMIs that you would be paying every month. Lesser the down payment, higher the EMIs! You can choose the mode of payment, ECS, PDCs, or DD, depending on your convenience. Car Insurance: As we all know, auto insurance in India is a legal necessity. Car insurance protects you against losses incurred in case of accidents. The car insurance covers against theft, fi nancial loss caused by accidents and any subsequent liabilities. Taking car insurance is quite easy as most of insurance companies have tie-ups with car dealers and leading manufacturers. These companies offer coverage immediately after you buy the car. There are many other general insurance companies, which also offer motor insurance service to customers.

Additionally, you can also research and take tips from websites that give you critical insight into choosing the best insurance policy for your vehicle. Again, you will fi nd many websites which allow you to compare rates. Please check if the insurance company selected offers ‘cashless’ claims, where you don’t have to pay any money upfront normally. Also, some insurance companies will offer you lower premium if you are willing to pay the fi rst `2,0005,000 of the claim amount from your pocket. Most public sector companies offer lower premiums but some of the newer private insurance companies have been quite aggressive in their premium quotes. Please do check the fi ne print before deciding your insurance provider. Dealing with the Dealers: Many people consider bargaining with a car dealer a naive thing. But it is totally possible to save a good amount by taking the time to research the price and offers on a particular model, and a little determination to haggle. Make use of the Internet to locate dealers in your area and fi nd out who has what on their offers list. Being well informed will put you in a better bargaining position than the dealer. Typically most dealers will give you the best deal at the time of booking the car. Even for newly launched cars, you can get free minor accessories Buying a new car towards the end or the beginning of a year is

the best time. Usually, dealers inflate the discounts during these times to get rid of the previous year models. Some of the areas where you can bargain effectively are accessories, extended warranty and insurance. Finally, remember you can always get good discounts on Loans and the Insurance premium, besides the vehicle itself, if you do your homework. Important to note: do not ask for exaggerated discounts, which may discourage the dealer to move further ahead with the deal.

Tax Claims Tax Implications: Depending upon how you buy the car will eventually determine your tax impact. If you are buying a car in your fi rm or company’s name, then there are tax write-offs as compared to buying in your individual name. Again, if you have availed for car loan, then interest payments can be written off. Depreciation is another area which is available and the rate would depend upon whether you buy the car in the April –September period or OctoberMarch period. Of course, your exact tax implications will differ depending upon your specific situation. Please check with your chartered accountant. (The author is the Chief Executive Officer of carazoo.com. Views expressed are personal.)

Indian auto companies can gain from experience of Italian manufacturers

Mohammad Hisham Qasmi

he evolution of Automobile industr y has been an interesting journey in the last 30 years of Indian auto market. A look back at 80s era when automotive industry was licensed and clubbed with high custom duty on import and with heavy excise duty and sales tax, it was controlled only by two players: Premier automobiles and Hindustan motors. The entry of Maruti Udyog limited was a turning point for 80s licensed era. It was a government supported market with long waiting period. Then the 90s saw a much liberalized time with delicensing and decrease in various taxes. Still it was a seller’s market as makers made good use of the excitement and low supply situation. Later with foreign banks entering and customers having great choice of make and money both it turned into a buyers’ market. Finance, f leet management insurance and used car market boom

became order of the day. In the last five years automotive industry has seen an upward trend for all its segments. While domestic sales have risen sharply, even exports from India have tripled in the last five years. India has become 4th largest passenger vehicle consumer and 5th largest commercial vehicle market in the world. Currently the data shows the market demand as per vehicle is highest in two-wheeler followed by passenger cars. In this scenario the presence of the most sophisticated car maker, the Italian car manufacturers and component makers, is a natural process. The importance of Italian automobile industry in the world is not only due to its extremely refi ned technology but also to the fact that automobile industry in Italy is to the level of extreme passion and amazing art both put together in the latest technology .The impact of this passion shows in every that market which starts bracing for better automobile. The Fiat group has its long written story of success in India. Now Cars like Ferrari and Maserati are an ambitious partner to Indian automobile boom time. Business promotions groups like ICE (The Italian Institute for foreign trade) and Confi ndustria (The general confederation of Italian Industry) along with Bergamo chamber of commerce are promoting various businesses with a highlighted success of automobile industry. With mechanical components predicting a growth rate of about 20

percent in next five years in the sector of hydraulics, pneumatics transmission systems and gears India is a favourite destination for many Italian manufacturers such as Eural Gnutti SpA, one of the ultimate names in these sector manufacturers.

Supply Chain Constraints The Italian SMEs are keeping their heads high despite an overall slump and depression in the European market. This is due to a steady and mostly an upward automobile market need. And the major indirect players to this demand are Asian countries like India and china. There are more than 3,000 auto parts manufacturers of various levels in spares, fi nished and semi fi nished products engaged in supply to direct automobile manufactures or component manufacturers. Many of these companies also engage themselves in distribution of components. With a turnover of 46.8 billion euro an staggering net profit of six billion have been achieved by these fi rms in previous fi nancial year (data ANFIA 2008) An estimated approximately 300,000 worker are directly involved with automobile industry in Italy. Besides this about one million people around the world are indirectly involved with this Italian business. Corresponding to this, if we look at the data of India automobile industry it gives us an amazing growth rate. It is not only the India success story. It also attracts major players of the world. This will naturally call for

Italian auto industry in full swing to the waiting Indian market. The estimated market size of automotive industry will jump from its previous position of 6.7 billion to a whopping 17 $ billion in 2012 end.

Export Markets The biggest attraction for the Italian automotive sector is their own strength as manufacturers of components, parts and spares. The huge and almost continuous downstream market for a new car to a used car in India makes it an attractive destination for these manufacturers. From scaling the costs to optimising the resources in India both have given an edge to Italian component makers. A total of 28 percent of the total exports goes to Italy. This advantage will be used by the end user to export the same product to European markets and in this circle of spares to components to fi nal product; Italian auto industry stands to gain handsomely. In the last decade the fast growth of Indian economy and business has been a reflection of the changing business situation in the world. For developed countries it was a matter of worry for a very short period of time but realizing the immense amount of available skilled hands it became a golden opportunity for manufacturers of high value products. From the traditional businesses of textile, clothing, and handicraft the fi rst major production units to arrive in India were of automobile sectors. From plants of small rubber parts to paints

and to gear box assembly India today is one of the biggest workshops for 20 auto majors of the world. As a result India has also been bracing for high quality automobiles and Italy has become an integral part of this development. Although major market analysts have cautioned Italy of checking their price or making small alteration to achieve an affordability, the market seems unstoppable. According to a survey by ICE ‘The prospects of Italian exports will also depend on their ability to intercept the demand for “affordable luxury”, which is expected to grow rapidly in the emerging countries in the coming years as the upper-middle class expands and women increasingly participate in education and employment. With this objective in mind, distribution channels and technology will have to be adapted to the new market trends.’ With an enthusiasm towards quality product in local market while Italy stands to gain , it is the local vendors and spares manufacturers who will reap the ultimate reward of this booming sector in India. (The author is attached with automotive industry thru his organization IBA-International Business Alliance for last 18 years. His organisation represents Italian firms catering to automotive industry with their state of the art product. He can be contacted at hisham@iba.co.in or hqasmi@ gmail.com)

Auto Monitor

16 - 31 March 2011

N AMERICAN ASSEMBLY

AUTOFACTS Global Automotive Outlook PricewaterhouseCoopers LLP

North America Assby Tracking 1-2011 (Tracking by Brand & Nameplate) Jan 2011

Last 3 Months

Ownership Org/ Brand & Nameplate

Volume

YOY % Chg

Assembly Share %

YOY Share Chg

Volume

Year to Date YOY % Chg

Assembly Share %

YOY Share Chg

Volume

YOY % Chg

Assembly Share %

YOY Share Chg

AM General Corporation (USA)

Hummer H2

AutoAlliance International (USA)

5,616

-20.5%

0.6%

(-0.2)

23,323

1.8%

0.8%

(-0.1)

5,616

-20.5%

0.6%

(-0.2)

Ford Mustang

2,605

-28.8%

0.3%

(-0.2)

10,953

-13.3%

0.4%

(-0.1)

2,605

-28.8%

0.3%

(-0.2)

Mazda Mazda6

3,011

-11.7%

0.3%

(-0.1)

12,370

20.2%

0.4%

3,011

-11.7%

0.3%

(-0.1)

BMW (Germany)

16,728

47.3%

1.7%

0.4

49,095

42.4%

1.7%

0.4

16,728

47.3%

1.7%

0.4

BMW X3

6,873

0.7%

0.7

17,130

0.6%

0.6

6,873

0.7%

0.7

BMW X5

6,369

-19.1%

0.6%

(-0.3)

21,707

-8.5%

0.8%

(-0.1)

6,369

-19.1%

0.6%

(-0.3)

BMW X6

3,486

0.2%

0.3%

(-0.0)

10,258

-4.6%

0.4%

(-0.1)

3,486

0.2%

0.3%

(-0.0)

CAMI Automotive (Canada)

-100.0%

(-0.7)

Chevrolet Equinox

-100.0%

(-0.5)

GMC Terrain

-100.0%

(-0.2)

Chrysler Group LLC (USA)

138,251

56.0%

13.8%

3.7

349,000

15.5%

12.2%

0.7

138,251

56.0%

13.8%

3.7

Chrysler 200

6,846

0.7%

0.7

8,256

0.3%

0.3

6,846

0.7%

0.7

Chrysler 300

-100.0%

(-0.2)

-100.0%

(-0.4)

-100.0%

(-0.2)

Chrysler PT Cruiser

-100.0%

(-0.2)

-100.0%

(-0.2)

-100.0%

(-0.2)

Chrysler Sebring

-100.0%

(-0.4)

787

-93.4%

0.0%

(-0.4)

-100.0%

(-0.4)

Chrysler Town & Country

8,853

272.8%

0.9%

0.6

24,859

24.3%

0.9%

0.1

8,853

272.8%

0.9%

0.6

Dodge Avenger

3,520

9.1%

0.4%

(-0.0)

12,176

1.3%

0.4%

(-0.0)

3,520

9.1%

0.4%

(-0.0)

Dodge Caliber

3,819

-27.2%

0.4%

(-0.2)

12,539

9.3%

0.4%

3,819

-27.2%

0.4%

(-0.2)

Dodge Caravan

13,654

209.7%

1.4%

0.9

35,786

29.8%

1.3%

0.2

13,654

209.7%

1.4%

0.9

Dodge Challenger

3,750

40.2%

0.4%

0.1

5,442

-44.8%

0.2%

(-0.2)

3,750

40.2%

0.4%

0.1

Dodge Charger

6,795

39.0%

0.7%

0.1

6,795

-56.4%

0.2%

(-0.4)

6,795

39.0%

0.7%

0.1

Dodge Dakota

1,623

33.1%

0.2%

5,133

26.8%

0.2%

1,623

33.1%

0.2%

Dodge Durango

7,198

0.7%

0.7

10,627

0.4%

0.4

7,198

0.7%

0.7

Dodge Journey

7,812

-6.2%

0.8%

(-0.2)

23,871

-10.7%

0.8%

(-0.2)

7,812

-6.2%

0.8%

(-0.2)

Dodge Nitro

1,742

41.2%

0.2%

6,623

41.3%

0.2%

0.1

1,742

41.2%

0.2%

Dodge Ram Pickup

-100.0%

(-2.5)

-100.0%

(-2.0)

-100.0%

(-2.5)

Dodge Viper

Fiat 500

908

0.1%

0.1

1,632

0.1%

0.1

908

0.1%

0.1

Jeep Commander

-100.0%

(-0.2)

-100.0%

(-0.2)

-100.0%

(-0.2) 0.6

Jeep Compass

7,937

338.5%

0.8%

0.6

10,413

36.5%

0.4%

0.1

7,937

338.5%

0.8%

Jeep Grand Cherokee

11,527

26.1%

1.2%

0.1

39,290

64.5%

1.4%

0.5

11,527

26.1%

1.2%

0.1

Jeep Liberty

4,215

0.7%

0.4%

(-0.1)

13,761

4.1%

0.5%

(-0.0)

4,215

0.7%

0.4%

(-0.1)

Jeep Patriot

8,137

405.1%

0.8%

0.6

22,706

77.5%

0.8%

0.3

8,137

405.1%

0.8%

0.6

Jeep Wrangler

5,026

75.6%

0.5%

0.2

14,749

55.7%

0.5%

0.2

5,026

75.6%

0.5%

0.2

Jeep Wrangler Unlimited

8,722

104.3%

0.9%

0.4

22,212

54.4%

0.8%

0.2

8,722

104.3%

0.9%

0.4

Ram Pickup

26,167

2.6%

2.6

71,343

2.5%

2.5

26,167

2.6%

2.6

Volkswagen Routan

-100.0%

(-0.1)

-100.0%

(-0.1)

-100.0%

(-0.1)

Daimler AG (Germany)

10,690

2.1%

1.1%

(-0.1)

31,106

8.0%

1.1%

(-0.0)

10,690

2.1%

1.1%

(-0.1)

Dodge Sprinter

-100.0%

(-0.1)

Freightliner Sprinter

658

29.3%

0.1%

1,680

25.0%

0.1%

658

29.3%

0.1%

Mercedes-Benz GL-Class

2,280

-9.6%

0.2%

(-0.1)

7,192

19.7%

0.3%

2,280

-9.6%

0.2%

(-0.1)

Mercedes-Benz M-Class

6,384

4.6%

0.6%

(-0.1)

18,266

12.2%

0.6%

6,384

4.6%

0.6%

(-0.1)

Mercedes-Benz R-Class

1,368

2.5%

0.1%

(-0.0)

3,968

23.6%

0.1%

1,368

2.5%

0.1%

(-0.0)

Ford Motor Company (USA)

177,029

-1.6%

17.7%

(-2.8)

520,725

-2.1%

18.3%

(-2.1)

177,029

-1.6%

17.7%

(-2.8)

Ford Crown Victoria

7,351

76.8%

0.7%

0.3

16,824

40.2%

0.6%

0.1

7,351

76.8%

0.7%

0.3

Ford Econoline

11,497

21.1%

1.1%

0.1

28,064

6.0%

1.0%

(-0.0)

11,497

21.1%

1.1%

0.1

Ford Edge

13,516

8.8%

1.4%

(-0.1)

36,899

9.4%

1.3%

13,516

8.8%

1.4%

(-0.1)

Ford Escape

25,583

18.3%

2.6%

0.1

65,231

10.7%

2.3%

25,583

18.3%

2.6%

0.1

Ford Expedition

3,279

-14.1%

0.3%

(-0.1)

12,632

2.1%

0.4%

(-0.0)

3,279

-14.1%

0.3%

(-0.1)

Ford Explorer

8,591

39.9%

0.9%

0.2

32,082

80.6%

1.1%

0.4

8,591

39.9%

0.9%

0.2

Ford Explorer Sport Trac

-100.0%

(-0.1)

1,580

-34.8%

0.1%

(-0.0)

-100.0%

(-0.1)

Ford Fiesta

10,910

1.1%

1.1

31,026

1.1%

1.1

10,910

1.1%

1.1

Ford Flex

3,009

-38.1%

0.3%

(-0.3)

7,809

-42.8%

0.3%

(-0.2)

3,009

-38.1%

0.3%

(-0.3)

Ford Focus

300

-97.9%

0.0%

(-1.6)

21,805

-51.0%

0.8%

(-0.9)

300

-97.9%

0.0%

(-1.6)

Ford F-Series

46,258

1.5%

4.6%

(-0.6)

143,142

-3.1%

5.0%

(-0.6)

46,258

1.5%

4.6%

(-0.6)

Ford Fusion

25,735

27.9%

2.6%

0.3

67,736

18.2%

2.4%

0.2

25,735

27.9%

2.6%

0.3

Ford Ranger

7,573

14.6%

0.8%

15,624

-33.6%

0.5%

(-0.4)

7,573

14.6%

0.8%

Ford Taurus

3,905

-50.1%

0.4%

(-0.5)

10,649

-45.8%

0.4%

(-0.4)

3,905

-50.1%

0.4%

(-0.5)

Lincoln Mark LT

-97.8%

0.0%

(-0.0)

-85.6%

0.0%

(-0.0)

-97.8%

0.0%

(-0.0)

Lincoln MKS

386

-74.9%

0.0%

(-0.1)

1,915

-53.5%

0.1%

(-0.1)

386

-74.9%

0.0%

(-0.1)

Lincoln MKT

853

-33.8%

0.1%

(-0.1)

1,611

-58.5%

0.1%

(-0.1)

853

-33.8%

0.1%

(-0.1)

Lincoln MKX

2,744

6.9%

0.3%

(-0.0)

8,264

25.6%

0.3%

2,744

6.9%

0.3%

(-0.0)

Lincoln MKZ

2,327

-18.4%

0.2%

(-0.1)

5,863

-23.6%

0.2%

(-0.1)

2,327

-18.4%

0.2%

(-0.1)

Lincoln Navigator

818

13.5%

0.1%

(-0.0)

1,741

-32.9%

0.1%

(-0.0)

818

13.5%

0.1%

(-0.0)

Lincoln Town Car

1,704

25.6%

0.2%

2,875

-18.1%

0.1%

(-0.0)

1,704

25.6%

0.2%

Mazda B-Series

-100.0%

(-0.1)

-100.0%

(-0.0)

-100.0%

(-0.1)

Mazda Tribute

688

-63.7%

0.1%

(-0.1)

2,354

-35.7%

0.1%

(-0.1)

688

-63.7%

0.1%

(-0.1)

Mercury Grand Marquis

-100.0%

(-0.4)

3,763

-53.1%

0.1%

(-0.2)

-100.0%

(-0.4)

Mercury Mariner

-100.0%

(-0.3)

-100.0%

(-0.3)

-100.0%

(-0.3) (-0.4)

Mercury Milan

-100.0%

(-0.4)

1,197

-88.8%

0.0%

(-0.4)

-100.0%

Mercury Mountaineer

-100.0%

(-0.0)

-100.0%

(-0.1)

-100.0%

(-0.0)

Fuji Heavy Industries (Japan)

22,312

17.9%

2.2%

0.1

63,289

16.5%

2.2%

0.1

22,312

17.9%

2.2%

0.1 0.2

Subaru Legacy

14,032

30.5%

1.4%

0.2

40,315

36.8%

1.4%

0.3

14,032

30.5%

1.4%

Subaru Tribeca

672

5.2%

0.1%

(-0.0)

1,749

22.5%

0.1%

672

5.2%

0.1%

(-0.0)

Toyota Camry

7,608

0.9%

0.8%

(-0.1)

21,225

-9.3%

0.7%

(-0.2)

7,608

0.9%

0.8%

(-0.1)

General Motors Company (USA)

225,080

12.8%

22.5%

(-0.3)

672,152

18.5%

23.6%

1.9

225,080

12.8%

22.5%

(-0.3)

Buick Enclave

5,744

-18.0%

0.6%

(-0.2)

16,490

18.2%

0.6%

5,744

-18.0%

0.6%

(-0.2)

Buick LaCrosse

2,671

-33.3%

0.3%

(-0.2)

12,562

-15.7%

0.4%

(-0.1)

2,671

-33.3%

0.3%

(-0.2)

Buick Lucerne

2,869

0.3%

0.3

6,844

96.3%

0.2%

0.1

2,869

0.3%

0.3

Cadillac CTS

5,846

16.1%

0.6%

15,110

13.2%

0.5%

5,846

16.1%

0.6%

Cadillac DTS

1,151

0.1%

0.1

4,026

75.4%

0.1%

0.1

1,151

0.1%

0.1

Cadillac Escalade

1,419

-51.5%

0.1%

(-0.2)

3,586

-36.8%

0.1%

(-0.1)

1,419

-51.5%

0.1%

(-0.2)

Cadillac Escalade ESV

541

-26.6%

0.1%

(-0.0)

2,205

24.0%

0.1%

541

-26.6%

0.1%

(-0.0)

Cadillac Escalade EXT

235

30.6%

0.0%

520

11.1%

0.0%

235

30.6%

0.0%

Cadillac SRX

6,100

21.9%

0.6%

18,536

21.1%

0.6%

0.1

6,100

21.9%

0.6%

Cadillac STS

245

-31.2%

0.0%

(-0.0)

894

28.3%

0.0%

245

-31.2%

0.0%

(-0.0)

Chevrolet Avalanche

1,833

17.5%

0.2%

4,726

-11.2%

0.2%

(-0.0)

1,833

17.5%

0.2%

Chevrolet Aveo

4,176

-7.9%

0.4%

(-0.1)

12,515

-8.0%

0.4%

(-0.1)

4,176

-7.9%

0.4%

(-0.1)

16 - 31 March 2011

N AMERICAN ASSEMBLY Jan 2011

Ownership Org/ Brand & Nameplate

Auto Monitor

Volume

Chevrolet C2 3,134 Chevrolet Camaro 9,978 Chevrolet Captiva 2,233 Chevrolet Cobalt Chevrolet Colorado 3,300 Chevrolet Corvette 379 Chevrolet Cruze 22,314 Chevrolet Equinox 19,099 Chevrolet Express 6,053 Chevrolet HHR 6,373 Chevrolet Impala 18,149 Chevrolet Malibu 7,607 Chevrolet Silverado 31,571 Chevrolet Suburban 3,372 Chevrolet Tahoe 8,364 Chevrolet Traverse 9,038 Chevrolet Volt 580 GMC Acadia 7,985 GMC Canyon 850 GMC Savana 2,125 GMC Sierra Pickups 12,764 GMC Terrain 9,519 GMC Yukon 4,967 GMC Yukon XL 2,496 Hummer H3 Hummer H3T Pontiac G6 Saab 9-4X Saturn Outlook Saturn VUE Honda Motor Company (Japan) 111,923 Acura CSX 149 Acura MDX 6,112 Acura RDX 2,024 Acura TL 1,852 Acura ZDX 149 Honda Accord 24,667 Honda Civic 26,178 Honda Crosstour 1,501 Honda CR-V 22,193 Honda Element 2,099 Honda Odyssey 11,588 Honda Pilot 12,091 Honda Ridgeline 1,320 Hyundai Motor Company (South Korea) Hyundai Elantra/i30 8,034 Hyundai Santa Fe 8,021 Hyundai Sonata/i40 18,512 Kia Sorento 11,388 Mitsubishi Motors Corp (Japan) 3,521 Mitsubishi Eclipse 220 Mitsubishi Endeavor 399 Mitsubishi Galant 2,902 Nissan Motor (Japan) 92,430 Infiniti QX series Nissan Altima 23,370 Nissan Armada 2,174 Nissan Frontier 4,119 Nissan Maxima 5,586 Nissan NV-Series 399 Nissan Pathfinder 3,524 Nissan Pickup 4,129 Nissan Sentra 16,958 Nissan Tiida 6,155 Nissan Titan 2,052 Nissan Tsuru 7,234 Nissan Versa 14,362 Nissan Xterra 2,218 Suzuki Equator 150 NUMMI (USA) Toyota Corolla Toyota Tacoma Tesla Motors (USA) 148 Tesla Roadster 148 Toyota Motor Corporation (Japan) 114,589 Lexus RX Series 6,646 Toyota Avalon 3,718 Toyota Camry 19,102 Toyota Corolla 19,615 Toyota Highlander 10,051 Toyota Matrix 1,945 Toyota RAV4 14,601 Toyota Sequoia 1,500 Toyota Sienna 12,146 Toyota Tacoma 11,278 Toyota Tundra 10,042 Toyota Venza 3,945 Volkswagen (Germany) 35,959 Volkswagen Bora 23 Volkswagen Golf/Jetta Variant 10,781 Volkswagen Jetta 25,155 Volkswagen New Beetle Total Light Vehicle 1,000,231

Last 3 Months YOY % Chg -36.0% 38.1% -14.0% -100.0% 7.4% -65.0% 53.3% 93.1% 17.4% 27.1% -34.5% -11.5% -16.3% 29.2% -19.7% -43.6% 101.0% -19.1% 92.5% 77.1% 5.4% -100.0% -100.0% -100.0% 10.6% -28.7% 7.6% 0.5% -51.0% -81.6% 11.6% 11.1% -61.5% 18.3% 40.0% 40.5% 43.5% -40.3% 45,955 14.2% 84.7% 21.1% 30.7% 3042.9% -46.4% 49.4% 21.0% -100.0% 6.9% 60.3% 0.2% 3.8% 121.9% 82.8% 59.1% 46.3% -25.4% 28.4% 2.0% 21.0% 150.0% -100.0% -100.0% -100.0% 146.7% 146.7% 15.4% -3.3% 38.1% -34.6% 30.5% 65.7% -56.5% 101.1% -25.8% 89.5% 159.0% 30.1% -45.0% 46.2% -98.9% 92.4% 92.4% -100.0% 14.2%

Assembly Share % 0.3% 1.0% 0.2% 0.3% 0.0% 2.2% 1.9% 0.6% 0.6% 1.8% 0.8% 3.2% 0.3% 0.8% 0.9% 0.1% 0.8% 0.1% 0.2% 1.3% 1.0% 0.5% 0.2% 11.2% 0.0% 0.6% 0.2% 0.2% 0.0% 2.5% 2.6% 0.2% 2.2% 0.2% 1.2% 1.2% 0.1% 73.7% 0.8% 0.8% 1.9% 1.1% 0.4% 0.0% 0.0% 0.3% 9.2% 2.3% 0.2% 0.4% 0.6% 0.0% 0.4% 0.4% 1.7% 0.6% 0.2% 0.7% 1.4% 0.2% 0.0% 0.0% 0.0% 11.5% 0.7% 0.4% 1.9% 2.0% 1.0% 0.2% 1.5% 0.1% 1.2% 1.1% 1.0% 0.4% 3.6% 0.0% 1.1% 2.5% 100.0%

YOY Share Chg (-0.2) 0.2 (-0.1) (-1.8) (-0.0) (-0.1) 2.2 0.5 0.2 0 0.2 (-0.6) (-0.9) (-0.1) 0.1 0.9 0.1 (-0.3) (-0.1) 0.1 (-0.5) 0.4 0.2 (-0.0) (-0.1) (-0.0) (-0.1) (-0.4) (-0.0) (-0.0) (-0.0) (-0.2) (-0.1) (-0.1) (-0.1) (-0.3) 0.1 0 0.2 0.2 (-0.1) 4.6% 0.8 (-0.0) 0.7 0.1 0 0 (-0.0) 0.1 0.5 (-0.1) (-0.2) 0.1 (-0.1) (-0.1) 0 0.2 0.2 0.5 0.1 (-0.1) 0.1 (-0.2) 0 0 (-3.3) (-2.3) (-1.1) 0 0 0.1 (-0.1) 0.1 (-1.4) 0.2 0.3 (-0.3) 0.6 (-0.1) 0.5 0.6 0.1 (-0.4) 0.8 (-0.2) 0.4 1 (-0.4) -

Volume 7,371 22,531 7,434 8,624 2,226 61,147 57,138 17,233 16,988 48,119 41,601 103,224 13,165 21,544 23,166 1,023 22,483 2,600 4,701 43,724 26,098 13,153 8,845 308,744 388 14,564 5,728 6,254 388 70,108 69,827 4,263 63,577 5,162 32,406 32,598 3,481 1.6 27,633 31,228 43,726 29,703 7,715 851 1,405 5,459 251,794 64,212 7,141 10,755 15,825 399 9,278 8,870 45,303 17,569 5,150 19,791 40,995 6,086 420 265 265 322,688 18,637 9,303 54,557 54,112 26,660 4,353 42,928 5,285 34,739 35,891 26,121 10,102 120,994 183 36,246 84,565 2,853,180

Year to Date YOY % Chg -47.7% -14.1% 10.0% -100.0% 28.0% 34.2% 148.5% 52.3% -5.6% 26.2% 14.3% -4.7% 6.2% 12.3% 101.1% 17.5% -12.5% 41.6% 3.8% 166.5% 35.7% 33.2% -100.0% -100.0% -100.0% -100.0% 5.9% -46.0% 22.3% 21.2% -48.2% -72.4% 7.3% -11.0% -65.0% 37.6% 32.3% 27.8% 32.2% -25.6% 132,290 21.8% 109.8% 19.3% 7.4% 1250.8% -17.9% 0.9% 14.5% -100.0% -1.4% 56.4% -3.8% -9.0% 59.9% 37.4% 46.4% 59.4% -25.4% 24.0% 11.1% 18.0% 162.5% -100.0% -100.0% -100.0% 66.7% 66.7% 10.9% -4.8% 30.9% -36.3% 17.2% 45.9% -59.7% 103.1% -12.8% 81.4% 194.7% 9.4% -51.7% 39.7% -97.0% 72.3% 71.1% -100.0% 9.0%

Assembly Share % 0.3% 0.8% 0.3% 0.3% 0.1% 2.1% 2.0% 0.6% 0.6% 1.7% 1.5% 3.6% 0.5% 0.8% 0.8% 0.0% 0.8% 0.1% 0.2% 1.5% 0.9% 0.5% 0.3% 10.8% 0.0% 0.5% 0.2% 0.2% 0.0% 2.5% 2.4% 0.1% 2.2% 0.2% 1.1% 1.1% 0.1% 85.3% 1.0% 1.1% 1.5% 1.0% 0.3% 0.0% 0.0% 0.2% 8.8% 2.3% 0.3% 0.4% 0.6% 0.0% 0.3% 0.3% 1.6% 0.6% 0.2% 0.7% 1.4% 0.2% 0.0% 0.0% 0.0% 11.3% 0.7% 0.3% 1.9% 1.9% 0.9% 0.2% 1.5% 0.2% 1.2% 1.3% 0.9% 0.4% 4.2% 0.0% 1.3% 3.0% 100.0%

YOY Share Chg (-0.3) (-0.2) 0 (-1.6) 0 0 2.1 1.1 0.2 (-0.1) 0.2 0.1 (-0.5) (-0.0) 0 0.4 0 0.1 (-0.0) 0 (-0.1) 0.5 0.1 0.1 (-0.1) (-0.0) (-0.2) (-0.0) (-0.3) (-0.0) 0.1 0 (-0.2) (-0.0) (-0.0) (-0.5) (-0.3) 0.5 0 0.2 0.2 (-0.1) 4.6% 1 0.1 0.7 0.1 (-0.0) 0 (-0.0) (-0.0) 0.4 (-0.1) (-0.2) 0.1 (-0.1) (-0.1) 0 0.1 0.1 0.4 0.2 (-0.1) 0.1 0 0 0 (-3.4) (-2.3) (-1.1) 0 0 0.2 (-0.1) 0.1 (-1.4) 0.1 0.2 (-0.3) 0.7 (-0.0) 0.5 0.8 0 (-0.4) 0.9 (-0.2) 0.5 1.1 (-0.4) -

Volume 3,134 9,978 2,233 3,300 379 22,314 19,099 6,053 6,373 18,149 7,607 31,571 3,372 8,364 9,038 580 7,985 850 2,125 12,764 9,519 4,967 2,496 111,923 149 6,112 2,024 1,852 149 24,667 26,178 1,501 22,193 2,099 11,588 12,091 1,320 1.9 8,034 8,021 18,512 11,388 3,521 220 399 2,902 92,430 23,370 2,174 4,119 5,586 399 3,524 4,129 16,958 6,155 2,052 7,234 14,362 2,218 150 148 148 114,589 6,646 3,718 19,102 19,615 10,051 1,945 14,601 1,500 12,146 11,278 10,042 3,945 35,959 23 10,781 25,155 1,000,231

YOY % Chg -36.0% 38.1% -14.0% -100.0% 7.4% -65.0% 53.3% 93.1% 17.4% 27.1% -34.5% -11.5% -16.3% 29.2% -19.7% -43.6% 101.0% -19.1% 92.5% 77.1% 5.4% -100.0% -100.0% -100.0% 10.6% -28.7% 7.6% 0.5% -51.0% -81.6% 11.6% 11.1% -61.5% 18.3% 40.0% 40.5% 43.5% -40.3% 45,955 14.2% 84.7% 21.1% 30.7% 3042.9% -46.4% 49.4% 21.0% -100.0% 6.9% 60.3% 0.2% 3.8% 121.9% 82.8% 59.1% 46.3% -25.4% 28.4% 2.0% 21.0% 150.0% -100.0% -100.0% -100.0% 146.7% 146.7% 15.4% -3.3% 38.1% -34.6% 30.5% 65.7% -56.5% 101.1% -25.8% 89.5% 159.0% 30.1% -45.0% 46.2% -98.9% 92.4% 92.4% -100.0% 14.2%

YOY Share Chg (-0.2) 0.2 (-0.1) (-1.8) (-0.0) (-0.1) 2.2 0.5 0.2 0 0.2 (-0.6) (-0.9) (-0.1) 0.1 0.9 0.1 (-0.3) (-0.1) 0.1 (-0.5) 0.4 0.2 (-0.0) (-0.1) (-0.0) (-0.1) (-0.4) (-0.0) (-0.0) (-0.0) (-0.2) (-0.1) (-0.1) (-0.1) (-0.3) 0.1 0 0.2 0.2 (-0.1) 4.6% 1.6 0.8 (-0.0) 0.7 0.1 0 0 (-0.0) 0.1 0.5 (-0.1) (-0.2) 0.1 (-0.1) (-0.1) 0 0.2 0.2 0.5 0.1 (-0.1) 0.1 (-0.2) 0 0 (-3.3) (-2.3) (-1.1) 0 0 0.1 (-0.1) 0.1 (-1.4) 0.2 0.3 (-0.3) 0.6 (-0.1) 0.5 0.6 0.1 (-0.4) 0.8 (-0.2) 0.4 1 (-0.4) -

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16 - 31 March 2011

Auto Monitor

ADVERTISERS’ LIST CORPORATE

Pg No. ............ Advertiser............................................................................................ Tel ............................................................................E-mail ......................................................................................... Website 42................... ADEA-Automotive Dealership Excellance Awards .............................. +91-22-30034650.....................................................prachi.mutha@infomedia18.in ................................................. 31................... Anest Iwata Motherson Limited ......................................................... +91-120-6752299 ........................................................................................................................................................ www.anest-iwata.co.jp 26................... 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Auto World Expo 2011......................................................................... +91-9884096806 .....................................................info@bmexhibitions.com .......................................................... www.bmexhibitions.com 20................... Coatec India ........................................................................................ +91-160-2648700 ....................................................info@coatecindia.com ............................................................... www.coatecindia.com 25................... Cognex Singapore INC ......................................................................... +91-80-40224118 ....................................................sales.in@cognex.com ................................................................ www. cognex.com 1,4 .................. 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GL Brothers ......................................................................................... +91-22-66047000 ....................................................info@pilotindia.com .................................................................. www.pilotindia.com 41................... Goodie Enterprises.............................................................................. +91-11-41613643 .....................................................goodie@goodiesons.com........................................................... www.goodiesons.com 47................... Greaves Cotton Limited ...................................................................... +91-22-24397575 .....................................................rrao@greavesmail.com .............................................................. www.greavescotton.com 15................... GS Auto International Ltd ................................................................... +91-161-2511001 ......................................................................................................................................................... www.gsgroupindia.com BIC ................. Guhring India Private Limited ............................................................ +91-80-40322500 ....................................................info@guhring.in ........................................................................ www.guhring.in 19................... Havells India Ltd. ................................................................................ +1800-11-0303 .........................................................marketing@havells.com ............................................................ www.havells.com 39................... 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Ltd. ........................................................... +91-2827-287081.....................................................info@jyoti.co.in.......................................................................... www.jyoti.co.in FIC.................. Kamal Envirotech................................................................................ +91-124-4367305.....................................................enquiry@giaatech.com .............................................................. www.giaatech.com 3 .................... M And M Auto Indus Ltd ..................................................................... +91-124-4763200 .....................................................corporate@mandmsprings.com ................................................ www.mandmsprings.com 40 .................. Messe Frankfurt Trade Fairs - Istanbul ............................................... +91-22-61445901.....................................................info@india.messefrankfurt.com ............................................... www.messefrankfurt.com.tr BC .................. Micromatic Machine Tools .................................................................. +91-80-41492285 ....................................................mmtblr@acemicromatic.com .................................................... www.acemicromatic.com 6 .................... Mipox .................................................................................................. +91-80-65830898 ....................................................rag-rao@mipox.co.jp ................................................................. www.mipoxindia.com 24................... New Swan Autocomp Pvt Ltd .............................................................. +91-161-4346000.....................................................info@swanindia.com ................................................................. www.swanindia.in 9 .................... Oetiker India Pvt Ltd........................................................................... +91-2192-250107 .....................................................akeswani@oetiker.com .............................................................. www.oetiker.com 36................... Padmini VNA Mechatronics Pvt. Ltd................................................... +91 124 3207398 .....................................................sales@padminiengg.com........................................................... www.padminivna.com 12................... Patvin Engineering (P) Ltd .................................................................. +91-22-27780310 .....................................................patvin@patvin.co.in .................................................................. www.patvin.co.in 22 .................. Rohan Standox Autolack ..................................................................... +91-22-65803331.....................................................sales@spraytec.net .................................................................... www.spraytec.net 48 .................. Sarveshwari Technologies Ltd ............................................................ +91-11-27023750 .....................................................info@sarveshwari.com .............................................................. www.@sarveshwari.com 8 .................... Schoeller Arca Time Solutions Ltd ...................................................... +91-22-42119500 .....................................................info@satmhs.com ...................................................................... www.satmhs.co, 7 .................... Siemens Ltd ......................................................................................... +91-22-27623727.....................................................motors.in@siemens.com ........................................................... www.siemens.com/automotive-excellence 48 .................. Sreelakshmi Traders ........................................................................... +91-44-24343343.....................................................sreelakshmitraders@gmail.com ................................................ www.sreelakshmitraders.com 37................... Starragheckert Machine Tools Pvt Ltd. ............................................... +91-80-42770600 ....................................................sales.in@starragheckert.com .................................................... www.starragheckert.com 44 .................. Tagma ................................................................................................. +91-22-28526876.....................................................diemould@tagmaindia.org ....................................................... www.tagmaindia.org 33................... Techaids .............................................................................................. +91-172-4379999.....................................................info@techaids.in ........................................................................ www.techaids.in 16................... Tech-Cast Mfg. Corp. ........................................................................... +886-5-591-6351 .....................................................sales@techcast.com.tw.............................................................. www.techcast.com.tw 35................... Varroc Engineering Pvt Ltd ................................................................. +91-240-2556227.....................................................varroc.info@varrocgroup.com .................................................. www.varrocgroup.com 13................... Yamazaki Mazak India Pvt Ltd ........................................................... +91-20-27351417 .....................................................sudhir_patankar@mazakindia.com .......................................... www.mazak.com

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PRODUCT INDEX Product ............................................................ pg no.

Dip spin coating machines ........................................................... 20

Power tiller ................................................................................... 47

Abrasive & cleaning guns ............................................................. 23

Dollies (trollies)............................................................................. 8

Pre tereatment systems ................................................................ 20

Acc. Padel sensor assy. ................................................................. 36

Drilling tools ................................................................................. BIC

Pumpsets and power reapers....................................................... 47

Adea-Automotive Dealership Excellence Awards ......................... 42

DVR ............................................................................................... 16

Quality steel.................................................................................. 11

Auto Monitor brand Ad................................................................. 52

E-coatings solutions ..................................................................... FIC

Reamers ........................................................................................ BIC

Auto parts ..................................................................................... 15

Egr valve ....................................................................................... 36

Rear axles ..................................................................................... 15

Automatic painting system........................................................... 12

Electronic control unit.................................................................. 36

Scada & dcs implimentaion ......................................................... 20

Automation................................................................................... 20

Electronic spray painting.............................................................. 31

Sealer dispensing system.............................................................. 12

Automotive electrical components .............................................. 35

Embossing rolls............................................................................. 33

Seat assemblies ............................................................................ 35

Autoparts ...................................................................................... 24

Exhibition- Engineering Expo ....................................................... 1,4

Seat recliner.................................................................................. 24

Axles ............................................................................................. 15

Exhibition-Blech India 2011 ......................................................... 39

Seat slider ..................................................................................... 24

Bearings for automotive............................................................... 26

Extension springs ......................................................................... 3

Self adhesive tapes ....................................................................... 48

Bolts.............................................................................................. 15

Factory automation ...................................................................... 20

Solid carbide drills........................................................................ 45

Brake motors ................................................................................ 19

Fine blanking ................................................................................ 24

Solid carbide drills with ic ............................................................ 45

Building automation .................................................................... 20

Five axis machining centers and four axis horizontal

Solid carbide mills ........................................................................ 45

Cables ........................................................................................... 19

machining centers ........................................................................ 37

Solid carbide reamers .................................................................. 45

Calendering .................................................................................. 33

Flange motors ............................................................................... 19

Camera ......................................................................................... 16

Flourine coated pumps related quipment & systems .................. 31

Car paints...................................................................................... 22

Fluidized bed coating machines. ................................................. 20

Car polish...................................................................................... 22

Fomable small containor ............................................................. 8

Ced coating machines................................................................... 20

Fombles small crates .................................................................... 8

Ced/ktl coatings ............................................................................ FIC

Foot mounting motors ................................................................. 19

Chemlok coating machines .......................................................... 20

Front axles .................................................................................... 15

Clamps .......................................................................................... 9

Glide coating machines ................................................................ 20

CNC ............................................................................................... 43

Gravity feed guns .......................................................................... 23

CNC cutting machines................................................................... 20

Gun drills ...................................................................................... BIC

CNC hmcs ...................................................................................... 43

Hollow bars................................................................................... 17

CNC laser cutting machines .......................................................... 20

Horizontal CNC machines ............................................................. 43

CNC lathes ..................................................................................... BC

Horizontal machining center ....................................................... 43

CNC machines ............................................................................... 43

Hot,cold & warm forged machined parts .................................... 35

CNC oval turning centers .............................................................. 43

Ic engine valves ............................................................................ 35

CNC oxy fuel cutting machines ..................................................... 20

Imaging & vision systems ............................................................. 20

CNC plasma cutting machines ...................................................... 20

Lightweight diesel engines ........................................................... 47

CNC turn mill centers.................................................................... 43

Lightweight petrol ........................................................................ 47

Turrets .......................................................................................... BC

CNC turning center ....................................................................... 43

Lubricating & protective coating guns ......................................... 23

Tyre chanding accessories ............................................................ 48

CNC vertical machining center ..................................................... 43

Machine tools ............................................................................... 5

Tyre repair tools............................................................................ 48

CNC/vmc machines ....................................................................... 13

Machinery steel ............................................................................ 11

Tyre service tools .......................................................................... 48

Coating machines ......................................................................... 20

Metal cutting tools ....................................................................... 45

Vaccum pump ............................................................................... 36

Coating plants............................................................................... 20

Milling cutters............................................................................... BIC

Ventilators .................................................................................... 48

Coating systems ............................................................................ 20

Modular tooling system ................................................................ BIC

Vertical line series ........................................................................ 43

Commercial vehicle tyres ............................................................. 21

Motors........................................................................................... 19

Vertical machining centers........................................................... BC

Compaction & concreting equipment. ......................................... 47

Nuts .............................................................................................. 15

Vision sensors and surface inspection systems ........................... 25

Compression springs .................................................................... 3

Paint circulation system ............................................................... 12

Vision software ............................................................................. 25

Countersinks ................................................................................. BIC

Paint pumps ................................................................................. 12

Vision systems .............................................................................. 25

Crane duty motors ........................................................................ 19

Paint shop equipments ................................................................ 20

Vmc-linear series .......................................................................... 43

Cutting machines.......................................................................... 20

Paint shop machines .................................................................... 20

Washing ........................................................................................ 23

Cutting tools ................................................................................. 33

Pallets ........................................................................................... 8

Waterjet cutting ............................................................................ 33

Cylindrical grinders ...................................................................... BC

Parkingsensor ............................................................................... 16

Wheel alignment accessories ....................................................... 48

Diamond tools .............................................................................. BIC

Plastic moulded components....................................................... 35

Wheel balancing accessories ........................................................ 48

Diesel engines (10-1000hp) .......................................................... 47

Powder coating system................................................................. 12

Wire forms .................................................................................... 3

Diesel/kerosene engines. Power sprayer ..................................... 47

Power chucking cylinders............................................................. BC

Wireless......................................................................................... 16

FIC : Front Inside Cover BIC : Back Inside Cover BC: Back cover

Solid carbide reamers with ic ....................................................... 45 Solid carbide special drills ........................................................... 45 Solid carbide special mills ............................................................ 45 Solid carbide special reamers ...................................................... 45 Spray equipments......................................................................... 41 Spray guns .................................................................................... 12,23,31 Spray painting equipment............................................................ 22 Squeezing rolls ............................................................................. 33 Stackable crates ............................................................................ 8 Stack-nest crate ............................................................................ 8 Strip steel ...................................................................................... 11 Suction feed guns ......................................................................... 23 Super finishing film - variofilm..................................................... 6 Taps............................................................................................... BIC Tool bits ........................................................................................ 11 Tool steel ...................................................................................... 11 Torsion springs ............................................................................. 3 Total integrated automation ........................................................ 7

Auto Monitor

THE OTHER SIDE

Getting Personal

16 - 31 March 2011

In Person

With Jun Nakata, Director (Sales and Marketing), India Yamaha Motor If not in the auto industry, where would you be? I like this industry

What car do you drive? What do you dream of driving? In India I drive Innova and in Japan I ride FZ1. I dream to ride VMAX

Your most recent indulgence… I bought a house in Japan

What are you currently reading? About India

What is Mr Nakagawa doing when not talking auto? Playing baseball

Outdoor activity you would miss office for… Camping and barbeque

Where did you go for your last holiday? Seychelles

You get angry when… When someone breaks his or her promise

What is the one thing you would like to change about you? I won’t like to change anything

Best thing to have happened to you… The opportunity to come to India

Jun Nakata is an industry veteran with an experience of over two decades. He has been associated with Yamaha ever since the start of his career. He is currently the Director of Sales and Marketing at India Yamaha Motor. Born on August 8, 1965, Nakata went on to pursue his education from Ritsumeikan University in Japan. Prior to joining India Yamaha Motor, Nakata had been instrumental in driving the sales of Yamaha Motor Corporation in the Japanese domestic market for nine years. Broadening his career goals, he graduated to spearhead the sales team of Yamaha Motor Corporation Water Vehicle (Jet Ski) for North America, Oceania and South East Asia for five years. After this, he became a part of the Indonesia MC Marketing and held this oining India Yamaha Motor, he was a part of position for five years. Before joining merica, a position the MC Planning for Asia and America, that he assumed for two years. perience on the Having acquired hands-on experience hat the first step two-wheeler sector, he believes that of climbing the ladder of success is continuous llenges with a team support, ability to face challenges h understandpositive attitude and an in depth ew. ing of the customer’s point of view. In his new role, he wants to build Yamaha any in India by as the leading motorcycle company focusing on building a strong network, propel lop the best prodcustomer satisfaction and develop nd reliability at ucts that emanate both charm and a competitive price. When not working, he likes to splay baseball and golf. He is passionate about motorcycles (forr e obvious reasons) and cars too. He is married and has two sons.

An experience I won’t forget…

Illustration: Sachin Pandit

When I went to Indonesia the market share of Yamaha was very less, only 12 percent but when I walked out it was 36 percent. That experience I can never forget. It was a result of our efforts and hard work.

Regn. Regn. No. No. MH/MR/WEST/20/2009-2011. MH/MR/WEST/20/2009-2011. RNI RNI No. No. MAHENG/2000/11414 MAHENG/2000/11414 WPP WPP Licence Licence No: No: MR/Tech/WPP-269/WEST/09-11 MR/Tech/WPP-269/WEST/09-11 Licenced to post without pre-payment at Mumbai patrika channel sorting office G.P.O. Mumbai Licenced to post without pre-payment at Mumbai patrika channel sorting office G.P.O. Mumbai 400 400 001. 001. Date Of Mailing: 1st & 2nd Fortnightly Issue. Date Of Publication: 28th of Every Month Date Of Mailing:16th & 17th Fortnightly Issue. Date Of Publication: 13th of Every Month

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