Auto Monitor - 16-31 October 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 Vol. 11 No. 19

16-31 October 2011

INTERVIEW “THE GOVERNMENT SHOULD NOT CURB THE GROWTH” Arvind Kapur, President, ACMA

Pg 08

72 Pages

Segmental shift within LCV sales

SOUTH INDIA SPECIAL Pg 16-51

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

` 50

AUTONOMICS CV SALES TO SEE ‘EXTREME’ ACTION

2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 201002 03 04 05 06 07 08 09 10 11 Sub-1T

Pick-ups

Pg 14

Upper-end

Daimler envisions new HCV service model

MRF turnover crosses `10,000 crore

RF crossed the annual turnover of `10,000 crore in the current fi nancial year and has became the fi rst Indian tyre company to achieve this mark. “MRF has registered growth in excess of 30 percent over last year. In 2007, we reported `5,000 crore,” said MRF, Chairman, KM Mammen. The company’s Tiruchi plant would go commercial in the fi rst quarter of next year, he added. Due to high raw material cost, the company is looking to acquire plantations or companies abroad to neutralise the impact of high import duty. Mammen said, “High import duty on raw materials is affecting our bottom line and therefore we are looking to acquire plantations in any region or acquire companies. We see lot of opportunities in Europe, South East Asia and China.” Currently the company exports tyres to around 65 countries and has seven manufacturing facilities in the country. Executive VP, Marketing, MRF, Koshy K Varghese said, “Raw material cost is more in India than the import of tyres. We are facing this issue for the past 15 years or so and the government has not taken a decision on this. This issue is adversely affecting tyre companies in India,” he said. Currently the import duty for natural rubber is 20 percent and for tyres is seven percent.

DATA MONITOR Domestic Sales Sector

Aug-10

Aug-11

Change

203,872

191,914

-5.87%

52,394

64,248

22.62%

49,737

45,443

-8.63%

957,236

1,111,340

16.10%

TOTAL

1,263,239

1,412,945

11.85%

Sector

Aug-10

Aug-11

Change

36,810

49,642

34.86%

6,219

6,705

7.81%

21,492

32,329

50.42%

125,057

169,395

35.45%

TOTAL

189,578

258,071

36.13%

Exports

Nabeel A Khan New Delhi

aimler India Commercial Vehicles (DICV) is meticulously planning to bring a paradigm shift in the way of doing business of heavy commercial vehicles in India. Breaking the traditional perception about the importance of a wide network of service support, the German CV manufacturer is hoping to offer vehicles that are robust enough to have fewer requirements of getting parked at the service station. The other radical change that the German automaker is bringing about is the use of information technology for the shopﬂoor workers to reduce their dependency on supervisors. “We will break the paradigm created by existing players that a huge network of the service stations is required for the success of

the business. They have a deeper penetration in the country, but our strength will be completely different. Our vehicles will be produced in such a manner that it would not require to be serviced before one lakh kilometres of running, ” said Vice President, Marketing & Sales V R V Sriprasad. The vehicle maker is set to challenge the conventional wisdom and bring about a paradigm shift in commercial vehicle space. Daimler India would be introducing the next generation trucks designed by the Indian engineers and for the Indian market at competitive prices within a year, to challenge the near duopolistic character of Indian commercial vehicle industry. The company has been testing its vehicle for over one lakh km and still going to check the life of the vehicle on its own test tracks. However, the

price will not be very far below as it could dilute the brand image. DICV attributes the move to the radical changes that are sweeping the Indian market— the way people communicate, travel, work or spend their leisure time. The changing preferences and lifestyles as well as ever increasing expectations of the customers are driving the vehicle technologies and service standards to the next level. Superior products are necessary but will not be a sufﬁcient for brand differentiation. Consumer experience will play a bigger role as product differentiation will cease. Sriprasad emphasised that dealerships’ pattern is set to change as they face the increasingly demanding OEMs and the customers. The company will not just be focusing on selling the vehicle but would like develop a participating relationship with

the customers in the complete life cycle of the product. Looking at the crucial role of the manpower and lean manufacturing, the company is adopting closer focus on the use of information technology for the shopfloor workers. It has developed a set of touchscreen instructions, with 3D visuals, guiding the workers to take up assignments that help reduce or even eliminate the requirement of any supervisors. The instruction on this screen is completely pictorial and hence can be handled by all classes or sections of workers on the shopfloor regardless of literacy or expertise levels. DICV has planned a total investment of `4,400 crores over the next five years. The company will manufacture light, medium and heavy duty trucks at its 400-acre facility in Oragadam, near Chennai.

Mahindra scales new heights of technology Abhishek Parekh Pune

ahindra & Mahindra has made a concerted bid to ‘rise’ in the global automotive sweepstakes with the launch of ‘XUV 500’ (pronounced ‘XUV five double o). The auto maker has not only packed its newly launched utility vehicle with advanced features offered at a ‘competitive’ price-tag in comparison with competing vehicles, but also broken some conventions in its own manufacturing philosophy as well as manufacturing process for getting desired synergy and productivity. Built on a monoque structure as opposed to a body-on-chassis design, the company has made an effort to offer reliability with advanced driving dynamics, rigid structure and lighter and cost effective mix of materials. The case in point is usage of plastics fenders, a ﬁ rst on any vehicle in this segment, on each side of the frontal body frame, which not only reduces weight but also increases safety for pedestrians. Additionally, the company has offered advanced safety features including electronic stability program (ESP) with roller miti-

gation, six airbags on front, side and curtain, anti-lock braking systems with electronic brakeforce distribution, hill hold and descent control as a standard offering. The company is looking to manufacture around 2,000 units at the Chakan facility and is also looking to export the SUV to markets like Australia, South and Central America. It has already launched the XUV 500 in South Africa early this month. The company is also seeking to create an aura of exclusivity around the XUV 500 by offering a membership of ‘The Purple Club’ to the buyer. In this concept,

President, AFES, M&M, Dr Pawan Goenka with Anand Mahindra

the service centre supervisor turns into a relationship manager and sales executive evolves into a consultant. “We have invested around `650 crore in this completely ‘indigenous’ developmental

Photograph: Joshua Navalkar

NEWS IN BRIEF

* Source: SIAM/ ** all sub segments considered

w w w.amonl ine.in

The XUV 500 is based on a monoque structure

effort but we are in the process of drawing synergies with future platforms of Mahindra and Ssangyong. We are looking to work jointly in the areas of interior and exterior electronics, platform sharing and distribution infrastructure sharing with Ssangyong but these are still at a preliminary stage,” said President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra, Dr Pawan Goenka. He added that there is a possibility of sharing powertrain aggregates and electronics,

with later being strength of the Korean auto maker. The XUV 500 was launched at the end of last month in Pune and is offered in two variants: W6 costing `10.8 lakh (ex-showroom New Delhi) and W8 costing `11.95 lakh. The W8 variant is also available with a four-wheel drive option costing `12.88 lakh. It is available at these introductory prices in ﬁve cities currently (Mumbai, Delhi, Chennai, Bangalore and Pune) and would be launched nationwide over the next three months.

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F I N D A S S A B S R I PA D S E RV I C E C E N T R E S I N C H E N N A I , D E L H I , H Y D E R A B A D A N D M U M B A I F O R M O R E I N F O R M AT I O N P L E A S E V I S I T W W W. A S S A B S R I PA D. C O M

EDITORIAL Strike it right

or some time now, the automotive industry has been witnessing labour unrest in major clusters across the country including National Capital Region, Chennai, Pune and Bangalore. The eastern region, which is known for strikes, is also experiencing a similar situation. Besides, there are some stray incidents in component clusters like Coimbatore, Jamshedpur and Trichy. What it all means is that there is a major issue in the guidelines and ethics of managing the workforce. Irrespective of the time, the standoff between the management and the workforce is always an issue, as it not only depletes the proﬁts for the companies involved but also affects the economy. While the companies witness a drop in sales, market share and turnover, the government loses revenue collection in various forms of taxes and levies. The passenger car segment has been moderating alarmingly for some time and the commercial vehicle segment is also witnessing a slowdown, primarily due to hardening of interest rates. During this time of uncertainty, the strike really hits harder. A strike is a weapon for the employees to press their demands while the employers of some of the companies merely look at it as a production loss. Labour unrest is not limited to the private sector but also in the public sector undertakings. To do away with these kinds of losses of man-days, the government should come out with clear guidelines on the management of the workforce. While the government can be urged for ﬂexible labour laws–in terms of temporary workforce among other demands, the multinational companies should also try to adapt to local conditions while handling their employees. Just as they make their products suitable for Indian conditions, it is necessary to customise their approach in dealing with human resources. This issue is a special on South India. A section of people see that this region, off late, seems to be losing its sheen as couple of major investments—from Ford and Peugeot that

were supposed to come to Tamil Nadu have gone to Gujarat. However, this is not the case, as Tamil Nadu has been receiving investments from different industries. On the automotive front, few companies including Mahindra have invested in the state. Recently, HMSI broke the ground in Bangalore to set up its third facility. A couple of OEMs are also looking at the southern region for their capacity expansion programmes. Evolution of additional clusters is a good thing since the existing ones cannot handle production when the passenger vehicles, for instance, swell to ten million in ten years. It will also compel the existing clusters to take stock of the situation and initiate corrective actions. A case in point is the emerging Oragadam belt near Chennai; while the state government is promoting the new industrial area in a big way, the infrastructure in terms of roads to reach the place is abysmally poor. Ditto with a few industrial areas in Karnataka. It is a paradox why the governments across the country are not taking initiatives to improve infrastructure in places from where they get maximum revenue. The industries in Tamil Nadu, off late, have begun facing harassment from different government departments including the labour ofﬁce. Unless and until the government creates a conducive atmosphere, the industries cannot be competitive. To make the issue special, my colleagues Bhargav and Akmal have put in their efforts to cover some of the companies in this region. You will ﬁnd interesting articles including Bill Forge, Comstar, LGB and Rane. Wishing you much pleasure reading. Do send us your feedback.

T. Murrali t.murrali@infomedia18.in

FORTNIGHT’S QUOTES Anand Mahindra, Vice Chairman & Managing Director, Mahindra & Mahindra in The Economic Times

Frank-Peter Arndt, BMW, Production Chief on BMW’s capacity expansion plans to Automotive newsEurope

“The XUV 500 will get us the high seat in global auto world”

“More important than the percentage capacity use is to have the right capacity at the right time in the right place”

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CONTENTS CORPORATE Hover Automotive looking to establish institute

Hover Automotive is in the process of evaluation and feasibility of a training college for technical and sales personnel for automobile dealerships

NNG to look for partnership in fleet management

NNG is looking to forge partnership in India for fleet management segment and launching ‘iGo Primo’ in the Indian market through its exclusive and non-exclusive dealers

Rane banks on LPS to raise productivity, capacity

GLOBAL WATCH 16

Rane Engine Valves (REVL) is looking to double floor size of the facility while trebling the production capacity through Lean Production System (LPS) and ‘My Line’ concept

Innovating technology at low cost: The Bosch experience

GM enters car-sharing market with RelayRides

Nissan, BMW choose Brazil for new facilities

LG Balakrishnan & Bros has bagged an order from Ashok Leyland to supply transmission parts for its range of vehicles

Brazil’s Iochpe-Maxion to acquire Hayes Lemmerz

IMAGE

Hayes Lemmerz International will be acquired by Brazilian wheel and chassis supplier Iochpe-Maxion SA for $725 million

RK Behera, Founder & Chairman, RSB Transmission RK Behera leads the company by mentoring and facilitating the top management, in evolving the strategic roadmap of the company and overseeing its implementation

Honda pulls curtain off Brio Honda Siel Cars India recently launched its much-awaited small car—Honda Brio in the Indian market priced between `3.95 lakh and `5.10 lakh. The car is powered by a four cylinder 1.2-litre i-VTEC engine that delivers maximum output of 88 PS @ 6000 RPM and torque of 109 nm (11.2 kgm) @ 4600 RPM. The company claims fuel economy of 18.4 kmpl. Brio is available in ﬁve-speed manual transmission with optimised gear ratios. The Honda Brio will be available in four variants—EMT, SMT, S(O) MT and VMT in six exciting exterior colours—energetic blue, rallye red, urban titanium, alabaster silver, taffeta white and crystal black pearl. The company offers a two years or 40,000 km warranty as standard value for all customers on Brio.

Auto Monitor

of the fortnight

Federal-Mogul kicked off its new facility in Chennai to manufacture brake friction materials for the OE and aftermarket segments for automotive and industrial `customers

Nissan will invest $1.5 billion to build a car plant in Brazil as part of its goal to be leading Asian brand in Latin America’s biggest auto market

THE OTHER SIDE

Federal-Mogul’s Chennai plant to start production soon

GM is teaming up with RelayRides, a San Francisco-based car-sharing service, to help GM owners rent their idle vehicles

Polaris India has enagaged MPL Adventure Sports Vehicles, a part of MPL Group, to open a sales outlet in Chennai

LGB to supply transmission parts to Ashok Leyland

Ford is likely to do away with its V6 engine and hybrid powertrain in the redesigned 2013 Escape crossover and move the Escape Hybrid’s powertrain to C-Max Hybrid

Bosch is working to develop new products that will help in cutting down emissions, increasing fuel efficiency and making driving safer at affordable costs

Polaris Industries takes off in Chennai through MPL

Ford to put Escape hybrid on hold, offer EcoBoost

Auto Monitor

16 - 31 October 2011

INTERVIEW

“The government should not curb the growth” The Managing Director of Rico Auto Industries, Arvind Kapur, has taken over recently as the President of Automotive Component Manufacturers’ Association (ACMA), the apex body of the auto component manufacturers in India. He sees that developing Tier II and Tier III companies are vital for the growth and development of not only the component industry, but also OEMs. He spoke to T Murrali on his agenda and plans to take the auto component industry to the next level. Can you tell us your agenda for the component industry? The primary agenda is to see the auto component industry do well. There are some blips now due to fuel price increase, inﬂation and hardening of interest rates. These issues are going on and we are trying to see how to tackle them. What are the issues that you see in the immediate future? Due to petrol price increase, a major change has happened in the percentage of petrol vehicle sales. Earlier, about 70 percent of the cars sold were petrol, but now it has reversed. At the moment, diesel engines are not available to meet the demand and this is the challenge that the auto indus-

try is facing and auto component industry will have to support it. What about two-wheelers? Two-wheelers are not showing recession now. From about 13 million units reported last year, it is expected grow 20 million to 22 million by 2020. Thus, the growth of the auto component industry has got to take place. While the Tier Is do have challenges of investments, the bigger challenges are with Tier IIs and Tier IIIs. And if they do not come up to the mark and make similar investments, success will not be there. I think the challenge for us is to take Tier IIs and Tier IIIs along. What are the other challenges you perceive?

The other challenge is that OEMs are setting up plants in multiple locations and they want the Tier I companies to follow suit. However, the issue for Tier I companies is to take Tier II and Tier III along with them so that the whole chain is strengthened. Some of the OEMs are not only doubling up capacity, but the exports are also going up; therefore it is necessary to triple the capacity. The auto component industry will be three to three-and-a-half times in 2020 than what it is today. And the car industry will be number two or three in the world by then. And the OEMs can produce cars only if the component industry matches the demand. What about concerns like manpower availability and technology? Yes, manpower availability is an issue; managerial depth is also an issue. We have been discussing about what we should do and what direction to take. With respect to technology, currently the Indian component industry largely follows the build to print model. The next step is to get into research and development mode to develop new products. We have identiﬁed it as RTD—Research, Technology and Development. The Indian companies are good at development but it’s a long way to go in terms of technology. We would like to leave the basic research to the institutions, while we have to master technology. Once it is done, we need to take it to the next level. What is the roadmap for upgrading technology? We are regarded as frugal manufacturing companies; frugal engineering is the strength of the component industry in India. We need to set up an R&D base and prove that affordable research and development is possible. This is one of the initiatives that we are encouraging our members to pursue. ACMA Centre for Technology has already set up an engineering cluster; we are initiating another cluster for new product development. What initiatives do you plan for Tier IIs and Tier IIIs? We are working on the modali-

ties on how we can support them. About three decades ago, Maruti came in to the country to make cars while Hero Honda came in to make motorcycles. That is the time when the OEMs held the hands of Tier I companies. Now the Tier Is will have to hold Tier IIs and Tier III companies and bring them to a level and that is the cycle that we have already started. It is not only supporting them as far as technology is concerned but also handholding them to manage the skills, training people and supporting in terms of ﬁ nance.

term; but we will be 5.5 million car industry by 2015. There will be ups and downs but its all ﬁ ne in the long term.

The auto industry in India and all over the world is experiencing a gloomy atmosphere due to recessionary trend. How do you view this situation and prepare the component industry? If you look at the 2008-09 collapse that took place in the US, we in India bounced backed within two months or so. This is primarily because we are driven by the domestic economy. It did not pertain only to automotive but also every segment including white goods. Even now, there are some worries in the short

Can you elaborate on the study on OEM-Vendor relationship that you unveiled during annual convention? We have shared it with the OEMs; we wanted to have a transparent relationship with the vehicle manufacturers as we got to grow in partnership. The Tier I companies invest depending on the OEMs’ requirements and in turn they also depend on the Tier I companies as far as supplies are concerned. The relationship is like a partnership and that is the reason we got the study done. There is some disconnect with OEMs and they should also see what best can be done. Although, there are arguments and debates, the OEMs are very open now and the study will improve the relationship further.

What according to you can be the role played by the government to encourage the auto component industry? The government should not curb the growth. The interest rates have become a major cause of worry for us—we need to ﬁ nd a solution for cheaper sources of funds. We keep on interacting with the government. Hopefully something good should happen.

What do you have to say about the FTA? As far as FTAs are concerned, we tell the government to give us a level playing ﬁeld. We cannot have an inverted duty structure where the ﬁ nished goods come at zero duty while the raw materials come at a particular duty, which make us uncompetitive. How is ACMA perceived globally and what are your plans to enhance its image? Globally, ACMA is an accepted body and respected well by several component industry associations including VDA in Europe and counterpart associates in Japan and Americas. We are interacting more with them so that there is more global integration that takes place. Truly there are no borders now and integration is taking place.

Auto Monitor

16 - 31 October 2011

CORPORATE

Hover Automotive looking to establish institute Abhishek Parekh Mumbai

over Automotive, the exclusive vehicle distribution partner of Nissan Motor India, is in the process of evaluation and feasibility of establishing a training college for technical and sales personnel for automobile dealerships. “Every automobile brand is on an expansion mode and there is no doubt that we are staring at a shortage of qualiﬁed technical and sales people in the dealership business. Though we have been seeing a ‘temporary’ slowdown of late, the issue (of quality manpower) will only intensify if we account for the growth in the passenger vehicle sales touching more than ﬁve million over the next three to four years,” said Vice Chairman and Managing Director, Hover Automotive India, GM Singh. He elaborated that the major issue in the vehicle dealership business is that working in a dealership seems to be the last

option for a talented engineer or technically qualiﬁed person or even sales executive. Automobile dealers are not doing enough to make distribution as a preferred career option for the next generation. He added that one of the ways to achieve this objective is to provide proper training and help chart a career path for the trainees. “We (dealers or OEMs) need to establish a college for automobile distribution business to impart right kind of training for the business. Such a college could comprise eminent technically qualiﬁed people from the industry like automobile, hospitality and retail. There has to be some dignity imparted into the profession,” he said. Though there are several training centres established by major dealers for their in-house and industry requirements but this does not seem to be adequate, according to Singh. As he puts it, if there is no interest level among youngsters to be in the dealership business, then training can be of

little or no help. The enthusiasm and passion to sell cars or serve customers is very important in this business and that is often overlooked. He also points out that institutionalised training infrastructure will help attract more females into the automobile distribution business. On vehicle sales, Singh point out that passenger car segment is unlikely to grow more than single digit in percentage terms this fiscal. “The market has been witnessing a very inactive stage of late partly due to trouble at Maruti’s facility and uncertainty on interest rate front. The market sentiments have taken a beating and there is a double whammy for customers as home loan and car loan Equated Monthly Instalments (EMIs) have risen. I do not see the passenger vehicle business growing beyond 5 percent on an optimistic note. Buying decisions are being postponed due to this uncertainty,” said Singh. He added that Hover has been in the process of setting up a dealership network for Nissan over the last two years. Nissan Motors tapped the services of Hover Automotive in order to get a headstart in sales and service in India. It has been mandated with establishing sales, service and relationship management for Nissan customers. For Hover Automotive, the key priorities are to continue with pace of expansion and getting right people to join the distribution business for Nissan. It is looking for ways to enhance service experience and delivery touch points. Digital marketing is an emerging area or avenue for reaching out to the customers and Singh is hoping to tap this ‘under-utilised’ channel. He points out

GM Singh, Vice Chairman and Managing Director, Hover Automotive India

that there are major challenges in terms of expansion due to high cost of real estate. There is a limit to how many physical outlets that Nissan can have and hence it is looking for ways to reach out to customers through innovative channels. “We have not yet reached a stage were dealerships will need to operate on a 24/7 mode. But given the rising cost of real estate, it may not be long before dealers in the city area will need to evaluate on that option,” said Singh. He further added that Hover Automotive is evaluating on

entering CV segment and are looking at pros and cons of doing so but that is at a very preliminary stage currently. The major focus is to maintain the pace of expansion to help Nissan achieve its growth objectives in India. Hover Automotive has already appointed around 45 dealers and is looking to appoint another equal number of dealers by the end of current ﬁscal. The Overall target is have around 300 dealerships over the next three years or so generating direct and indirect employment for around 18,000 to 20,000 people.

Ashok Leyland, Gulf Oil sign MOU Our Bureau Mumbai

shok Leyland and Gulf Oil joined hands to launch a co-branded range of lubricants for the new range of Ashok Leyland light vehicles

including Dost, the ﬁ rst vehicle from the Ashok Leyland-Nissan joint venture. This exclusive range of co-branded lubricants, NxG series, has been specially blended by Gulf Oil and has been jointly tested for superior performance. Ravi Chawla, President, Gulf Oil, Dr Sumantran, Vice Chairman, Hinduja Automotive & Nitin Seth, ED, LCV, Ashok Leyland

The ‘NxG’ series is the fourth range of co-branded lubricants launched by Gulf Oil in association with various OEMs in the past one year adding to Gulf Oil’s existing rich portfolio of co-branded products. It is also a reflection of the confidence that OEMs repose on Gulf Oil for their technical prowess, distributions strengths and equity of brand ‘Gulf’. In a previous initiative of a similar nature, Ashok Leyland and Gulf Oil had launched the ‘Max’ range of co-branded lubricants for the medium & heavy commercial vehicle segment. Gulf Oil Corporation is an established player in the lubricants market in India and markets a wide range of products/services for the automotive business including lubricants, car care, fi lters, lubrication systems and recently launched two-wheeler batteries. Today, the Gulf brand is present in more than 80 countries with operations in five continents.

Auto Monitor

16 - 31 October 2011

CORPORATE

NNG to look for partnership in ﬂeet management Our Bureau Mumbai

NG, which supplies navigation software under the brand ‘iGo my way’, is looking to forge partnership in India for fleet management segment targeted at trucks and buses. It is in process of launching its flagship navigation product ‘iGo Primo’ in the Indian market through its exclusive and non-exclusive dealers. The company is also looking to tap the two-wheeler and the pedestrian segment in India, though its current focus is largely confi ned to the passenger vehicle segment mainly through the OEM route. It is also in the process of setting up its distribution network in partnership with hardware or device manufacturers. The applications provided by NNG are geared at local usage patterns and typical customer behaviour in a particular market. In case of India, the localisation implies that applications will have more local languages, several levels of 3D landmark capabilities, ‘appropriate’ pricing and ease of usage. The PND device with ‘iGo’ already supports 40 different languages. “We are not trying to clas-

sify the market as an emerging market and bringing features/ applications that may have been or are popular in another comparable market like Brazil or China. The market for customer-centric products evolve in a very unique manner and India is unlikely to be any different in this respect,” elaborated Vice President, Eastern Europe & Emerging Markets, NNG Kft, Peter Bolesza. “Our experience is that a user would actually stop using a device for navigation if it gets complex to use and he/she has to tap several times for getting directions on a device. Moreover, complexity in usage is counter-proPeter Bolesza, VP, Eastern Europe ductive as it could lead & Emerging Markets, NNG to more time being

Detailed shots of varying graphic interfaces of iGo my way software

consumed for any task,” said Director, Sales and Marketing, Navteq, Rajat Tandon. NNG was established in 2004 and has partnerships with various mapping and content service providers across the world to provide customer interface on navigation devices. Application service providers, like NNG, offer applications for content (like area maps) to the hardware suppliers (personal navigation device manufacturers) and the navigation device is then sold to the OEMs and in the aftermarket. This three-way partnership is critical for optimum utilisation of capabilities of each partner and for providing end customers with enhanced visual experience. The navigation software is also sold as an application for iPhone and android application stores for mobile phones and other per-

sonal devices. “We can enter a market with a portfolio of applications or products when the basic mapping of most of the geographical areas of key towns and cities is done. We do not aggregate maps and hence we partner with leading content aggregators who provide mapping service,” said Bolesza. More importantly, our application has to be robust and updated as maps are constantly enhanced and updated at the content providers end. The navigation market is beginning to take off in recent months with pre-installed devices in several mid-sized passenger vehicles. However, the attraction of the market is primarily for low level of penetration of PNDs and other forms of navigation in automobiles. Currently, navigation enabled passenger vehicles comprises just around 1.5 to two

percent of the total number of passenger vehicles sold in India, according to Navteq’s and other industry estimates. In Europe, around 50 percent of the new passenger vehicles sold are enabled with some form of navigation. “Most application providers and map/content partners are looking for suitable delivery models and it is difﬁcult to say as to which delivery model would be predominant in India. Even though most industry observers predicted that mobile phones would be the predominant mode of navigation software delivery, the experience in Europe has proved that user requires bigger screens and PND mode is predominant there,’ according to Bolesza. NNG, in partnership with Navteq, is working on several features or applications suitable for the Indian market.

Auto Monitor

16 - 31 October 2011

AUTONOMICS

CV sales to see ‘extreme’ action D Geoffrey D’cunha Analyst, CRISIL Research

Hetal Gandhi Team Leader, CRISIL Research

C. Sridhar Head, CRISIL Research

omestic road freight transporters, the primary source of demand for goods commercial vehicles (CVs), are gradually evolving into integrated logistics service providers. Integrated transporters, who have larger f leets, countrywide distribution networks and provide value added services, are adopting the hub-and-spoke model to cut logistics costs. The increasing adoption is pushing CV sales to two extreme tonnage segments— heavy commercial vehicles (HCVs: >16 tonne) for hub-to-hub transportation and small commercial vehicles (SCVs: <3.5 tonne) for delivery to end consumers. Although GDP growth will drive overall goods CV sales, prevalence of the hub-and-spoke model will lead CV manufacturers to launch more models in the HCV and SCV segments.

Transporters More Organised

We are witnessing a gradual shift from MCVs, which were earlier used across all routes, to higher and lower tonnage vehicles suited to specific routes. With stricter implementation of the 2005 Supreme Court ban on overloading and increasing consolidation in the transportation industry, HCVs will continue to eat into the share of MCVs on long-haul routes

The largely unorganised transportation industry is gradually evolving, with the dominance of small-fleet operators (SFOs) (who own one-five vehicles), giving way to large fleet operators (LFOs) (owning >20 vehicles). LFOs, who have pan-India operations, primarily use the hub and spoke model. These operators primarily function on long and medium-haul routes within the supply chain. Their market share in the industry is estimated to have increased from 2 percent in 1993-94 to 11 percent in 2008-09 and is set to increase further in the coming years, as the industry consolidates. Under the hub and spoke model, big warehouses (hubs) are set up in different regions of the country, where goods are consolidated and sent to various spokes. From the spokes, goods are finally moved to the various end-consumption points.

Speeding Up Sales As the share of LFOs is slowly rising, demand in the medium and heavy commercial vehicles (MHCV) segment is shifting from MCVs to HCVs. HCVs are more suitable for hub-to-hub transportation of goods, as they offer a better price/payload ratio than MCVs and are suitable for long-haul transportation. For example, a medium commercial vehicle (MCV) costing about `nine-12 lakh will offer an average payload of nine tonnes, while a multi-axle vehicle (MAV) priced at `12-16 lakh will offer an average payload of 15 tonnes. This means that at a minimal price difference, transporters can transport greater incremental loads on MAVs. Hence, we are witnessing a gradual shift from MCVs, which were earlier used across all routes, to higher and lower tonnage vehicles suited to speciﬁc routes. With stricter implementation of the 2005 Supreme Court ban on overloading and increasing consolidation in the transportation industry, HCVs will continue to eat into the share of MCVs on long-haul routes. Additionally, development of highways and availability of more models in the last two years will also aid demand for HCVs. In a hub and spoke network, distribution of goods to end-consumption points takes place through SCVs, such as subone tonne vehicles and pick-ups (2-3.5 tonnes). For instance, an organised retail company might have around eight-10 distribution centres (spokes), which would supply goods to 20-25 stores (end points). Within SCVs, demand is shifting towards sub one-tonne vehicles, aiding sales in the other extreme segment of the CV industry. With more and more cities restricting or regulating the entry of large trucks in cities, LCVs (especially SCVs) are replacing MCVs on short-haul routes. Over the next ﬁve years too, demand for higher and lower tonnage vehicles is expected to continue rising, with players launching more models in both these segments. During 2010-11 to 2015-16, the share of SCVs in total LCV sales is expected to grow to 92 percent from 86 percent, while share of HCVs (including tippers) in total MHCV sales will increase to 64 percent from 58 percent. Riding on hub and spoke trend; CV makers to launch more HCV and SCV models

Segmental shift within LCV sales 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 200102

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Segmental shift within MHCV sales 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 200102

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The emergence of the hub and spoke network is expected to drive new model launches in the HCV (> 16 tonne) and SCV (<3.5 tonne) segments over 2010-11 to 2015-16. CV makers are launching more HCV models across various tonnage points that are being priced competitively. This offers greater choices to transporters (who are migrating from 16-tonne to 25- and 31-tonne vehicles). Leading CV manufacturers such as Tata Motors and Ashok Leyland launched heavy tonnage premium trucks under the brands Prima and Unitruck, respectively. These models have better driver facilities, higher horse power and fuel efﬁcient engines compared to the existing range of trucks. Strong growth in the domestic LCV segment has prompted players like GM-SAIC, Beiqi Foton and Ashok Leyland-Nissan to enter the segment.

Factors That Will Push Adoption Currently, national highways constitute only about two percent of the total road network in India, but carry about 40 percent of the total traffic. On the other hand, state roads and the major district roads account for 18 percent of the road length, but carry only 40 percent of the balance traffic. Over the next five years, government investments on road expansion are likely to double from about `three trillion in the previous five years. Of this, a major proportion would be spent on national highways and the rest on state and rural roads. During 2011-12 to 2015-16, CRISIL Research expects an average of 14.7 km of national highways to be constructed / upgraded per day, at an estimated cost of `2,535 billion. The construction of national highways is expected to increase the length to 5,773 km in 2015-16 from 3,737 in 2011-12. The development of highways is expected to replace MCVs by HCVs, use of which is currently restricted by inadequate road infrastructure. Consumption of consumer products in rural areas is set to rise aided by a widening hub and spoke network and better roads. Consequently, movement of goods in these regions will shift from tractors and non-motorised vehicles to LCVs, (especially SCVs) boosting demand for the same. CRISIL Research expects the ratio of sales of LCVs to MHCVs to increase from 1.15 times in 2011-12 to 1.58 times in 2015-16.

Growth In Organised Retail As of December 2010, the two largest organised retail players—Pantaloon Retail

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and Reliance Retail—have 2,113 and 860 outlets respectively. By 2014-15, Pantaloon plans to add about 15 million sq ft of retail space. As retail chains expand their reach and compete for quicker delivery of goods to consumers, they will outsource their logistics needs to large transporters using the hub and spoke model. CRISIL Research expects the organised retail sector to record a CAGR of 23 percent between 200910 and 2014-15, while penetration is likely to increase to 9.1 percent from 6.4 percent in the same period.

Emergence Of GST The government proposes to implement a centralised goods and services tax (GST) to replace the existing tax regime (excise, service tax and VAT). However, the new tax norms are yet to be implemented as all states have not fi nalised the GST structure yet. Under the current tax structure, the Centre levies a uniform tax (CST) on interstate sales besides the local value added tax paid to the state governments. To avoid interstate CST, companies are forced to maintain at least one warehouse in each state. Emergence of the GST is vital as currently; tax avoidance plays a more important role in deciding how a company sets up its distribution network, than logistics costs and customer service considerations. This leads the mushrooming of multiple inefficient warehouses in each state. The GST, however, would allow companies to aggregate state-based warehouses into one large, regional warehouse that offers cost and operational efficiencies in geographically large markets. As a result, the use of HCVs for hub-to-hub transportation will increase to service these large warehouses, which function as centralised hubs. Similarly, movement of goods in remote areas will be taken care of by SCVs, thus driving sales in both extremes of the CV industry.

SCVs To Drive LCV Sales As the hub and spoke model proliferates, CRISIL Research expects SCV sales (forming 86 percent of LCV sales) to post a CAGR of 17-20 percent during 2010-11 to 2015-16. HCV sales (including tippers) will grow by 12-14 percent during the same period. This would be faster than the 9-11 CAGR growth in overall MHCV sales. (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.)

16 - 31 October 2011

CORPORATE

Auto Monitor

Ubifrance to focus Skoda’s Rapid rolls off VW’s on presence in India Chakan plant Our Bureau Mumbai

rench companies are looking to enlarge their footprint by offering newer technologies and solutions for the growing needs in India’s infrastructure and transportation sectors, according to Head of the Infrastructure Transport Industry Department for India, French Trade Commission, Sophie Clavelier. The French Trade Commission held an exhibition on ‘Sustainable Mobility’ for companies and the infrastructure and transportation sector in New Delhi, Mumbai and Chennai last month. The exhibition is the fi rst instance of companies focussed on automotive and transport sector to interact with participating companies and individuals from India. “The exhibition could create some nice links between companies in India and France. Our expectation would be to have a real partnership/s signed, as well as a contract for the participants. Hopefully we will organise a follow-up event next year,” said Clavelier. The French Embassy also organised an open discussion forum on select topics including: ‘Traffic Scenario in Chennai and a Mobility Plan for the City’ by Senior Planner, S Chitra and Deputy Planner, Chennai Metropolita n Development Authority, R Meena; ‘Reducing fuel consumption and CO2 emissions in the road transport sector’ by Chairman & CEO, EG Gas, Kailash Mishra, ‘Alternative Modes of Transport’ by Founder of Nammacycle, Murali MR. The prominent participants during the Delhi leg of the exhibitionincludedAmbassadorofFrance in India, Jerome Bonnafont; Officer on Special Duty (Urban Transport), Ministry of Urban Development, Government of India, Sanjeev Kumar Lohia; Director General of Urban Planning Department of the city of Rennes (France), Christian Le Petit; Director General (Road Development) and Special Secretary, Ministry of Road Transport and Highways, RP Indoria and French Trade Commissioner, Patrick Manon. The French Embassy began the groundwork on the theme of the exhibition ‘Sustainable Mobility’ due to a need felt for a separate platform for companies in automotive, information technology and transport technology to cater to growing requirements in India. “We received regular enquiries from automotive and state transport undertakings in India for players in transportation technologies in France in connection with numerous current and upcoming projects in India,” said Clavelier. Two major players from France in the urban management and security participated in the meet. Steria, which delivers IT enabled business services for airports, mass rapid transport systems, fleet operators, participated in the exhibition. Another prominent French player Urbaco, a retractable bollard control system provider, already has a significant presence in government and hospitality segments in India. It is looking to enhance its presence and enter newer market

segments in India. Prominent French players in transport management sector including Egis Rail, Lumiplan, Air Liquide, Arep Ville among others are looking to play a major role through sustainable partnership based projects. Some of the prominent investments from companies in France into India include Renault/Nissan facility in Tamil Nadu, PSA’s Euro 600 million investment in Gujarat and French tyre maker Michelin’s investment of around Euro 600 million in Tamil Nadu. With growing joint sector projects in the transportation and infrastructure in India, the exhibition on ‘Sustainable Mobility’ may have be organised at opportune time for an exchange of ideas.

Our Bureau Mumbai

koda Auto India kicked off production of its entry level sedan, the Rapid at its plant in Chakan, near Pune. The Rapid will be exclusively manufactured in India at Volkswagen’s Chakan plant. The car will be offered with a choice of diesel and petrol engines. The commencement of production is in line with Skoda’s 2018 growth strategy, which aims to double sales globally to at least 1.5 million units. Volkswagen Group Chief Representative India, President a nd Ma nag i ng Di rector, Volkswagen India, Dr Chacko, said, “Skoda has always been

try’s mid-sized sedan s e gment. Skoda Auto I nd i a has set up a manufacturing facility in Shendra near Aurangabad, Maharashtra. The facility is spread across 300,000 sq mt. The company Skoda Rapid roll-out at VW’s Chakan plant has four modan integral part of the plant in els on sale in India—Superb, Chakan. The first car that was Laura, Fabia and the recently produced at this plant has been launched Yeti. The company the Fabia, and we are happy to has a network of 81 outlets roll-out the Rapid.” across the countr y and has The Rapid will be positioned sold over 122,770 units since at the entry level of the counNovember 2001.

Auto Monitor

SOUTH INDIA SPECIAL

16 - 31 October 2011

Rane banks on LPS to raise productivity, capacity T Murrali Trichy

he Trichy plant of Rane Engine Valves (REVL) is all set to commence its expansion project in a unique way. While the floor size of the facility is doubled, the capacity will increase by three folds and this is due to Lean Production System (LPS) and ‘My Line’ concept. The facility commissioned in 2008 originally, was built for six manufacturing lines. However, it now has seven lines due to implementation of LPS. The new shed under construction, which is exactly the same size as the existing one, will have nine manufacturing lines. The plant, situated around 350 km south of Chennai, was producing about 7,000 valves per day during the fi rst year of operation. Now it makes around 30,000 units daily. Once the expansion is over, say by 2014, the capacity will reach more than 81,000 valves per day. When asked how the company could improve productivity, President, REVL, G Ramkumar told Auto Monitor that the company as a whole began practicing LPS beginning with its fi rst plant in Alandur near Chennai. While imbibing the process, the Trichy plant introduced a concept called ‘My Line,’ which is an extension of

‘My Machine’ concept practised for some time now—where the operator takes the onus of maintaining his machine. As a natural progression, the plant wanted to look at the manufacturing line rather than focussing on only the machine. And ‘My Line’was born. “It is essentially another initiative in Total Employee Involvement (TEI), he said.

Line Ownership ‘My Line’ has been introduced to create and improve the ownership of the complete manufacturing line. Vice President (operations), REVLTrichy, S Krishnan Iyer said that the operator skill sets found to be in select machines in ‘My Machine’ concept, due to skill building process in a particular operation. “Though individually we were performing better, there was a gap in achieving the line performance,” he added. So the plant decided to move to the next level, which is ‘My Line’ where the line in-charge, elected in rotation, will manage the line, consumables, achieving production target, internal rejection, safety and 5S. The teams also take up some projects; at the beginning of this ﬁscal the teams have taken projects to reduce the internal rejections of ‘face damage’ of

(L) S Krishnan Iyer (4th from right) along with his core team (R) My line team at REVL Trichy

valves from 2,200 ppm to zero, ‘stem damage’ from 549 ppm and ‘seat height low’ from 736 to zero. The plant plans to manage line production planning using LPS concept soon, he added. When asked whether REVL will horizontally deploy this practise across other plants, Ramkumar said that Plant 1 and Plant 4 have already been following similar concepts. These plants kicked off ‘Self Motivated Work Team’ (SMW T) working on similar principles of ‘My Machine’ concept. Instead of a cell leader’s involvement, the onus of planning is given to one of the operators. “We do not want the ‘leader’ position in SMWT to be looked up on as a prestige position. Every operator will be a leader by rotation and develop the skill. Eventually the cell leaders can manage two or three

Inside views of the Rane plant

lines.” This helps the company in reducing the supervisory manpower. Ideal Organisation Structure introduced in Plant 1 has optimised the workforce.

The LPS Edge In 2008, the company began practising LPS kicking off at its fi rst plant—Alandur in Chennai. The company formed four teams targeting to achieve significant results in productivity, internal rejections, consumable cost and inventory. Currently, it has six manufacturing lines and three pre-machining shops at the Alandur plant, spread across about 11 acres of land. The initiatives taken by the company have abbreviated the plant to half, while also enhancing the overall output. “We have transformed an old plant by making the line more compact and by bringing machines closer together. We have eliminated unnecessary operations and non-value added activities. We have also reduced the manpower and increased the number of machines per man. Today, we are in a position to compress the entire factory in half its original size. Before the end of this fiscal, the entire plant will be following LPS,” he said. The result of LPS includes

overall output increasing by 87 percent, manning reduced by 35 percent, space utilisation has reduced by 50 percent, material travel distance reduced by 80 percent. The company has introduced LPS in few manufacturing lines including that of Tata Cummins. Soon it will be extending this to manufacturing lines that make valves for Ashok Leyland, Hero MotoCorp and Deutz that are in shop 3 and these will be accommodated in shop 1 itself. Rane Engine Valves has initiated this project at its plant 2, which is at Medchal in Hyderabad, catering to the automotive sector of Mahindra. The capacity of this plant has increased by 35 percent, material travel distance has reduced by 41 percent and space utilised contained by 44 percent. Similarly it has extended this project to Plant 4, which is at Aziz Nagar in Hyderabad. The third plant of the company, situated in Ponneri near Chennai, makes tappets and LPS is being implemented here. “We will further contract the space between manufacturing lines to accommodate more lines. LPS is the way forward for us. This was possible due to involvement of workforce in every initiative,” Ramkumar signs off.

Auto Monitor

16 - 31 October 2011

SOUTH INDIA SPECIAL

Innovating technology at low cost Shambhavi Anand Bangalore

ith its ambition and commitment of taking the automotive industry in the country to new heights, the automotive component major, Bosch is working relentlessly to develop new products that will help in cutting down emissions, increasing fuel efﬁciency and making driving safer and more fun. Of course their effort is to keep the costs as low as possible. “In a sensitive market like India, it is very important to keep the cost of innovation low. That is the main challenge and also our main focus,” Joint Managing Director of Bosch Dr Manfred Duernholz, said. Among the plethora of products, the company is making products handle engine man-

Products on display at Technical Center, India

agement functions called, engine control units (ECUs) that determine the fuel efﬁciency of a vehicle. There are several safety enhancement features intended to achieve zero accidents. And, infotainment systems to enhance the driving experience.

Among the several automotive electronic products that the company has, is a low cost value direct current to direct current (DC-DC) converter that allows continuous usage of MP3 player in start-stop conditions, a feature highly desired in the present day

cars. Its expenditure on research and development (R&D) in the automotive electronics has been 425 million Euros and has a team of 3200 engineers working on research and development. While there will be uninterrupted radio and MP3 usage, the

start-stop systems of Bosch helps in reducing carbon-dioxide emission and fuel consumption in urban traffic to up to 12 percent. When the vehicle comes to a halt, the internal combustion engine is automatically switched off. It also has the life span as that of the vehicle. And to restart, it is only necessary to press the clutch pedal. The company expects the system to be in every third vehicle in India by 2015. For commercial vehicle engines used in on and off road highways, the company has developed a special common rail system. The design of this system is modular so that the engines can be converted from UPS, or PF plug-in pumps with little expense. It consists of one or two PF plug-in pumps, an individually adapted rail and solenoid valve controlled injectors. The hardware and software of the electronic control unit are selected to match the system architecture and the engine. Bosch also has a whole line of products for safety for both, two wheelers and passenger cars. It works on safety products under four categories—active safety, passive safety, driving comfort and information and crash avoidance and mitigation. For four wheelers, the company has products like radar sensors which can detect collision, automatic full braking to mitigate collision which can expand the predictive breaking system, lane assistance and departure, driver drowsiness detection to name some. Apart from this it sees Electronic Stability Program (ESP) as the long term solution for four wheelers. For two-wheelers the company has come out with compact Anti-Breaking System (ABS), which can also work with one disc break. It sees more possibility of it being adopted in the Indian market as most models have one disc break. The company also announced the concept of eCluster, which is an electronic instrument display system which has the instrument cluster and music system functionality combined in single ECU. The instrument acts as a gateway for vehicle network to communicate with Computer Electronics (CE) world and can use the computing power and features of Compact Flash (CF) devices to present the details to the user defi ned area of the display instrument fitted with seven inch transistor liquid crystal display (TFT). The device enables flexible display of area, reduction of power consumption and easy adaptation for individual vehicle models, markets and interior designs. Bosch recorded sales of `6,630 crore in 2010, which was a growth of 39 percent over 2009. The share of automotive business in the company has also gone up from 89 percent to 91 percent.

Auto Monitor

16 - 31 October 2011

SOUTH INDIA SPECIAL

Polaris Industries takes off in Chennai through MPL T Murrali Chennai

he diverse landscapes of Tamil Nadu and the long coastal line running over 1,000 km in the state were few among many attributes for Polaris India to open a sales outlet in Chennai, according to Managing Director, Polaris India, Pankaj Dubey. In Chennai the vehicles will be sold by MPL Adventure Sports Vehicles, a part of MPL group, which is in to vehicle dealerships for several OEMs including Ford, Mahindra and Ashok Leyland. Couple of months ago, the US company announced its formal entry in the Indian market with the launch of its off-road vehicles. The product line introduced to the Indian market consists of All Terrain Vehicle (ATVs), Ranger RZR side-by-side vehicles and Snowmobiles—priced between `2.84 lakh and `24 lakh. Dubey said the company has already established nine dealerships and it will add one more before the end of this calendar. “We have forayed in to Chennai, as it is one of the key markets for us in India. We foresee huge interest and business potential in the market and thus

appointed MPL as our dealer to offer our innovative products. In the fi rst phase, we are launching our flagship product including ATVs. We are hopeful of offering lot of adventure and utility experience on off-roads in Chennai.” Speaking to Auto Monitor at the test track to showcase the capabilities of the vehicle here, Dubey said the company has already received orders from defence for snowmobiles to be deployed in bad weather conditions. Several government institutions including defence is actively looking at buying off-road vehicles to also support after sales service requirements of their fleet operating in forward areas that cannot be reached through normal roads. The company is looking at customers in several segments including agriculture / farming, adventure, fun, lifeguard, beach patrol, construction, manufacturing, forest, mining, exploration, paramilitary, tourism and fi re fighting. Considering the specific requirements of the country, he said, “We may sell more vehicles for utility purpose than for adventure and fun.” Dealer Principal and Director, MPL Adventure Sports Vehicles, S Ravindranathan said the ded-

A range of vehicles manufactured by Polaris

icated showroom for Polaris in Chennai will be operational within a few days. In addition to the display area, the showroom will have a small service centre. However, most of the service will be carried out at the customers’ premises, as these vehicles cannot be brought to the service centre. National Service Manager, Polaris India, Vinod Jee Pandita said the company would shortly be launching Polaris On-Site Ser vice (POSS) to facilitate servicing of the vehicles at customer’s premises. Each vehicle would be given a periodical maintenance chart with which the customers will know the schedule. Based on the requirements POSS will facilitate after sales ser v ice at customers’ place. Unlike the on-road vehicle Polaris vehicles will not have free services. “While the Indian market is no stranger to ATVs, the look and feel of these vehicles and adventure has been very limited so far. Polaris is a brand known worldwide for its innovative off-road vehicle and we associate with them right from the beginning and jointly develop the off-road vehicle market in the country— something that people desire for, but have been missing,” Ravindranathan said. Dubey said, “Since the market for such vehicles is still in nascent stage in the country, our principal aim is to sensitise the consumers, create a new market and to generate more interest in these activities.” After the ten dealerships break even, say in about three to five years, the company will look at increasing the number of dealers to 25, he added.

MPL Group completes spectrum Ravindranathan, who was selling Toyota cars in the Middle East close to three decades ago, came back to his home country for good and begun his business in 1986 by selling earthmoving machineries such as front-end loaders, rear dumpers, hydraulic excavators and bull dozers, under the brand MPL. Celebrating its 25th anniversary this year the S Ravindranathan, Director, MPL MPL group has forayed in to Adventure Sports Vehicles selling all terrain vehicles and two wheelers manufactured by HMSI. After selling earthmoving machineries for sometime, MPL expanded its business in the late 1980s by foraying in to ‘surface miners’ that are used for excavating lime stones. Almost all the cement manufacturers are its customers. The group then became a dealer for Mahindra & Mahindra to sell utility and commercial vehicles. Its foray into passenger cars came in 1996 by becoming the ﬁ rst dealer for Ford vehicles in India. It currently has dealerships in Chennai and Pondicherry and soon it will be setting up a showroom for Ford in Kochi. The group is already in the city of Kochi as it has recently became the dealer for LCVs manufactured by the Ashok Leyland—Nissan joint venture. With MPL Adventure Sports Vehicles, the group has entered in to selling off-road and all terrain vehicles. MPL will be completing the spectrum in vehicle dealerships with the opening up of its two-wheeler showroom for HMSI in Chennai. The showroom is getting ready and will be operational in a month’s time.

An illustration of the MPL showroom

Auto Monitor

SOUTH INDIA SPECIAL

16 - 31 October 2011

LGB to supply transmission parts to ALL Bhargav TS Chennai

oimbatore headquartered, LG Balakrishnan & Bros (LGB), has bagged an order from Ashok Leyland (ALL) to supply transmission parts for its range of vehicles. This is for the fi rst time that LGB is receiving orders from Ashok Leyland. “We have got the orders from Ashok Leyland for the fi rst time since we incepted in 1937, and we will supply transmission parts next year. We are gearing ourselves to supply more parts to them and we will be growing with them in a big way,” said Deputy Managing Director, LGB, Prabakaran P. For the past ten years, the company’s main focus is on fi ne blanking technology and currently, it has 25 presses

to manufacture 100 tonne to 1,000 tonne. LGB acquired fi ne blanking technology for manufacturing chain plates. It further extended its fi ne blanking division as a separate manufacturing section during the late 1990s, to cater to the OEMs demand for fi ne blanked components. “Fine blanking is our key area and we have increased our customer base and strengthened our existing customers. This will help us to grow further and this year we will be growing by 40 percent in fi ne blanking alone,” he said. In fi ne blanking, the company manufactures two-wheeler chassis components and engine components. For the four-wheeler segment, it manufactures engine components, brake components, and transmission parts. Prabhakar also revealed that the company has started supply-

Prabakaran P, Deputy MD, LGB

ing transmission parts to ZF and Eaton and will be supplying the same components to Daimler next year. LGB is also supplying sprockets to BMW motorcycles through Hero Motors and garnered expertise in supplying components to premium motorcycles. It is also in talks with Harley Davidson to

A range of components from LGB

supply a few ﬁ ne blanking parts and expected to supply the same in 2012. Relying on its refined engineering expertise, LGB has formed technica l a lliances with various companies for better quality services to clients in India. LGB has also designed and developed a silent chain for

two-wheeler and four-wheeler applications and the company believes that in-house R&D is its core strength. “Today all the cars are equipped with silent chains instead of belt drives, therefore we see good potential for silent chains in the future and this is the futuristic project of LGB,” he said. Currently, it is supplying the silent chains in the aftermarket and soon expected to send it to vehicle manufacturers. To manufacture lighter components, LGB is taking several initiatives and implementing the same. As a result of this, the company has engineered and manufactured a chain, which is 200 gram lighter compared to the traditionally manufactured chain. LGB is also working towards reducing the steel content in the chain which helps in reducing the weight, cost and helps in improving vehicle’s fuel efficiency. Asking about the progress of the China plant, Prabakaran replied, “We have temporarily postponed the plan because we thought labour and infrastructure cost will less compared to India. However, after exploring further, we realised that the labour and infrastructure cost is higher than India. Moreover, we didn’t get any specific advantage over India and our customers are happy to procure the products from here. Therefore we have brought back the machineries for the time being,” he said. The manufacturer has earmarked a capex of `100 crore towards new machineries and expansion of the existing facility. Currently, it has four plants in Coimbatore and one each in Pantnagar, Maneser, Tapukar, Ahmedabad, Pune, Bangalore and Mysore. LGB has dedicated plant in Coimbatore to make fine blanking components. From these facilities, it produces seven million fi ne blanking parts, three million chains and three million sprockets per month. According to Prabakar, the company is facing severe problems due to the non-availability of power and increase in fuel price. It is not able to meet the demands of its customers due to insufficient power. And the increase in fuel price affects the logistic business and hence the company is looking to put additional power back up units in their facilities. For the last three years, LGB has been growing at 25 percent and this year, it is expecting to grow by 30 percent. In 2010-11, the LGB Group reported a turnover of `700 crore. In addition to automotive chains, which is the flagship product of the company under the brand ‘Rolon’, LGB makes fi ne blanking, sprockets, forged and cold heading components, V-belt and other chains for textile, agriculture and conveyors.

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16 - 31 October 2011

Federal-Mogul’s Chennai plant to start production soon Our Bureau Chennai

ndia is one of Federal-Mogul’s strategic bases of operations for serving the fast-growing automotive market in Southeast Asia and other global markets, said President and CEO, FederalMogul, José Maria Alapont. He made the statement after the ofﬁcial announcement of Federal-Mogul’s new manufacturing facility coming up near Chennai at an investment of about $15 million, to make brake friction material. This is the eighth manufacturing facility for the company in India. It has manufacturing facilities in Bangalore, Bhiwadi, Parwanoo, Patiala and Radrapur. Federal-Mogul, through one of its Indian subsidiaries, broke ground earlier this year on a

An illustration of the Chennai plant

10-acre site for construction of the new 38,000-sq mt facility to manufacture the company’s broad portfolio of leading-edge technology, environmentally-friendly brake friction materials for the

OE and aftermarket segments for automotive, construction, railway and industrial customers. Production is scheduled to begin before the end of 2011. “Our newest manufacturing

facility in Chennai will enable us to better serve brake friction technology requirements for existing and new customers in several markets in the region and globally. When we bring on-line the Chennai manufacturing facility later this year, Federal-Mogul will have the ability to manufacture our global market-leading brake friction products in every major geographic automotive market around the world, complemented by our strong base of regional technology and engineering centres supporting our brake friction customers,” Alapont said. The Chennai facility will initially produce non-asbestos organic disc brake pads for light vehicles, half block linings for commercial vehicles and brake blocks for railway and industrial customers. The company expects to employ approximate-

Jean de Montlaur, President & MD, Federal-Mogul Group of Companies in India

ly 300 people when the facility is in full operation. “The combined Indian automotive, commercial and railway markets are expected to grow on average by 14 percent per year over the next fi ve years,” said President and Managing Director, FederalMogul Group of Companies, India, Jean de Montlaur. “The aftermarket is also rapidly growing as the influx of new vehicles has expanded the total Indian car parc, resulting in new requirements for high quality OEM-style repair and maintenance parts. Demand in India for technology is becoming increasingly sophisticated as the world’s vehicle makers are all competing for a share of this expanding market. India is a strategic market for FederalMogul and we have invested in the capacity and infrastructure to maintain and grow our leadership position in India and globally,” he said. “The new Chennai facility will help Federal-Mogul broaden its portfolio of global-leading technologies produced in India. Bringing the production of new friction technologies to India supports the company’s sustainable global profitable growth strategy, which is based on delivering leading high-tech and innovative solutions for improving fuel economy, reducing emissions and enhancing vehicle safety,” Alapont added. Federal-Mogul established joint venture operations in India in the 1950s. The company has since established several wholly owned operations and majority joint ventures in the country. The company has grown its revenue from its Indian operations to approximately $250 million and currently employs more than 6,600 employees. Fe der a l-Mog u l’s I nd ia n headquarters is in Delhi, and one of the company’s 18 globally-networked technical centres is in Bangalore. Together these facilities design, develop and manufacture a broad range of vehicle powertrain components, including pistons, piston rings, engine bearings, ignition and sintered products, for both OEMs and aftermarket customers. Federal-Mogul Corporation is a leading global supplier of powertrain and safety solutions to the world’s foremost original equipment manufacturers of automotive, commercial, aerospace, marine, rail and off-road vehicles; industrial, agricultural and power generation equipment as well as the worldwide aftermarket. Founded in Detroit in 1899, the company currently employs about 45,000 people in 35 countries.

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Involute to ride productivity wave in auto segment Our Bureau Mumbai

roductivity drive in the automobile manufacturing segment is opening up opportunities for players in the process automation business. New capacity build up in the two-wheelers and four-wheelers segment is leading to higher demand for robots and other automation systems in new manufacturing facilities. “We are currently looking at a robust order booking, especially from the two-wheeler segment, and are gearing up for higher demand from automobile and auto component sector,” said Managing Director, Involute Automation, Anil Kumar. He added that the company is looking to expand its existing shopfloor area and add two new premises in Pune and Chennai each for training semiskilled and skilled workers in various shopfloor processes and automation related equipments and solutions. He added that effective automation implies that machines and systems including robots and supporting infrastructure is deployed to remove manual intervention, especially in hazardous areas within a shopfloor. More importantly, the automation solution has to be flexible for effective integration in the existing setup of any customer and have scope for manual supervision for effecting changes. “One of the major issues that have emerged in recent times is lack of skilled labour for foundries. With more employment opportunities in other areas of economy, technically skilled people are not willing to work in a foundry. Moreover, OEM customers are continuing to demand higher quantities in consistent quality castings and other components from suppliers. These are the key reasons for the automation drive,” elaborated Kumar. He added that the auto component suppliers focused on the domestic market are continuing to expand but there are major concerns for customers focused on European markets. The automobile sales in Europe and North America are taking much longer to revive than expected. Involute Automation has been focused on providing automation solutions to aluminium foundries. In recent times, it has expanded its solutions and expertise to ferrous foundries and other auto component manufacturing units as well as Original Equipment Manufacturers (OEMs). Kumar has a team of around 40 employees and he is looking to expand the team size to around 60 to 65 people in this fiscal and operate from a larger premise. He is also looking to collaborate with a certain segment or product within automation equipment to offer more solution to customers. “Most automation solution companies are looking to have dealership networks here and such an approach is unlikely to work in a value conscious market like India,” said Kumar. He also points out that closer interaction with customers and fully understanding the context of client requirements is more important for offering suitable cost effective solutions. Technical tie ups or collaborations can only help to an extent in market penetra-

Involute Automation’s facility

tion and it is the relationship and trust of customers that matters in the long run. “We are looking to expand

our market presence by offering products and solutions to automate a hitherto manual process. Over the last decade or so, we

have mostly catered to the needs of aluminium castings units. Though robots have been mainly deployed in processes like metal

ﬁ nishing and welding in the automotive sector, we are looking to automate processes like fettling and deburring as well,” said Kumar. Established in 1971 by Kumar’s father-in-law, M Subbarao, the company specialises in design, manufacturing and integration of automation equipment. It currently has manufacturing units in two locations in Hyderabad equipped with design, machining and integration facilities. It is an ISO 9001: 2008 certified company. Over the last two decades. It has evolved into developing fully indigenous and customised automation solutions for foundry, forging, solar, pharmaceutical and defence sectors. It is also a certified system integrator for ABB Robotics and Cognex vision systems in India.

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Dimo casts production lines for TVS Bhargav TS Bangalore i mo Ca st i ngs, a Bangalore-based component manufacturer, has developed new components for TVS Motor and will start supplying the components before this ﬁ nancial year is over. The company manufactures 65 kinds of pressure die casting components and supplies majorly to TVS Motor and Toyota through KTTM (Kirloskar Toyota Textile Machinery), where they supply the auto components to Japan. “We have started working towards the new components for TVS Motor. We have received the dies and the production is expected to commence in another three months. We are already supplying four to ﬁve new components

Photographs: Bhargav TS

Muthu Krishnan P, MD, Dimo Castings

to TVS Motors in the last two months,” said Managing Director, Dimo Castings, Muthu Krishnan P in a recent interaction with Auto Monitor. Recently, the company has increased its capacity from 150 tonne to 250 tonne per month, to cater to the demand of the OEMs. Dimo Castings has one plant in Bangalore and recently commenced product ion in its Hosur facility. The new plant will manufacture smaller components like pipe intakes, spring plug, movable drive, fixed drive and cover oil pump. “We supply around 80 percent of components to TVS Motors like, engine blocks, cylinder blocks, cylinder heads, wheel hubs, cover magnetos, clutch housing, cover oil pump and gear case,” he added. Muthu Krishnan revealed that the company is looking at a third plant, since it sees huge demand in pressure die casting, so it is planning to utilise the third plant exclusively for pressure die casting. Since the company is a major supplier to TVS and has received new enquiries from Chennai, it is planning to have its third plant in Hosur. Initially, the company was manufacturing castings. Now it has installed a couple of machineries for machining purposes and will soon install machineries for assembling entire components too. “Earlier we were outsourcing the components for machining but now we have started doing it in house, and would extent the same methodology for assemblies also soon,” Muthu Krishnan said. The casting manufacturer recently installed four die casting machines and will be upgrading two more machines and one fully automated machine in the current year. Therefore the company is investing `2.5 crore towards machineries. Dimo Castings has also started supplying wheel hubs, pillion handles to Sundaram Clayton recently. He said “we take up almost seven to eight new components a year, and we also get more enquires for exports, but unfortunately, due to capacity constraints, we are not able to meet the demand.” The company was established in 1984 for supply auto components to two-wheelers, three-wheelers, electrical motors and health care. Now it is the major supplier for TVS Motor, Tyco Electronics and KTTM.

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16 - 31 October 2011

Wabco to deploy Indian best practises, T Murrali Chennai

eading supplier of safety and control systems for commercial vehicles, Wabco is in the process of emulating the best practise garnered at its wholly owned subsidiary in India at its manufacturing facilities across the globe. The global company has commenced this process at some locations and the rest of the plants will follow suit. While the plant in Poland is reaching an advanced stage of implementation of best practises, the facility in Hanover in Germany along with another plant will start this concept soon. The $2.2 billion company has three plants in India and 15 in the rest of the world. Established

in 1962 as Sundaram Clayton, the joint venture between TVS and Clayton Devandre to manufacture braking systems, the company was de-merged into Wabco-TVS (India) in 2008. Wabco took the majority ownership in the following year. Speaking to Auto Monitor, the Chief Human Resources Ofﬁcer, Wabco, Kevin Tarrant said that the global company is keen to deploy best practises from the Indian facility as it will help improve total employee involvement and productivity. Employees at Wabco India come out with about 60 implementable ideas a year when compared to ten to 15 in other locations of the global company. When asked the reason for deployment of best practises he said, “First, we have to value our employees. Each

Kevin Tarrant, Chief Human Resources Officer, Wabco

employee is accountable and has ideas that can be explored. They have to be empowered so that they come out with ideas.” The Indian company kicked off TQM concepts as early as 1987 and won the Deming Prize in 1998 followed by Japan Quality Medal in 2002. These initiatives resulted in higher employee involvement and improved productivity. “We are taking some policy deployment practises to be deployed across our companies. We plan to take goals from the organisation and connect each and every employee and see how

Jacques Esculier, Chairman and CEO of Wabco What is the new branding initiative all about? The new brand is not going to modify the current positioning of Wabco India as a centre for manufacturing; it is just more on the alignment of the branding across all regions. This is because the company sells products manufactured in India in other parts of the world. And we obviously want to feature our brand when we sell our products elsewhere in the world. What would you be looking at from your India operations? We will continue to focus on three verticals—engineering, manufacturing and sourcing, and these verticals will be strengthened because of the branding. How do you see these three verticals change in the next ﬁve years? In the case of engineering centre, we currently have about 300 people and we have ambitions to grow way beyond than what it is now. Firstly, we do not want to dilute the existing knowledge resources. Also, the race for hiring talents is high, though highly talented people are available in India. The pillar of engineering centre has a clear strategic purpose; it is to manage and develop more

16 - 31 October 2011

SOUTH INDIA SPECIAL

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deepen India engagement

Wabco plant, Ambattur, Chennai

they can contribute to the growth and development of the organisation. However, it will be adapted to suit different cultures. About 80 percent of the principles work everywhere while the rest will be customised,” he said. One of the attributes of the Ambattur plant of Wabco is the impression left by the co-author of the book ‘The Machine That Changed The World’, James traditional and conventional products, which were done in Germany. Secondly, to adapt the technologies developed outside India to the local requirements. As the local requirements are growing bigger, we need more and more engineers since the design developed in and for a particular market can be adapted to other markets too. For instance, the automated-manual transmission is primarily developed for emerging markets. The project is lead by people from Germany and supported by China in terms connecting to the market and identifying the specific requirements of customers, is supported heavily by Indians in terms of design and software. By the way, the productionion has started in China for such a complex and sophisticated product. What is the roadmap for manufacturing in India? While we continue to manufacture products for this country, the latest technologies that we develop globally, will be brought to India as and when the customers require them. And these products will be manufactured once the volumes reach certain level as our philosophy is that we have to manufacture nearer to our customers. We are also integrating India in the network of Centre of Excellence, for some of the key products like compressors. India, for example, will support the compressor requirements of few countries including the US and Brazil. It is just a matter of optimising the network. What is your plan for sourcing? We have a set of suppliers supporting our manufacturing facilities in India. We are currently exploring opportunities to source for our facilities outside India too. We are already doing in a small way now. Currently, 45 percent of the material sourced is outside of traditional markets, which is very significant for company like ours. Our vision is to increase it significantly.

P Womack. After a visit, the author said that the facility is the leanest plant outside Toyota in Japan. Asked whether Wabco would imbibe lean manufacturing practise of the Ambattur plant globally, Tarrant replied, “We are already practising lean concept across the plants; but the learning is the way in which it has been implemented here (Ambattur). We can replicate them everywhere and we will have tremendous improvements,” he said. To a question on the benefits that these initiatives will reap for the company he answered, “I think there will be two major benefits; fi rst of all I believe, everybody in the world wants to make a difference. They want to know how they can contribute better. I think this method will

help people to get involved in the organisation and thereby make a difference by better contribution. Secondly, it will result in better productivity.” Recent ly, Wabco India unveiled its plans to consolidate its brand under the Wabco name as part of a strategic initiative to strengthen the company’s market position in the country. The company, a subsidiary of Wabco Holdings Inc, manufactures airassisted and air-brake systems for commercial vehicles and continues to expand its technology portfolio to manufacturers of trucks, buses and trailers. Unveiling the new brand the Chairman and CEO of Wabco, Jacques Esculier said, “We will continue to support customers in their pursuit of vehicle safety and efficiency by offering

optimal technology solutions while striving world class service levels. We are passionate about three pillar strateg y— technology leadership, global capabilit y and excellence.” The W hole Time Director of Wabco India, P Kaniappan said, “Our new brand marks the convergence of our powerful engineering capabilities and outstanding operational environment together with global technology portfolio.” The company aims at enhancing vehicle efficiency and environmental sustainability as well as improve vehicle safety and driver effectiveness, he said. The company has manufacturing facilities in three locations— A mbat t u r a nd Ma h i nd ra World City (in Chennai) and Jamshedpur respectively.

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16 - 31 October 2011

Comstar turns focus on domestic market Akmal Rahman B Chennai

We have recorded a turnover of `300 crore and are looking at 20 percent growth. We have started focusing on the Indian market and we anticipate that we will grow with Indian OEMs

hennai-based Comstar Automotive India, a leading Tier I supplier of starter motors and alternators for passenger cars and light commercial vehicles, is gearing up to focus on domestic market. The company, which is primarily export-oriented, is shifting its focus to the domestic market due to growth here. In an exclusive interview with Auto Monitor, Director and Chief Financial Ofﬁcer, Comstar Automotive Technologies, Sat Mohan Gupta said, “We have recorded a turnover of `300 crore and are looking at 20 percent growth. We have started focusing on the Indian market and we anticipate that we will grow with Indian OEMs.”

Quantum Of Supplies Currently, the company exports to Japan, Europe, North America, South Africa, Brazil, Canada, Philippines, Thailand and China. “We have more than 80 percent utilisation of our

Inside the Comstar factory

capacity for starter motors and around 40-50 percent capacity for alternators,” he said. It is supplying starter motor and alternators to Ford, Tata Motors, Jaguar, Land Rover, Volvo, Aston Martin, Nissan, Ashok Leyland,

and Mazda. The company exports more than 90 percent of its products to other countries and supplies only ten percent to Indian OEMs. The company has been working towards reducing costs and improving efﬁciency.

Revising Productivity Presently, the company aims to improve its two key products— starters and alternators. To make the components lighter, Comstar is opting for alternate materials. For instance, instead

of steel, it uses aluminium to reduce weight. The company is also looking at making its motors compact and to eliminating unwanted materials. The second and crucial line of improvement is revising the cost structure of the process. It is not necessary that weight reduction always results in cutting costs. Sometimes, lighter materials like aluminium are more expensive, because it’s much lighter than steel. The company foresees the

ELITE MOLD

Sat Mohan Gupta, Director & CFO, Comstar Automotive Technologies

Add: No.17 Yongjiang Road Beilun Zone.Ningbo.China. P.C.: 315806 Sales Tel: Tracy Lin +86-13736075777 +86-574-86148158 After-sales Tel: Steven Lin +86-13566032563 +86-574-86117178-804 Fax: +86-574-86117138 Email: marketdept@diemaker.com.cn Website: www..diemaker.com.cn

need to focus on innovation and product development and catch up with technology. It develops and designs all its products inhouse in Chennai. Recently, it has invested at its plant in testing and manufacturing operations. Also, it is expanding the capacity for starter motors as its already utilising 80 percent of it. It has spent around `15 crore in this area. Comstar also has other ongoing developments round the corner. “We are also working on to support the OEMs on new technologies like improving the efﬁciency of vehicles—for instance, enhancing mileage and reduction in carbon content,” stated Gupta. When asked about how it would meet the demands of Indian OEMs, Gupta replied, “We have a good technical centre here. We are working on products that not only meet the European expectations, but Indian expectations as well. We will supply the same quality as what we export to other OEMs.” The company is also working on procuring orders from new OEMs in the future. Gupta revealed that it is working with Indian, Chinese, European and North American OEMs, although it would take a while before the results would materialise. The company has no plans of expanding its product portfolio in the immediate future as it “wants to consolidate and develop more products like starters and alternators. We want to see Comstar as a `500crore company by 2013. And we are working on it aggressively,” he concluded.

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16 - 31 October 2011

Bill Forge into new segments, automated expansion Bhargav TS Bangalore

Photographs: Bhargav TS

angalore-based Bill Forge has started supplying aluminium handle bars to Hero Honda for its premium motor cycle segment. The company has indigenised its supplies for Hero Honda along with mass production, which can be fitted readily in the fi nal assembly. This is the company’s fi rst hot forged aluminium component that helps Bill Forge manufacture lighter components. In a recent interaction to Auto Monitor, Director, Bill Forge, Hari K said, “The aluminium handle bars we manufacture are mainly for Hero Honda’s premium motor cycle segment, which has been introduced recently. We have developed it successfully and started manufacturing the aluminium forging for them

Bill Forge’s Bangalore facility

and we are in production of those parts. It was the ﬁ rst component that we attempted in a hot forging on aluminium and currently, we manufacture 900 sets of handle bars per day.” Bill Forge covers the entire spectrum of forging components, including cold forging, warm forging and hot forging. It

manufactures components from six grams to ten kilograms. In hot forgings the company has presses, hammers up setters. Also, the manufacturer is looking to broaden the variety of products that it can offer to the customers within the forging umbrella. Meanwhile Hari also said, “We have established our creden-

A range of components by Bill Forge

tials as a company that can forge, machines and deliver solutions in aluminium and we are getting lot of enquiries from passenger vehicle manufacturers.” Currently, Bill Forge manufactures steel forged components to four-wheelers like transmission parts, gear blanks, ﬂanges and supplies to Delphi, GKN, NTM and Bosch.

In the coming years, the company is planning to enter the commercial vehicle space, as the industry is growing rapidly. “In the current year, our thrust continues in the two-wheeler and passenger vehicles segments. We plan to supply products for commercial vehicle segments in the FY 2013. Since the footprint of the com-

Hari K, Director, Bill Forge

mercial vehicle is increasing in India, we feel this is the right time to enter the segment,” he added. It exports 15 percent of its total production to General Motors, Ford Motors, American Axle, Land Rover, Piaggio and GKN in Japan. In the current year, it has a capex plan of about `35 crore, which mainly caters to new programmes and expansions—during the expansion mode scheduled shortly, Bill Forge is planning to install additional machines in all its plants. When asked about productivity improvement, Hari said, “We have installed few machines with automatic gantry loading and most of our machine shops have been automated. In forging also, we are moving towards automation by installing press robots and automated transfers for forgings. Therefore, we are working towards enhancing our productivity with the help of automation.” When it earns revenue, the company invests the same into the following year and in a similar manner, the investment plan will be followed for the coming year too. Last year, the company grew by 45 percent and this year it is expecting to grow by 35 percent. And compared to the export market, the company feels it has great opportunity in the Indian market, which is growing at a very fast rate. Currently, it has six manufacturing facilities in India, four in Bangalore and one each in Coimbatore and Haridwar. The facilities primarily cater to two-wheelers and the passenger car segment for domestic and export markets. Also, the company had dedicated its Haridwar plant to cater to the demands from Hero Honda. Bill Forge manufactures handle bars, engine valve retainers, steering races to major two-wheeler manufacturers like TVS, Bajaj, HMSI, Yamaha, Hero Honda and Suzuki. It also manufactures transmission parts, pump parts, auto electrical parts, common rail parts and drive shafts for passenger vehicle segment.

Safe and Connected

Active Safety. Helping prevent crashes in the first place. Everyone agrees. Safety is not a luxury. It’s a priority. And it’s especially important on the road. With millions of auto accidents resulting in injury every year, Delphi places high priority on bringing effective and affordable safety products to both vehicle manufacturers and consumers around the world. And, Delphi is uniquely postioned to integrate safety with another growing consumer expectation: seamless connectivity. Once consumers had high-speed Internet access in their offices, they wanted it iin their homes. When they got W iit at home, they wanted it as they w walked down w the street. Today, consumers want to be just as connected to information and entertainment on the road as they are on the sofa. And they need to connect safely. Connecting safely is a vision Delphi is working hard to bring to reality for automotive manufacturers — and drivers —worldwide.

Th first step in realizing this vision is creating robust active safety systems. The T These systems continually monitor a vehicle’s traffic environment, e evaluate the situation and identify when a crash is likely to occur. U Using that information, active safety systems help drivers avoid a crash — whether by providing warnings of a potentially dangerous situation or by actually taking action. Extensive vehicle systems expertise helps Delphi engineers integrate safety features with other vehicle systems. An example of this is Delphi’s industry-first, integrated Radar and Camera System (RACam), which combines radar sensing, vision sensing and data fusion in a single sophisticated module. The technology integration is helping to provide optimum value to vehicle manufacturers by enabling a suite of active safety features that includes full speed range adaptive cruise control, adaptive headlamp control, traffic sign recognition, lane departure warning, forward collision warning, and autonomous braking for pedestrians and vehicles. As a result, the entire vehicle can work with the driver to respond to a situation that could result in a crash. Delphi believes that the driver and vehicle working together can help prevent many accidents from occurring and is developing new products to help create a society where zero fatalities, zero injuries and zero accidents is a possibility.

The connected car. TThe he second step is to create a connected car with intuitive infotainment a and driver interface systems. Everything from video entertainment t vehicle diagnostics can be delivered into and out of the vehicle to d digitally — the most flexible medium available. An integrated smart an antenna structure can enable a multitude of wireless formats. Some services can use new long-range, high-speed networks. Others, like multiple channels of video, can be delivered via satellite. However the data gets to the vehicle, the vehicle distributes it digitally. Not only does this simplify the ways vehicle makers can add competitive services, it creates entirely new business opportunities to respond, not only to customer demands, but to customer dreams. Delphi’s MyFi® family of products offers infotainment solutions designed to address the unique connectivity requirements of consumers. From hands-free system operation and audio streaming to integrated infotainment system solutions with Bluetooth, WiFi and cellular connectivity, Delphi MyFi products provide the right level of connectivity for each specific application. Premium MyFi connectivity solutions can even leverage local and wide area networks for smart phone apps, remote servers and cloud-based services. And they are connecting with safety to help reduce driver distraction and maximize safety. With important applications for both personal and commercial vehicles, Delphi can help vehicle manufacturers respond to these evolving markets.

Managing system convergence and driver integration. At the center of these systems is the driver. Delphi excels at creating solutions that integrate the driver with the vehicle and its surroundings; the vehicle safety system, the connected infotainment system, an intuitive user interface and infrastructure connectivity — seamlessly integrated to help keep drivers safe and connected. To learn more about the ways Delphi can keep drivers safe and connected wherever they roam, visit delphi.com.

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16 - 31 October 2011

Srivasavi Adhesives to expand footprint B

angalore-based Srivasavi Adhesives who manufactures automotive grade adhesives tapes, is entering into the western market to increase its presence and to double its revenue. The company brings out a broad range of high quality adhesives for all segments of automotive industry, making vehicles safer and more dependable. D i r e c t o r, Business Development, Srivasavi Adhesives Darshan CS, said, “We have good customer base in South India and are supplying to major OEMs. Also, we are planning to enter the western regions especially in Pune, where the company sees more potential for these kinds of products. The plans are in pipeline and we have started exploring

the possibilities.” He also said that the company is in talks with a few Tier I customers and will be supplying to them in another three months. Founded in 2002, the company has been manufacturing tapes for windmills, solar panels and for the packing industry.

Later in 2004, it started supplying masking tapes to Toyota, and depending upon the customer requirements they started manufacturing products like fastening tapes, acrylic tapes for emblem mounting, double sided foam tapes, bumper sealings, speedometer cables, filter meshes

(that resist water leakage), mirror mounting tapes, butyl tapes, heat activated tapes, adhesive tape die cuts and wiring harness tapes. Darshan also said, “The wiring harness that we manufacture has strong adhesive, elongation and ﬂexibility advantages comparing to other products available in

Wire harnessing tape

the market. We can support our customers by supplying PVC and fabric-based tapes and we are ready to supply what our customer requires.” Currently, it supplies wiring harness tapes to Minda, TVS, TAFE and BEML. These tapes are ﬁre retardant and lead-free. Since the vehicle manufactures

Darshan CS, Director, Srivasavi Adhesives

are looking on improved materials to develop lighter vehicles and in turn derive better fuel efficiency, OEMs are turning to newer manufacturing methods and processes including high performance automotive adhesives and sealants tapes. These materials create the opportunities to design and build advanced lightweight constructions and to enable seemingly confl icting aims such as higher speeds and lower fuel consumption to be reconciled. Srivasavi Adhesives also manufactures tapes of varying thickness grades, depending upon their applications. According to him, the products consist of PET fi lm backing with modified acrylic adhesive, and are designed in various thicknesses. The tapes are designed for high adhesive levels relative to low thickness. And resistant to demanding environmental conditions, tapes have excellent handling performance in converting process. The adhesive is also formulated to suit low energy surfaces as well as high energy surfaces. Moreover, these tapes play a vital role in safety, comfort and value retention. Components made from highly rigid structural foams absorb impact energy in the event of a crash (improved safety); innovative sound-deadening materials improve vehicle acoustics (more comfort); and special pre-treatment systems for car bodies, which optimise corrosion protection and paint adhesion. The adhesive manufacturer has invested around `10-12 crore in their plant towards expansion, which will be ready in the second quarter of 2012. Due to new customers this year, the company is expecting to gain 33 percent growth. Meanwhile it has recorded `12 crore turnover last year. The standard of the wiring harness tape that the company manufactures is 18-20 mm and sells around 50,000 rolls per month. Masking tapes and all the other products can withstand a temperature in the range of 70 to 220 degree centigrade, so these products can be used even in the engine room and exteriors. The company mainly focuses on automotive industry, renewable energy, electronics, and pharmaceuticals and currently supplies to Volvo, Renault Nissan, ALL, Motherson Automotives, Pricol, Visteon, Minda, and Samsung. It has started exporting to Indonesia for the last three months and plans to increase the export percentage after the inception of its new plant.

Photograph: Bhargav TS

Bhargav TS Bangalore

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16 - 31 October 2011

Government should create the right kind of T Murrali Chennai What’s your reading on the recent global happenings? Things were shaping after the Lehman Brothers shocking disclosure. The US and Europe were recovering and especially the auto industry, thanks to some incentivisation, the recovery was quite good. While in the US, it was a private fi nancial crisis mainly caused by institutions on Wall Street such as housing fi nance, investors and insurance companies, in Europe it was due to the countries that were borrowing beyond their scope and limitation. EU seems to be more of a concern. In the US, while the recovery has been slow and not on the expected lines, the fi rst quarter results have been a little more positive. Nevertheless, there has been a perception that US is not much to worry about, particularly in the case of auto industry. What we understand is that the pipeline is empty spurring demand and thus for the next few months, at least till the things stabilise, production will continue. What about Europe? Europe will still be a concern because there is a clear confl ict within the EU and EC on whether the basic concept of the common currency is workable or not when political leadership does separate the countries. So far Germany, which is a prime nation in Europe, is doing well. However, the question is what will happen if Italy, Greece, Ireland, Spain and Portugal have problems and they are not able to convince their electorate to opt

India is such a diversified country that we need all types of employment and economic activities. I believe that incentivisation is not a good idea. What the government should do is to create the right kind of environment. I think there is a serious problem in this. India really needs jobs. Also, there are serious issues in the infrastructure L Ganesh, Chairman, Rane Group

for some measures. As a result, there will be lot of resistance in places like Germany to support these countries. How will these concerns impact the domestic auto industry? Our customers in the US and Germany feel that in the next six to nine months, the build up cycle will get stronger. We will have to wait and see. Currently, what everybody recognises in India is that the moment the interest rate increases, the industry slows down. And if the industry is slowing down beyond a point, then the revenue collection will dip eventually making the deﬁcit to go down. Therefore, the government has to tread carefully. Some food prices seem to be softening a bit

but the issue is whether it will hold or not in the next few quarters. The interest rate increase has affected the sentiments of the people compelling them to postpone their purchases. Thus the passenger cars sales are affected. For us, we have planned for a robust year, as our customers were optimistic; but even when we were preparing our plan for capex, we decided to watch the ﬁ rst quarter closely. And certainly there has been softening in the passenger car segment, which is holding up. I see some softening happening in all the segments but not as sharp as passenger cars. Would the festive season help? There could be some festive

season buying, which is always a tradition in India, but I don’t think that it will reverse the trend. That might have one or two months of lesser fall. Would the drop be severe in the last quarter? I think so; if the interest rates do not come back to normal, it can then be more affected. For example the average interest rates for industries a year ago was between seven and eight percent. Today, it is more than 10.5 percent; and if things go in this direction, it can go up to 11.5 percent by the end of this ﬁ nancial year. While in retail, for car ﬁ nancing etc, it has gone up to 16 percent, which is very high. If you recollect, even during the last slowdown, the interest rates were

hiked to these levels and vehicle purchases were postponed. Do you see a direct impact of hardening interest rates in auto industry? Almost every industry has given an average of 15 percent salary increase in April. And food infl ation is not an issue for those who can afford to buy a car. However, they postpone the purchase mainly due to low sentiments on account of hardening of interest rates. The government mainly talks on food Infl ation and we don’t see if the government will benefit by cutting down the industrial activity. Classical economic theories say that if the interest rates are lowered during infl ation, then infl ation will run away.

16 - 31 October 2011

SOUTH INDIA SPECIAL

Auto Monitor

environment: L Ganesh, Chairman, Rane Group Do you see the interest rates coming down in the near future? I do not expect interest rates to come down in the next six to nine months. Even if the inflation comes down by March or June next year, we can see some kind of softening in the interest rates later. Thus I don’t see any chances of great recovery; its going to be a fairly a tough year. What is your next course of action for the Rane Group? The immediate step that we take is to re-do our capex. Except for some customer-related specific programmes that are inevitable, other capex plans will be revisited. Secondly, we are trying to manage the fi xed cost more carefully. After the 2008 crisis, we created a system in the group of fi xing the costs even at the beginning of the year and to identify the fi xed cost as discretionary and non-discretionary. The moment things start slowing down, the checklist that we created will help our companies decide on the areas that are to be deferred and those that are

to be followed. Thirdly, we look at increasing exports and to this being f lexible helps. Exports are not a complete substitute, but still we are trying to push. Everybody is moving towards aftermarket, which also will not hold up after a while. What is the capex for the group for this year? At the beginning of the year we had planned for about `250 crore, but I don’t think we will end up investing that much. We will do a mid-year review in the middle of October and I expect that the companies will cut down on this substantially. What will be the effect of containing the capex on the turnover? Last year, the Rane Group registered `2,200 crore and our sales plan for this year is `2,500 crore. Now, I don’t think we will be able to achieve it. All our companies are operating around ﬁve to 10 percent below the plan till August. The one company that is badly affected is Rane NSK, since it hardly has any business in the

Rane Group enters Defense & Aerospace In a major diversification move, Rane Holdings has acquired 26 percent equity stake in SasMos HET Technologies (SHT), a company engaged in manufacturing interconnection systems (cable harnesses) for various applications in the defence and aerospace industries. Rane has an option to increase it’s stake to majority over a period of time. Based in Bengaluru, SHT has been on the lookout for a suitable partner to expand its

business. It is an eligible ‘offset partner’ for supplies to the Indian defence sector and also supplies interconnection systems (cable harnesses) to both domestic and overseas customers. The Chairman of Rane Group, L Ganesh said, “We feel there are significant growth opportunities both in India and as an exporter. This entry also opens a new knowledge base for Rane in electronics which will have a synergy with automotive industry.”

commercial vehicle or tractor segment. It caters to only passenger cars and 80 percent of the products go to Maruti. What are the other options you see to manage the crisis? One cannot react to such short-term problems as these are cyclical. Therefore, in the short term, we need to go through this. We are, not because of the current situation, looking at aerospace and defence where we see good opportunities. In chalking out our growth plans, we have asked our companies to look at two things—one is innovation, in the form of better products and better business module. Secondly, we have asked them to expand the product portfolio in the adjacent areas by optimising existing resources. The inorganic growth will be taken up by the holding company. Can you throw a little light on ‘expanding in adjacent areas’? For example, in order to make hydrostatic steering for tractors, Rane Madras has developed some competence in hydraulics. We found that there are some opportunities in hydraulics apart from steering, but using the basic competence that we developed. We found that we have been able to see some penetration in commercial vehicles. Now we are looking at making it as a separate division of Rane Madras. How do you foresee the next decade will be for you? We will be having some inorganic growth and foray in to non-automotive business also. Currently, we are looking at aer-

ospace; we see the opportunity because of the privatisation of the aerospace and defence. What do you think can be the catalyst from the government for the auto industry to grow? I would like to answer this two ways; personally I don’t believe that the government should look at any specific catalyst or incentives for any kind of industry because given the Indian setup, the government should be doing things that will enhance competitiveness. This is better than artificially boosting the industrial segments. India is such a diversified country that we need all types of employment and economic activities. I believe that incentivisation is not a good idea. What the government should do is to create the right kind of environment. I think there is a serious problem in this. India really needs jobs. The majority of the package announced by US President, Obama recently is aimed at creating semi-skilled jobs in the range of $20 to $40 per hour. Even if America needs that kind of a job how long are we going to realise it in India? Unless we create those kind of jobs the economy per capita will not grow, despite the economy growing at about eight percent. There should be inclusive growth. There are serious issues in the infrastructure—if these issues are addressed, not only the auto industry but every industry will benefit, resulting in inclusive growth. What about labour laws? Flexibility has to be broadened with the unionised workers of the permanent employees, oth-

erwise people are shying away from employment. The industry and even the public sector are all heading towards non-permanent employees. There is no clarity in this; it will be better if the government comes out with some clear guidelines on the proportion of non-permanent employee and minimum wages. This will make the industry competitive. Today, the non-permanent workforce is very nebulous. With Tamil Nadu loosing a fair amount of investments in the recent past to other states, do you think the state is loosing its charm? I don’t think so, because Tamil Nadu has been growing phenomenally in the last few years, not only in auto but also other industries. Gujarat has a lot of dynamism; a lot of growth and incentivisation is going on, therefore people are being attracted. There is nothing wrong. There needs to be some amount of stability in the employee front that is warranted today. Apart from cost escalation and 20 to 25 percent attrition that all of us are facing, we are not able to develop a trained management team for the future. The quality of people and the management is not being developed. Everybody is in a hurry to recruit people; they stay for few years and shift. I think some amount of stability in this area, say for about ﬁve years, will help the local industry to create competence, which has been a rolling stone now. Some kind of rest for Tamil Nadu is not a bad idea. This is not a slowdown as investments are still coming in.

16 - 31 October 2011

SOUTH INDIA SPECIAL

Auto Monitor

Perfect Alloy gears up for higher exports Bhargav TS Shimoga

himoga-based Perfect Alloy is ramping up its production capacity and developing turbocharger components for exports to help its customers meet the Euro V and Euro VI emission norms. The company supplies turbocharger components to OEMs in the passenger car segment and has embarked on capital expenditure programme of around `12 crore to strengthen its product portfolio. Director, Perfect Alloy, VK Divekar told Auto Monitor, “We are likely to be a single global supplier for some of the turbocharger components to major OEMs, but due to capacity constraints, we are not able to meet the demand. After the inception of our new facility we will be geared up to meet the demands.” Towards this aim, Perfect Alloy will be investing around `12 crore towards its new facility and moving its existing foundry to a new facility. “We are expanding our foundry capacity from 1,300 tonnes per annum to 3,000 tonnes per annum and after the expansion, we will be strengthening our footprints both, in domestic and export markets,” he said. The expansion would help the company meet the expected surge in turbocharger component demand for diesel vehicles in the domestic and international markets. From its Shimoga plant, it can manufacture 14 million valve seats, four million bushings and three million turbocharger parts. Perfect Alloy has its in-house R&D centre and is developing new materials. It is also developing new components with new materials for the next-generation vehicles, which can withstand higher temperatures and has good corrosion resistant properties. Earlier, the company was using iron and chromium for making critical turbocharger parts, but now to meet the Euro V and VI norms, it is using chromium and nickel. This material change is done by the Perfect Alloy and currently, it manufactures 4.8 million bushes and other components like nozzle rings, adjust rings and insert turbines.

ALL-City Union Bank in MOU for CV financing

shok Leyland and City Union Bank entered into an understanding to offer

Ashok Leyland Ltd signs MoU with City Union Bank

customers of Ashok Leyland friendly terms for financing commercial vehicles on pan India basis. The manufacturer has tied up with a host of public and private sector banks, as part of their pool of accredited financiers, in view of their f unding capabilit y, smoot h terms and transparent transactions. Cit y Union Ba nk, headquarteredinKumbakonam,is one of the leading banks in south India.

Divekar revealed that the company will be supplying turbocharger components to Mitsubishi Turbocharger in Holland, and for Volvo Eicher, Wakesha and IPD in US; the company will be supplying valve seats before the end of this December. Turbocharger assemblies when ﬁtted into diesel engines, enable vehicles to meet advanced emission norms. According to Divekar, the assemblies improve the engine efﬁciency by 25 percent. Due to the high precision and technology intensive nature of the product, especially the ones for passenger car applications, turbocharged diesel engines in cars are faster than truck engines, while enabling 120,000 revolution per minute (RPM) in case of a typical turbocharged diesel engines for passenger cars as compared to around 70,000 RPM

VK Divekar, Director, Perfect Alloy

for a truck engine. Currently, Perfect Alloy exports turbocharger components for Euro V compliance to its customers in US and Europe. It is moving to the next level as its research and development centre is developing components for meeting Euro VI emission norms. Talking about the latest trends in turbocharger assemblies, Divekar pointed out

Components from Perfect Alloy

that as engines are became smaller and more efﬁcient, material compositions for turbochargers were also morphing from chromium and nickel to withstand high RPM and high temperatures in export markets. In 2013-2014, the company is expecting to clock topline of around `100 crore while maintaining the export contribution

of around 60 percent of its production to UK, Canada, China, Germany, Japan, Korea and US. Perfect Alloy was established in 1979 for supplying valve seat inserts to Ashok Leyland and subsequently started supplying valve seas to Kirloskar Oil Engines and Greaves. It supplies to Hero Honda, M&M and Tata Motors in the domestic market.

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SOUTH INDIA SPECIAL

16 - 31 October 2011

Nibon Adhesives to setup new manufacturing facility Bhargav TS Chennai

dhesives are increasingly being used in modern automotive production to reduce the weight of vehicles. To support the automobile manufacturers, Kochi-based Nibon Adhesives is gearing up to setup its manufacturing facility in Pollachi in Tamil Nadu. Currently, the company markets the industrial, automobile, consumer adhesives manufactured by Cartell Chemical Co. The company is ready to expand its business all over India with variety of adhesive products with the help of its new facility. In a recent interaction to Auto Monitor, Managing Director, Nibon Adhesives, Nithin Largus Konnully said, “The adhesive industry is growing rapidly and

we want to register our footprint in the Indian market by bringing different kinds of adhesives. To cater to this we will be setting up our manufacturing facility in Pollachi next year and will be investing around `200 crore to manufacture 20 metric tonnes of adhesives.” In modern vehicle construction, all components can be bonded using industrial adhesives. The beneﬁts of adhesives are particularly evident when different materials need to be bonded to each other. This is even more important when dealing with a mix of lightweight construction materials, where bonding would not be possible without adhesives. Adhesives also play an important role in costsavings when compared with the mechanical fasteners. They allow different materials to be perma-

nently bonded in an energ y-efficient manner and without the need for other auxiliary parts. The company will also be launching the thread lock and cynoacrylate adhesives soon. The thread lock is a single component, solvent-free product, which dries immediately and offers more advantages. Cynoacrylate is a general purpose industrial grade gap-filling substrate, which can be used in all the applications. “The new thread lock will help our industrial end-users, new design and manufacturing

Products to be launched by Nibon

opportunities, all in one formulation. In short, these two improved products permit the use of top quality anaerobic thread lockers in a much wider range of applications,” he said.

The thread lock is a single component, solvent-free product which dries immediately and offers additional advantages. While cynoacrylate is a general purpose industrial grade gap-

The adhesive industry is growing rapidly and we want to register our footprint in the Indian market by bringing different kinds of adhesives. We will set up the facility in Pollachi next year and will be investing `200 crore to manufacture 20 metric tonnes of adhesives ﬁ lling substrate, which can be used in all the applications. The purpose of a nut lock is to prevent the loosening of mating components, which may be operating in conditions of varying stress levels, temperatures or vibrations. The effectiveness of the locking device is often critical to the safety of the system. Cynoacrylate enables faster cures with greater depth of cure. Light curing adhesives are often referred to as adhesives that cure “on-demand” or “on-command”. This is due to the ability to adjust or align components with the adhesive in place, and only curing when the assembly is correctly positioned. There are several polymer types that cure via light cure technology and are appropriate as adhesives. Most are based on free radical curing acrylate technologies. RTV is basically designed for automotive applications, such as sealing exhaust manifolds, turbo housings, oxygen sensors, adhering auto and appliance trims, providing form in place of gaskets for gear boxes, compressors and pumps sealing trailer and truck cabs, and bonding or sealing appliance parts. PU sealants are solvent free polyurethane with high adhesion strength and good elasticity, which allows multi-coat painting. It is basically used in common joints for car body works such as wind shields, front and back panels, engine cabins, car doors and folded parts. Nibon Adhesives currently supplies to Popular Automobiles in Kerala and Tamil Nadu and to many other dealers. In the days to come, it will also do the evaluation for the adhesives targeted at the OEMs, as an expansion mode.

Auto Monitor

SOUTH INDIA SPECIAL

16 - 31 October 2011

Auto Clutches to enter passenger car segment

uto Clutches, Shimogabased component manufacturer is gearing up to supply components to the passenger car segment. Currently the company supplies shackle pins and king pins to major commercial vehicle manufacturers like Ashok Leyland, Tata Motors and BEML. “We are working on passenger car segments and looking to manufacture machined gear box parts. Currently, we are exploring the possibilities of manufacturing parts for the segment and in 2012-2013, we will start our production,” said Proprietor, Auto Clutches, Subramanyam HV during a recent interaction to Auto Monitor. The company has taken some

Photographs: Bhargav TS

Bhargav TS Shimoga

Narendra HS, GM & Subramanyam HV, Properitor, Auto Clutches (R) Auto Clutch facility

actions to manufacture light weight gear box components and it is working with OEMs to develop additional components. Auto Clutches manufactures components for gear box and under chassis parts and is looking to expand its product portfolio. Auto Clutches is also planning to put assembly lines in their facility, which will help to improve its customer base. Currently, it has SQF (Sealed

Quench Furnace) for heat treatment process to manufacture high quality king pins. As a diversiﬁcation process, the company has started manufacturing oil relief valves, which is used in the hydraulic pumps. The company sees huge potential in oil relief valve where it is used in most of pump applications. The company’s General Manager, Narendra HS said, “The oil relief valve, which we currently manufacture are

prone to a lot of wear-and-tear, so we are manufacturing it in a way to ensure high quality and accuracy. Also, we have invested `1.4 crore on eight-axis CNC machines, which is a fully automated machine that manufactures with high precession,” he said. Recently, Perfect Alloy has implemented lean manufacturing system to enhance its productivity and it sees a huge difference after the system is implement-

ed. Narendra said, “We have increased our capacities by implementing lean manufacturing system and we have substantially reduced inventory, process wastage and other system oriented process. Therefore our productivity has been increased by 34 percent after implementation of lean manufacturing process. Earlier, we were manufacturing around 7,000 shackle pins, and now we are manufacturing 20,000 shackle pins,” he said. In their overall production, 45 percent goes towards shackle pins, 25 percent goes to king pins and 30 percent caters to other components. Last year, Auto Clutches recorded a turnover of `24 crore and expecting around `33 crore turnover this year. This substantial growth is due to new products added in the current year.

Mercedes-Benz opens 3S facility in Chennai Our Bureau Chennai

ercedes-Benz inaugurated its 3S (Sales, Service and Spares) facility, Transcar India in Chennai recently. This is the company’s largest dea lership network in south India, which can accommodate 20 cars and having three bays for service.

Peter Honegg, MD&CEO, Mercedes-Benz India

Addressing the press during the launch of the showroom, CEO & Managing Director of Mercedes-Benz India, Peter Honegg said, “Luxury car segment in India is growing faster and consumers in Chennai are exposed to global lifestyle and are looking for the best in luxury and technology. This multi-storied showroom has the capacity to display 20 cars and has been designed in such a way that at every level, there is a different experience zone for displaying different segment cars along with accessory section.” Mercedes-Benz is also planning to start leasing its cars in India to attract entry level luxury car buyers and to start its used car business. It hopes to attract people who want to buy cars that are priced below `20 lakh and initially it will start in Delhi, Mumbai, Pune and Kolkata. T he compa ny recorded a growth of 12 percent in September 2011 over last year and aims to sell over 7,000 units this year compared with 5,600 units last year. Honegg also indicated that the company has plans to introduce diesel version on some of its models.

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SOUTH INDIA SPECIAL

16 - 31 October 2011

Pearlite to supply liners to John Deere Bhargav TS Shimoga

earlite Liners, the Shimogabased cylinder liner and brake drum manufacturer, has bagged an order from John Deere to supply cylinder liners. The company will commence the supply of cylinder liners in the ﬁ rst half of 2012 and it will be supplying liners of 106 mm diameter, and the value of the project is around `six crore. “We have submitted the samples and they are at the testing phase currently. In another three to four months, we will start supplying to John Deere. Initially, we will be supply 5,000 liners per month and later we will be adding another 10,000 liners per month,” said Director, Pearlite Liners, SG Divekar in a recent interaction with this magazine.

Cylinder liners are one of the major components in the combustion chamber, with cylinder heads and pistons in any internal combustion engine. It plays an important role for the motion guidance of the piston, sealing with piston rings, oil control and heat transfer during engine operation. To enhance the engine performance and to reduce the oil consumption, Pearlite is using the latest technology called plateau horning. It is the process which is executed at the ﬁ nal stage of operation in the cylinder liner and creates valleys in the liners. These valleys help to retain the oil in the liner and that in turn leads to reduced wear and tear of the liner. According to the company’s Senior General Manager, Raghudutt J, the systems can

Quality control process for liners in the facility

address even the most critical applications with stringent specifications. Today, the company not only has access to the modern technologies in production but also excellent inspection and testing facilities that ensure product quality at every stage of the manufacturing process. Innovation, attention to details, right from conceptualisation till the product is shipped, has been the culture of operations at Pearlite since its inception, he added. The company is not only present in the automobile segment but also manufactures and supplies liners for industrial engines, compressors, marine engines, earth moving equipments and locomotives. It has four decades of experience in manufacturing a wide range of products starting from small agricultural applications to large power plants. Raghudutt also revealed that the company will be supplying liners to Man for their genset applications and it will be supplying the liners soon. The key differentiating factor for Pearlite is that it manufactures liners ranging from 60 mm to 900 mm bore and concentrates only on OEMs. The company is not into the replacement market due to price sensitive nature of that segment. The company’s foundry has a melting capacity of around 1,000 tonne per month and currently, it is utilising 70 percent of the installed capacity. The company always has this additional capacity to cater to the sudden demand from its customers. Currently, it manufactures one lakh liners and 200 tonne of hand moulded castings every month. The manufacturer is also planning to enhance its production facility by adding more machines, especially plateau horning machines to manufacture bigger size liners. It has enough space to put additional machineries and is planning to invest around `three crore on capital expenditure. Pearlite supplies brake drum to Caterpillar and BEML and has developed a unique technology called gravity shell die casting, which uses one fi fth of sand compared to the conventional method and gives better results. Last year, the company recorded a turnover of `48 crore and it is expecting to cross around `52 crore this fiscal. The company has also invested in windmills, which can produce 1.5MW of power (35 lakh unit of power for a year) and it uses 50 percent of the power generated by this windmill.

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SOUTH INDIA SPECIAL

16 - 31 October 2011

APAC 16 aligns industry with global The event has set the roadmap for sustainable technologies Our Bureau Chennai

n a bid to bring together the industry, the academia and the government to give a roadmap for the automotive industry, the Society of Automotive Engineers India (SAE India), hosted 16th Asia Paciﬁc Automotive Conference (APAC 16) in Chennai recently. The conference, in which about 1,000 people participated from the global and domestic automotive community, created a platform for an exchange of ideas and insights on contemporary challenges for sustainable technologies for safe and smart mobility. Around 140 technical papers were presented, and the event witnessed the

(L-R) Asit K Barma, Chairman Southern Section, SAEINDIA; David Schutt, CEO, SAE International; R Dayal, President SAE India, Chairman, Steering Committee APAC16; Venu Srinivasan, Chairman,TVS Group; R Seshasayee, Patron, APAC 16 (Executive Vice-Chairman, Ashok Leyland ); Ted Robertson, President, FISITA & President, Magna International, Canada & Aravind Bhardhwaj, Chairman, Organising Committee, APAC 16 (CEO, Automotive Infotronics)

(L-R) Prof Thanakom, Senior VP, SAE Thailand; Dr Pawan Goenka Chairman, Steering Committee, APAC & President, Automotive & Farm Equipment Sectors, M&M; R Seshasayee, Patron-APAC 16 (Executive Vice-Chairman, ALL); SR Marathe, Chairman, Exposition Committee, SAE India (Director, ARAI)

participation of 100 exhibitors from SAE USA, Japan, Korea and other countries. The conference highlighted the areas of engine technologies, green vehicles, safety, automotive infotronics, frugal engineering, collaborative innovations, IPR policy and regulations. R Seshasayee, Patron-APAC 16 and Executive Vice-Chairman, Ashok Leyland, said the conference has provided the platform to address burning issues like public transportation, sustainable mobility, vehicle safety apart from developing upon the usual technical areas of discussion. “We need to integrate the best practices in design and development. It is only right that expectations are met with action,” he added. The Chairman, Steering Committee, APAC and President, Automotive & Farm Equipment Sectors, Mahindra & Mahindra, Pawan Goenka, said that in the world of automotive engineering, today, there is a lot of stress on ﬁ nding sustainable solutions. APAC 16 has provided a platform on how the automotive world can contribute towards the environment and conservation of resources. Clearly, innovation is what will take the industry to the next paradigm, he said. “In the future,” stated the Chairman, Exposition Committee, SAE India and Director of ARAI, SR Marathe, “there will be a need for the Indian automobile industry to work closely with infrastructure development.” He added that electric mobility and hybrid electric vehicles will be the game changers in the market. “By building a seamless mobility network in the country, we can tap the complete potential of sustainable mobility and make a larger impact on the environment,” he opined. Earlier, inaugurating the three-day conference, the Chairman, TVS Motors Venu Srinivasan said India is securing its spot in the global automotive landscape and has a global responsibility towards taking measures in reducing emission of CO2 and encouraging usage of cleaner energy. “Indian cities are growing at a rapid pace and we will need to focus on sustainable technologies as a core part of the business. Customers are also increasingly aware of the beneﬁts of such initiatives and are making wise choices. Technology offers enormous possibilities to address problems not only in the manufacturing stage but also through the entire product life cycle.”

16 - 31 October 2011

SOUTH INDIA SPECIAL

Auto Monitor

standards, collaborate on innovations for safe and smart mobility Seshasayee said there are a number of factors that are accelerating change in the Indian automobile industry. The impetus from the government has helped the industry clock a phenomenal growth rate. The Indian automobile industry, is estimated to have a turnover of $73 billion, accounting for six percent of the GDP, and is expected to hit a turnover of $145 billion by 2016. The depletion of natural resources has alerted the industry to look at producing “no more waste” than the planet’s restorative capability. India brought in a radical change in manufacturing with its cost effective frugal engineering. The acceptance of sustainable transportation is gaining wide acceptance and has become a competitive advantage for automobile manufactures. Sustainable technology will change design and operational characteristic of mobility in the country. The President of FISITA and the President of Magna International, Ted Robertson, felt that APAC 16 is a signiﬁcant initiative towards India being a collaborator in innovative technologies, which will transform the sustainable mobility in the country. The event has been a successful platform provider for the world’s automotive engineers to share knowledge for the advancement of every aspect of automotive technology and indicate the future direction of automotive engineering worldwide. During his presentation he said that the global vehicle production is set to increase to 102 million units by 2017 from 72 million in 2010. While the share of North America will dip from 19.7 percent in 2010 to 18.4 percent in 2017 and Europe will drop from 27.9 percent to 26.7 percent the share of Asian region will increase from 52 percent to 54.4 percent during the same period. This, according to Robertson is due to increase in wealth and soaring global population. Share of vehicle production in India will increase from nine percent to 13 percent during the period. He also viewed that unconventional technologies will exceed 40 percent of the new vehicle sales by 2035. According to the CEO of SAE International, David Schutt, the global automotive industry faces a new challenge of creating equilibrium between manufacturing and environment. The industry is being sensitised on the emerging trends that will aid in sustainable mobility. This will help in identifying the best practices and help standardise technologies for the future. At the valedictory session, the Chairman, Organising Committee, APAC 16 and CEO, Automotive Infotronics, Aravind S Bharadwaj said, “Sustainable technologies are poised to make an impact in the automotive industry and mobility network in the country. APAC 16 has provided the opportunity for various stakeholders to come under one roof and chalk out a plan for the future direction of the automotive industry. The event has provided a platform for the Indian automotive industr y to be aligned with international standards and collaborate on innovative technologies.”

R Seshasayee appreciating a display at APAC 16

One of the stalls displaying interesting innovations at APAC 16

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SOUTH INDIA SPECIAL

Akmal Rahman B Chennai

Photograph: Mahesh Talkar

Our Bureau Mumbai oyal Enfield (RE) has launched two limited edition leisure bikes: Chrome and Desert Storm recently. The Classic Chrome, is tagged at `1,65,400 (exshowroom Mumbai), is equipped with a 500cc Shaji Kochy, Sr VP & Venkatesh Padmanabhan, twin-spark engine, with CEO, Royal Enfield with the Desert Storm 27.2 BHP power output. The Desert Storm, too, also has a 500cc twin-spark engine and is Ma nu fact u red at R E’s priced at `1,58,200 (ex-showroom Chennai plant, the two limited Mumbai). edition models are available at select dealerships across India. While the Chrome comes in two metallic colour variants, It was announced that RE is also Desert Storms sports a unique working on Royal Enﬁeld 750cc retro sand coloured matt ﬁ nish. and 1000cc versions.

16 - 31 October 2011

Sathya Auto to expand its product portfolio

Royal soldiers storm 2W market

athya Auto (SAPL), which is a single source supplier of automotive tool kits and jacks to Hyundai, is planning to expand its product portfolio by developing bottle jacks and wipers. The company has already set up a new plant in Chennai as a part of its expansion plan. SAPL is currently supplying auto parts, sheet metal components and forged parts to Hy undai, Toyota, Bosch, Visteon, Wabco, Sona Koyo Steering Systems and Faurecia. It has planned to develop bottle jacks for Toyota, with the technical assistance of Kawasaki Japan. The company has also

Images: Akmal Rahman B

become a module supplier by manufacturing wiper blades with wiper arms. Ma nag i ng Di rector, Sathya Auto, Mohan R said that there is some dialogue going on with respect to the technical tie up with companies in Japan and Korea; and since they are in the initial stages, he did not disclose further details. The tie ups will enable the company to manufacture full sheet metal assembles for wipers, except the rubber part, which will A range of components by SAPL be imported. started developing and supTalking further about plying wiper arms to Bosch. their expansion plans, Mohan Moreover, it has planned to stated that SAPL has two facili-

Mohan R, MD, SAPL

ties in Chennai. The third plant, which will majorly cater for manufacturing forged parts, has already started operations. The facility will also manufacture tool kits and jacks for it new and existing customers. The new plant, which is claimed to be seven times larger than its existing plant, is constructed with an investment of `35 crore, and has facilities like hot forging, machining, in-house tool room and induction heating to make the plant environmentfriendly. “Today our priority is to increase the utilisation level of the new plant and ramp up the production,” he added. The company is a 100 percent subsidiary of MK Auto Components, Malaysia, which is jointly owned by UMW and MKI. It is targeting to supply 300,000 jacks for Nissan, 50,000 jacks for Renault and 150,000 jacks for Volkswagen by the end of 2012. It also expects to manufacture two million jacks to get 50 percent of market share in jack manufacturing by 2015. To ensure the quality of the product, Sathya Auto has strong research and development facilities like product designing, prototyping, validation and testing at its second plant in Chennai. The company recently bagged orders from TIDC, Brakes India and Stanley Black & Decker. The company that has a dedicated manufacturing line for its customers has recorded a turnover of `30 crore and expecting to register `40 crore this year and 70 crore by the end of 2013. SAPL has completed the development samples of jack for supplying it to Nissan and Renault and Volkswagen, which is expected to start by this November. Currently, it ma nu fac t u re s products for passenger car and also plans to focus on the commercial vehicle segment in the future.

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Auto Monitor

SOUTH INDIA SPECIAL

16 - 31 October 2011

New Chennai facility, upgrades to Texcel targeting enable Newall portfolio expansion `1,000 crore turnover Akmal Rahman B Chennai

ewall Engineering Works, is planning to set up a new plant in Chennai with an investment of `15 crore, CEO, Newall Engineering Works, Stephen Xavier told Auto Monitor. “We are planning to set up a new plant in Chennai to produce commercial vehicle components and earthmoving equipment components. The plant will be spread over 70,000 sq ft.” The company, which already has two facilities in Chennai, expects that the new plant to be operational by the end of 2012 or beginning of 2013. The new plant at Chennai will cater to the needs of the existing customers includ-

A range of Newall components

ing Ashok Leyland, Caterpillar and Bharat Heavy Electricals. The company has started upgrading its existing plant in Ambattur with an investment of `three crore. The new plant will have a heat treatment shop with suitable capacity. It will also setup CNC tools and cutter grinders with ﬁve-axis and an imported CNC turning cen-

tre with advanced inspection facilities. Newall is currently a Tier I supplier to Caterpillar and Ashok Leyland. It also has a sister concern-Quality Engineering Company. Both the facilities manufacture HSS and carbide cutting tools, automobile components, precision engineering components and CNC turned and VMC machined components for its OEM clients. The company intends to expand its product portfolio by introducing engine components for earth moving equipment to its existing customers. The company has recorded a turnover of `ﬁve crore last year and is aiming to touch the target of ten crore by 2012-13.

Akmal Rahman B Chennai

excel International is targeting a turnover of around `1,000 crore by 2015 on a consolidated basis. The company is planning to invest around `100 crore to add two more manufacturing lines to increase its foundry capacity at its existing plant in Coimbatore. The investment will be made with the help of US-based Clear Water, a private equity investor. Managing Director, Texcel International, Kumar Narayanan revealed, “Most of the automotive foundry plants are facing capacity constraints because of issues regarding labour and pollution control, which has created short-

ages in foundry capacity in India. We are looking at foundry expansion because of huge demand”. The company has planned to expand its units by installing an automated high pressure moulding line to meet the increasing demand. Currently, it procures 400 tonnes of steel every month and is aiming to increase it by 2,000 tones with the new expansion. Texcel will also invest around `60 crore for setting up a manufacturing facility in Bhuj, Gujarat to cater the needs of the existing customers. This new plant will be dedicated to AMW, Ford and Tata Motors for supplying sheet metal components. The company is already supplying sheet metal parts like chassis parts, cab parts, engine parts to AMW, suspension

Kumar Narayanan, MD, Texcel International

parts to SAF Holland and chassis parts to TAFE from its existing plants in Chennai. Recently, it bagged an order from Daimler to supply the same components. “I believe that getting private equity investments with the right cost is the key to growth, I would say that private equity is the best vehicle to trigger that growth. If there is a trade off between equity versus capital at low cost. I will go for capital at low cost,” said Kumar. The company has eight plants across the country, which caters 70 percent of its business in the automotive industry and 30 percent in engineering and plant constructions segment. In the future, the company wants to migrate its business from component supplier to module supplier, for which it is looking out for a joint venture with German companies. The company, which claims to have a market share of 70 percent in the material handling segment is supplying expandable steel racks, returnable steel racks and a variety of pallets to TVS logistics, NYK logistics and Procom Logistics to name few, from its Chennai plant. It is also planning to setup a manufacturing unit for material handling division in Jamshedpur and Pune as a part of its expansion plan. According to him, the strategy behind the expansion plan is to meet the demands of the industry and to create facilities near its customer base to address the next generation concept for logistics requirement of automotive industry. The company has created dedicated manufacturing lines for its customers like Ford, Hyundai and Daimler. Its consolidated sales turnover for the last ﬁ scal stood at `300 crore. Texcel is looking at growing its business from its design, manufacture and support capabilities for cast, machined and sheet metal components. It is also looking out for new acquisitions.

16 - 31 October 2011

SOUTH INDIA SPECIAL

Auto Monitor

Vibromech to develop anti-vibration device Akmal Rahman B Chennai

ibromech Engineers and Services, one of the leading manufacturers of anti-vibration products in the automotive industry, is developing an active anti-vibration system, which it claims, will cancel the engine vibrations in vehicles. However, this product will be supplied only for the premium segment vehicles, which require high levels of engine reﬁ nement. Elaborating on the way the active anti-vibration system will work, Joint Managing Director, Vibromech Engineers and Services, Mahesh Ramamurthy said, “The anti-vibration components that are currently made are passive devices like dampers, which act indirectly reducing

Mahesh Ramamurthy, Joint MD, Vibromech Engineers and Services

vibrations in the crankshaft. They either absorb the energy or dissipate the energy in some other form, thereby reducing the vibration level to a great extent. However, the active anti-vibration system will apply energy in the opposite direction to neutralise and cancel the vibration.” According to Ramamurthy, the system will require some kind of control unit, which will control the device and depending on the situation, apply varying levels of vibrations. Apart from active anti-vibration technology, it has introduced the dampolator, the latest generation of crankshaft vibration reduction device. The dampolator has replaced components like the damper and isolator inside the engine to control both— the high order torsional mode and low order rigid body mode. “We have developed, patterned and trade marked dampolators in India, which addresses more issues than the conventional dampers,” Mahesh said. Typically, the crankshaft damper helps reduce the crankshaft vibrations, while isolators solve problems like the rigid body mode that occurs in low speed mode when the engine is idling. However, dampolators combine the functionality of both the isolator and the harmonic balancer. The company has already introduced it in the international market, but plans to supply the products in India only when the market has demand for the same. He also pointed out that the dampolator is a comprehensive solution to all torsional modes of vibration of the crankshaft, as this product combines the functionality of two different and independent functions. In addition, Vibromech has made further changes in manufacturing this product by replacing iron casting into sheet metal to reduce the weight. Ramamurthy informed that the company has made technological advancement in its manufacturing capability and process. It has introduced ﬂow-forming technol-

ogy for manufacturing pulleys, which provides high material recovery and huge weight saving advantages. “Normally casting technology is used for manufacturing the pulley with groves on it, which is done through the machining process. Nevertheless in ﬂow forming technology, using the sheet metal doesn’t require the machining process, as sheet metal is made to ﬂow into shape, which is called cold plastic deformation. It results in considerable weight reduction as the input weight loss is less than two percent compared to 20 percent in machining process,” he added. Recently, the company has setup a consolidated base in Chennai at an investment of `seven crore. The plant has integrated facilities like capacity, assembly, product development,

An array of components by Vibromech Engineers and Services

testing, and validation. The company has an approved R&D facility; it has also carried out some low cost automation in assembly ﬁ xturing, testing and validation equipment. “We have developed most of the technologies in Vibromech in-house, and to manage the entire unit, we came up with a consolidation plan. The functional layout was moved and realigned as a product layout to provide dedicated

manufacturing line for our customers,” he said. The company is supplying rubber and viscous dampers to Neptune engine of Ashok Leyland and mHawk engine of Mahindra. It is also exporting its products to General Motors and Caterpillar across America. Vibromech has a capacity of 45,000 dampers a month and procures 250 tonne of cast iron, 150 tonne of steel and one tonne

of rubber. It has recorded a turnover of `20 crore and expecting `70 crore by the end 2015 with its new products and order placements. The company is in talks with OEMs like VW, Skoda, Audi, Renault, Nissan, and Volvo to supply anti-vibration products. “As most of the OEMs are localising engine components in India, we feel that we have many opportunities to supply our products to these companies” he said.

Auto Monitor

16 - 31 October 2011

CORPORATE

Toyota to export Etios & Liva to South Africa Shell Lubricants announces new product offers Our Bureau New Delhi

oyota Kirloskar Motor recently announced the plans to export Etios and Etios Liva to South Africa by March 2012. The export model of Etios will be built on the same platform as Etios and Etios Liva, manufactured and sold in India. However, there would be a few changes in technical speciﬁcations/features, pertaining to the different needs of each market. The export model will be customised to suit the local requirements. The company will export only the petrol variants of the Etios. Commenting on the beginning of TKM’s export operations, Managing Director, TKM, Hiroshi Nakagawa said, “With the start of exports, TKM has entered a new chapter of business in India. This milestone is a deﬁ ning moment for all of us at

TKM. Exporting the Etios to South Africa would also mean showcasing the advanced technology and superior quality features that have been developed by Toyota for Etios. We are convinced that the Etios will be successful in delivering Toyota’s promise of quality in South Africa too.” The Etios is currently manufactured in Bidadi industrial area on the outskirts of

Bangalore. The export model will also be manufactured in the same plant. The current production capacity in the second plant is 80,000 units which will be ramped up to 1,20,000 units by 2012 and 2,10,000 units by 2013. Etiois Liva The engine and transmission for the Etios sold in India and export markets will be ma nu fact u red at Toyota K i r lo s k a r A ut o Pa r ts. Approximately 100,000 engines will be produced per year starting in the third quarter of 2012 and approx imately 240,000 transmissions per year starting in early 2013. The engines and transmissions are currently being imported from Japan.

Our Bureau Mumbai

hell lubricants, one of the global market leaders in finished lubricants has announced several product offers for truck and tractor owners. The offer is applicable on Shell Rimula Heavy duty diesel engine oil. The Shell’s range, according to the company, ﬁghts against acids, deposits and wear and provides engine durability to truck owners and tractor owners. The company has launched the promotion ‘Free 4l’, where the customers get 20 litres pack of Shell Rimula R1 multi at the price of 16 litres pack alongwith a range of other offers. The promotion is designed to build awareness among the key decision makers- in this case, the

truck and tractor owners, about the beneﬁts they are entitled to receive. Under Shell Rimula R1 Multi promotion, vehicle owners can receive four litres of additional lubricant at the same price and can depend on Shell Rimula R1 Multi’s well-proven performance additives to ﬁght engine corrosion and wear. The offer enables the costumers to stay on budget. The Rimula R2 Extra additives contain dispersants that provide protection against dirt and keep engines clean and running smoothly. The company claims that the product range offers consistent performance. Shell Rimula R1 Multi and Shell Rimula R2 extra are marketed through ‘Shell Lubricants’ strong distributor network in India.

Bajaj Auto launches ‘refreshed’ Pulsar Our Bureau Mumbai

ajaj Auto launched the new Pulsar: the Pulsar 150, Pulsar 180 and Pulsar 220 in order to replace the existing range. The bikes will be available in two colour schemes: red with black and blue with black, coupled with black handle bar and rear grab rails. “The

decals have added a new dimension to the look of the Pulsar, making it more aggressive and sporty. The decals have been launched as a festival offering to Pulsar lovers” said GM, Marketing & Sales, Bajaj Auto, R Chandrasekar.

Cognex bags major order Our Bureau Mumbai

og ne x C or p or at ion bagged an order from Kiva Systems for 140 of its new DataMan 500 barcode readers. Kiva, a leading provider of warehouse automation systems, will integrate these image-based barcode readers into a sophisticated, automated order fulﬁ lment system being designed for a large medical device manufacturer. The DataMan 500 systems will read barcodes on product packaging to ensure that the right items are shipped to the right destination, and to collect data for instant inventory management. The DataMan 500 is an advanced barcode reader that combines the high performance of image-based readers with the ease-of-use and low cost of laser scanners. And, unlike traditional laser-based systems, the DataMan 500 can also read the newer 2D codes, such as Data Matrix and QR codes, and can simultaneously read multiple codes that are in the same image.

16 - 31 October 2011

TECHNOLOGY

Auto Monitor

element14 launches six microsites targeting key technology segments

lement14, one of the fi rst electronic component distributors that fuses commerce and community, launched six new microsites that focus on the key segments of lighting, alternative energy, wireless, sensing, transportation, and instrumentation and measurement recently. Customers will now be able to browse through an extensive range of products and information resources from leading manufacturers that are specific to these segments. The microsites also provide instant and easy access to design resources and the latest developments and methodologies. The Lighting microsite focuses on LED lighting, a maturing technology that is recognised for its energy efficiency and has the potential to dominate the market in the near future. element14 has more than 10,000 lighting components in stock, ensuring engineers can find an optimal solution from different categories. This includes high power LEDs, power supplies, LED drivers as well as thermal management, optical and interconnect solutions from key suppliers such as CREE, National Semiconductor and NXP. As global energy consumption continues to rise, more countries and corporations are exploring and investing in sustainable energy options. The company’s Alternative Energy microsite aims to become a comprehensive resource for engineers in this emerging sector. The inventory includes over 3,000 energy efficient products from leading brands. The microsite allows engineers to bring lower total cost of ownership and ease of implementation to areas such as generation, transformation, storage, conversion and distribution phases of any design. Wireless technology is one of the most rapidly evolving fields, especially with the increasing popularity of mobile platforms. element14 offers over 5,000 wireless products that are essential in the design, testing and prototyping phase of the product development life cycle. These components, from foremost suppliers such as Freescale, Microchip and Texas Instruments, support popular functions such as WiFi, ZigBee, Bluetooth and 3G and can be used in a variety of applications ranging from Automotive Telematics to Wireless Data Acquisition. The Sensing microsite focuses on a sector that is experiencing significant growth with the advent of innovative micro-machining, device miniaturisation, fabrication and packaging technologies. With over 4000 industrial, PCB level and MEMSbased sensors in stock, it offers a comprehensive portfolio of sensing technologies from analogue devices, Honeywell and STMicroelectronics to meet the demands for a diverse range of applications such as automobiles, computers, medical devices and more significantly, infotainment products such as media players, tablet PCs, and smart phones. The Transportation microsite provides solutions on leading electronic power steering, car access system, car HVAC system

and onboard entertainment systems to engineers. The platform allows engineers to fi nd a broad range of automotive grade products from key market players. The integration of information, product and design resources on a single platform enables engineers to access new technologies and electronic components to make vehicles safer and efficient. The Instrumentation and Measurement microsite gives engineers access to over 600 advanced precision Test & Measurement solutions from leading specialists in the market to help engineers verify, diagnose, fi x and fi ne-tune their complex hardware designs.

“With the rapid evolution of technology, one of the biggest challenges for engineers is that they continuously face a steep learning curve. By consolidating the latest products with relevant information resources on the same platform, we aim to provide a one-stop location that meets all their needs,” says Wi l lia m Chong, Reg iona l Director of Supplier Marketing, element14, Asia Paciﬁc. “By combining our expertise and inventory, we aim to empower electronic design engineers with the best tools to maximise the products’ utilities and facilitate innovation throughout the product lifecycle.”

A screen grab of the microsite

Auto Monitor

GLOBAL WATCH TECHNOLOGY

16 - 31 October 2011

Ford to put Escape hybrid on hold, offer EcoBoost

ord is likely to do away with its V6 engine and hybrid powertrain in the redesigned 2013 Escape crossover, due in early 2012. The next generation Escape will have three engine options, all of them fourcylinder ones. Ford will move the Escape Hybrid’s powertrain to the C-Max Hybrid, which it will launch next year. The redesigned Escape will be based on the Vertrek concept shown at the 2011 Detroit auto show. Ford will show a production version of the 2013 Escape this fall at the Los Angeles Auto Show. It will offer a 2.5-litre fourcylinder naturally aspirated engine as the base engine in the 2013 Escape. Ford will also offer a 1.6 and a two-litre turbocharged d i rect-i nject ion EcoBoost engine in the next generation Escape. The two-litre engine

is offered in Ford’s Edge and Explorer crossovers. The 1.6-litre EcoBoost makes its North American debut in the

Escape. In Europe, it is sold in the C-Max compact minivan and Focus compact car. Ford expects the Escape with the 1.6-litre

EcoBoost engine to generate more than 175 HP and 170 pounds-feet of torque. It is expected to deliver higher highway fuel economy than the current EscapeHybrid,which is rated at 31 mpg highway, said Group Vice PresidentGloba l Product Development, Ford, Derrick Kuzak. twolitre EcoBoost will replace the threelitre V-6 in the Escape. The t wo-litre engine is expected to earn better fuel economy than competitors’ V-6 engines and deliver performance competitive to those larger six-cylinder

powertrains, Kuzak said. Ford is moving its hybrid powertrain to the C-Max Hybrid and discontinuing the Escape Hybrid because the C-Max Hybrid’s body shape is more conducive to a hybrid powertrain than the current Escape’s design, said Ford spokesman, Richard Truett. The five-passenger C-Max Hybrid will contain the first hybrid transmission and lithium ion battery system Ford is building in-house. The 2013 Escape moves from a unibody platform to Ford’s global compact car platform. The current Escape is assembled at Ford’s plant in Kansas City but Ford will build the 2013 Escape in its plant in Louisville. Ford has been retooling the plant to build vehicles on the compact car platform. Under a tentative agreement reached with the UAW recently, Ford’s Louisville plant will get an unnamed vehicle in addition to 2013 Escape. Ford will assemble the Transit commercial van from Europe at the Kansas City plant. It will build the C-Max Hybrid alongside the C-Max Energi plug-in hybrid at its Michigan Assembly plant in Wayne, Michigan. Ford now builds the Focus compact there.

Ranger Pickups The new Ranger will soon be shipped to 148 markets from South Africa, where Ford is increasing its output of the pickup truck to 110,000 per year. Currently, the company sells about 275,000 Rangers globally. The new Ranger will hit showrooms in South Africa by the end of November. Three months ago, Ford began production of a diesel engine that will be put into the new Ranger, part of a $500 million investment in an engine plant and assembly plant in South Africa. Of the 110,000 Rangers to be built in South Africa, only a quarter of them will remain in the country and the rest will be exported, mainly to Europe and other countries in Africa. It will sell the Ranger in 180 countries. Rangers will also be made at Ford plants in Thailand and Argentina. The Ranger will be near-global, because it won’t be sold in North America, where the ﬁ rst Ranger was developed in the early 1980s. It plans to stop selling the Ranger in the US market early next year after halting its production in December. Compa ny executives have said the Ranger became less important in the US market as the company produced more fuel-efficient turbo-charged “EcoBoost” engines for its larger F-Series pickup trucks. This year, the Ranger is the No 2 compact pickup in the US market, behind the Tacoma from Toyota. Staying in the US market once the Ranger goes away are Nissan’s Frontier, the third-biggest seller, and GM’s Chevrolet Colorado, in fourth place. Compact pickup trucks made up four percent of total US industry sales in September, compared with a 26 percent share for full-sized pickups, according to Autodata Corp. However, in Thailand, where the Ranger began production last week, small trucks like Ranger account for more than 40 percent of the market.

16 - 31 October 2011

GLOBAL WATCH

Auto Monitor

GM enters car-sharing market with RelayRides G M, making its fi rst foray into car sharing market, is teaming up with RelayRides, a San Franciscobased car-sharing service, to help GM owners rent their idle vehicles. RelayRides, formed in June 2010, operates in San Francisco and Boston. It allows vehicle owners to rent their idle vehicles using an online marketplace. The owner controls the rates and availability of the vehicle. The company provides online access and a $one million insurance policy to make the transaction convenient and safe for borrowers. Starting early next year, GM vehicle owners who are OnStar subscribers will be able to give borrowers access to their vehicles using RelayRides’ planned smartphone application. RelayRides users now have to install a remote-unlock device in their vehicles to give borrowers access to the vehicles. GM’s venture-capital unit, GM Ventures, is in advanced discussions about acquiring an equity stake in RelayRides, the automaker said. “We’re using technology to make both our older and newest models car-share ready and available for those owners who choose to participate in car sharing,” Vice Chairman, GM, Stephen Girsky said in a statement. “Our goal is to fi nd ways to broaden our customer reach, reduce traffic congestion in America’s largest cities and address urban mobility concerns.” In North America, car sharing has grown from 400,000 users in 2009 to 640,000 in July, according to Innovative Mobility Research. It is forecasted to grow to an estimated 4.4 million users by 2016, studies show. In August, Ford announced plans to provide Zipcar with 1,000 cars for use in Zipcar’s college car-sharing fleets. Ford expanded the Zipcar alliance with a program that provides student groups with $300,000 in grants and Zipcar driving credits. Toyota also provides Zipcar with a small number of Toyota Prius plug-in hybrid cars in San Francisco, Boston and Portland. Daimler operates a car-sharing service called Car2go that provides its tiny Smart car to borrowers in Austin, Texas, Hamburg and Ulm, Germany and Vancouver, British Columbia.

NHTSA investigation Federal regulators ended an investigation into more than 850,000 GM SUVs for faulty fuel gauges after the Detroit automaker agreed to help pay to install new fuel level sensors. The National Highway Trafﬁc Safety Administration (NHTSA) said in a notice posted on its website that it had closed its preliminary investigation into 867,337 2005-07 GM Chevrolet Trailblazer, GMC Envoy, Buick Rainier and Saab 9-7 SUVs. As many as one third of the vehicles under investigation—or nearly 300,000 SUVs—may have the problem. NHTSA had opened its investigation in April and raised concerns because a vehicle suddenly running out of gas could cause an engine stall and crash. However, less than 10 percent of the complaints received by NHTSA reported an engine stall—and there were no reports of crashes. GM said the problem is contacts on the fuel level sensor may

Buick Rainier

wear prematurely. GM told owners it will pay for 50 percent of the repair costs for vehicles with up to 120,000 miles—and the customers will be responsible for paying the remaining cost. In a letter to owners, GM said dealer labour rates vary widely. GM believes this is the ﬁ rst time the company has instituted

a cost-sharing plan with customers to address an issue that was under investigation. If GM had picked up all the costs, and all of the consumers with the problems had gotten the vehicles ﬁ xed, it could have cost the company around $100 million, according to a Detroit News estimate. Had GM recalled the vehicles, the

Chevrolet Trailblazer

Detroit automaker would have been required to pay all of the costs of repairs. Nevertheless, NHTSA has agreed to the proposed solution. NHTSA had received 668 complaints—including 58 for engine stalls—while GM had reported more than 5,470 reports of fuel gauge failures. Most of the com-

plaints were empty fuel tank readings after ﬁ lling the tank. Drivers with faulty gauges will see warning light illuminated on the dash, and in some cases, a warning chime - but as the fuel level drops the warnings may turn off and the tank may show a reading of a “slightly higher level of fuel than what is in the tank.”

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16 - 31 October 2011

GLOBAL WATCH

Auto Monitor

Nissan, BMW choose Brazil for new facilities committing major investments N

issan will invest $1.5 billion to build a car plant in Brazil as part of its goal to be the leading Asian brand in Latin America’s biggest auto market. Nissan will construct the factory in Resende, in the state of Rio de Janeiro, with initial capacity to produce 200,000 vehicles a year. The ﬁ rst vehicles are expected to roll off the line in 2014, the company said. The announcement closely follows Nissan’s alliance partner, Renault’s announcement to expand its Curitiba manufacturing complex in Brazil. Renault will invest around $260 million to increase its production capacity by 100,000 vehicles to 380,000 by 2013. GM is also working on a new investment plan for Brazil, which it will introduce in the ‘coming months,’ said Head of GM’s Latin American operations, Jaime Ardila, according to Bloomberg News. Brazil—one of the fast-growing BRICs, the acronym for Brazil, Russia, India and China—is the world’s fourth-largest auto market with 3.5 million vehicle sales in 2010.

Growing Presence “Just as Nissan has demonstrated in China, Russia and India, we are investing in the regions with the most potential for growth,” said Chairman and Chief Executive Officer, Nissan and Renault, Ca rlos Ghosn. “Bra z i l has c le a r l y emer ge d as the engine of Latin American growth.” Nissan announced in June that it aimed to capture at least five percent of the Brazilian market by 2016. It currently has a 1.7 percent share of the market, while Renault has just over five percent and is targeting an eight percent share by 2016. Nissan already can produce 59,000 vehicles in Brazil at a Renault plant, which will continue to produce the Nissan Livina, Grand Livina, X-Gear and Frontier. The new Nissan factory will employ as many as 2,000 people directly. Another 2,000 jobs will be created at parts suppliers and in the wider community. “It is a distinct pleasure to officially welcome Nissan to the state of Rio de Janeiro,” said Sérgio Cabral, the state’s governor. As part of its growth plan, Nissan will launch 10 new models in Brazil by 2016, including the new Versa sedan next month. Over the same period, it plans to increase the number of dealer outlets to more than 239 from 117.

BMW Vision BMW will pick Sao Paolo, Brazil’s biggest city, as the site for its ﬁ rst car assembly plant in Latin America, German business daily Handelsblatt reported. Citing company sources, the newspaper said the supervisory board was set to approve in December plans to assemble cars in Sao Paulo “because all the important parts suppliers are there”. A BMW spokesman denied it BMW had already made its choice, saying: “There is still no decision.” BMW said in March that it would likely this year approve plans to expand its production

footprint to Latin America, where Brazil is already an important market for volume carmakers like Fiat, GM and Volkswagen. For BMW, it remains a ﬂedgling market with expected sales of 10,000 vehicles this year, almost negligible for a company forecasting volumes of over 1.6 million globally. The company is keen to expand quickly in emerging markets. At BMW’s annual general meeting in May, Chief Executive, Norbert Reithofer told shareholders Brazil, Russia, India, Korea and Turkey—or BRIKT— was a group with dynamic growth and BMW was considering setting up another site in BRIKT on top of the assembly plant in Brazil.

Nissan announced in June that it aimed to capture at least five percent of the Brazilian market by 2016. It currently has a 1.7 percent share of the market, while Renault has just over five percent and is targeting an eight percent share by 2016

Auto Monitor

GLOBAL WATCH TECHNOLOGY

16 - 31 October 2011

Visteon showcases ‘C-Beyond’ at SAE Brazil 2011 V

isteon Corporation displayed its C-Beyond, a technology demonstration vehicle equipped with more than 40 information, entertainment, connectivity, climate control, interior and lighting technologies in Brazil. The car showcases advanced technologies including those related to enhancing connectivity, sustainability and the user experience. It will showcase C-Beyond at its exhibit during SAE Brazil 2011, the 20th International Mobility Technology Congress and Exposition that was held in Sao Paulo from 4-6 October, 2011. “These concepts allow vehicle manufacturers to experience firsthand some of the advanced technologies that the supplier has developed over a few years that could be featured on the next generation of vehicles,”

said Director, Visteon Brazil and Leader, Interiors group, South America, Alfeu Doria. “C-Beyond was developed to ref lect consumers’ real needs and how they will want to interact with the automobile in the future,” he added. Innovations showcased in the C-Beyond arose from research conducted around the world with consumers and vehicle manufacturers. The C-Beyond features touch panels, a remote input device for the human machine interface, intelligent lighting and advanced climate control concepts such as vertical air-f low among other technologies. “The technologies demonstrated in the vehicle were developed to offer the user an easy, friendly and ergonomic interaction with all of the

car’s resources, providing connectivity and comfort without diverting the driver’s attention,” said Director, Visteon’s Electronics Group in South America, Roberto Picchi. In its research, the company identified that automobiles of the future should be equipped with materials that contribute to the planet’s sustainability. In the C-Beyond, some components were produced using natural fibres and recyclable materials, designed to reduce vehicle weight, improve fuel economy and reduce emissions of greenhouse gases. “Consumers are concerned about preser ving the env ironment and conserving natural resources. We pooled our efforts to turn those considerations into sustainable technologies,” explained Director, Visteon Climate

Group in Sout h A merica, Andreas Jancso. The ma nu fact urer a lso identified in its research that consumers want to stay connected with the outside world while in their vehicles. The company developed several features to facilitate that desire. For instance, in the C-Beyond, the users can experience a fully connected world through the f lex ible in-vehicle infotainment system. Multiple uses have been created for the driver while driving or parked, as well as for passengers such as children, young adults or business associates who can download songs, navigate social media or manage e-mail. The C-Beyond also demonstrates the possibility of using customisable commands and features. In the back seats, for

instance, children may watch digital video or even browse the internet while one passenger listens to music, and another replies to e-mails. The technologies demonstrated in the C-Beyond are at different stages of development, ranging from concepts to commercialisation-ready. Adva nced con nect iv it y : —C-Beyond evolves traditional cockpit electronics from a driver information function to “driver coaching,” and uses connectivity features for remote or on-board conf ig uration, advanced navigation with prejourney planning and real-time traffic updates. Also featured is it’s infotainment and internet platform, a scalable solution with audio, consumer device connectivity, media manager, navigation, rear seat infotainment and voice control. Personal Comfort: The vertical air f low concept creates four discrete, vertical air f low zones. The roof-mounted registers direct air f low from ceilingto-f loor within the occupants’ personal zone for fully customised comfort and temperature control, compared with traditional front-to-rear cabin air f low. Its adaptive climate controls automatically adjust to the number and location of occupants, and can save energy by deactivating in unoccupied zones. Vertical air f low eliminates traditional instrument panel registers, thus freeing significant packaging space in the cockpit area to allow for additional styling options. This concept is suitable for both electric and conventional vehicles and does not require architectural changes to the heating, ventilation and air conditioning (HVAC) module. Ambience: C-Beyond exhibits a high level of perceived quality with simple designs and a visibly lighter instrument panel architecture. By redistributing traditional interior elements like dedicated controls, storage, comfort and air distribution features, these concepts allow passengers to create their own personal zones. Exteriors/Lighting: It is equipped with its proprietary high-intensity headlamp LED projector module that provides all main beam patterns. The company’s camera-driven, adaptive high-beam system switches automatically between high and low beams according to the ﬂow of passing and oncoming trafﬁc. The automotive supplier designs, engineers and manufactures innovative climate, electronic, interior and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Michigan (US); Shanghai, China; and Chelmsford, UK; the company has facilities in 26 countries and employs approximately 26,700 people. It bagged this year’s A lfred P Sloan Award for Bu si ne s s E xc el lenc e in Workplace Flexibility for companies in Michigan. It ranks in the top 20 percent of employers nationally for policies and practices that incorporate workplace f lexibility as part of an effective strateg y to achieve business objectives and help employees balance on-and-offthe-job responsibilities.

Auto Monitor

ADVERTISERS’ LIST CORPORATE

16 - 31 October 2011

Pg No. ........Advertiser ...................................................................................Tel ..................................................E-mail ...................................................................... Website 42...............AB Diachem Systems Pvt Ltd ......................................................+91-11-25155456 ...........................info@anandbros.com .............................................. www.anandbros.com 1 ................ACE Manufacturing Systems Ltd .................................................+91-80-28360508 ..........................ams@bgl.vsnl.net.in ................................................ www.amsindia.net 54 ..............ADEA Awards ..............................................................................+91-22-30034650 ..........................prachi.mutha@infomedia18.in ............................... www.adea.in 56 ..............Aiema Technology Centre ...........................................................+91-44-26258731 ..........................info@acmee.in ........................................................ www.acmee.in 11 ...............Anand Automotive Ltd................................................................+91-11-26564542 ...........................arpita.bhatia@anandgroupindia.com..................... www.anandgroupindia.com 10...............Ashfa Corporation ......................................................................+91-22-25107461 ...........................ashfa91@hotmail.com ............................................ www.ashfacorp.com 4 ................Assab Sripad Steels Ltd ...............................................................+91-44 24951980...........................chennai@assabsripad.com...................................... www.assabsripad.com 21...............Bharat Petroleum Corporation Ltd 49...............Borg Warner Beru Systems .........................................................+91-20-24226300 .........................sales@beruindia.com .............................................. www.beru.com 30 ..............Brassoforge.................................................................................‘91-129-2472701.............................dheeraj@brassoforge.com ...................................... www.brassoforge.com 45...............Camozzi India Pvt Ltd ................................................................+91-120-4055252 ..........................info@camozzi-india.com ........................................ www.camozzi.com 58 .............Confederation Of Indian Industry ..............................................+91-124-4013871........................... rachna.jindal@cii.in .............................................. www.autoexpo.in 33...............Delphi ................................................................................................................................................................................................................................. http://delphi.com/ 17...............Delux Bearings Limited ..............................................................+91-22-24926660...........................info@deluxbearings.com ........................................ www.deluxbearings.com 30 ..............Dr. Dinesh & Ramesh Engr. Pvt Ltd ............................................+91-79-25893704 ..........................hpatel@drecasting.com .......................................... www.drecasting.com 65...............Durr Ecoclean .............................................................................+91-20-30585001 ..........................info.india@ecoclean.durr.com ................................ www.durr-ecoclean.com 35...............Ecocat India Pvt Ltd....................................................................+91-129-4266500 ..........................alok@ecocatindia.com ............................................ www.ecocat.com 25 ..............Elantas Beck India Ltd ................................................................+91-20-30210600 ..........................sanjay.patil@altana.com ......................................... www.elantas.com 67 ..............Electromech Material Handling Systems (I) Pvt Ltd ....................+91-20-66542222 ..........................getcranes@emech.in ............................................... www.emech.in 46,47 ..........Electronica Hitech Machines Pvt Ltd ..........................................+91-20-30435400 ..........................marketing@electronicahitech.com ......................... www.electronicahitech.com 52 ..............Engineering Expo .......................................................................+91-9819552270............................engexpo@infomedia18.in ....................................... www.engg-expo.com 29 ..............Ferromatik Milacron India Pvt Ltd .............................................+91-79-25890081 ..........................salesfmi@milacron.com .......................................... www.milacronindia.com 24...............G W Precision Tools India Pvt Ltd ...............................................+91-80-40431252 ..........................info@gwindia.in ...................................................... www.gwindia.in 31...............Godrej & Boyce Mfg. Co. Ltd .......................................................+91-22-67962751 ..........................trmktg@godrej.com ................................................ www.godrejtoolings.com BIC .............Guhring India Private Limited ....................................................+91-80-40322500..........................info@guhring.in ..................................................... www.guhring.in 48 ..............Indian Machine Tools Manufacturers’ Association .....................+91-80-66246600..........................imtma@imtma.in .................................................... www.imtma.in 60 ..............Indian Machine Tools Manufacturers’ Association .....................+91-80-66246514 ..........................anuj@imtma.in ....................................................... www.imtma.in 18...............ISMT Limited...............................................................................+91-20-66024901 ..........................sachin.joshi@ismt.co.in........................................... www.ismt.com 51...............Jyoti CNC Automation Pvt. Ltd. ...................................................+91-2827-287081 ..........................info@jyoti.co.in ....................................................... www.jyoti.co.in FIC..............Kamal Envirotech Pvt Ltd ...........................................................+91-9650600413 ...........................enquiry@kamalcedsolution.com ............................ www.kamalenvirotechgroup.com 22 ..............Komax Automation India Pvt. Ltd ..............................................+91-124-4599100...........................info.dei@komaxgroup.com ..................................... www.komax.com 59...............Komet Precision Tool India Pvt Ltd ............................................+91-80-280780000 ........................info.in@kometgroup.com 27 ..............Larsen & Toubro Limited ............................................................+91-9967800456 ...........................SM.Haridas@larsentoubro.com ............................... www.larsentoubro.com 3 ................M And M Auto Indus Ltd .............................................................+91-124-4763200...........................corporate@mandmsprings.com.............................. www.mandmsprings.com 61...............MAG Industrial Automation Systems ..........................................+91-80-40677000 .........................sales-India@mag-ias.in ........................................... www.mag-ias.in 36, 37 .........Meiban Engineering Technologies Pvt Ltd .................................+91-80-26860600 ..........................sales-turning@meibanengg.com ............................ www.meibanengg.com BC ..............Micromatic Machine Tools..........................................................+91-80-41492285 ..........................mmtblr@acemicromatic.com ................................. www.acemicromatic.com 10...............Mipox..........................................................................................+91-80-65830898..........................rag-rao@mipox.co.jp............................................... www.mipoxindia.com 57 ..............MMC Hardmetal India Pvt Ltd ....................................................+91-80-23516083 ..........................mmcindia@mmc.co.jp ............................................ www.mitsubishicarbide.com 38 ..............Napino Auto & Electronics Ltd ...................................................+91-124-2290050 ..........................info@napino.com .................................................... www.napino.com 8 ................Ningbo Elite Mold Manufacture Co.,Ltd .....................................+86-574-8614-8158 .......................marketdept@diemaker.com.cn ............................... www.diemaker.com.cn 13...............Oetiker India Pvt Ltd ..................................................................+91-2192-250107 ...........................akeswani@oetiker.com ........................................... www.oetiker.com 55...............Omron Automation Pvt. Ltd. ......................................................+91-80-40726400..........................in_enquiry@ap.omron.com .................................... www.omron-ap.com 53 ..............Padmini VNA Mechatronics Pvt. Ltd...........................................+91-124-3207398 ...........................sales@padminiengg.com ........................................ www.padminivna.com 20 ..............Patvin Engineering (P) Ltd ..........................................................+91-22-27780310...........................patvin@patvin.co.in ................................................ www.patvin.co.in 12...............Precision Components Corporation ...........................................+91-40-65229339 ..........................info@dynatherm.in ................................................. www.dynatherm.in 6 ................Rane Holdings Limited ...............................................................+91-44-28112472 ..........................v.usha@rane.co.in ................................................... www.rane.co.in 16...............Rohan Standox Autolack.............................................................+91-22-65803331 ..........................sales@spraytec.net ................................................. www.spraytec.net 7 ................Safexpress Private Limited .........................................................+1800-113-113 ...............................suyash.srivastava@safexpress.com ......................... www.safexpress.com 39...............Schenker India Pvt. Ltd ..............................................................+91-124-4645000 ..........................nitin.aswal@dbschenker.com ................................. www.dbschenker.com/in 32...............Shimadzu Analytical (I) Pvt. Ltd..................................................+91-22-29204741 ...........................info@shimadzu.in ................................................... www.shimadzu.in 9 ................Shriram Transport Finance Company Ltd ...................................+91-22-40959595 ........................................................................................................... www.stfc.in 28 ..............Sigma Freudenberg Nok Pvt Ltd .................................................+91-11-42411600 ...........................sigma@sigmacorporation.com ............................... www.sigmacorpoaration.com 34 ..............Sigma Vibracoustic India Pvt Ltd................................................+91-11-42411600 ...........................sigma@sigmacorporation.com ............................... www.sigmacorpoaration.com 8 ................Sreelakshmi Traders ...................................................................+91-44-24343343 ..........................sreelakshmitraders@gmail.com.............................. www.sreelakshmitraders.com 63 ..............Starragheckert Machine Tools Pvt. Ltd .......................................+91-80-42770600..........................sales.in@starragheckert.com .................................. www.starragheckert.com 19...............Tata Motors Ltd...........................................................................+91-22-66561866 ..........................charu.gulati@tatamotors.com ................................ www.tatamotors.com 44 ..............Techno Spring Industries ............................................................+91-129-4024488 ..........................vikastantia@technospringindia.com....................... www.technospringindia.com 15...............The Indian Electric Co.................................................................+91-20-24475845 ..........................iecmktg@indianelectric.com .................................. www.indianelectric.com 41...............Titan Industries Limited .............................................................+91-4344-664846 .........................senthilm@titan.co.in ............................................... www.titanautomation.in 43...............Varroc Engineering Pvt Ltd .........................................................+91-240-2556227 ..........................varroc.info@varrocgroup.com ................................ www.varrocgroup.com 26...............Wagner .......................................................................................+91-124-4121626 ...........................imtiaz.ahmed@wagner-group.com......................... www.wagner-group.com 40 ..............Windsor Machines Limited .........................................................+91-79-25841591...........................sales.imm@windsormachines.com ......................... www.windsormachines.com 23 ..............Yamazaki Mazak India Pvt Ltd ...................................................+91-2137-668800 ..........................sudhir_patankar@mazakindia.com ........................ www.mazak.com Q Our consistent advertisers

16 - 31 October 2011

Auto Monitor

GLOBAL WATCH

International auto round-up Brazil’s Iochpe-Maxion to acquire Hayes Lemmerz Hayes Lemmerz International will be acquired by Brazilian wheel and chassis supplier Iochpe-Maxion SA for $725 million. Iochpe-Maxion will pay $702 million for privately held Hayes Lemmerz and assume $23 million in debt. The Brazilian company has “a strategic, long-term interest in the global automotive and commercial-vehicle industries,” Chief Executive Officer, IochpeMaxion, Dan Ioschpe said. “This transaction will position us well to partner with customers to offer technologically advanced products and outstanding services to meet their needs in every major geographic region for years to come.” Hayes Lemmerz is based in suburban Detroit, employs 6,100 and has 17 plants around the globe with a capacity to make 63.4 million wheels a year. The company generated global revenue of $1.5 billion in 2010, up from $1.3 billion in 2009, according to the Automotive News Data Centre. European customers accounted for 53 percent of the wheel maker’s 2010 sales, with North America customers representing 22 percent of sales. The company reported net income of $39.3 million on revenue of $890.5 million during the six months ended July 31, 2011. The deal is expected to close in the fi rst half of 2012. Late last year, reports began circulating that Hayes Lemmerz, the world’s largest wheelmaker, was in discussions with fi nancial advisers regarding strategic options, including a sale of the company. Hayes emerged from Chapter 11 bankruptcy in December 2009 after more than seven months under court protection. The company was able to cut debt by $720 million to $240 million and reduce health care and pension costs for retirees in the US to $75 million from more than $250 million. Brazil, South America’s largest economy, saw 7.5 percent growth in its gross domestic product in 2010, led by a growing manufacturing base. Iochpe-Maxion generated revenue of $1.2 billion in 2010 and net income of $89.9 million. In the second quarter of this year, Iochpe-Maxion is seeing continual growth, generating revenue of $380 million and net income of $28.9 million.

VW recalls 168,000 cars for fuel leaks Volkswagen of America is recalling 168,000 2009-2012 diesel vehicles over concerns fuel injector leaks could start an engine fi re. The German automaker said in a notice posted on the National Highway Traffic Safety Administration website that it is calling back its 20092012 Jetta, Jetta SportWagen, Golf and Audi A3 that have its 2 TDI diesel engine. The recall includes 161,144 VWs and 7,131 Audi vehicles. No fi res, crashes or injuries have been reported. VW said about 20 percent of vehicles recalled have fuel injection lines with potentially faulty material. The automaker said one supplier used a faulty part in assembling fuel injectors—and the failures only related to one of four injector lines. The company began investigating the

issue in March 2010 after a warranty return of a single report of fuel leaks. The company didn’t discover a cause, but as additional fuel leaks were reported, it notified its parent company in Germany, VW about the issue in February this year. In February, NHTSA upgraded an investigation into 2009-2010 diesel VW Jetta, Golf and Audi A3 models to an engineering analysis after it received 160 complaints and field reports alleging incidents of engine stall and/or loss of power that appear to be related to high pressure fuel pump failures. Approximately half of the reports indicate that the failure resulted in an engine stall incident, with many of these alleging stall incidents at highway speeds in traffic with no restart. There has been one minor crash alleged to have

CWK 400

resulted from failure in the vehicles. VW has said it believes the problem is gasoline contaminated diesel fuel—consumers using the wrong fuel.

Ford, UAW deal pledges $16K in bonuses, profit sharing payouts Hourly workers at Ford will receive a $6,000 signing bonus as part of a new four-year contract with the automaker that also pledges $4.8 billion in new investment in US plants at least $15,700 in bonuses and proﬁt sharing payouts. The agreement also secures more than 12,000 jobs, including 7,000 previously announced the following: 6,250 hourly and 750 salaried, 5,750 new jobs that will be added by the end of 2012 and pay an entry-level wage.

CWK 500

Ford workers will get the bonus if the contract is ratified by the automaker’s 41,000 union-represented employees. Workers will also get a $1,500 annual lump sum in lieu of cost of living increases, and overflow production of the popular Ford Fusion—now built in Mexico—will go to the automaker’s plant in Flat Rock, Ford confi rmed. Plants in Kansas City, Louisville, Wayne and Avon Lake will get new jobs and vehicles to build. Some of the new jobs are from in-sourcing work done in other countries, including Mexico, Japan and China. Ford will offer buyouts of $50,000 to production workers and $100,000 to skilled trade employees. That’s richer than those negotiated as part of GM’s labour pact with the UAW, which totalled $75,000 for skilled trade

employees and $10,000 for assembly line workers who are nearing retirement age. Like the GM contract, Ford has simplified its profit sharing formula and increased pay for entry-level workers—now $15.51 an hour at Ford—to $19.28 an hour over the term of the agreement. The pact guarantees profit sharing checks averaging $3,700 this year. In all, Ford workers will get $16,700 in bonuses, lump sum payments and profit sharing if the contract is approved. Ford has fewer than 250 workers on lay-off, and some will be recalled to the automaker’s Louisville factory, where a second shift will be added by year’s end. Ford also has about 2,000 temporary workers, who also earn the entry-level wage—about half of the traditional $28-an-hour pay.

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Auto Monitor

PRODUCT INDEX

16 - 31 October 2011

Products .......................................................... Pg. No.

AC motors ...................................................................15

EGR valves ..................................................................53

Power steering systems ..............................................6

Acc paddle sensor assemblies ....................................53

Electrical/electronic architecture ...............................33

Power train systems ...................................................33

Acmee-2010 exhibition ..............................................56

Electronic control units ..............................................53

Precision tools ............................................................8

ADEA - Automotive Dealership Excellence Awards .....54

Encoders.....................................................................55

Press tools engineering services.................................31

Advanced auto crimping ............................................22

Engine valves..............................................................6

Press tools ..................................................................31

Air chillers ..................................................................29

EngineeringExpo exhibitions .....................................52

Pressure regulators ....................................................45

Aluminium castings....................................................30

Environmental monitoring systems ...........................32

Proﬁlers & gantry machines.......................................61

Analytical instruments ...............................................32

Epoxy and polyurethane systems...............................25

Proximity sensors .......................................................55

Auto Expo-2012 exhibition .........................................58

Exhibitions .................................................................52, 56, 58

Quality steels ..............................................................4

Automatic painting systems .......................................20

Expandable monoblock reamers ...............................59

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

Automatic spray guns .................................................26

Extension springs .......................................................3, 44

Resistor assemblies ....................................................38

Automotive electrical components ............................43

Financial services .......................................................9

Robot systems ............................................................29

Automotive products .................................................11

Five-axis machining centers .......................................63

Robotic assembly lines & robotic weld cells ..............41

Automotive wire harness ...........................................38

Flameproof motors ....................................................15

Rotary assembly machines.........................................41

Bearings .....................................................................17

Flange mounting motors ............................................15

Safety electronics .......................................................33

Belt & rollers ..............................................................22

Four-axis horizontal machining centres.....................63

Safety lights ................................................................55

Bicycle components and assemblies..........................30

Granulators ................................................................29

Scale watchers ............................................................42

Brake linings ..............................................................6

Gravity die-castings ....................................................30

Sealer dispensing systems ..........................................20

Brake motors..............................................................15

Grinders......................................................................29

Seat assemblies ..........................................................43

Buses ..........................................................................19

Grippers......................................................................45

Seat belt systems ........................................................6

Bushes ........................................................................28, 34

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

Self-adhesive tapes ....................................................8

Cam shaft holders ......................................................30

HMC/VMC machines ...................................................46

Sensors .......................................................................33

Capacitors discharge igniters .....................................38

Hollow bars ................................................................18

Silicon carbide-based particulate ﬁlters ....................35

Car paints ...................................................................16

Hopper dryers ............................................................29

Slipring crane-duty motors ........................................15

Car polishes ................................................................16

Hopper loaders ..........................................................29

Solenoid valves ..........................................................45

Castings ......................................................................25, 30

Horizontal boring machines ......................................61

Solid carbide drills .....................................................24, 59

CED/KTL coatings........................................................FIC

Horizontal CNC machines...........................................51

Solid carbide mills......................................................24

Clamps........................................................................13

Horizontal machining centres ....................................51, 61

Solid carbide reamers ................................................24

CNC HMCs ...................................................................51

Horizontal turning centers .........................................61

Solid carbide special drills .........................................24

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

Hot/cold & warm-forged machined parts ..................43

Solid carbide special mills..........................................24

CNC machines ............................................................47, 51

HVAC parts .................................................................30

Solid carbide special reamers ....................................24

CNC oval turning centres ............................................51

Hybrid & electric vehicle products.............................33

Solid carbide tools......................................................57

CNC turn mill centres .................................................51

IC engine valves..........................................................43

Solid mono block reamers .........................................59

CNC turning centres....................................................51

Induction heating equipment ....................................12

Solid oxide fuel cell technology .................................33

CNC vertical machining centres..................................51

Industrial cleaning machines .....................................65

Spark plugs.................................................................49

CNC .............................................................................51

Industrial control & sensing devices ..........................55

Special boring bars.....................................................59

CNC/VMC machines ....................................................23

Industrial scientiﬁc instruments ................................32

Special ﬁne boring tools.............................................59

Coatings......................................................................25

Infotainment ..............................................................33

Special line boring tools .............................................59

Cold forming machines ..............................................61

Injection moulding machines ....................................40

Special machines........................................................61

Combination switches ................................................38

Lean assembly lines ...................................................41

Special reaming machines .........................................59

Commercial vehicle loans ..........................................9

Level controllers .........................................................55

Special-purpose machines .........................................31

Commercial vehicles ..................................................19

Linear assembly lines .................................................41

Spray guns ..................................................................20

Compact chillers.........................................................29

Logistic services..........................................................7, 39

Spray painting equipment .........................................16

Compression springs ..................................................3, 44

Low pressure die-castings ..........................................30

Standard ﬁne boring tools .........................................59

Connecting rods .........................................................30

Machinery steels ........................................................4

Strip steels ..................................................................4

Counters & power supplies ........................................55

Magnum spray guns ...................................................26

Super ﬁnishing ﬁlms...................................................10

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

Manual powder coding systems .................................26

Switching relays..........................................................55

Cranes ........................................................................67

Measuring & monitoring relays ..................................55

Taps ............................................................................BIC

Cutting tools ...............................................................57

Metal cutting tools .....................................................24

Temperature controllers ............................................55

CV joint machines ......................................................61

Metﬁn compounds .....................................................10

Thermal ......................................................................33

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

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

Thermo-compression moulds ....................................31

DC motors ..................................................................15

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

Threading tools ..........................................................59

Dehumidiﬁed air dryers .............................................29

Motors ........................................................................15

Timers ........................................................................55

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

Mould temperature controller ...................................29

Tool bits .....................................................................4

Die casting dies ..........................................................31

Mounts .......................................................................28, 34

Tool steels ..................................................................4

Die-casting engineering services................................31

Movement technology ...............................................26

Torsion springs ...........................................................3, 44

Die-casting machines .................................................8

Non-ferrous castings ..................................................30

Transmission ..............................................................28, 34

Dies ............................................................................8

Paint circulation systems ...........................................20

Tungsten carbide metal cutting tools ........................27

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

Paint pumps ...............................................................20

Turning machine solutions.........................................36

Driver interface ..........................................................33

PBEGL geared motors .................................................15

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

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

PCD & carbide reamers ..............................................59

Vacuum pumps ..........................................................53

Photoelectric sensors .................................................55

Ventilators ..................................................................8

Physical testing & measuring equipment ..................32

Vertical line series ......................................................51

Pipe extrusion lines....................................................40

Vertical machining centres.........................................1, 61, BC

Plastic moulded components ....................................43

Vertical turning centres..............................................61

Plug top coils .............................................................49

Vision inspection systems ..........................................41

Pneumatic & hydraulic cylinders ...............................45

Vision sensors.............................................................55

Polymer conveyer belts ..............................................29

VMC linear series ........................................................51

Powder coating systems .............................................20

Wire forms ..................................................................3, 44

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Powder feeding systems .............................................26 Power chucking cylinders ..........................................BC

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Auto Monitor

16 - 31 October 2011

STUDY

Indian port sector: Growth plans ambitious, uncertainty over implementation Cargo Mix of Major Ports - 2010-11 C argo growth at Indian ports was moderate in 2010-11, with the overall increase in throughput at four percent year-on-year (yoy). This resulted from the low growth in cargo volumes at the major ports (1.6 percent yoy increase) because of a signiﬁcant reduction in volumes of iron ore, a major cargo category, following Karnataka’s banning of iron ore exports since August 2010. The cargo growth at the non-major ports however continued to be robust, with volumes increasing by nine percent on yoy basis. In market share terms, the non-major ports increased their share marginally from 34 percent of the total cargo in 2009-10 to 35 percent in 2010-11. The outlook for cargo growth remains favourable, given the robust domestic demand from key end-user industries. The main cargoes, the volumes of which are expected to drive growth, include coal; crude oil and containers. Accordingly, port ventures with an exposure to these cargo categories stand to gain. W h i le t he favou rable demand—supply scenario in the Indian port sector augurs well for industry participants, from a credit perspective ICRA believes that its rated portfolio of companies is faced with certain challenges the most prominent of which include: project execution risks given that many companies are in a moderate to large scale capital expenditure mode; the hardening interest rate environment; regulatory risks emanating from an evolving policy environment; cargo concentration risk particularly for entities having a high exposure to iron-ore cargo given the ongoing uncertainties on iron-ore mining activities in various states; possibility of temporary capacity overhang in some cargo segments and incremental risks associated with expansion in scope of business/inorganic growth.

Background India’s long coastline of over 7,500 km is home to the country’s 13 major ports and around 200 non-major ports located along the western and eastern corridors. While the number of non-major ports is large, only about onethird of them undertake regular commercial operations; these ports are located mainly in Gujarat, Andhra Pradesh, Goa, and Maharashtra. The trend is expected to gain traction with the major ports increasingly moving to a landlord/asset ownership model, allowing the private sector a dominant role in capacity additions and port services and operations.

Cargo Trends & Outlook Cargo trafﬁc at Indian ports increased to 883 million tonnes (mmt) in 2010-11 from 850 mmt in 2009-10. The lower yoy increase in cargo at 4 percent in 2010-11 (14 percent yoy growth in 200910) may be attributed partly to the larger cargo base and partly to the low growth (two percent yoy in 2010-11) in the volume of cargo handled by the major ports. The weak performance of the major ports followed mainly

the decline in volumes of one of the principal commodities, iron ore, by 13 percent yoy to 87 mmt in 2010-11 from 100 mmt in 200910 with iron ore exports being banned in Karnataka. The nonmajor ports on the other hand reported a nine percent yoy increase in cargo volumes and as a result gained market share (35 percent in 2010-11 as against 34 percent in 2009-10).

Coal, 13% Fertilisers & Fertiliser Raw Materials , 4%

POL, 32%

Growth Estimates Among the major ports, Kandla in Gujarat continued to lead in terms of cargo volumes (82 mmt in 2010-11, at three percent yoy growth) followed by Vishakhapatnam in Andhra Pradesh (68 mmt at four percent yoy growth). While cargo volumes at all the major ports increased in 2010-11, although in single digits, the volumes at New Mangalore and Paradip reported a dip of 11 percent and two percent yoy respectively, primarily because of their high exposure to iron ore. Among the non-major ports, Mundra Port and Special Economic Zone Limited located in Gujarat was the largest operator (52 mmt in 2010-11), followed by Essar Ports (40 mmt) which has two facilities at Vadinar and Hazira , both located in the state of Gujarat. By cargo mix, petroleum, oil & lubricants (POL) continued to account for the largest share of 32 percent in 2010-11 (31 percent in 2009-10), followed by containers (20 percent against 18 percent). ICRA’s view on cargo growth over the medium to long term remains positive based on the level of activities in the key end-user industries. Going forward, growth of traffic at Indian ports is expected to be driven mainly by higher volumes of coal (to meet the requirements of the large number of current and proposed thermal power projects based on imported coal); containers (given the market under-penetration and potential for cost savings); crude oil and POL (large upcoming refi nery capacity); fertilisers (strong domestic demand and low selfsuffi ciency); and steel (mega projects proposed in the eastern part of the country).

Port Milestones According to the estimates of the Ministry of Shipping (MoS), cargo volumes in India are expected to breach the one billion tonne mark in the current ﬁscal (201112); the two billion tonne mark by 2016-17 (seven-year CAGR of 13 percent); and 2.4 billion tonnes by 2019-20 (10-year CAGR of 11 percent). Growth at the non-major ports is expected to outpace that at the major ports, with the former commanding a 51 percent share of the total cargo in a decade’s time. By composition, coal (expected 10-year CAGR of 18 percent) and containers (expected 10-year CAGR of 15 percent) are expected to drive much of the growth. Thus, port ventures with a higher exposure to these cargo categories are favourably placed. On the supply side, the Indian port sector has seen certain major milestones being reached in the recent past, including the

Iron-ore, 15%

Other Cargo, 17%

Containers, 20%

Source: Industry Reports and ICRA’s Analysis

Kandla in Gujarat continues to lead in terms of cargo volumes (82 mmt in 2010-11, at three percent yoy growth) followed by Vishakhapatnam in Andhra Pradesh (68 mmt at four percent yoy growth). Cargo volumes at all the major ports increased in 201011, although in single digits, the volumes at New Mangalore and Paradip reported a dip of 11 percent and two percent yoy respectively

commissioning of the ﬁ rst phase of operations at: International C ont a i ner Tr a n sh ipment Terminal, Vallarpadam; solid cargo port terminal, Dahej; coal terminal, Mundra; bulk terminal, Hazira; and a greenﬁeld port, Dhamra. The ambitious Nationa l Ma r it i me Development Programme (NMDP) has failed to live up to expectations because of the absence of various enabling factors and is due to complete its tenure in March 2012. To replace it, the MoS has formulated the Maritime Agenda 2010-20, outlining the next decades’ programme for the development of the Indian maritime sector.

Three-Pronged Strategy As a part of its efforts to improve the institutional framework for PPP projects at major ports, the Central Government const it uted a com m ittee under the Chairmanship of BK Chaturvedi in February 2010 to review and recommend revi-

sions in the Model Concession Agreement (MCA), which is the basic contractual framework governing the PPP model in India. The key recommendations of the committee (made in September 2010) include the following: A three-pronged strategy may be adopted to improve the tariff setting mechanism as follows: streamlining TAMP procedures and building in-house capacity in the short term; delegating the tariff setting function to the respective port trusts over the medium term and allowing market forces to determine tariffs over the long term with the role of the port authorities being limited to oversight. While ICRA does not expect the viability of port projects to be adversely impacted by the additional land cost, as that would be governed more by other strategic considerations such as cargo potential, extent of handling infrastructure, and draught, the higher land cost is likely to lead to higher capital intensity, which in turn would lead to some moderation in the return on capital employed.

Hub ports to be developed to receive 13,500+ TEU2 containerships; at least two such hubs to be established on the eastern coast (Chennai and Visakhapatnam) and two on the west coast (Jawaharlal Nehru and Cochin ports). A specialised Maritime Finance Corporation is to be formed with the equity of ports and financial institutions to appraise and fund port projects, given their specialised nature and requirements.

Capacity Expansion

Progress & Policies

The Maritime Agenda envisages a cumulative investment of around `2,774 billion in the port sector over the next 10 years in three phases. The non-major ports are expected to account for 61 percent of the proposed investment, and the major ports for the rest. Capacity expansion by way of construction of new berths and jetties accounts for 65 percent of the total outlay, and other support works for the rest. With the envisaged capital expenditure being made, the capacity of the port sector would likely increase to over 3 billion tonnes by 2019-20; the non-major ports would account for 53 percent of the enhanced capacity and the major ones for the rest 47 percent. The projected capacity expansion and the expected cargo growth would bring down the utilisation levels at the major ports from the current 90 percent levels to around 80 percent, paving the path for better service.

A special purpose vehicle, Indian Ports’ Global, is to be set up to make investments in ports overseas. A monitoring and feedback mechanism to be instituted to track progress at the level of the ports and at the government‘s level so that timely action on slippages in progress a nd implementat ion ca n be taken. Apart from the above, another recently formulated policy is the Policy for Prevention of Monopoly at Major Ports, 2010, which seeks to restrain operators with existing facilities at a port from bidding for similar terminal development projects within the same port and/or within a radius of 100 km of it. The intention is to allow development of healthy market competition and prevent capacity concentration, which may impact pricing and performance standards.

Key policies and framework agreements to be reviewed periodica lly a nd modif ied from time-to-time include the policy for land use, model documents like RFQ, RFP and MCA and the guidelines for fixing of tariffs. Also, a regulator is to be established to oversee the activities and tariffs of the non-major ports. Greater focus is to be placed on environmental aspects and an environment clearance mechanism to be instituted to expedite progress of projects.

Hub Ports

(Courtesy ICRA Research. Views expressed are personal)

16 - 31 October 2011

Auto Monitor

STUDY

Indian two-wheeler industry: Steady growth continues

he Indian two-wheeler industry reported a strong double-d ig it volu me growth of 17 percent in Q1, 201112 (YoY), even as several other automobile segments showed signs of a cyclical dip in growth during this period. W hile the northward movement in macroeconomic variables including inf lation, fuel prices and interest rates has been the nemesis of the automobile industry at large, the two-wheeler industr y has been relatively less impacted so far. ICRA believes that the resilience shown by the two-wheeler industry volumes is likely to persist, a large base not w ithstanding, w ith the industry looking on course to record yet another year of double-digit growth. However, the situation may change in the event of higher than expected decline in India’s GDP growth or persistent inf lationary pressures over a longer period. Overall, ICR A expects the two-wheeler industry to report a volume growth of ~13 percent in 2011-12 and a volume CAGR of 10-12 percent over the next five years to reach a size of 21-23 million units by 2015-16. Our growth outlook is built on the strength of the various structural growth drivers associated with the two-wheeler industr y comprising of favourable demographic profile, moderate two-wheeler penetration levels (in relation to several other emerging markets), under developed public transport system, growing urbanization and expected strong replacement dema nd, besides moderate share of financed purchases.

Segment-Wise Analysis The strong double-digit volume growth of 17.5 percent recorded by the motorcycles segment in Q1, 2011-12 was not consistent across segments Entry, Executive and Premium. The volume growth was a blend of: The f lattish growth (~three percent) of the entry segment (bikes having price less than `40,000) which accounts for around 16percent of the total domestic motorcycles sa les volumes. The steady growth (~17 percent) of the executive segment (bikes in the `40,00050,000 price range), which accounts for around 65 percent of the total domestic motorcycles sales volumes. The fast growing (~30 percent) premium segment (bikes having price greater than `50,000) which accounts for around 19 percent of total domestic motorcycles sales volumes. The Indian motorcycles segment continues to be dominated by Hero MotoCorp (erstwhile Hero Honda) which has been recording sequential gains in market share over the last three quarters. The top three players accounted for 88.2 percent of the industry’s volumes in Q1, 2011-12 (92 percent in 2007-08), with Honda Motorcycles having overtaken TVS since Q1, 201011 as the third largest player, behind Hero MotoCorp and Bajaj Auto.

Short to Medium Term Outlook ICRA expects the entry segment volumes in the domestic market to grow at a much slower pace than the overall

two-wheeler industry and volume growth in this segment to be driven mainly by exports. This is because the segment is no longer a key focus area of OEMs due to limited scope for margin expansion and high interest-rate sensitivity. W hile the executive segment is expected to maintain its steady growth, competition is likely to intensify following aggressive model refurbishment and new model launch plans of most OEMs. The premium segment is expected to remain the fastest growing over the medium term, given the strong growth in purchasing power in the hands of middle-class urbanites, especially in the age group of 20-30 years. This should also translate into superior profit margins for players that are stronger in the

premium segment.

Sales Volumes Analysis The growth in scooter segment’s sa les volumes has outperformed that of the motorcycles segment over the last several years. However, in Q1, 2011-12, the scooters segment recorded a growth of 13.3 percent (YoY), lower than the 17.5 percent growth in motorcycle sales. This could be attributable primarily to the capacity constraints of Honda Motorcycles, the market leader in the scooters segment. With this, the share of the scooters segment in the total domestic two-wheeler volumes declined marginally to 17.8 percent in Q1, 2011-12 from 18.7 percent in 2010-11.

Market Share Trends Overall, Honda Motorcycles

continues to maintain its leadership position in the scooters segment through its ﬂ agship brand Activa (besides Aviator and Dio) enjoying a market share of 42.4 percent in Q1, 2011-12. However, capacity shortfall at the company’s existing plant at Manesar (Haryana) has restricted its volume growth lately. With commercial production at Honda Motorcycles’ new plant at Tapukara (Rajasthan) expected to commence in Q2, 2011-12, the company is expected to get better equipped to consolidate its market position. However, Hero MotoCorp’s demonstrated success in improving market share (through its sole brand Pleasure) coupled with new scooter models proposed to be launched by TVS and Yamaha over the short to medium could imply shrinkage of market share gap between

the market leader and others over time.

Short to Medium Term Outlook ICRA expects the scooters segment to gradually increase its share in the domestic two-wheeler market from 18.7 percent in 2010-11 to ~24 percent by 2014-15. With this, the scooters market is estimated to double in size by 2014-15. Thus, even as a multitude of brands already dot the segment’s landscape and more are expected to follow, the likely expansion in the pie should offer sufﬁcient volumes for the industry to grow proﬁtably. For the new entrants, a steady gain in market share could hasten the process of profitability improvement. (Courtesy: ICRA Research)

Auto Monitor

16 - 31 October 2011

N AMERICAN ASSEMBLY

AUTOFACTS Global Automotive Outlook PricewaterhouseCoopers LLP

North America Assby Tracking 8-2011 (Tracking by Brand & Nameplate) August 2011 Ownership Org/

Last 3 Months YOY

Assembly

YOY Share Chg

Year to Date YOY

Assembly

YOY

Volume

% Chg

Share %

Share Chg

YOY

Assembly

YOY

Volume

% Chg

Share %

Share Chg

(-0.0)

75,044

-9.9%

0.9%

(-0.2)

0.7%

0.1

54,064

-5.0%

0.6%

(-0.1)

-30.0%

0.2%

(-0.1)

20,980

-20.5%

0.2%

(-0.1)

114.7%

2.2%

1.1

181,494

92.2%

2.1%

0.9

Brand & Nameplate

Volume

% Chg

Share %

AutoAlliance International (USA)

12,413

40.8%

1.0%

0.2

29,991

1.2%

1.0%

Ford Mustang

9,255

84.5%

0.8%

0.3

23,452

15.5%

Mazda Mazda6

3,158

-16.9%

0.3%

(-0.1)

6,539

BMW (Germany)

26,467

101.3%

2.2%

1.0

70,552

BMW X3

11,675

1.0%

1.0

30,936

1.0%

1.0

78,470

0.9%

0.9

BMW X5

11,062

21.3%

0.9%

0.1

28,793

26.3%

0.9%

0.2

73,094

11.6%

0.9%

0.0

BMW X6

3,730

-7.4%

0.3%

(-0.1)

10,823

7.5%

0.3%

0.0

29,930

3.5%

0.4%

(-0.0)

Chrysler Group LLC (USA)

170,722

6.8%

14.0%

(-0.6)

487,388

19.6%

15.5%

1.9

1,315,466

24.8%

15.4%

2.1

Chrysler 200

14,458

1.2%

1.2

31,971

1.0%

1.0

83,101

1.0%

1.0

Chrysler 300

3,920

6.6%

0.3%

(-0.0)

15,328

66.5%

0.5%

0.2

35,801

23.5%

0.4%

0.1

Chrysler PT Cruiser

-100.0%

(-0.1)

-100.0%

(-0.1)

Chrysler Sebring

-100.0%

(-0.6)

-100.0%

(-0.4)

-100.0%

(-0.4)

Chrysler Town & Country

11,721

-13.7%

1.0%

(-0.3)

28,547

-21.2%

0.9%

(-0.3)

72,720

-20.3%

0.9%

(-0.3)

Dodge Avenger

7,255

19.4%

0.6%

0.0

14,660

-5.9%

0.5%

(-0.1)

48,582

17.7%

0.6%

0.0

Dodge Caliber

372

-93.6%

0.0%

(-0.5)

14,563

-13.2%

0.5%

(-0.1)

38,332

-24.2%

0.5%

(-0.2)

Dodge Caravan

18,688

2.2%

1.5%

(-0.1)

42,450

-0.8%

1.3%

(-0.1)

113,064

3.1%

1.3%

(-0.1)

Dodge Challenger

4,592

-10.8%

0.4%

(-0.1)

13,257

20.0%

0.4%

0.1

29,744

2.3%

0.3%

(-0.0)

Dodge Charger

6,091

-42.9%

0.5%

(-0.5)

22,662

-9.6%

0.7%

(-0.1)

62,750

-9.1%

0.7%

(-0.1)

Dodge Dakota

2,417

12.7%

0.2%

0.0

6,554

31.4%

0.2%

0.0

17,390

37.0%

0.2%

0.0

Dodge Durango

5,925

0.5%

0.5

19,083

0.6%

0.6

55,118

0.6%

0.6

Dodge Journey

10,079

-32.5%

0.8%

(-0.5)

30,770

-13.6%

1.0%

(-0.2)

71,568

-16.1%

0.8%

(-0.2)

Dodge Nitro

3,013

-15.5%

0.2%

(-0.1)

6,255

-10.1%

0.2%

(-0.0)

17,557

1.8%

0.2%

(-0.0)

Dodge Ram Pickup

-100.0%

(-0.9)

Dodge Viper

-100.0%

(-0.0)

-100.0%

(-0.0)

Fiat 500

5,697

0.5%

0.5

16,040

0.5%

0.5

35,997

0.4%

0.4

Fiat Freemont

3,587

0.3%

0.3

10,447

0.3%

0.3

17,104

0.2%

0.2

Jeep Commander

-100.0%

(-0.1)

Jeep Compass

2,527

-23.7%

0.2%

(-0.1)

24,673

168.4%

0.8%

0.5

70,794

168.4%

0.8%

0.5

Jeep Grand Cherokee

18,355

-0.7%

1.5%

(-0.2)

42,192

21.9%

1.3%

0.2

107,552

83.3%

1.3%

0.5

Jeep Liberty

7,200

28.0%

0.6%

0.1

17,908

12.6%

0.6%

0.0

47,635

10.3%

0.6%

0.0

Jeep Patriot

1,845

-71.3%

0.2%

(-0.4)

17,814

-2.8%

0.6%

(-0.0)

55,844

44.1%

0.7%

0.2

Jeep Wrangler

5,259

53.6%

0.4%

0.1

12,726

-14.9%

0.4%

(-0.1)

39,486

2.5%

0.5%

(-0.0)

Jeep Wrangler Unlimited

9,055

100.7%

0.7%

0.3

21,424

4.2%

0.7%

(-0.0)

65,561

15.5%

0.8%

0.0

Lancia Thema

303

0.0%

0.0

303

0.0%

0.0

303

0.0%

0.0

Ram Pickup

27,931

7.3%

2.3%

(-0.1)

74,853

7.9%

2.4%

0.1

217,883

81.3%

2.6%

1.0

Volkswagen Routan

432

-79.1%

0.0%

(-0.2)

2,908

-32.6%

0.1%

(-0.1)

11,580

-17.0%

0.1%

(-0.0)

Daimler AG (Germany)

15,889

30.9%

1.3%

0.2

34,506

13.7%

1.1%

0.1

98,381

12.9%

1.2%

0.0

Freightliner Sprinter

801

32.8%

0.1%

0.0

1,906

26.4%

0.1%

0.0

5,461

26.5%

0.1%

0.0

Mercedes-Benz GL-Class

3,680

26.0%

0.3%

0.0

7,904

8.2%

0.3%

0.0

21,904

4.4%

0.3%

(-0.0)

Mercedes-Benz M-Class

9,568

35.4%

0.8%

0.1

20,656

16.9%

0.7%

0.1

59,232

16.7%

0.7%

0.1

Mercedes-Benz R-Class

1,840

18.9%

0.2%

0.0

4,040

4.5%

0.1%

(-0.0)

11,784

6.1%

0.1%

(-0.0)

231,401

13.9%

18.9%

0.5

640,282

0.8

Ford Motor Company (USA)

11.9%

20.3%

1.3

1,708,789

12.8%

20.1%

Ford Crown Victoria

8,757

95.4%

0.7%

0.3

23,762

119.8%

0.8%

0.4

62,291

92.5%

0.7%

Ford Econoline

14,658

22.9%

1.2%

0.1

30,601

4.0%

1.0%

(-0.0)

96,256

13.1%

1.1%

0.1

Ford Edge

15,134

60.4%

1.2%

0.4

41,488

34.1%

1.3%

0.3

111,083

14.8%

1.3%

0.1

Ford Escape

23,758

-7.2%

1.9%

(-0.4)

75,422

16.9%

2.4%

0.2

211,451

15.2%

2.5%

0.2

Ford Expedition

5,426

0.9%

0.4%

(-0.0)

12,667

-8.8%

0.4%

(-0.1)

36,162

15.7%

0.4%

0.0

Ford Explorer

17,753

371.4%

1.5%

1.1

41,611

184.3%

1.3%

0.8

107,197

128.7%

1.3%

0.7

Ford Explorer Sport Trac

-100.0%

(-0.0)

-100.0%

(-0.1)

-100.0%

(-0.1)

0.3

Ford Fiesta

9,946

8.8%

0.8%

(-0.0)

30,569

10.7%

1.0%

0.1

80,367

140.5%

0.9%

0.5

Ford Flex

2,844

8.3%

0.2%

(-0.0)

7,538

-25.1%

0.2%

(-0.1)

19,840

-33.0%

0.2%

(-0.1)

Ford Focus

26,832

46.3%

2.2%

0.5

62,323

5.8%

2.0%

0.0

130,749

-1.9%

1.5%

(-0.2)

Ford F-Series

67,780

18.8%

5.5%

0.4

174,741

7.2%

5.5%

0.1

468,616

13.6%

5.5%

0.3

Ford Fusion

14,521

-44.4%

1.2%

(-1.2)

71,464

7.0%

2.3%

0.0

190,795

8.2%

2.2%

0.0

Ford Ranger

9,216

276.5%

0.8%

0.5

24,936

49.5%

0.8%

0.2

66,972

32.9%

0.8%

0.1

Ford Taurus

0.6%

(-0.2)

17,375

-13.7%

0.6%

(-0.1)

50,218

-16.3%

0.6%

(-0.2)

Lincoln Mark LT

-13.2%

0.0%

(-0.0)

111

-45.9%

0.0%

(-0.0)

281

-54.8%

0.0%

(-0.0)

Lincoln MKS

1,155

6,813

-25.1%

-21.5%

0.1%

(-0.0)

3,047

-4.0%

0.1%

(-0.0)

7,965

-29.2%

0.1%

(-0.0)

Lincoln MKT

373

26.0%

0.0%

0.0

1,125

49.6%

0.0%

0.0

3,344

-25.7%

0.0%

(-0.0)

Lincoln MKX

2,862

71.9%

0.2%

0.1

8,209

46.2%

0.3%

0.1

22,622

36.6%

0.3%

0.1

Lincoln MKZ

1,652

-13.8%

0.1%

(-0.0)

7,466

66.9%

0.2%

0.1

21,535

49.8%

0.3%

0.1

Lincoln Navigator

770

-30.4%

0.1%

(-0.0)

2,181

-24.4%

0.1%

(-0.0)

6,711

3.9%

0.1%

(-0.0)

Lincoln Town Car

1,118

-16.7%

0.1%

(-0.0)

3,646

34.0%

0.1%

0.0

10,192

15.4%

0.1%

0.0

Mazda B-Series

-100.0%

(-0.0)

-100.0%

(-0.0)

Mazda Tribute

-100.0%

(-0.1)

-100.0%

(-0.0)

3,977

-39.1%

0.0%

(-0.0)

Mercury Grand Marquis

-100.0%

(-0.3)

-100.0%

(-0.3)

165

-99.3%

0.0%

(-0.3)

Mercury Mariner

-100.0%

(-0.3)

-100.0%

(-0.2)

-100.0%

(-0.3)

Mercury Milan

-100.0%

(-0.2)

-100.0%

(-0.1)

-100.0%

(-0.2)

Mercury Mountaineer

-100.0%

(-0.1)

-100.0%

(-0.0)

-100.0%

(-0.0)

Fuji Heavy Industries (Japan)

23,794

-1.6%

1.9%

(-0.3)

54,274

-8.5%

1.7%

(-0.3)

150,350

-2.2%

1.8%

(-0.2)

Subaru Legacy

13,222

-15.1%

1.1%

(-0.3)

31,397

-16.0%

1.0%

(-0.2)

93,408

1.4%

1.1%

Subaru Tribeca

401

51.9%

0.0%

0.0

1,249

46.3%

0.0%

0.0

4,096

20.9%

0.0%

0.0

Toyota Camry

10,171

21.8%

0.8%

0.1

21,628

2.6%

0.7%

(-0.0)

52,846

-9.2%

0.6%

(-0.1)

General Motors Company (USA)

299,227

13.1%

24.5%

0.4

747,620

2.4%

23.7%

(-0.6)

2,086,306

12.0%

24.5%

0.9

Buick Enclave

6,890

2.6%

0.6%

(-0.0)

19,040

-4.6%

0.6%

(-0.1)

52,637

2.0%

0.6%

(-0.0)

Buick LaCrosse

6,287

-7.1%

0.5%

(-0.1)

15,078

-23.4%

0.5%

(-0.2)

43,212

-17.6%

0.5%

(-0.2)

Buick Lucerne

-100.0%

(-0.4)

319

-97.0%

0.0%

(-0.3)

15,882

-18.3%

0.2%

(-0.1)

Buick Regal

2,556

0.2%

0.2

4,640

0.1%

0.1

10,812

0.1%

0.1

Cadillac CTS

7,881

29.0%

0.6%

0.1

11,206

-34.3%

0.4%

(-0.2)

41,764

3.2%

0.5%

(-0.0)

Cadillac DTS

-100.0%

(-0.2)

-100.0%

(-0.2)

6,515

-54.7%

0.1%

(-0.1)

Cadillac Escalade

1,826

-26.6%

0.1%

(-0.1)

4,375

-24.5%

0.1%

(-0.1)

12,101

-28.1%

0.1%

(-0.1)

Cadillac Escalade ESV

948

-47.9%

0.1%

(-0.1)

2,318

-36.6%

0.1%

(-0.0)

5,267

-35.2%

0.1%

(-0.0) (-0.0)

Cadillac Escalade EXT

168

-41.9%

0.0%

(-0.0)

526

-33.9%

0.0%

(-0.0)

1,666

-11.1%

0.0%

Cadillac SRX

8,319

10.6%

0.7%

(-0.0)

23,017

15.8%

0.7%

0.1

57,336

15.9%

0.7%

Cadillac STS

-100.0%

(-0.0)

-100.0%

(-0.0)

1,907

-38.4%

0.0%

(-0.0)

Chevrolet Avalanche

2,521

-29.4%

0.2%

(-0.1)

7,624

-14.1%

0.2%

(-0.1)

17,812

-6.2%

0.2%

(-0.0) 0.0

0.0

Chevrolet Aveo

6,564

24.8%

0.5%

0.1

17,454

16.9%

0.6%

0.1

44,006

16.5%

0.5%

Chevrolet C2

3,342

-9.1%

0.3%

(-0.1)

8,642

-29.2%

0.3%

(-0.1)

28,113

-26.2%

0.3%

(-0.2)

Chevrolet Camaro

11,147

8.7%

0.9%

(-0.0)

26,911

3.7%

0.9%

(-0.0)

75,023

4.3%

0.9%

(-0.0)

Chevrolet Captiva

3,301

17.4%

0.3%

0.0

9,459

6.6%

0.3%

0.0

23,174

17.9%

0.3%

0.0

16 - 31 October 2011

Auto Monitor

N AMERICAN ASSEMBLY August 2011

Last 3 Months Assembly Share %

YOY Share Chg

Year to Date

Ownership Org/ Brand & Nameplate

Volume

YOY % Chg

Chevrolet Cobalt Chevrolet Colorado Chevrolet Corvette Chevrolet Cruze Chevrolet Equinox Chevrolet Express Chevrolet HHR Chevrolet Impala Chevrolet Malibu Chevrolet Silverado Chevrolet Sonic Chevrolet Suburban Chevrolet Tahoe Chevrolet Traverse Chevrolet Volt GMC Acadia GMC Canyon GMC Savana GMC Sierra Pickups GMC Terrain GMC Yukon GMC Yukon XL Hummer H3 Hummer H3T Saab 9-4X Saturn Outlook Saturn VUE Honda Motor Company (Japan) Acura CSX Acura MDX Acura RDX Acura TL Acura ZDX Honda Accord Honda Civic Honda Crosstour Honda CR-V Honda Element Honda Odyssey Honda Pilot Honda Ridgeline Hyundai Motor Company (South Korea) Hyundai Elantra/i30 Hyundai Santa Fe Hyundai Sonata/i40 Kia Sorento Mitsubishi Motors Corp (Japan) Mitsubishi Eclipse Mitsubishi Endeavor Mitsubishi Galant Nissan Motor (Japan) Infiniti QX series Nissan Altima Nissan Armada Nissan Frontier Nissan March Nissan Maxima Nissan NV-Series Nissan Pathfinder Nissan Pickup Nissan Sentra Nissan Tiida Nissan Titan Nissan Tsuru Nissan Versa Nissan Xterra Suzuki Equator NUMMI (USA) Toyota Corolla Toyota Tacoma Tesla Motors (USA) Tesla Roadster Toyota Motor Corporation (Japan) Lexus RX Series Toyota Avalon Toyota Camry Toyota Corolla Toyota Highlander Toyota Matrix Toyota RAV4 Toyota Sequoia Toyota Sienna Toyota Tacoma Toyota Tundra Toyota Venza Volkswagen (Germany) Volkswagen Beetle Volkswagen Bora Volkswagen Golf/Jetta Variant Volkswagen Jetta Volkswagen New Beetle Volkswagen Passat

4,236 1,493 28,911 23,715 7,916 19,403 19,365 47,311 4,880 5,908 8,109 12,725 2,395 8,062 1,761 2,022 18,841 10,976 5,738 3,655 55 109,397 3,805 2,427 3,439 299 26,877 19,280 839 25,358 13,781 12,157 1,135 54,604 11,303 10,304 20,997 12,000 4,219 979 2,019 1,221 114,414 32,981 1,847 5,775 5,843 6,592 1,198 3,220 5,143 14,399 13,763 2,308 4,384 14,193 2,578 190 174 174 107,104 4,405 3,782 28,067 21,250 10,583 2,230 4,214 1,916 12,637 8,604 5,369 4,047 52,874 3,994 59 13,746 32,075 3,000

28.2% 11.8% 3887.7% 39.4% 9.7% -100.0% 15.3% -22.8% 3.7% 31.8% -18.2% -12.7% -3.4% 61.1% 16.9% -1.2% 39.5% 6.2% 23.6% -5.0% -37.8% 22.4% 2.2% 1.2% -28.7% -53.7% 10.5% -100.0% 29.3% 8.1% -43.6% 20.5% 26.7% -20.1% 10.2% 30.5% 64.8% 259.9% -41.3% 30.8% 27.9% -14.2% 5.1% -5.7% 24.0% 77.2% 47.2% 148.2% -33.7% -35.6% 9.7% -5.8% -24.0% 128.9% 128.9% -13.4% -38.2% -5.3% 7.2% 21.4% 25.3% -28.5% -72.4% -27.1% 0.2% -29.6% -42.1% -23.8% 33.1% -92.2% 37.3% 37.3% -100.0% -

0.3% 0.1% 2.4% 1.9% 0.6% 1.6% 1.6% 3.9% 0.4% 0.5% 0.7% 1.0% 0.2% 0.7% 0.1% 0.2% 1.5% 0.9% 0.5% 0.3% 0.0% 8.9% 0.3% 0.2% 0.3% 0.0% 2.2% 1.6% 0.1% 2.1% 1.1% 1.0% 0.1% 4.5% 0.9% 0.8% 1.7% 1.0% 0.3% 0.1% 0.2% 0.1% 9.4% 2.7% 0.2% 0.5% 0.5% 0.5% 0.1% 0.3% 0.4% 1.2% 1.1% 0.2% 0.4% 1.2% 0.2% 0.0% 0.0% 0.0% 8.8% 0.4% 0.3% 2.3% 1.7% 0.9% 0.2% 0.3% 0.2% 1.0% 0.7% 0.4% 0.3% 4.3% 0.3% 0.0% 1.1% 2.6% 0.2%

0.0 0.0 2.3 0.4 (-0.0) (-0.7) 0.1 (-0.7) (-0.3) 0.4 0.1 (-0.2) (-0.3) 0.2 (-0.1) 0.0 0.0 (-0.2) 0.2 (-0.0) 0.0 0.0 (-1.5) (-0.2) 0.0 (-0.0) 0.0 (-0.2) (-0.9) (-0.1) (-0.0) (-0.1) 0.2 (-0.0) (-0.1) 0.3 0.9 0.1 (-0.7) (-0.0) 0.1 0.0 0.1 (-0.1) 1.4 0.4 (-0.0) (-0.0) 0.5 (-0.1) 0.1 0.0 0.2 0.3 0.6 (-0.1) (-0.3) (-0.0) (-0.0) (-0.0) 0.0 0.0 (-2.5) (-0.3) (-0.1) (-0.1) 0.1 0.1 (-0.1) (-1.0) (-0.1) (-0.1) (-0.4) (-0.4) (-0.2) 0.7 0.3 (-0.1) 0.2 0.5 (-0.5) 0.2

10,169 3,633 70,761 51,748 22,439 42,851 53,454 126,316 4,880 17,012 27,636 31,571 3,032 21,227 4,104 5,197 54,393 24,010 13,000 9,386 192 221,624 9,170 4,029 7,184 339 50,544 45,148 3,429 48,052 27,941 24,653 1,135 151,328 27,696 27,576 58,105 37,951 12,733 3,281 6,196 3,256 286,746 80,113 4,676 15,116 12,037 17,037 4,772 8,151 13,723 38,167 44,003 6,054 12,367 23,574 6,336 620 488 488 254,828 10,898 8,639 61,137 50,368 25,444 5,731 10,100 5,145 31,152 22,735 12,791 10,688 158,617 6,016 183 42,666 99,552 10,200

-100.0% 29.1% -11.6% 4838.0% 28.7% 11.6% -100.0% 6.4% -22.3% -0.3% 20.2% 1.9% -25.7% -5.3% 44.4% -4.8% -2.0% 38.8% -10.0% 12.4% -30.6% -100.0% -46.5% -16.2% -22.3% -14.0% -30.9% -41.0% -51.7% -20.9% -100.0% -10.3% -19.5% -74.4% 29.8% 14.7% -3.8% 17.9% 89.4% 54.6% 362.0% -0.1% 15.9% 27.3% -25.1% 11.9% -4.6% 32.9% 76.7% 7.4% 130.3% -25.2% -33.6% -47.1% -2.5% 17.0% 116.9% 116.9% -22.9% -45.6% -32.4% -13.8% -0.4% 18.0% -32.5% -76.5% -21.5% -10.3% -4.7% -46.5% -24.5% 32.7% -94.7% 44.0% 44.0% -100.0% -

0.3% 0.1% 2.2% 1.6% 0.7% 1.4% 1.7% 4.0% 0.2% 0.5% 0.9% 1.0% 0.1% 0.7% 0.1% 0.2% 1.7% 0.8% 0.4% 0.3% 0.0% 7.0% 0.3% 0.1% 0.2% 0.0% 1.6% 1.4% 0.1% 1.5% 0.9% 0.8% 0.0% 4.8% 0.9% 0.9% 1.8% 1.2% 0.4% 0.1% 0.2% 0.1% 9.1% 2.5% 0.1% 0.5% 0.4% 0.5% 0.2% 0.3% 0.4% 1.2% 1.4% 0.2% 0.4% 0.7% 0.2% 0.0% 0.0% 0.0% 8.1% 0.3% 0.3% 1.9% 1.6% 0.8% 0.2% 0.3% 0.2% 1.0% 0.7% 0.4% 0.3% 5.0% 0.2% 0.0% 1.4% 3.2% 0.3%

(-0.5) 0.1 (-0.0) 2.2 0.3 0.0 (-0.7) 0.0 (-0.6) (-0.2) 0.2 0.1 (-0.0) (-0.4) 0.1 (-0.1) 0.0 (-0.0) (-0.1) 0.2 (-0.1) 0.0 0.0 (-3.6) (-0.0) (-0.3) (-0.0) (-0.1) (-0.0) (-0.8) (-1.1) (-0.1) (-0.5) (-0.1) (-0.2) (-0.2) (-0.1) 0.9 0.9 0.1 (-0.2) 0.1 0.2 0.0 0.2 (-0.0) 0.9 0.4 (-0.1) 0.0 0.4 (-0.1) 0.2 0.1 0.2 0.0 0.8 (-0.1) (-0.2) (-0.7) (-0.0) 0.0 0.0 0.0 (-2.9) (-0.3) (-0.2) (-0.4) (-0.1) 0.1 (-0.1) (-1.1) (-0.1) (-0.2) (-0.1) (-0.4) (-0.1) 1.1 0.2 (-0.1) 0.4 0.9 (-0.6) 0.3

27,142 9,034 195,573 154,060 54,189 29,460 132,702 144,469 341,247 4,880 39,650 69,564 84,423 6,301 60,143 8,952 17,746 139,219 71,693 34,504 23,616 512 669,375 1,170 33,114 10,630 20,524 860 144,997 143,391 10,759 135,671 7,500 78,423 76,431 5,905 400,414 82,796 70,710 147,204 99,704 30,218 7,142 10,399 12,677 734,836 204,992 13,577 38,249 19,290 46,329 10,641 23,458 31,536 108,294 71,869 17,789 42,579 88,593 16,190 1,450 1,262 1,262 703,608 37,501 24,180 135,104 126,332 63,531 11,986 67,157 11,400 78,090 65,554 51,824 30,949 360,475 6,016 333 101,504 236,840 15,782

-100.0% 18.6% -23.7% 13547.8% 42.9% 18.0% -40.6% 7.9% -9.5% 13.1% 3.0% -0.6% 8.1% 14.8% 5.5% 20.4% 4.5% 61.9% 0.0% 5.8% -100.0% -100.0% -100.0% -100.0% -23.0% -11.4% -24.5% -21.8% -16.1% -80.7% -27.2% -30.8% -60.8% -17.1% -30.2% -0.6% -4.4% -61.1% 39.0% 13.8% 3.0% 19.9% 60.0% 41.6% 179.9% 25.2% 13.2% -100.0% 11.5% -12.6% 11.5% -4.7% 34.1% 73.9% 22.3% 66.3% -12.5% -12.7% -18.7% -5.6% 30.6% -100.0% -100.0% -100.0% 116.8% 116.8% -15.9% -32.9% -16.8% -29.6% 1.3% 21.0% -55.2% -27.1% -25.1% -7.9% 41.3% -27.5% -32.2% 31.2% -97.0% 51.0% 51.0% -100.0% -

0.3% 0.1% 2.3% 1.8% 0.6% 0.3% 1.6% 1.7% 4.0% 0.1% 0.5% 0.8% 1.0% 0.1% 0.7% 0.1% 0.2% 1.6% 0.8% 0.4% 0.3% 0.0% 7.9% 0.0% 0.4% 0.1% 0.2% 0.0% 1.7% 1.7% 0.1% 1.6% 0.1% 0.9% 0.9% 0.1% 4.7% 1.0% 0.8% 1.7% 1.2% 0.4% 0.1% 0.1% 0.1% 8.6% 2.4% 0.2% 0.4% 0.2% 0.5% 0.1% 0.3% 0.4% 1.3% 0.8% 0.2% 0.5% 1.0% 0.2% 0.0% 0.0% 0.0% 8.3% 0.4% 0.3% 1.6% 1.5% 0.7% 0.1% 0.8% 0.1% 0.9% 0.8% 0.6% 0.4% 4.2% 0.1% 0.0% 1.2% 2.8% 0.2%

(-1.2) 0.0 (-0.0) 2.3 0.4 0.1 (-0.3) (-0.0) (-0.3) 0.2 0.1 (-0.0) (-0.1) 0.0 0.1 0.0 (-0.0) 0.0 (-0.1) 0.3 (-0.0) (-0.0) (-0.0) (-0.0) 0.0 (-0.0) (-0.0) (-3.2) (-0.0) (-0.2) (-0.0) (-0.1) (-0.0) (-0.8) (-0.9) (-0.2) (-0.5) (-0.0) (-0.1) (-0.1) (-0.1) 1.0 1.0 0.0 (-0.1) 0.1 0.1 0.0 0.1 0.0 0.4 (-0.0) 0.1 (-0.0) 0.0 0.2 (-0.1) 0.1 0.1 0.1 0.1 0.3 (-0.0) (-0.1) (-0.3) (-0.0) 0.0 (-1.2) (-0.8) (-0.3) 0.0 0.0 (-2.4) (-0.3) (-0.1) (-0.8) (-0.1) 0.1 (-0.2) (-0.4) (-0.1) (-0.2) 0.2 (-0.3) (-0.2) 0.7 0.1 (-0.1) 0.3 0.8 (-0.5) 0.2

Total Light Vehicle

1,222,699

11.1%

100.0%

3,150,977

5.0%

100.0%

8,516,018

8.1%

100.0%

Volume

YOY % Chg

Assembly Share %

YOY Share Chg

Volume

YOY % Chg

Assembly Share %

YOY Share Chg

Auto Monitor

THE OTHER SIDE

Getting Personal with RK Behera, Founder & Chairman, RSB Transmission If not in the auto industry, where would you be? I am obsessed with the auto industry; my passion is auto industry. I grew up in the auto industry environment (Jamshedpur, Tata Motors) and have dreamt since my engineering student days to be an auto industry entrepreneur. What car do you drive? What do you dream of driving? I drive Mercedes E 350. I like Mercedes and I will only go with the higher version of Mercedes What is your current indulgence… My current focus is on M&A, organisation structure and strategy. My effort is towards aligning the organisation structure and the strategy and to prepare it for the quantum leap. There has to be euphoria in work What are you currently reading? Currently I am reading ‘Jaya: Illustrated Retelling of Mahabharata’ by Devdutt Pattanaik,‘There’s a Spiritual Solution to Every Problem’ by Dr Wyane W Dyer and ‘An Economist’s Miscellany’ by Kaushik Basu What is RK Behera doing when not talking auto? I do not think and talk business 24/7. I take out a good slice of my time for spiritual indulgence, meditation and family Outdoor activity you would miss office for…. Golf. It clears the clutter and refreshes me Where did you go for your last holiday? Singapore, with my entire family You get angry when….. For me anger is a sign of weakness, hence I rarely get angry. But the few occasions I get angry are when people do not honour their word and when people are inflexible and adamant to see others view points to resolve an impasse What is the one thing that you would like to change about you? I wish I could be more assertive and fi rm on my decisions when I have full conviction. Many a times, in spite of conviction, I change under the influence of the others to the eventual detriment of the context.

Illustration: Sachin Pandit

Best thing to have happened to you…. I owe everything in my life to my beloved mother and father from whom I have inherited the moral values and ethics which are the moorings of my life. Since childhood and even today, they continue to inspire and motivate me. The values that I have imbibed from them help me to stand rock steady even in times adversities, which have been many.

16 - 31 October 2011

In Person RK Behera, along with his brother, SK Behera commenced his entrepreneurship journey in 1975 in Jamshedpur by laying the foundation of International Auto Products, a sole proprietorship company. He leads the company by mentoring and facilitating the top management, principally, in evolving the strategic roadmap of the company and overseeing its implementation. He has served the Confederation of Indian Industry (CII), the leading industry association of India in various capacities—he has actively participated and served on CII, Pune Zonal Council from 2002 till 2010. He has also earned emberships into the many industry awards and memberships ory Commissions Board of Governorship and Advisory titutions. set up by various government institutions. rise Leadership He has been awarded “Enterprise amshedpur Alumni Gold Medal” by RIT (now NIT), Jamshedpur ship and leaderAssociation for his entrepreneurship ship in business. Behera is currently a member of the onal Board of Governors of NIT (National a Institute of Technology), Rourkela constituted by the Government of India. RK Behera has studied BSc. Engineering Mechanical) from Regional Institute of Technology (now NIT), Jamshedpur and has business experience of over 35 years in automotive components and systems industry.

An experience I won’t forget… During the early years of my entrepreneurship, in 1990, we embarked to set up Neelachal Auto Private (the original version of RSB) and we had enormous financial hurdles to overcome. In 1989-90, the then group establishment, International Auto Products had a turnover of around `100 lakh. The Neelachal Auto endeavour was a project of about `130 lakh. Our equity contribution was limited. We secured a term loan of `90 lakh from a government financial institution, but were falling short by about `32 lakh. We aimed to fill this gap through `15 lakh of state subsidy and `15 lakh of seed capital (meant only for first generation technocrat entrepreneurs) from a national level financial institution. However, securing these two sources of fund was difficult as they entailed a lot of stringent scrutiny and evaluation. Simultaneously, I continued negotiating with the state and the financial institution for the state subsidy and the seed capital respectively. Meantime, I had to arrange for alternate source of fund to continue with the execution of the project. Finally, convinced that we would secure the state subsidy and the seed capital, the bank extended a bridge loan to tide over the cash requirement. In the meantime, the discussions with industry department and the financial institution were protracted and difficult. Finally, my perseverance bore fruit; I was able to convince both the industry department and the financial institution about the merit of the project and we could secure their approval for `12 lakh each towards state subsidy and seed capital respectively. In spite of the hurdles, the project implementation was on schedule and we delivered to the customer on time. This was a life changing experience for me. It infused in me the confidence and belief to take challenging projects and is one of the most memorable chapters in my life.

Regn. No. MH/MR/WEST/20/2009-2011. RNI No. MAHENG/2000/11414 Licenced to post at Mumbai patrika channel sorting office G.P.O. Mumbai 400 001. Date Of Mailing:16th & 17th Fortnightly Issue. Date Of Publication: 13th of Every Month