Auto Monitor 22 july 2013 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. 13 No. 26

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22 July 2013

SOUTH INDIA SPECIAL Pg 16-22

Rajiv Bajaj speaks openly on why he won’t compromise

The odds are not against it. But there are other concerns.

Datsun key to Nissan plans

Nabeel A Khan New Delhi

fter keeping the Datsun brand for three decades in hiatus, parent Nissan Motor has brought it back to life with the Go. Datsun’s Go, inspired by the brand’s century old model DAT Go, is a compact hatchback for emerging markets.

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The car is a ﬁve-door, front-wheel drive hatchback powered by a 1.2 litre engine paired to a ﬁve-speed manual transmission. The unveiling of Datsun is an important part of Nissan’s Power 88 strategy under which it plans to acquire 8 percent of global market share from the present 2.6 percent. “Tapping high growth markets like India is essential.

argo body and spec ia l appl ic at ion s manufacturer Chaphekar Engineering has set up a new vertical to expand its business with a stateof-the-art Cathodic Electro Deposition (CED) plant at its Hinjewadi facility. The CED plant brings a new wave of opportunity to the truck body maker. Sachin Chaphekar, Di rector of Chaphek a r Engineering, says, “The CED plant is one of the best in the country. You may see a number of CED plants elsewhere but the paint we use is something that none of them use. They use an old generation of paint whereas we use the latest generation of paint which I believe even most OEMs don’t have in India.” To give you a brief of the CED plant Chaphekar runs, the

truck body is immersed into an 80,000 litre capacity tank containing environment-friendly water-based paint colour. The plant is equipped with the advanced 675 series (6th generation) of CED paint of Asian PPG, which the company says has exceptional edge coverage and throwing power. The tank has a rocking mechanism to eliminate air pockets in the truck bodies during coating. The plant was set up in March and until now, 4,500 truck bodies have been painted. Suresh Sabharwal, VP Projects at Chaphekar says that, “If you calculate it in terms of salt spray tests, in spray painting, paint cannot go to all corners of the body, from where rusting starts. In this method of painting, in terms of salt spray tests, it is 240 hours whereas in our CED plant, it is 1,200 hours.” Chaphekar has invested $5 million in the plant. The com-

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To launch 10 new models including two Datsuns by 2016, targeting a market share of 10 percent.

Today, the global auto market is in a period of transition. Five years ago, a majority of car sales would come from markets including Japan, Europe and the US. High growth markets including China, Russia accounted for 40 percent of total sales. This trend is shifting and by 2016 the high growth markets will contribute to 60 percent of the total sales.” Carlos

Ghosn, CEO, Nissan Motor said. With a tentative price of under Rs 4 lakh, the Datsun clearly has its sights set on India and is expecting considerable contribution from the country to its global numbers. Datsun is pitched as a value brand in its second innings. The car is positioned half a segment higher than the Alto and a segment lower than the Swift so expect prices to start as low as Rs 3.2 lakh for the base variant as it will be entirely localized. Datsun GO will be produced at Renault-Nissan Alliance factory at Oragadam, Chennai. If the Rs 3.5 lakh entry point of the Micra Active is anything to go by, Datsun should be able to achieve a lower price for the Go since the cars will borrow signiﬁcant number of parts from the common parts bin. To achieve economies of scale, exports will be a key. The company produces the Micra,

Sunny and Evalia for Nissan, and the Pulse, Scala and Duster for Renault. Last year the alliance produced 193,944 cars, but sold only 89,418 units in the domestic market and exports far exceeded domestic sales at 104,526 units. “We think signiﬁcant growth will come from India. India’s car sales are expected to reach 4 mn units by 2016. Our share in India will grow to 10 percent by 2016 from 1.2 percent and Datsun brand will contribute signiﬁcantly,” Ghosn said. Nissan along with its French ally, Renault has invested $2.5 billion in India and the company intends to double its investment in the next few years and eye a 15 percent market share jointly. Nissan is aiming to launch at least 10 models which will include two from the Datsun brand. The company will increase its presence in India to 300 dealerships by 2016.

plant, the potential for orders is high. Sachin says, “We also offer ED coatings for components. There are exporters in India that require ED coating in the construction equipment sector since they receive complaints when their products go overseas.” The CED business is quickly gaining importance and is poised to become the most important arm of Chaphekar, but another vertical the company is focusing on is its applications business. Sachin says, “We are a very ﬂexible company because we see that India is a developing economy

and in some areas, there is zero development. There is scope for new applications. With our inhouse development team, we can develop new applications within a month so we keep working on new products.” So much so that the company is setting up a new plant exclusively for the applications business at Pirangut near Pune. Chaphekar owns three acres of land in the area on which a new facility will be set up soon. Over the years, the engineering cell at Chaphekar has developed applications for specialised needs and is now in the process of standardising them. Once done, the company plans to aggressively market them. Up until now, Chaphekar didn’t even have a marketing team. Sachin says, “In the coming years, marketing will be our focus. We know what the market wants in terms of quality, price and features and so we have standardised our products accordingly. Now we will aggressively market them.” Sachin is targeting a net turnover of Rs 130-150 crore in FY13-14. Last year the ﬁgure stood at Rs 105 crore.

Coat of arms! Anand Mohan

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Pg 10 COLUMN Pg 14 NEWS “Demands are absurd” Will DAT-SUN Rise?

pany is conﬁdent that this plant will generate extra business over the 2,500 capacity truck bodies that the company produces itself per month. That is why the CED plant is capable of dashing out 3,000 units per month. The capacity of the CED plant can be increased from the current 4 JPH (jobs per hour) to 6 JPH. That’s 1.5 times or 4,500 units per month. Each job considered is a 6.3 metre long product so if the product is smaller, the number will increase more. Since Chaphekar is the only company in the cargo body space equipped with a CED

EDITORIAL Downwards

his issue focuses on South India. And while many auto makers may be gung-ho about the state, there are some serious troubles brewing there. During my conversations with people, most of them rated infrastructure as a major hurdle in conducting business smoothly. Some of the large component companies are glad that they don’t operate out of the South alone, and have businesses running out of other states. Southerners in India are generally not looked at askance. They are much accepted as they are genial, intelligent, and disciplined. But the problem here is not the people. It’s the government. How do you invite companies to invest crores of rupees and not set up the required infrastructure? And then even years later, still don’t rectify the mistake? Power outages that last for hours each day, disastrous last mile connectivity roads, and, not to forget, the language barrier. It is no wonder that the South is losing its charm as an industry hub. Exporters may not consider it, but those catering to domestic demand could do well to consider other states that are hub and spoke. It is also no wonder that realising the gaffes made by certain

other states, Gujarat’s Narendra Modi has gone out of his way to create infrastructure and welcome companies to set up base. And companies are not complaining. And at the rate that Gujarat is ramping the road, it may soon become the Detroit of India.

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QUOTABLE QUOTES Carlos Ghosn, CEO, Nissan Renault on the need for an ultra low cost car in India to the Economic Times

Norbert Reithofer, CEO, BMW on the recovery in the Western Europe car market to the Boersen-Zeitung

There’s a huge need for this car that nobody has addressed yet. I hope we would answer that in the future. We’ll continue to work on it.

Little will change until the middle of next year. Perhaps we will see a slight pickup in western Europe in the second half of 2014.

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CONTENTS 08

WHAT’S INSIDE

Jaya Hind, Montupet form JV to make cylinder heads

“Demands are absurd”

Tackling pollution: Diesel engines aren’t the problem

Will DAT-SUN Rise?

Southern Comfort

Seeing it right

“Systems need our installation support”

In the pipeline

Jaya Hind Industries will transfer its existing cylinder heads supply business to the JV christened Jaya Hind Montupet Ltd., which is slated to start operations by the end of the year.

Bajaj Auto’s Chakan plant workers demand company shares, a demand the company terms baseless.

OVERDRIVE Editor Bertrand D’Souza argues that the poor quality of fuel and poor road infrastructure in India are to blame for air pollution, and not simply the diesel engine.

Datsun has launched the GO at a time when the Indian market is moving to bigger vehicles. How will it stay smart?

South India is much favoured as an auto hub. While a majority of players are present there, the southern state has its share of problems.

Carl Zeiss visualises enormous oppurtunities in the evolving Indan automotive sector with deamnd for cutting edge solutions and growing volumes.

Mahr has launched a slew of product for the automotive sector OEMs keeping in mind their aesthetic needs and service support that will need to be provided.

Continental is looking to apply its development and advanced automotive engineering skills to the commercial vehicle (trucks and construction equipment) and agricultural equipment segment.

16 OTHER SIDE

Andreas Lauenroth, Executive Technical Director, Volkswagen India

A lontime VW hand, Lauenroth held positions in various departments such as planning, logistics and production as well as a stint with Volkswagen China

Auto Monitor

NEWS

22 JULY 2013

Jaya Hind, Montupet JV to make cylinder heads Abhishek Parekh

une-based Jaya Hind Industries Ltd. has entered into a joint venture with Montupet SA for the development and manufacture of automotive cylinder heads in India. The Pune-based components manufacturer, owned by the Firodia family, will transfer its existing cylinder heads supply business to the JV, christened Jaya Hind Montupet Ltd., which is slated to start operations by the end of the year. The equal JV partners will invest around Rs 200 crore in the ﬁrst phase to set up a facility for manufacturing aluminium-based cylinder heads by the end of this year. The facility will have a capacity of 500,000 units, eventually scaling up to a million units in due course. Jaya Hind Industries is already working on various cylinder heads projects, and these will be taken up by the JV in order to optimise operational and technological resources. “We are looking to evolve into a major supplier to the passenger car industry and this partnership with the number two player in the cylinder heads and aluminium castings business globally would be immensely helpful. We will have access to their process technologies, advanced metallurgical applications as well as work together to develop and grow the market in India and other markets in Asia,” said

The equal JV partners will invest around Rs 200 crore in the first phase to set up a facility for manufacturing aluminium-based cylinder heads by the end of this year.

We have joined hands with one of the global leaders in the business from a long-term perspective. Though the current scenario in the automotive sector, especially passenger cars and light commercial vehicle business is not looking healthy, the longterm prospects in these segments continue to be attractive. Prasan Firodia, Managing Director, Jaya Hind Industries. He pointed out that Jaya Hind Industries is already supplying around 500,000 cylinder head units to passenger car OEMs in the domestic market and is already a leading player in the aluminium die castings business. The JV will cater to the entire Asia region and is likely to evaluate opportunities for an additional facility for export to neighbouring markets such as China, South-East Asia and the Far East. The partners are currently scouting locations to set up a new facility under the JV. “We have joined hands with one of the global leaders in the business from a long-term perspective. Though the current scenario in the automotive sector, especially passenger cars and light commercial vehicle business is not looking healthy, the long-term prospects in these segments continue to be attractive and we are looking to play a major role in these segments. We would beneﬁt from advanced manufacturing process technology as well as next generation products that would help us evolve as a leader in the aluminium cylinder head castings business in India and the Asian market,” said Firodia. Based in France, Montupet has been manufacturing aluminium castings since 1894. Today, it is the world’s second-largest manufacturer of cylinder heads with sales of over Euro 500 million. The company also manufactures safety parts such as suspension systems and components, knuckles, control arms and brake master cylinders. It has facilities in France, UK, Spain, Mexico and Bulgaria. The company is working on some 21 major casting programmes at its technical centre, which employs more than 150 engineers and casting experts. Its customers include Audi, Bentley, BMW, Citroen, Daimler, Ford, General Motors, Nissan, Peugeot, Porsche, Renault and Volvo. Jaya Hind Industries is a part of the Firodia Enterprise and is a leading supplier of cylinder blocks, cylinder heads, bed plates, cam carriers, oil sumps, engine covers, transmission housings, and engine carrying brackets to OEMs such as Ford, Renault-Nissan, Cummins, Mahindra, Maruti Suzuki, GM, Tata Motors and several global tier-one companies such as Bosch, and ZF.

Auto Monitor

22 JULY 2013

NEWS

“Demands are absurd” Workers demand company shares. Bajaj terms demand baseless.

he strike by workers at Bajaj Auto Limited’s (BAL) Chakan facility demanding company shares is ‘absurd’, says Rajiv Bajaj. These are workers affiliated to the Vishwa Kalyan Kamgar Sanghatana (VKKS). He has made it clear that no shares will be given irrespective of the period of the strike. Pune’s labour court has adjourned the hearing between BAL and the VKKS to July 22. Kailash J Zanzari, V P Manufacturing (motorcycles), BAL, said that the labour court was displeased with the strik-

ing workers’ demands. At a press conference last week at Bajaj’s Akurdi facility, the company stated that production and discipline have to be restored before meaningful dialogue, and suspension pending enquiry will be reviewed by the management in which misconduct is not serious and the employee accepts the mistake in writing. As of July 17, 2013, the strike had entered its 23rd day but more workers were returning to duty. On July 1, 388 workers reported for duty. The number rose to 684 on July 16. Total manpower at the Chakan facility was 1,486 workers

The strike caused a loss in production of up to 20,000 units in June. To keep production losses in check, the company shifted part of the production to its Waluj facility.

as of June 2013, out of which 900 were permanent, 364 trainees, and the rest a mix of learn-andearn, employment promotion program (EPP) and trade trainee apprentices. According to BAL, 20 percent deliberate production loss started from October 2012 in one particular shift. On June 19, 2013, the VKKS sent a letter to BAL demanding each worker be given the option to subscribe to equity shares of the company at a discounted rate of Re 1 per share (share prices were around the Rs 1,900 mark then) and be allowed to buy up to 500 shares.

The demand was rejected, with BAL terming them ‘baseless, unwarranted, impractical and improbable’. In response, the VKKS wrote to BAL on June 13 that work will be stopped from the morning shift of June 28. Work came to a halt three days prior to this date on 25 June, the same day the KTM 390 Duke was launched. A week later, on July 1, 388 workers returned to work and the number gradually began increasing. The Chakan facility manufactures all the Pulsar and KTM models and has an installed capacity of 3,600 units per day.

The strike caused loss in production of up to 20,000 units in June. To keep production losses in check, Bajaj shifted part of the production to its Waluj facility where 40 percent of the production was managed pending resumption of full-scale operations at Chakan. Zanzari said that once the festive season begins in September, it will be difficult to continue like this since Waluj will be required to increase production of the Discover and Platina models. At present, production is at 90 percent. Zanzari said the KTM 390 Duke’s production was not hampered because workers on the 390 line weren’t among the absent workforce. Bajaj also makes the KTM 200 for India and export and the KTM 125 for export at the Chakan plant.

Auto Monitor

OPINION

{ G a

Diesel engines aren’t the problem

R Bertrand D’Souza Editor, OVERDRIVE

ecently a concerned resident of Delhi ﬁled a PIL in the Supreme Court which resulted in a notice issued to the Central and Delhi governments. As per that litigation, Arvind Gupta claimed that diesel was the dirtiest fuel in the world and due to an over abundance of diesel vehicles the air quality in Delhi was staggeringly poor. Citing a World Health Organisation study, the plaintiff observed that the air quality in Delhi was 30 times worse than what was recommended. This puts Delhi on the list of one of the worst cities in the world in terms of air quality, critically endangering lives. The PIL called for introduction of Euro V emission norms as well as to make manufacturers introduce Euro V and Euro VI engines in their vehicles as this would curtail emissions. It also asked the Supreme Court to put a stop to subsidies on diesel as this encouraged more people to buy diesel-powered vehicles

as this was a cheaper fuel. The Supreme Court has of course asked the Centre and the Delhi government to respond. There are, however, a few problems with this PIL and while it is heartening to see concerned citizens raise their voice about a

22 JULY 2013

very critical issue, I think the direction it is pointed in is incorrect. India is a complicated situation and untangling the mess we have driven ourselves into isn’t going to be simple. It’s going to take more than just a simple GPS device to show us the way. So what exactly is the complication? You see, every vehicle sold in India already conforms to existing emission norms. Manufacturers, however, cannot move to engines conforming to Euro V emissions as these engines cannot accept the fuel quality that is available in India. In fact most manufacturers have to downgrade their engines before offering them to Indian consumers because of the poor fuel quality. It’s not just engines but also the fuel quality that has to move forward and Indian fuel companies are not equipped, presently, to make that move. To upgrade the fuel quality needs massive investments, something to the tune of Rs 30-40,000 crore is needed to upgrade refineries. With increasing global prices of crude and subsidised fuel, oil companies aren’t in a position to put in those investments, which is where the government needs to step in. Europe, Japan, North America and certain parts of Asia have made these necessary changes and now are able to enjoy the benefits of lower emission engines. A source at the oil ministry says that this battle over emission norms between oil companies and car manufacturers will continue but also undergo a change because the subsidy issue with petrol and diesel is being dealt with. Gradually it is hoped that oil companies will be able to invest in improving refineries and the fuel quality as well. That, however, is just one part of how emissions can be controlled. There are other factors that need to be addressed because just moving up to Euro V compliant fuel and engines isn’t the final solution. According to Sumit Sharma at the Energy and Resources Institute (TERI), Centre for Environmental Studies, we also need to get the rest of the country to conform to Euro IV emission norms. Tier-2 cities still conform to Euro III norms and this is also contributing to increasing emissions. The PIL states that particulate matter in the air is extremely dense and that is absolutely true, see the smog buildup in any city and you will know just how bad the situation is. As per the study conducted by TERI more than 80 per cent of cities in India are above the standard limits and some such as Delhi, Raipur, Jhansi, Ludhiana etc. are preposterously above the limit. But how do matters get to these proportions, it is certainly not something that is generated overnight? The answer could lie in our traffic management. According to Rajesh Kumar, the director and head of Mumbai zonal centre NEERI (National Environment Engineering Research Institute) the problem is not as much with the pollutants our cars emit but the amount of time they emit this, depending on the rate of flow of traffic. So the longer a car sits in a traffic jam the more pollutants it emits. If our infrastructure was up to date, the traffic free of obstacles be it potholes or bottlenecks (5 into 2 lanes) vehicles would spend less time on the road thus reducing pollution. I can subscribe to this notion whole-heartedly since I drive a diesel and I spend on average an hour and a half commuting to work. Using the local transport system isn’t an option I am willing to take, at least not until it improves in terms of quality. The 28 kilometre distance I commute daily then should take me no more than 45 minutes, but I take twice that time, which means my contribution is exactly twice what it should be. To add to this I also burn more fuel and this applies to everybody on the roads. According to Rajesh Kumar, “The people in the auto fuel policy committee need to keep in mind the lack of infrastructure and development in public transport which ensures that air pollution gets worse. For instance, the quality of roads or the cost of public transport in comparison to plying a two-wheeler. These are things that need to help shape the policy rather than looking at it as an issue of engines and fuel only.” Yes, manufacturers can additionally help offset some of the emissions by introducing technology such as start-stop systems or cylinder deactivation. This is however an additional burden to the end user. Manufacturers are already offering stateof-the-art engines but unless the fuel they burn is also cleaner these advanced engines can’t do much. We still seem to be moving in circles.

Auto Monitor

COLUMN

A Nabeel A Khan

t the last Auto Expo in Delhi, industry honchos were all praise for the Indian car market, which they foresaw going beyond small cars. That came almost true, going by the success and sales of compact sedans and compact SUVs. The UV segment experienced spiraling growth of around 30 to 50 percent for several months. The story began when the XUV500 saw unprecedented bookings, followed by the Renault Duster with the latest being the 30,000 bookings for the Ford EcoSport within 17 days of launch. Similarly, there was an enthusiastic response to the Honda Amaze, with even the Maruti Dzire and other products in the segment faring pretty well. If the above statement is true, then why did Carlos Ghosn, CEO of Nissan Motor, launch Datsun in this segment in India? The small car and low-cost segment has been the fancy of Ghosn since Tata Motors launched Nano, and when, a few years ago, he initiated an ultra-low-cost (ULC) project with Bajaj Motors that did not take off. Nissan Motor’s last ﬁscal sales performance supports this trend when we realize that the company sold more Sunnys (23,998 units) than the hatchback Micra (11,449 units). And now Ghosn is back with a brand that Nissan killed off 32 years ago. Moreover, the strongest reason why Ghosn unveiled the product in the segment which is not so happening in India is that it is not

22 JULY 2013

Will DAT-SUN rise?

meant for India alone but for exports like its traditional policy. The Datsun GO has

been designed to suit emerging markets such as BRICS and ASEAN countries. Historically, Nissan Motors has exploited its Indian facility for export purposes and this will continue with the new hatch also. The company makes the hatchback Micra, the Sunny, a sedan, and Evalia, a multipurpose vehicle, at this plant. In the last financial year Nissan produced 138,549 cars. Of this, it sold 36,955 units in the domestic market and exported 98,971 units. Consider the Indian small car market. The compact hatchback market has seen several new players coming up with new products in an attempt to create a flurry. All their attempts fizzled out as they failed to compete with existing players, and bigger ones. When Chevrolet introduced Spark, they were gung-ho about the rise of a new star but nothing of that sort happened. In April-June quarter this year, Chevrolet sold only 845 units of Chevy Spark against 37,785 units of combined sales of Hyundai Eon and Santro, and Maruti Suzuki’s 97,668 units in the same category in the same period. Maruti has four models in this category –Alto 800, Wagon R, A-Star and the Alto. Often, launches of new models tend to create some excitement and they tend to sell initially. But soon after, they peter out. This does not imply that the new products pitted against the existing behemoth are lower in terms of quality or price. They simply cannot survive the competition. A leading reason for their failure is not the product itself, but aftersales. Customers buy cars because they see a lucrative re-sale value and convenient aftersales. And most of the times, the new entrants fall back in terms of deeper penetration in terms of sales and service network. Maruti Suzuki and Hyundai have created much bigger networks and touch points that will take years for the new entrants to emulate. This is also the reason why the top players are seeing a large part of their sales coming from small towns and cities, which is still distant for the new players. The other pivotal reason for their success is availability of parts at reasonable cost. There’s a general impression that other than these two brands, servicing costs of other brands are costly. Coming back to Nissan Motor, if the company wants to achieve 10 percent market share in India by 2016 as envisaged by Carlos Ghosn, it doesn’t need only 10 new models. What it needs are sales that are 10 times bigger, not to forget a sales and service network that will create trust among customers. Ghosn is hoping that Datsun will play a major role in increasing volumes. Resurrecting the brand was a key element of Nissan’s Power 88 strategy under which the carmaker is also targeting an eight percent global market share in the same time period. Ghosn is not wrong in attempting the mini hatch market as this is the segment which has the biggest volumes at over 1,36,298 units in AprilJune and only three products are leading the number against the total volume car sales was at 4,34,551 in the same period. Nissan needs to price it competitively and it should start in the early Rs 3 lakh range to be able to enthrall the market.

Auto Monitor

22 JULY 2013

NEWS

Southern Comfort Southern India is largely associated with the auto industry. A large part of the manufacturing happens here. But things are not all hunky-dory. Let’s take a look. MNCs preferred to set up base in the southern region given its blend of skilled and disciplined engineering talent and labour, proximity to ports, financial incentives, and a stable industrial policy.

hy do foreigners love South India? This was a question thrown at me by a Pune-based automotive components company when I told him about the special feature on South India in this issue. I have no answer. I am not even sure whether the question implied only the weather. But one thing’s for sure. Whether the weather is pleasant or inclement, you cannot ignore South India when it comes to automotive. Yes, the presence of 14 ports (and counting) is a big lure. But then for that matter, West India too boasts of that. It’s besides the fact that Gujarat has opened its doors wide to auto companies, but that’s only now. It’s easy to see why MNC car companies preferred to set up base in the southern region given its blend of skilled and disciplined engineering talent and labour, proximity to ports, ﬁnancial incentives, and a stable industrial policy. What is spoiling the show now is the poor power distribution thus leading to frequent power outages. Last year, R Chidambaram, principal scientiﬁc adviser to the Government of India, in an inaugural address at the fourth edition of the Conference on ‘Automotive R&D Trends 2015’, had said that Chennai can emerge as the automotive R&D hub, considering it is the house for global and domestic automotive majors. Knowing that Chennai has automotive industry-led research institutions such as the Ashok Leyland and Nissan Research joint venture; Mahindra Research Valley; research teams of Hyundai and Renault, not to forget the academia present there, it makes sense to carry out R&D on proprietary or generic automotive technologies. And now Karnataka too wants its share of the limelight. Recently, Honda Motorcycle and Scooter India Pvt Ltd (HMSI) commissioned its two-wheeler manufacturing plant by at Narasapur in Kolar district to produce 1.8 million two-wheelers by March 2014. The company, along with 17 vendors, invested over Rs 3,000 crore. This is the second two-wheeler plant that has come up in the state after TVS Motors who operates a plant at Mysore. The state has automobile companies like Mahindra Reva, Tata Motors, Volvo, and Toyota run-

ning operations. A positive factor here is that Honda will require more than 4,200 persons working at the plant. It has also requested its component suppliers to set up plants around the new plant and this will take the total employment to 10,000 or more by next year. The state government has allotted 119 acres to HMSI. Karnataka is already home to other automobile majors like Volvo, which has two plants for making trucks and buses at Hoskote and Toyota Motor Corporation at Bidadi. Toyota makes cars and engines. Mahindra Reva has recently set up a new plant to produce electric cars at Bommasandra near Bangalore and TVS Motors has a plant at Nanjangud in Mysore district to manufacture two-wheelers. Tata Motors has set up two plants for construction equipment and buses in Dharwad. BEML has two plants for making buses and trucks for armed forces in Bangalore and KGF.

Courtesy: Hyundai

Courtesy: Renault

Positive aspects When OEMs set up shop at a particular place, it’s obvious that their component makers will follow suit. Not only does this increase their chances of keeping prices of the end products low, but provides business opportunity to local component manufacturers. Going by ﬁgures cited by auto components companies, sourcing of auto components from low cost countries currently at around $65 billion is set to touch $375 billion by 2015. Considering that three groups headquartered in Chennai – TVS, Rane and Amalgamations – account for more than 20 percent of India’s auto component production, the industry has great prospects. The global market for vehicles and auto components is expected to be driven by emerging markets over the next decade with vehicle production in India expected to grow three fold from 2009 levels to 2020. With OEMs also considering capacity expansions, this also augurs well for the $23 billion component industry. The industry has a potential to grow to a size of $110 billion by 2020 from the current size of $26 billion. Exports can grow $3.8 billion to $26 billion by that time. A nd component ma kers are gearing up. Most auto

Courtesy: RSB

22 JULY 2013

The ChennaiHosur-Bangalore belt houses around 350 out of 1,000 auto component makers in India, and accounts for nearly 35 percent of total component production.

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component makers are already armed with various quality certiﬁcations and more than ten Deming Medal (medal for quality production) winning companies are located in Tamil Nadu. Similarly, the Chennai-Hosur-Bangalore belt houses around 350 out of 1,000 auto component makers in India and accounts for nearly 35 percent of total component production. Hence, the component suppliers in this region are exposed to global practices and norms like product liability, warranties and others. The successful development of Nano car by Tata Motors has resulted in 37 patents being ﬁled by component makers, demonstrating the capability of Indian auto component makers. A breakup of products that are largely manufactured in South India are Engine parts (33 percent), Drive transmission and steering parts (20 percent), Body and chassis (14 percent), Suspension and braking parts (14 percent), equipment (12 percent), and Electrical parts (7 percent).

The Andhraite emerges The emergence of Sri City as South India’s Integrated Business City was another development that Andhra so badly wanted. The City consists of a Special Economic Zone, Domestic Tariff Zone and Free Trade Warehousing Zone, Ready Built Factories (RBF)

at the Japanese Enclave to attract Japanese SME’s. The RBF’s will be in sizes of 5000, 10,000 and 20000 square feet area. In the first phase, Sri City has already built two RBF’s and will build more as demand increases. Plans are afoot to set up 20 RBFs in the next two years spread over 20 acres. The Ready Built Factories can help companies become operational in 4-5 months. Isuzu was the first to lap it up and set up a Rs 1,500 crore plant shop at Sri City in Chittoor district of south AP. Data reveals that in 2010-11 the state saw total investments of Rs 10,094 crore pumped in by large projects (of above Rs 1 crore) alone, and last fiscal stood at nearly Rs 8,550 crore. Investments in South AP have been going up, with investments in large projects rising from Rs 2,570 crore in 2010-11 to Rs 2,200 crore in 2012-13. This trend is set to accelerate as the proposed Chennai-Bengaluru Industrial Corridor (CBIC) comes up and attracts more projects to the region. In the Union Budget, the Finance Minister spoke about the project cutting through Chittoor, Nellore and Anantapur districts, which will play a key role in the industrial development of the region. Major investments can no longer remain concentrated in the state capital area, which is already a major IT and pharma

Courtesy: Ford

Courtesy: Hyundai

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The power shortage in the state is worsening matters. The state faces a shortage of 30003500 MW shortage. Although OEMs are not highly affected, it does affect the supply chain.

22 JULY 2013

NEWS

hub. New investments are coming in manufacturing, heavy industries, engineering goods and South Andhra is an ideal base due to its good infrastructure like roads and proximity to ports. The power supply too is much better than the rest of AP. Investors have been choosing South AP mainly because of its proximity to Chennai as they can derive beneﬁts from both Andhra Pradesh and Tamil Nadu. The easy availability of large parcels of land for industries to set up their facilities too is another key factor driving investments southwards.

What’s biting now? The success has apparently not stood the test of time. One automaker who already has a plant in South India is considering setting up its second plant in the Western region, namely Gujarat. The company is investing Rs 4,000 crore that will initially have an installed capacity of 2.4 lakh units annually. The power shortage in the state is also worsening matters. Apparently, the state faces a shortage of 3000-3500 MW short-

age that mainly affects industry. Although OEMs are not highly affected, it does affect the supply chain. Moreover, most of the manufacturing is assembling of components and when the components suppliers are faced with a power outage, the OEMs too have to bear the brunt. Another factor is that the cost of labour, power and fuel has almost doubled in TN over the last three years. Component makers end up paying around Rs 12-13 for a unit of power due to usage of generators versus Rs 4-6 for grid power. Chennai produces practically everything that moves – from bicycles to battle tanks, including motorcycles, cars, tractors, earth-moving equipment, trucks and even rail road coaches—so it’s no surprise that auto manufacturing was able to thrive. Last year was a good year for the state. According to its estimate, over $3 billion (around Rs 13,800 crore) was invested in Chennai by the car manufacturers by end of 2010. It is a vital industry for TN, employing about 2.5 lakh people. Total installed capacity in and around Chennai is 12.8 lakh cars

Courtesy: Hyundai

Courtesy: Renault

every year, making Chennai one of Top 10 centres in the world for car manufacturing. The lack of power isn’t the only problem crippling TN’s auto industry. Labour problems threaten to sink it as well. At Hyundai Motor India, workers went on a 18-day strike two years ago to demand recognition of the employees’ union. The then company spokesperson came on record and said the company is moving in 20 productions to its Turkey plant, to cater to European markets. Tire maker MRF has experienced a debilitating strike—the Arakkonam (TN) unit was closed for 185 days in 2009. The main problem was rival unions clamouring for recognition. Its workers subsequently went on strike again in October 2010 as well as June 2011. Finally, it is ironic that a policy that was once their strength in Tamil Nadu has become a weakness. Real estate pricing according to industry experts is killing the industry. Prices are now 200 per cent higher in TN. Even just setting up costs, sans the land price, is 30-40 per cent higher. When an OEM invests Rs 1, rest of the people in the chain including suppliers invests Rs 4. It’s a matter of time when one will ﬁnd that the South cannot handle its success. Unless the state government acts quickly, Tamil Nadu risks losing its pride, customers like Hyundai and its position as India’s premier auto hub.

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22 JULY 2013

INTERVIEW

Lokesh gets stronger in Pune

Lokesh Machines plant.

yderabad-based Lokesh Machines Ltd has set up a plant in Pune to manufacture its sole product for the automotive industry – cylinder blocks and heads. Unique to the plant is its automation line that took the entire investment in the plant to Rs 35 crore. The idea is stay close to the customer since the company soaks in large orders from Mahindra. The company has employed Gudel line, an automated process for turning, grinding, as well as hardening, measuring and finishing operations. The line allows the f lexibility to change product types without compromising on production while allowing for simultaneous production of different types of products. What M Lokeshwar Rao, MD of Lokesh Machines is most impressed with is that the plant employs only two people to operate the machines. “As it’s a completely automated line, the Gudel line picks up the component and takes it from machine to machine for the final product. We established the factory to make cylinder blocks for Mahindra’s Maxximo.” The plant can make up to one million connecting rods that are supplied to Mahindra and Tata Motors. Earlier when Lokesh Machines supplied the cylinder blocks from Hyderabad it would take more than a month to deliver. Supply chain was an expensive affair as consignments would be sent in smaller batches and quicker. In a first, the company has also supplied a line to Eicher Volvo that will enable them to manufacture cylinder blocks conforming to Euro 6. Lokesh Machines bagged the contract put out through a global tender that saw stiff bidding from Chennai Metal and other large global companies. Earlier the company had supplied 17 such machines to Volvo for making engine blocks, and some to Mahindra too. Rao says that the high value machines cost as much as Rs 4 crore. Reproducing the machines in India meant that seven engineers had to travel to Sweden to understand the original Volvo line before emulating the same in India. The total cost of the deal was Rs 30 crore. Since the company garners a considerable amount of business from the auto industry, it has set sights on capturing more customers. Rao says, “A f lourishing market pushes us to concentrate on existing customers. It’s only conditions deteriorate that we seek to widen our base and this is not easy.” In another move, Rao is mulling expansion of product for the auto segment, but this is a long term view. Tough market conditions coupled with heavy investments in R&D do not make it feasible for the present. However, it has sought to make crankshafts for Bharat Forge, and makes component for the Mahindra Bolero at Hyderabad.

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Ravi Sirige, Vice President (Services and Applications - IMT Division), is proud of the engineering capabilities of Carl Zeiss. The company has global standards and metrology has been gaining wide acceptance. How does Carl Zeiss serve the Indian automotive sector? How does the IMT division play a role in this? The Indian automotive sector is integrated with the global automotive sector. The requirement is to cater to all global players and the need to have quality standards at par with the best in the industry. Zeiss has been able to provide solutions to the special quality needs of the industry globally. This experience will help Indian industry to lay hands on the Zeiss experience and to improve the quality standards at par with the global requirement. Measurement Technology has moved from Laboratories to Shop ﬂoor. Metrology is gaining signiﬁcance in the manufacturing process. Growing awareness of metrology is changing the Indian manufacturing industry’s outlook towards Quality. How do you plan to deploy Indian Engineering skills for your global operations? Indian engineering skills are in great demand. Software development, software testing play a key role in supporting R &D. Carl Zeiss has partnered with global companies for Software development, Software testing, Service and applications. Indian engineers are sent out for providing applications and service support all over the world.

Considering the current market situation, could you tell us some of the verticals that will help you drive growth in India? The manufacturing industry is one of the second largest sectors that contribute to the GDP of our nation. Automobile, Aerospace, Wind Energy, Auto Components Industry, Gear, Machine Tool and Cutting Tool Manufacturers, Tools and Dies, Plastics etc are some of the verticals that will help drive growth in India. Could you tell us how you foresee Carl Zeiss in India considering that India is now a Centre for several MNCs to set it up as global manufacturing hub? India is increasingly adopting global approach to become a strategic player on international platform. Entry of foreign companies in manufacturing industry has anchored technology-based orientation which is subsequently helping India create a core and contemporary manufacturing sector, fed by ancillary manufacturers who also need expertise technical skills. Carl Zeiss has worked with all leading companies globally and provided solutions to them. We can provide top end solutions that would help Indian industries to help to integrate with global manufacturing. How do you see the current Indian market for your products? How do you plan to tackle the current slowdown in the market? Our products have wide acceptance across the globe. The current slowdown in Indian Industry can only be overcome by giving importance for export. For exports sustained quality becomes essential feature. Zeiss products help in producing reliable & reproducible products which enhances the export potential. You have a modern campus in Bangalore. What are some of the hi-tech activities that happen there? We are clearly giving a contribution to the quality of the manufactured products that meets the expectation level of the customers. Carl Zeiss has state-of-the-art built in assembly facility and competence centre. This possesses several CMM’s in the Competence center. These machines can be demonstrated to prospective customers showcasing the ability to provide solutions to their quality problems. India is increasingly adopting global approach to become a strategic player on international platform. Entry of foreign companies in manufacturing industry has anchored technology-based orientation which is subsequently helping India create a core and contemporary manufacturing sector, fed by ancillary manufacturers. Certain hi-tech activities of our competence centre include providing total measuring solutions, Tele services, Technical seminars, Reverse engineering solutions, application training, software testing and software development.

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Seeing it right

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22 JULY 2013

INTERVIEW

“Systems need our installation support” Mahr Metrology India has been operating since 2007 as a 100 percent subsidiary for Mahr GmbH, Germany. In addition to Metrology business, Mahr manufactures rotary stroke bearing and spinning pump products in Germany. R Ganesan, MD, Mahr Metrology India, speaks about his company plans.

You’re planning to introduce a new range of products. Is it for the auto sector? Could you elaborate on each product? Mahr caters to automotive industry predominantly and closely works with major automotive companies in the world. To keep up the new demands and expectations from customers, Mahr follows these special needs and develops speciﬁc new product releases and related application developments on existing models. Some application developments launched in the market are as follows: MarSurf: Surface Finish Measuring sys-

tems – introduced mobile measuring systems M400 for easy measurements right on the shop ﬂoor, Launched 2-in-1 high speed Surface ﬁnish cum Contour measuring system model LD130/LD260. Launched high precision 2D/3D Measuring station for measurement and evaluation of Optical components such as Aspheric Lens. MarForm: Form measuring systems – introduced new models for parts measuring 900mm in length. Introduced 3-in-1 motorised probe system i.e., Surface Finish, Contour and Form measurements in single set up. CAM evaluation software, Diameter measurements,

Each Metrology system is designed to work either in the standards room facility which is environment controlled or in a shop floor. Systems need our installation support and product operation training support.

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Velocity Analysis for Roller bearing parts, Lead testing and analysis for shaft seal face, Piston Measurement, Commutator analysis are some of the key application options offered by Mahr. MarGear: GMX series 600 offers customers a unique advantage of combining 3D, Form and Gear measurements in a single system. CNC control offers fully automated inspection of all type of Gears and Gear cutting tools in addition to Engine and Transmission parts Viz., Piston, Crankshaft, Camshaft, Con-Rod to name a few. Precimar: Universa l Leng t h Measuring system(ULM) for in-house calibration of all type of Gages, Dial Gage Comparator and Gage Block comparator MarShaft: Contact and Optical based shaft measurements system for turned parts and for shop ﬂoor / production is in use.

What are the applications where these products will be used? Application of our products mostly caters to automotive industry / parts viz., Engine components, transmission components, brake parts, etc., other industries covers Bearing, Machine Tools, cutting tools, Hydraulic systems, Aerospace, Defence, etc.,

Will they need installation or is it off the shelf? Each Metrology system is designed to work either in the standards room facility which is environment controlled or in a shop ﬂoor. Systems need our Installation support and product operation training support also.

Considering that the range of products you have are a one-time purchase, how do you conduct your marketing? Our products are capital investment based and normally the systems stay healthy for several years and more than a decade. Mahr India participates in important International exhibitions and regional ones also to stay live with the market. In addition we have sales partners who also market our product. Mahr India present in all major cities and operating thru branch network and this helps to improve our presence. Kris Automated Packaging ackaging Systems, A – 39, Road No 11,Wagle Industrial Estate, Thane (West) – 400 604, Maharshtra, India. Tel: +91-22-30948000, www.krisautomated.com

How are the products priced? Mahr positions the individual product pricing in accordance to the market requirements.

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In the pipeline Comfort, regulations to drive next-generation Continental products in CV, agri equipment segments.

Frederic Moulin, Segment Manager France, Vehicle Electronics, Commercial Vehicles & Aftermarket, Continental Automotive France SAS

Abhishek Parekh Germany

ontinental is looking to apply its development and advanced automotive engineering skills to the commercial vehicle (trucks and construction equipment) and agricultural equipment segment. Low volume manufacturing and long development and sales cycle

22 JULY 2013

REPORT

are unlikely to be deterrents in the company’s endeavour to introduce advanced driver information systems, safety, utility and comfort-based features in commercial vehicles and agricultural equipment. The company has developed a system for the construction sector that provides a three-dimensional view of the vehicle’s environment. The all-round camera surveillance system ProViu 360-degree

provides drivers in the cabin with a complete view of their vehicle’s exterior. The camera system comprises several digital micro cameras attached to the outside of the vehicle, which can sweep the sides, rear and front of construction vehicles and trucks in real time. An electronic control unit merges these four digital, high-resolution camera images, which are automatically optimised for con-

trast and brightness, on a display in the cockpit, giving the driver virtually a bird’s-eye view of the vehicle, including all blind spots. The system switches between 2D and 3D representation at the push of a button. In two-dimensional mode, the driver’s view is focused on the immediate surroundings, whereas in 3D mode even more information from the surroundings, as well as other road users, is more easily recognisable. The ProViu 360 system (which can also be retroﬁtted) offers not only enhanced safety but also positive economic effects with faster manoeuvring and shorter loading and unloading times. The company currently supplies displays and instrument clusters, sensors to measure speed, pressure, temperature, nitrogen oxides (NOx) and the fuel level, as well as radios and accelerator pedals to the commercial vehicle segments. “Some of our products have been developed using our extensive local insights regarding operational conditions of the vehicles as well as our skills in development of safety and comfort features for passenger cars. These products can enhance profitability for the vehicle operators as well as help vehicle manufacturer differentiate their offerings in a competitive market,” says Dr Michael Ruf, Head of the Business Unit – Commercial Vehicles & Aftermarket, Continental. The gradual enhancement of automated systems and growing regulatory compliance issues on safety and fuel efﬁciency for agriculture equipment in different markets globally has not escaped the attention of component suppliers. “More than regulations, our interaction with customers and local market expertise are likely to be guiding factors for us in development of advanced electronics

systems for agricultural equipment and construction equipment markets,” said Frederic Moulin, Segment Manager France, Vehicle Electronics, Commercial Vehicles & Aftermarket, Continental Automotive France SAS. He added that the key issue with the introduction of ‘next generation’ technologies in any segment are market readiness as well as demand and ability to absorb these technologies in terms of need and ability to pay for higher costs. The company had earlier introduced programmable cluster that offers high-deﬁnition colour display and its cutting-edge human machine interface software tool chain to provide tractor operators with information they need to simplify control and use of machinery. The cluster presents the information in the form of widgets, text, 2D and 3D graphics, animations and videos. It is also possible to prioritise displayed information according to the context on a potential 12-inch colour display. In a recent media interaction at the divisional headquarters in Southern Germany, the company also showcased products like electronic control units (MUX4-P), customisable transmission control systems, body control units, sensors to measure speed, pressure, temperature and nitrogen oxides (NOx) in addition to instrumentation platforms such as full programmable cluster. Continental is aleading automotive supplier with sales of 32 billion euros in 2012. It currently employs 173,000 personnel in 46 countries. The company’s automotive group with its three divisions: chassis & safety (7 billion euros sales in 2012), powertrain (6.1 billion euros) and interior (6.4 billion euros) contributed 19.5 billion to the total group turnover in 2012.

22 JULY 2013

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AUTOPOINT

“Replacement demand to keep tyre rolling in near term” Revati Kasture Head - CARE Research

Vishal Srivastav Manager Kunal Maheshwari Analyst

ver the last one decade the automobile industry has gone through various structura l changes that has driven automobile sales and in turn OEM demand for tyre industry. The emergence of small commercial vehicles (SCV’s), growing demand of mid size cars and premium hatchback cars, recent emergence of small utility vehicles, growing popularity of gearless scooters are some of the key structural changes that triggered growth in their respective segments. On the other hand, growth in the replacement demand has been propelled by healthy rise in automobile sales during last 8-10 years barring FY08 and FY09 that has led to considerable increase in population of vehicles on road.

Healthy replacement demand kept industry afloat in FY13 The continuing pressure on automobile sales owing to challenging economic environment has substantially impacted the original equipment manufacturer (OEM) demand for tyres in FY13. However, healthy rise in replacement demand helped to keep tyre sales aﬂoat. As per the data released by the Automobile Tyre Manufacturers Association (ATM A) for April-December FY13 period, the replacement demand in unit terms has witnessed a growth of 10 per cent. Whereas in tonnage terms the replacement demand witnessed

a strong rise of around 27 per cent on y-o-y basis. Sharp drop observed in sales of higher tonnage T&B tyres has considerably

pulled down the OEM demand especially in tonnage terms during April-December FY13 period.

OEM demand shrinked considerably… The OEM demand of tyre industry that has been growing

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22 JULY 2013

AUTOPOINT

economics for radial tyres and improvement in road infrastructure have fuelled the replacement demand for this tyre category. CARE Research estimates that the proportion of radial tyres in T&B tyre production to increase to around 45-48 per cent by FY18.

...Strong demand from OEM segment has fuelled the growth in TBR tyres off-late

at a healthy pace during FY10FY12 period, hit a roadblock in FY13. Challenging economic scenario and steep hike in fuel prices during FY13 augmented the overall cost of ownership that led to subdued demand in the automobile industry, strained the OEM demand. In unit terms the OEM demand witnessed a drop of around 2 per cent. While in tonnage terms, the drop has been much sharper at around 7 per cent during April- December FY13 period indicating sharp drop in the demand for higher tonnage tyres.

OEM demand expected to remain under pressure in short term whereas replacement demand would continue to remain the growth engine in near term CARE Research foresees the OEM demand to increase at a moderate rate of around 6 per cent in unit terms. However, as the demand for higher tonnage T&B segment is expected to grow at lower pace, the growth in terms of tonnage is expected to be lower at around 4-5 per cent.

On the other hand replacement demand that formed around twothird of the overall domestic tyre demand in FY13 is expected to remain the growth engine for the industry in short to medium term period. CARE Research believes considerable addition on vehicles on road during last one decade will continue to fuel replacement demand for tyres. CARE Research foresees replacement demand in FY14 to grow in a range of around 12 per cent in unit terms, whereas in tonnage the growth is expected to be around 14-15 per cent, suggesting higher rise in replacement demand.

India is among the least penetrated market for Truck & Bus radial (TBR) tyres in the world that enhances its growth potential Even though the penetration of radial tyres has increased signiﬁcantly in the domestic market, India continues to remain one of the least penetrated markets for these tyres in the world. For example even in some of the emerging economies from South

America, Africa and Eastern Europe, the proportion of radial tyres is more than half in T&B segment, which indicates ample growth opportunities for the TBR tyre manufacturers in India. CARE Research believes TBR tyres have been able to garner signiﬁcant share in the OEM demand, however, its share in replacement demand is considerably low.

TBR tyre demand to almost double in next five years… CARE Research observed that during last 3-4 years, the demand for radial tyres in T&B category has witnessed a strong rise. Although, its penetration in T&B segment has increased nearly three folds from around 7-8 per cent in FY10 to estimated 23 per cent in FY13, it still remains the lowest compared to other automobile segments. The increase in OEM demand for radial tyres has been mainly due to rising purchase by commercial vehicle manufacturers for their new sales, growing demand from transport operators, etc. While, rising awareness among truck operators about better cost

CARE Research has observed the rise in TBR market was led by strong growth in the OEM demand as M&HCV manufacturers have started preferring radial tyres over cross-ply ones owing to its inherent advantages. CARE Research foresees the OEM demand would continue to drive the TBR market in near term. The penetration of TBR in T&B OEM demand that was estimated to be around 53-55 per cent

in FY13 is expected to increase to around 65 per cent by FY15. However, the replacement market which formed close to 3/4th of domestic demand in FY13 for T&B segment is critical for the growth of TBR tyres. CARE Research believes, initiatives taken by key tyre manufacturers (both domestic and global) to impart awareness about the beneﬁts of the radial tyres would fuel growth for these tyres in replacement market in medium to long-term period. Hence, healthy rise in demand for TBR in replacement market would significantly surge the proportion of these tyres in T&B replacement segment in the medium term period. CARE Research estimates the proportion of TBR in replacement market which was estimated to be around 20 per cent in FY13, is expected to increase to 30 per cent in FY15.

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22 JULY 2013

VIEWPOINT

Traceability for the automotive industry

raceability helps in overall improvement process, documenting genealogy of parts and sub-assembly of vehicle or range of vehicles. This data can be accumulated and combined into a barcode and marked ensuring full traceability. Some of the information collected are: z Source manufacturer z Manufacturing or assembly facility z Place of origin z Production time and date z Lot number z Part number z Model number z Serial number z Components used in assembly z Expiration dates, etc

Goals of a Part Traceability Program Monitoring process control Real-time tracking systems reduce lead times and optimizes supply chain by providing

information about work movements from zone to zone. These are based on work in process (WIP) identiﬁcation and associate data with order management and other control systems. Implementing error prooﬁng methods Traceability improves quality by ensuring that processes are performed in the correct sequence on the right parts. In addition to eliminating manual part number data entry errors, code reading, it assists in data logging for safety, liability, warranty issues and identify parts that can be counterfeited. Minimizing rejects and recalls “Dealing with a bad part at the supplier plant can cost between $25,000and $500,000 USD’’. With a traceability programme, these costs remain minimal.

Complete Automotive Part Traceability 1. Component Level Marking parts and subassemblies assures full automotive traceability. At this level, serial numbers and information can be converted to barcodes and directly marked on parts (DPM) or printed on labels. Finished products with incorrect components have to be reworked, causing productivity losses. Operators using instruction sheet to select final assembly components can eliminate errors by scanning each assembly individually to identify the assemblies to be mounted. Barcodes can also contain warehousing instructions. And DPM traceability provides operational visibility. 2. Sub Assembly Production history can be gathered automatica lly by marking and reading codes and integrating data collected with ERP system. Each component history can be documented, enabling response in the event of problems. Kitting Check cards or other documents may be printed with long 1-D codes while parts are marked with small DPM codes. When the same station requires operator to read a small code and then a long code, they use two different readers, slowing throughput. DataMan 8000 series increases efﬁciency and reduce cost. 3. Major Assembly

DPM identiﬁcation is driven by six-sigma quality initiatives. Finished products with incorrect components have to be reworked. Tracking historical data include time, date, assembly detail achieving regulatory compliance etc. 4. Final Assembly & Shipment Operators using instruction sheet to select final assembly components can eliminate errors by scanning each assembly individually to identif y assemblies and subassemblies to be mounted. Part Tracking Reliable ID reading keeps line moving toward meeting daily throughput goals. Achieving compliant production improves overall productivity, reduces operating costs etc.

The Adoption of 2-D DPM Codes To address full lifecycle traceability, manufacturers and suppliers permanently mark parts with two-dimensional (2-D) codes. It helps mark and identiﬁes individual parts, subassemblies and ﬁnished goods till the end. 2-D codes are used for DPM applications due to their small size, error correction and amount of data that can be stored as compared to 1-D linear barcodes. They are marked directly on part depending upon material composition, part application and environmental conditions.

Connectivity and Communications An Ethernet network pro-

vides computing systems access to plant floor data and allows vision systems and ID readers to share information for managing inventory, tracking parts, and automating production line changeovers. Fixed-mount and handheld image-based barcode readers are available with Ethernet connectivity that allow to scan barcode data directly to network of PCs, databases and PLCs without any special transfer devices on the floor. The ID readers should support protocols such as: z Ethernet/IP with Rockwell Add on Profile (AOP) z PROFINET with Siemens GSD z MC Protocol z Modbus/TCP z TCP/IP and FTP Scalability is also enhanced with Ethernet integration.

Automotive Example

Traceability

1. Intake manifold is labeled with a barcode containing assembly date and time, production line, and supplier. 2. A scanner reads the code to start the process of building the induction system and also read 1-D and 2-D codes marked on parts like the fuel rail, air box etc to add data to master record. 3. Barcode is added as it is packaged for shipment to the engine plant linking the entire subassembly to the ﬁle. The author is Patrice Denizard, VP, MVSD Sales & Services, Automotive Industry AsiaPac & KIA Region, Cognex.

Auto Monitor

INTERVIEW

22 JULY 2013

Volkswagen Academy & Educational Initiative by Volkswagen India The Volkswagen Group Academy at the VW plant in Chakan, Pune conforms to the global academy format. It provides technical and non-technical training to VW and dealer employees. For external participants at the Volkswagen Academy there are two types of apprenticeship programmes – 1-year Apprenticeship and Dual Apprenticeship. After training, apprentices can either join Volkswagen or look for opportunities outside. Pradeb Biswas gets to know more about this initiative from Dietmar Hildebrandt, Director Group Service, Volkswagen Group Sales India Private Limited. Can you elaborate on the technical training solutions that the Volkswagen Group Academy will provide? The Volkswagen Group Academy has been set up to provide technical and non-technical training to internal as well as external employees of Volkswagen Group dealerships, service centres and other apprentices. The technical training for internal employees includes end-to-end training for the employee. For example, for shop ﬂoor workers, there is training in processes such as welding and machining. All the employees of Volkswagen India go through induction training and production system training. To facilitate these trainings, there are Proﬁ rooms set up. The internal employees also get non-technical training in behavioural and leadership skills, the German language, etc. There are customised programs designed

to suit the requirements of employees which follow the format set globally by Volkswagen Academy. Apart from these, there is also a three year Dual Apprenticeship training of Mechatronics (Mechanical + Electronics + Informatics) based on the German system. In these three years of Dual Apprenticeship training, the first one concentrates on the basics of all elements required in the production field such as welding, metal work, electronics, IT, robotics, etc. The second year consists of advanced study of chapters covered in the first year and has more practical learning. The third year consolidates the learning process of the first two years and has independent projects. Volkswagen is keen to offer employment to 100% participants of the Dual Apprenticeship training. However, it is the choice of the participants if they want to be employed at Volkswagen or they want to move out to other manufacturers. Does the Academy offer non-technical training too? Volkswagen Academy caters to the complete Group when it comes to dealership and after sales service as well as the training required for working at the manufacturing facilities. For dealer and after sales training, all five Volkswagen Group brands in India are served. For technicians, mechanics, etc, who work directly on vehicles there are 43 training modules, designed at four levels – Fundamental, Basic, Advanced and Expert. These modules vary from the fundamentals of vehicles, engine and electrical basics to CAN bus oscilloscope diagnostics. For sales, marketing, etc., personnel, there is basic, advanced and expert training with regard to processes, functions and behavioural and soft skills. All the participants are awarded certificates on completion of the course. What criteria are used to recruit trainees for the Academy? For external participants, there are two types of apprenticeship training – 1-year apprenticeship and Dual Apprenticeship program. The 1-year program requires the participants to be ITI pass-outs, diploma holders or graduates. For the Dual Apprenticeship Training, there is a minimum requirement of 10+2 pass out with Physics, Chemistry and Mathematics as subjects as well as a selection process that includes a written exam, practical test and personal interview. Do you offer employment opportunity to the students? VG-TAP (Volkswagen Group Training and Education Program) training centres are associated with technical institutions and impart training to develop skills with which the students can work in the automotive industry once they complete their course. Students who complete the course are declared as ‘Certified by Volkswagen’. Currently, there are 12 institutes across India that are covered under the VG-TAP and so far 151 students have completed the course till 2012. What are your plans and strategies for the Body Shop Training? For example, robot operations, robot programming, advanced welding, etc. Almost all the activities that are covered in body shop have a training module and specific customized or tailor made training program is designed. What sales and after sales challenges do you seek to overcome with this academy? The main challenge faced by the industry today is lack of skilled manpower. The first batch of Dual Apprenticeship training at the Volkswagen Academy began in September 2011 and is expected to finish its training in September 2014.

Auto Monitor

32 Continental develops ‘active seatbelt’

uring an accident, the occupants of a vehicle are subjected to enormous forces that can result in injury. International automotive supplier Continental has developed a new function to tighten seatbelts immediately prior to an accident, which can reduce the severity of possible injuries by up to 15 percent. This new ContiGuard function – Active Emergency Belt Control – received the Euro NCAP Advanced Award last year and is already available in two compact cars produced by major German automobile manufacturers. “Safety systems like seatbelts and airbags are fully effective if occupants happen to be in the optimal sitting position before the impact. Our new Active Emergency Belt Control function can make this possible by tightening the seatbelts and holding the occupants in that optimal position“, said Dr. Ralf Schnupp, Head of the Occupant Safety & Inertial Sensors (OSIS) segment of the Passive Safety & Sensorics Business Unit in Continental’s Chassis & Safety Division. Seatbelt tightening occurs by means of a reversible electro-mechanical belt tensioner. For added safety, the car’s windows and sunroof shut automatically so that objects cannot penetrate into the car’s interior in the course of the accident. For this function, the driving status of the vehicle is analyzed in the Safety Control Unit (SCU) with the help of vehicle dynamics sensors and signals from surrounding sensors. As soon as the system detects that the driver is slamming on the brakes, that the car is skidding, that a low-speed accident is about to occur, or that a front-end or rear-end collision is imminent, the Active Emergency Belt Control activates the integrated safety functions prior to impact.

National Instruments and Kollmorgen collaboration

ational Instruments have announced that it is expanding its motion control offering through a collaboration with Kollmorgen, a leading global provider of motion systems and components for OEMs. These products include drives, motors, linear positioners, gearheads, cables and accessories. This collaboration between two of the industry leaders in motion control makes the design of sophisticated machinery and equipment easier. NI provides a variety of motion hardware, all programmed through the National Instruments LabVIEW NI SoftMotion Module and based on the LabVIEW reconﬁgurable I/O architecture, to help engineers create customized and highly conﬁgurable motion systems tightly integrated with NI’s broad measurement and control I/O portfolio. Kollmorgen will extend that offering to include servo and stepper technology across a variety of drive and motor product families.

OTHER NEWS

22 JULY 2013

Ashok Leyland Q1 results

he company registered a turnover of Rs 2,363.81 crore for the quarter ended June 30, 2013 as against Rs 3,026.89 crore during the corresponding quarter in the previous fiscal. Various cost control measures have helped the company remain positive on the EBIDTA front. Sale of vehicles for the quarter stood at 14,900 units with domestic volume at 12,960 units, reflecting a drop of 25.2% over the previous corresponding quarter. Sales of the successful SCV Dost was 6,824 units. Volumes from international operations stood at 1,940 units. The company’s loss from operations before Other Income, Finance Costs and Exceptional Items stood at Rs 71.92 crore. Apart from a drop in volumes, heavier discounting of vehicles to compete in the marketplace further eroded profits. Ashok Leyland suffered a Net Loss of Rs 141.75 crore as against a Net Profit of Rs 66.94 crore for the corresponding quarter in the previous year. “Although the entire commercial vehicle industry

has had a very tough Quarter 1, we at Ashok Leyland have remained focused on being future-ready by staying committed to our product development, network expansion and cost control programmes,” said Vinod K. Dasari, Managing Director, Ashok Leyland, announcing the Quarter 1 results of the Hinduja Group ﬂagship. “What we are experiencing is one of the harshest and steepest of downturns and while we are combating it, the situation also affords us an opportunity to streamline our processes towards becoming a leaner and far more customer-oriented organization.”

BorgWarner to supply new EGR cooler to Renault

orgWarner will be supplying its latest exhaust gas recirculation (EGR) cooler for Renault’s 1.6-liter diesel engine. BorgWarner’s advanced EGR cooler with integrated hybrid tube technology helps improve fuel economy up to three percent while helping to achieve upcoming Euro 6 emissions standards. The combination of BorgWarner’s optimized turbocharger and its latest compact EGR technology fulﬁlls future engine requirements with improved durability. “BorgWarner’s advanced EGR solutions, combined with our optimized turbocharging technology, is a major step in enabling diesel engines to meet future emissions regulations while improving fuel economy,” said Brady Ericson, President and GM, BorgWarner Emissions Systems. “With our many years of experience, BorgWarner offers customers the latest compact, low-pressure EGR technology.” Renault’s powertrain strategy included a low-pressure, compact EGR system. Although low-pressure EGR systems offer lower emissions and better fuel economy than high-pressure systems, components in low-pressure EGR systems must withstand extreme loads and damaging particles. BorgWarner’s EGR cooler technol-

ogy employs highly corrosion-resistant stainless steel hybrid tubes inside the cooler to quickly reduce the temperature of hot exhaust gases. The specially shaped hybrid tubes keep exhaust gases moving at high speeds to increase EGR rates as well as avoid soot and hydrocarbon buildup. The system also features an integrated hydro formed EGR tube to guide exhaust gases into the cooler and a metallic EGR ﬁlter with optimized permeability to protect the turbocharger compressor wheel by ﬁltering out any remaining particulates. BorgWarner’s advanced EGR cooler offers a compact, cost-effective and easy-toinstall technology engineered to reduce emissions and improve fuel economy.

Auto Monitor

22 JULY 2013

NEWS

Ashok Leyland unveils ‘Stile’

shok Leyland have launched the Stile, a stylish multi-purpose vehicle (MPV) based on an unspecified “contemporary award-winning platform”. Stile follows the successful Dost as the second light vehicle offering from Ashok Leyland. The Stile was developed by the Ashok Leyland- Nissan Motor Company joint venture. The vehicle is set to hit the

roads before the Diwali festival season, and will be manufactured at Nissan’s plant at Oragadam, near Chennai. The Stile has been developed to address 7-8 seater transport in urban and rural areas, for use as hotel shuttles, taxi service, ambulance, panel van, courier service, inter-city and intra-city travel. It aspires to offer India “global levels“ of performance and comfort.

M&M ties up with Central Bank

ahindra & Mahindra Ltd. (M&M Ltd.), India’s leading SUV manufacturer, has entered into a “preferred ﬁnancier” tie-up with Central Bank of India. The memorandum of understanding (MoU) between them will enable Mahindra customers from various strata of society to beneﬁt from tailor-made schemes of Central Bank, viz. Cent Sahyog, Cent Vehicle & SRTO Schemes for purchase of three wheel-

ers, cars and commercial vehicles of M&Mahindra. The MoU was signed by Arun Malhotra, Chief Sales & Customer Care Officer, Automotive Division, Mahindra & Mahindra Ltd. And Narinder Singh, General Manager - Retail Banking, Central Bank of India in the presence of Central Bank and M&M ofﬁcials. The tie-up will enable both M&M Ltd. and Central Bank to make use of the other’s pan-India network of over 250 dealers and 4300 branches respectively.

Polaris inaugurates dealership at Lucknow

Pankaj Dubey, MD, Polaris India Handing over the keys of RZR S 800 to cricketer Bhuvenshwar Kumar along with Bhavnish Mediratta, MD, Beekay Motors.

olaris India Pvt. Ltd, a wholly owned subsidiary of Polaris Industries Inc., the world leader in off-road and allterrain vehicles has forayed into Uttar Pradesh with the inauguration of a dealership in Lucknow. The complete range of Polaris ORVs and ATVs will be available in Lucknow through the Beekay Motors dealership. This is the 14th Polaris dealership in India since its inception in India in August 2011. Polaris currently has dealerships in Ahmedabad, Bangalore, Chennai, Cochin, Dehradun, Jaipur, Jammu, Kolkata, Mumbai, New Delhi,Ludhiana, Indore and Hyderabad. “We are happy to have opened a dealership in Lucknow as this would help us to strengthen our reach in the Northern region of the Hindi heartland. Uttar Pradesh is an important market for us in terms of size and target customers. Italso happens to be my home state. This new dealership underlines the importance we attach to the Indian market and growth prospects in the country,” said, Pankaj Dubey, MD, Polaris India. Uttar Pradesh has more metropolitan cities than any other state in India. The absolute urban population of the state is 44.4 million, which constitutes 11.8% of the total urban population of India, the second highest of any state. “We now have 14 dealer points in the country. With this development, we aim to optimize the reach and spread of Polaris and availability of our products to ourcustomers. This dealershipis state of the art and offers post sales service at par with international standards,” added Dubey.

22 JULY 2013

Auto Monitor

G L O B A L WAT C H

Worldâ&#x20AC;&#x2122;s ďŹ rst full production fuel cell cars to arrive in the UK

and south east England. The LHNE project, a governmentbacked initiative co-funded by the Technology Strategy Board, will put hydrogen-fuelled vehicles into daily business use and deliver the refuelling infrastructure to support their operation. These fuel cell vehicles will be leased to key public and private ďŹ&#x201A;eet users in the capital. They are among the ďŹ rst of 1,000 examples that Hyundai has committed to produce between now and 2015 and are built on the same production line, in Ulsan, Korea, as the Tucson. The majority of those 1,000

cars will be available in Europe where the European Commission has established a number of schemes, such as the Fuel Cells and Hydrogen Joint Undertaking (FCH JU), to promote the use of hydrogen as an energy carrier with zero carbon content. With various hydrogen projects concentrating on establishing hydrogen infrastructure in Europe, the timing is right for hydrogen-powered vehicles to accelerate the project. Worldâ&#x20AC;&#x2122;s ďŹ rst mass produced Fuel Cell vehicle As the ďŹ rst car company in the world to assembly line-pro-

A third of motorists think minimum driving age should be increased

eading UK vehicle remarketing company, British Car Auctions (BCA), have conducted a research to ďŹ nd out UK motoristsâ&#x20AC;&#x2122; opinions on the minimum age of drivers. Over a third (35%) of those polled said they felt the minimum age for drivers should be increased with 40% of those saying it should be raised to 21 years old. 40% of motorists who responded to the BCA survey said they believed raising the minimum driving age would reduce trafďŹ c accidents. Over half (58%) of respondents to the BCA survey would like to see compulsory re-testing for older drivers, with most believing that older drivers should be re-tested between one to ďŹ ve years (47%). â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s interesting that more than half of respondents to our research said that they donâ&#x20AC;&#x2122;t think that the minimum age for drivers should be increased,â&#x20AC;? said Tim Naylor, Editor of the BCA Used Car Market Report. â&#x20AC;&#x153;However, when it comes to older drivers, there seems to be a consensus that re-testing is needed after a certain age. Indeed, the results of our survey suggest that people may see elderly drivers as more of a road safety issue than younger motorists. Of the 42% who think drivers of all ages should be re-tested regularly, over 50% think it should take place every 10 years regardless of age.â&#x20AC;?

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mission-free hydrogen powered vehicles will soon be operating in London. It is the intention that ďŹ ve Hyundai ix35 Fuel Cell models - the ďŹ rst production fuel cell cars in the world - will be an integral part of the London Hydrogen Network Expansion (LNHE) project. Hyundai Motor, as a supplier to the LHNE project, will join the existing consortium of companies with expertise in hydrogen transport infrastructure and operation, working to establish the UKâ&#x20AC;&#x2122;s ďŹ rst hydrogen transport network covering London

duce fuel cell vehicles, Hyundai has enabled not just the real start of Europeâ&#x20AC;&#x2122;s Hydrogen Roadmap but also accelerated Londonâ&#x20AC;&#x2122;s plans to become one of the major hydrogen capitals of the world. For Hyundai, the philosophy behind the ix35 Fuel Cell project has been to produce a car that offers the same practicality, safety levels and driving experience as an ix35 driven by an internal combustion engine, but with zero tailpipe emissions. That means comparable performance - 100mph maximum, 0-62mph in 12.5 seconds and a range of almost 370 miles from each tank - but with no emissions: the only emission is water. Quick and easy refuelling Just as importantly, a Fuel Cell vehicle can be reďŹ lled in two to three minutes and, in use, an ix35 Fuel Cell demands no compromise from the driver. Although Hyundai has been developing its Fuel Cell vehicles for more than 15 years, it is only now - with the start of a viable hydrogen refuelling network in place - that it can consider putting a fuel cell car into series production. So after a number of â&#x20AC;&#x2DC;false dawnsâ&#x20AC;&#x2122; for hydrogen-powered cars, this time the Fuel Cell vehicle has a genuine, clear and realistic future here in the UK. Much of this is down to the work of the London Hydrogen Partnership and that of other projects such as the London Hydrogen Network Expansion project which is led by Air Products. With these key partners working together, hydrogen mobility is about to become a reality. Two hydrogen fuel stations are already open in the Capital - one of which has public access - with a third to come as part of the London Hydrogen Network Expansion (LHNE) project.

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MADE IN SWEDEN

22 JULY 2013

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CLASSIFIEDS

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Pg No

Abhijeet Dies & Tools Pvt Ltd

Advertiser’s Name & Contact Details Ecocat India Pvt Ltd

Pg No 31

Advertiser’s Name & Contact Details

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Larsen & Toubro Limited

FIC

Advertiser’s Name & Contact Details Ranger Stork

T: +91-22-28682837

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ACE Micromatic Group

1,30, BC

Fiem Industries Ltd

Leuze Electronics

Rohan Standox Autolack

T: 91-80-40200555

T: +91-9991702453

T: +91-80-40854444

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ALP Overseas

Fox Solutions

Meiban Engineering Technologies Pvt Ltd. 25

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Safexpress Private Limited

T: 91-124-4731500

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Automag India Pvt. Ltd

G W Precision Tools India Pvt Ltd

Minda Management Services Ltd.

Sumitron Exports Pvt Ltd.

T: +91-20-22951182

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Automotive Dealership Excellance Awards 36

Godrej & Boyce Mfg. Co. Ltd.

Molex Incorporated

Taegutec India Ltd

T: +91-22-30034650

T: +91-22-67962751

T: +86-28-8789-5088

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Carl Zeiss India (Bangalore) Pvt Ltd. 15

Igus India Pvt Ltd

Padmini VNA Mechatronics Pvt. Ltd. 33

Tata Motors Ltd.

T: +91-80-43438102

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Continental Automotive Components India Pvt. Ltd. 27

Jyoti CNC Automation Pvt. Ltd.

W: www.continental-corporation.com

Dhoot Transmission Pvt Ltd

BIC

Paras Enterprises

Tyrolit India Superabrasive Pvt. Ltd

T: +91-20-65118080

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Kris Automated Packaging Systems

Patvin Engineering (P) Ltd

VE Commercial Vehicles Ltd

T: +91-22-30948000

T: +91-22-27780310

T: +91-7292-402633

E: sales@dhoottransmission.com

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DSM India Pvt Ltd

Lanxess India Pvt.Ltd.

W: www.dsm.com/air-management FIC : Front Inside Cover BIC : Back Inside Cover BC: Back cover

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Prayag Polytech Pvt Ltd

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22 JULY 2013

OTHER SIDE

Getting Personal

In Real Life

with Andreas Lauenroth, Executive Technical Director, Volkswagen India Private Limited If not in the auto industry, where would you be? I am interested in German history between 1900 and 1920. I would probably be a historian. What car do you drive? What do you dream of driving? I am currently driving a VW Phaeton. My dream car is a Bentley Continental. Your most recent indulgence… (eg, a holiday home, a fancy car, an exotic holiday or cruise, designer clothes or accessories, pricey gadgets: something expensive but highly desirable) It is nothing to buy. For me it’s an absolute pleasure to have my wife here in India now – this is beyond price.

Andreas Lauenroth began his career with the Volkswagen Group as an apprentice in 1980, working as a tool maker. His later took positions in various departments such as planning, logistics and production. He also undertook a project with Volkswagen China. Lauenroth was born in Wolfsburg and is an engineer by training. He is married and has one son.

What are you currently reading? Letzte Fahrt, about Robert Falcon Scott’s last expedition to the Antartic. What do you do when not talking auto? Tell us about your hobbies and other interests in life. I spend time with my wife and dog. Sometimes our son comes for a visit, than we spend a lot of time with him. An outdoor activity you would miss ofﬁce for… I enjoy playing golf. Where did you go for your last holiday? Andalucía, Spain. You get angry when… When someone is lying or is not reliable. What is the one thing you would like to change about yourself? Sometimes (and that is very often at the moment) I am not patient. Especially when things are moving very slow. The best thing to have happened to you… The birth of our son was the best thing that ever happened.

Illustration: Sachin Pandit Compiled by: Jayashree Mendes

An experience I won’t forget… My first day at Volkswagen in Germany. I took up the apprenticeship, but was very unhappy with the work. Afterwards I saw the chances which Volkswagen could provide me, so I decided to stay and used all the opportunities of a global player.

Regn. No. MH/MR/WEST/20/2012-2014. RNI No. MAHENG/2000/11414 Licenced to post at Mumbai patrika channel sorting office G.P.O. Mumbai 400 001. Date Of Mailing: 1st & 2nd Fortnightly Issue. Date Of Publication: 28th of Every Month