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 ns Tur w No
ly k e We
Vol. 12 No. 22
23 July 2012
w w w.am o n l i n e.i n
SPECIAL
NORTH INDIA
50 Pages
` 50
INTERVIEW FADA WANTS AUTO ZONES TO OFFSET RISING COST OF RETAIL SPACE
Pg 20-25
Nikunj Sanghi, President, FADA
Pg 8
Maruti’s Manesar plant operations halted Nabeel A Khan New Delhi
T
he workers and the management remain bewildered as to what is going to come next after the inferno at Maruti’s Manesar plant recently. The violence erupted after an alleged derogatory remark made on a worker by a supervisor. The General Manager (Human Resources) Awanish Kumar Dev’s charred body was found in the plant and 100 employees were seriously injured in the grisly incident. An industry expert sees third party involvement as the reason behind aggravating situation. “The situation gets worse when there is third party involved. The best way to solve these kind of problems is when the two parties directly come on the table and talk,” said Partner, Automotive Pract ices, Pricewaterhouse
Coopers, Abdul Majeed Auto Monitor. He further pointed that; the government needs to revisit the labour law to avoid such occurrences. Many other manufacturers in the neighborhood hold the local politically-affiliated people’s involvement responsible for the flare up. The car manufacturer in a statement said, “We are deeply disturbed by the mob violence and arson at our Manesar Plant on Wednesday (18th July) evening. Several executives, managers and supervisors were brutally attacked and injured, and nearly 100 of them had to be hospitalised.” The company has not yet revealed the amount of damage. However, it is clear that the office facilities have been burnt beyond repair, as have the main gate, security office and the fire safety section. According to the company, the situation took a turn for the worse when workers’
union demanded the reinstatement of a worker who had been suspended for beating up a supervisor. While negotiations were on with the senior management, the first act of violence by the mob was to forcibly shut the main gate and prevent managers from leaving the premises after working hours. President, SIAM, S Sandilya, condemned the totally unprovoked and barbaric act of violence and called upon the state and central governments to take very strict action against the guilty. “The industry cannot accept such acts of violence no matter what the grievances are… such acts of violence sully the image of India as a manufacturing base, as an investment destination and destroys years of efforts made by the government as well as industry to nurture industrial development in the country, which cannot be allowed to happen. SIAM
also appealed to the workers of Maruti not to resort to violence but to resolve issues through mutual discussions.” CII also condemned the incident. “We deeply regret the incidence that occurred at Maruti and condemn the violence and vandalism. Loss of lives and scores of injuries
caused and sabotage by a group of workers is really unfortunate,” said Chairman, CII (Northern Region), Malvinder Singh. He added that CII strongly recommends that State of Haryana should administer this effectively and enforce law and order so that such incidence would not be repeated.
TML may enhance CV portfolio to counter competition Our Bureau Mumbai
T
ata Motors is looking to enhance its commercial vehicle portfolio to effectively counter double whammy of heightened competition and impending
DATA MONITOR Top 5 2W Makers Company
Jun-11
HML HMSI Bajaj Auto
208,883
211,510
1.26%
TVS
155,296
147,865
-4.79%
24,835
25,188
1.42%
Suzuki
Jun-12
Change
499,425
521,810
4.48%
137,745
216,208
56.96%
Top 5 2W Exporters Company
Jun-11
Jun-12
Bajaj Auto
113,944
106,867
Change -6.21%
TVS
23,337
17,545
-24.82% -4.20%
HML
12,819
12,281
HMSI
11,166
10,468
-6.25%
IYM
9,332
8,040
-13.84%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
slower growth in the CV market. The company is looking to tap newer geographies in the international market to garner higher overall market share in the commercial vehicle segment in order to emerge as a global player in the CV segment. Tata Motors’ predominance in commercial vehicles will be challenged by the entry of international brands like Mercedes-Benz, Volvo and Navistar which have all entered, or are in the process of entering India. A new line of very competitive, fuel-efficient vehicles is being developed by Tata Motors to meet the competition head-on. The company will need to address the marketplace more effectively with its existing and future products in order to regain the level of market share that it earlier enjoyed, pointed out Chairman, Tata Motors, Ratan Tata in the company’s latest annual report. The report further points out that the company is in the process of developing or absorbing several technologies in the commercial vehicle business as well as other business segments. The technol-
The competition has intensified over the years as existing OEMs have launched new variants and new entrants have tried to gain foothold
Ratan Tata
ogies for the commercial vehicle segment include hydrogen recirculation blower system on fuel cell battery for the hybrid bus family and battery management system on bus and car hybrids. Additionally, the company has continued the development of fuel cell bus, next generation of gas injection technology for its LCV, MCV and HCV range. It is also developing engine management systems for series of hybrid technology for buses. TML has spent around `1,550 crore on R&D activities across vehicle segments in 2011-12.
The company’s total domestic vehicle sales grew by 10.9 percent to 863,248 vehicles in FY 201112, according to the company’s annual report. Commercial vehicle sales increased by 15.7 percent to 530,204 units in the last fiscal. The competitive scenario has been intensifying for the company over the last few years as the existing OEM’s launched new variants to protect market share and new entrants sought to gain a foothold in the market. The company maintained leadership with a market share of 59.4 percent in the commercial vehicle segment. During the last fiscal, the domestic commercial vehicle market, recorded a growth of 19.2 percent with the highest ever sales
of 892,349 vehicles. The Medium and Heavy Commercial Vehicle (M&HCV) segment grew by 6.5 percent, while the growth of Light Commercial Vehicle (LCV) segment stood at around 29.1 percent. In the M&HCV segment, the company sold 207,086 units during FY 2011-12, which resulted in a market share of 59.4 percent. The lower growth of agriculture, manufacturing and construction, mainly contributed to lower growth in the CV segment at 19.2 percent in current year as compared to 27.3 percent in FY 2010-11 over FY 2009-10. Further, M&HCV demand was mainly affected by higher interest rates and restricted availability of financing support, due to tight monetary policy by the RBI. The positive trend in the last fiscal was steady growth in SAARC and ASEAN countries. In particular, the growth in small commercial vehicle segments in these geographies was robust. The new launches during the last fiscal from the company’s stable included the Tata Divo, a super-luxury inter-city bus and new variants in the Tata Starbus Ultra range.
EDITORIAL Reality check
T
he violent protest at Maruti Suzuki facility at Manesar is arguably one of the worst industrial related disasters in recent years that the country is still witnessing. What is distressing (and short of alarming) about this event is its recurring occurance and the apparent lack of government intervention to contain it. There have been instances of industrial violence in the past at facilities in Southern India and notably at auto component supplier, Pricol, where an HR head was killed by protesting workers three years ago. Few instances in the seventies and eighties involving the likes OEMs and suppliers alike serve as a grim reminder of the ugly face of industry related disasters taking a turn for the worse. In the late eighties, Ind Suzuki faced some violence at its facility leading to its closure for many days. The key issue that comes to the fore in Maruti’s instance is the labour policy laid down by the state governments and its implication for workers in manufacturing setups. Industry observers point out that though state government’s labour department has been keen on resolving the matter in the interest of all parties concerned, it is also keen to be seen as neutral. The Industrial Disputes Act law mandates establishment of a Grievance Settlement Authority/Committee in every establishment employing 50 or more workmen. It is alleged
that Maruti too had promised to form such a committee to address its workers’ grievances last year after the initial unrest at the facility, but few concrete steps were taken in this direction. This led to intervention by the state’s labour department. The company on its part maintained that it has always treated workers on fair and equal terms and that any grievances should be settled through negotiations and dialogue and respecting labour laws. The latest incident at Maruti’s Manesar plant may be an opportunity to revisit the archaic labour laws in the country that were drafted decades back and may not serve their purpose today, given the uctuations in auto production. A more exible labour policy may be required to address the production uctuations in the auto sector. Such a policy also needs to take cognisance of temporary workforce on shopoors. OEMs (and their suppliers) need to ensure a more harmonious existence at locations where they are based. State government too can ill-afford disruptions (and dislocations) and be seen as trouble zones from domestic and foreign investors’ point of views alike. Comments can be sent to abhishek.parekh@infomedia18.in
QUOTES S Sandilya, President, SIAM & Chairman, Eicher Motors on violent attacks at Maruti’s Manesar plant
Industry cannot accept such acts of violence no matter what the grievances are. All IR issues have to be sorted out only through mutual discussion
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CONTENTS NORTH INDIA SPECIAL Fully automated GNA facility in Jalandhar becomes operational
20
GNA Udyog has recently set up a Greenfield precision forging plant in Jalandhar, Punjab with an investment of `50 crore with full production capacity of 30 lakh units a month
Maruti steers towards new exports markets, rural India
22
Maruti Suzuki India has stepped up its focus on the rural market and steered its exports business to non-European countries to counter the sluggish market trends
“We have good buying power; we just need cheaper financial options”
24
Rattan Kapur instills hope that the highway connecting Gurgaon to Gujarat (NH8) is an industrial potential area and will develop fast, if FDI is allowed
Nissan carves business partnership with Stanley, Dewalt
CORPORATE Fiat develops lighter future products
30
Nissan has signed an exclusive deal with Stanley and Dewalt for 13 Nissan Navara 4x4s for use by their retail, trade and roadshow teams
16
Fiat has developed gear box with engineered plastic and hollow anti-roll bar, which the company claims will substantially reduce the weight as well as improve the NVH levels
16
Ford India expands engine plant by 36 percent
GLOBAL WATCH
Federal-Mogul pistons higher outputs
34
Federal-Mogul has developed a high-strength aluminium piston to increase the power density and efficiency of boosted, direct injected gasoline engines
Seat launches new Leon
40
Seat has recently introduced third generation Leon packed with technology, utilising an upgraded chassis, advanced infotainment systems and driving aids
26
Ford India has expanded its engine production capacity in its Chennai plant to 340,000 units per annum through debottlenecking and additional investments
THE OTHER SIDE
48
26
N Krishnamoorthy, President, Dealership Business, TV Sundram Iyengar & Sons Krishnamoorthy, known ‘NK’ to friends and associates, has 33 years of experience in different divisions of TVS & Sons and credited for establishing TVS Lanka
Auto Monitor
23 JULY 2012
INTERVIEW
8
FADA wants auto zones to offset rising cost of retail space There has been lots of action in the auto industry in the last few years. The dealers’ association continues to demand for industry status but no progress has been made so far. If they get an industry status, it would entitle dealers to a number of benefits including lower costs of working capital and lower costs of electricity. Commenting on the increasing costs of infrastructure, FADA President, Nikunj Sanghi, told Nabeel A Khan that the association is approaching both the central and the state governments to develop specific ‘auto zones’ where land is made available for all kinds of auto dealerships at reasonable prices. There have been talks about a uniform vehicle registration law across India. How is the progress in this front? Progress on this front is not much to talk about. As this relates to the agreement by various states, with political differences between different parties ruling the state, arriving at a consensus is almost like a dream. We already have the example of GST not yet becoming a reality. Availability of automobile retail is a big problem in the country. Any steps planned to tackle the situation? The cost of infrastructure, specifically prices of real estate is the biggest challenge facing the automobile industry. FADA is approaching both the central and the state governments to develop specific ‘auto zones’, where land is made available for all kinds of auto dealerships at reasonable prices. FADA has been demanding industry status. Any progress? This would be easier said than
My suggestions to the fellow dealers would be to cut down their overheads as far as possible without compromising on expenditure relating to creation of demand. I would also strongly recommend major focus on service, spare parts business and on CRM to retain existing customers
multi-brands coming under different roofs but of the same dealer owner. As competition heats up and finding good dealers becomes difficult, multi-brand showrooms might become a reality in India.
done but if we do get the industry status, it would entitle dealers to a number of benefits including lower costs of working capital and lower costs of electricity. It would also result in better terms for term loans.
Indian economy is slowing down substantially; the rupee has devaluated to all time low. How would you respond to it? These are very disturbing indicators. Both the slowing down of economy and devaluation of the rupee, do not portent well for the automobile industry. While sluggish economy would result in negative sentiments and thus decrease demand, devaluation would mean increase in cost of vehicles.
Will India be able to see multi-brand automobile dealers any time soon? This does not seem to be very far fetched. We can already see
Vehicle sales have been almost trailing in the last couple of months. Any revival expected and what would be the conditions for revival?
There seem to be no immediate indications of revival as the fundamentals are weak. Revival if any can only be expected in the likelihood of a very good monsoon or some major positive steps by the government towards policy reforms. The CV segment, which did quite well in the last financial year is on way to ‘cyclic’ downturn. How does it augur to the dealer community? A downturn in the CV market does not augur well for the dealers as any downturn has a severe impact on dealer profitability, especially for CV dealers. In the current situation, which may be termed ‘not so favourable’, what would your suggestion be for the fellow dealers? My suggestions to the fellow dealers would be to cut down their overheads as far as possi-
ble without compromising on expenditure relating to creation of demand. I would also strongly recommend a major focus on service, spare parts business and on CRM to retain existing customers as it is a time proven fact that retaining existing customers is nearly 70 percent cheaper than acquiring new customers. The industry lacks skilled manpower. What are your plans on this front? Automot ive Skill Development Council (ASDC) under the aegis of the National Skill Development Council (NSDC) primarily addresses the problem of lack of skilled manpower. Most of the course content has a lmost been finalised and pilot training batches for machinists, technicians and drivers have already started. We expect much faster progress after the pilots have been tested.
23 JULY 2012
Auto Monitor
C O R P O R AT E
11
Tyre makers maintain cautious outlook Our Bureau Mumbai
T
yre manufacturers are maintaining a cautious outlook in the coming months due to muted sales growth in four-wheelers and commercial vehicle segment. Though the replacement market demand may offer support to the tyre manufacturers in the current uncertain times, such demand may be inadequate to counter the expected stagnation or downturn in volumes. “Cheap imports into the aftermarket continue to be the biggest challenge. While the government has been supportive and has imposed anti-dumping duty on these imports, tyres continue to be imported into the country through unfair means. To add to this, is the volatility of production at the automotive ma nufacturers’ end, which makes it difficult for us to forecast and plan capaci-
ties,” pointed out Chief, India Operations, Apollo Tyres Ltd, Satish Sharma. The company is looking to expand beyond its traditional strongholds of truck and bus segments to spread its operations geographically. It is maintaining a cautious growth outlook for aftermarket for tyres in the domestic market. The company is seeing good momentum from the truck segment and expect the industry growth rate to be close to double-digits, according to a recent conference call with analysts. The company further pointed out that the passenger car segment should also see a growth rate in high single digits over the next year or so. It is targeting around 20 percent growth in the revenues this fiscal. It aims to expand into new geographies and has already set-up an office in the Middle East and is looking at new locations in South East Asia to set-up sales and marketing offices.
Sharma added that though the company has been exporting tyres to many countries, the focus is on the Middle East, ASEAN and the Oceania region. It is looking to mirror its domestic aftermarket strategy in these markets as well. He also pointed out that the replacement market in these regions will take time in reaching the maturity levels of the aftermarket in India. Though the company has established a favourable position in the domestic market, the domestic aftermarket cannot be aloof to the overall economic conditions. The aftermarket contributed around 73 percent to the company’s consolidated revenues of FY12. Bridgestone India Pvt Ltd is expecting muted growth in demand for tyres in the replacement market. It is evaluating newer segments within the automotive segment for growth and may be looking to have a larger play in the commercial vehicle
Bridgestone is setting-up its Pune facility with an investment of around `2,600 crore to manufacture radial PV tyres
Satish Sharma, Chief, India Operations, Apollo Tyres Ltd
segment as the radialisation level grows across the automotive sector. “We are increasingly looking at the scenario of lesser number of tyres being replaced in the aftermarket and efforts by the owners to prolong the life of the tyres. When earlier all four tyres would be replaced by a vehicle owner, just a set of tyres are
Vaibhav Saraf, PSR Sales & Marketing, Bridgestone India
replaced for cost optimisation purpose and this is restricting the demand for tyres in the aftermarket especially in a slowdown. However, we feel this phase of postponement of purchase may be temporary and overall demand would continue to be good in the coming months,” said General Manager, PSR Sales & Marketing, Bridgestone India Pvt Ltd, Vaibhav Saraf. He added that high fuel prices are likely to lead to lesser vehicle run that could in turn imply lesser wear and tear of tyres prompting reduced after sales demand. Both these factors are leading to an average increase in time cycle of replacement demand from around 2.5 to three years currently to around four years or so. The company currently has around 2,200 touchpoints including exclusive and non exclusive
outlets. “We promote multibrand outlets as we do not have solutions for all vehicle segments and it is in the dealers’ and customers’ interest to have different sizes for various applications,” said Saraf. It has around 320 ‘committed’ dealers who derive around 70 to 80 percent of their volumes from Bridgestone products. The company manufactures around 15,000 units per day at its Indore facility and it is setting up a new facility in Pune, which will add up similar capacity over the next three to four years. It has started its operations in 1996. It set-up its manufacturing facility in Kheda, Madhya Pradesh in around 1998. The company is setting-up its Pune facility with an investment of around `2,600 crore with capacity to manufacture a range of radial passenger vehicle tyres.
Auto Monitor
23 JULY 2012
A N A LY S I S
12
The passenger car segment grew by 5.22 percent during the April-June period this fiscal, while the utility vehicles grew by 50.85 percent and the multi-purpose vehicles declined by 9.6 percent in this fiscal. Honda led the passenger car segment with a growth of around 158.51 percent from 7,734 units to touch 19,993 units this fiscal, as compared to the previous period. Maruti registered the highest growth in the utility vehicle segment with 1162.15 percent growth to touch 18,965 units in April-June 2012-13 period. Passenger Cars OEMs
2011-12
2012-13
BMW**
2,377
2,088
Fiat
5,705
2,819
Ford
20,754
19,039
GM
20,611
17,624
HM
866
407
HSCI
7,734
19,993
HMIL
92,907
97,302
M&M
3,807
2,888
MSIL
208,432
216,225
Merc
1,663
1,257
Nissan
4,377
10,743
Renault
-
1,798
7,379
10,535
54,346
49,576
-
514
TKM
15,672
20,547
Audi
1,254
1,908
VW
18,568
15,539
Two-Wheelers
Commercial Vehicles
Passenger Vehicles
-12.16%
The overall commercial vehicles segment registered a growth of 6.06 percent in April-June, 2012-13 as compared to the same period last fiscal to touch 183,215 units. M&HCVs sales declined by 11.99 percent to touch 66,055 units compared to 75,054 units in the same period in the previous year. The LCV segment grew by 20 percent to touch 117,160 units in this fiscal, compared to 97,697 units in the same period last fiscal. Three-wheeler sales were stagnant at 111,249 units in April-June period compared to 110,330 units in same period last year. Passenger carriers rose by 5.66 percent in April-June while goods carriers fell by 15.09 percent. ALL registered the highest growth in the LCV segment to touch 7,412 units. TVS Motors registered highest growth in threewheeler segment to touch 3,267 units.
-50.59%
LCVs (PC+GC) -8.26%
OEMs
2011-12
2012-13
-14.49% ALL
Tata Tata JLR
7,412
5,253
5,717
42
56
6892.45%
Force
8.83%
158.51% HM 4.73% -24.14%
Skoda
106
-53.00%
M&M
26,983
31,959
MNAL
2,393
2,234
Piaggio
2,929
1,103
33.33% 18.44% -6.64%
Scooter/Scooterettees
-62.34%
3.74% -24.41%
OEMs
-15.44 Swaraj
1,049
887
Tata
56,435
64,973
42.77%
VECV - Eicher
Total
-8.78%
2,507
97,697
15.13%
2,819
12.45%
31.11%
OEMs
2011-12
2012-13
ALL
16,632
17,170
AMW
2,329
1,679
Total
5.22%
M&M
Ford
634
455
GM
5,889 472
381
HSCI
67
83
HMIL
254
228
ICML
92
132
M&M
44,407
58,616
1,502
18,965
Nissan
40
29
Renault
-
86
438
325
Skoda Tata TKM VW
Total
9,915 13,513 4
78,034
NA
0
0
9,621
30,487
-
4,917
67,785
76,730
109,279
105,366
13.20% -3.58% 29.14%
532,240 687,333
Motorcycles/StepThroughs OEMs 00.00%
BAL
2011-12
2012-13
623,175
618,489
-0.75%
118.96%
-28.23%
MNAL
559
1,224
-37.10%
Swaraj
2,000
2,330
-19.28%
Tata
45,541
34,943
HDMC 16.50%
0
279
HML
1,389,220
1,486,654
HMSI
179,404
261,314
7.01%
-23.27% VECV - Eicher
23.88% -10.24% 43.48%
7,668
8,343
VECV - Volvo
113
152
Volvo Buses
195
214
Total
75,054
66,055
IYM
8.80% 34.51% 9.74% -11.99%
32%
77,549
17,668
26,415
M&M 2W RE
49.51%
SMIL
15,567
15,836
TVS
155,793
142,413
1.73%
Total 2,461,862 2,628,949
6.79%
3-Wheelers (PC+GC)
-25.80%
OEMs
2011-12
2012-13
Atul
5,504
6,726
Bajaj
42,276
44,837
Force
4
1
M&M
14,058
13,815
Piaggio
42,535
39,441
Scooters
3,368
3,162
TVS
2,585
3,267
110,330
111,249
Mopeds/Electric
-2.97% 77.84% -100.00%
22.20%
OEMs
2011-12
2012-13 6.60%
6.06% TVS
-75.00% 50.85%
117,711
81,035
45.66% -4.30%
-8.59%
-27.50%
24,032 -
59.85% -5.49%
-27.91%
30.61%
1162.65% MSIL
17
3,704
HM
32,257
12.15%
3.23%
2012-13 1,054
108,971 360,862
TVS
M&HCVs (PC+GC)
52.15%
JCBL
807
97,165 225,754
M&M 2W
19.92%
117,160
HML HMSI
SMIL
Daimler*
Force
-
Piaggio
466,452 490,802
2011-12
2012-13
145.44%
UV OEMs
2011-12
BAL
-16.31%
Total
Domestic two-wheelers sales witnessed a growth of 10.53 percent in this fiscal to touch 3,519,529 units against 3,184,774 units during the same period in the previous fiscal. Mopeds, motorcycles and scooters grew by 6.6 percent, 6.79 percent and 29.14 percent respectively. The motorcycle sales grew to 2,628,949 units in April-June period as compared to 2,461,862 units in corresponding period in the previous fiscal. In the Motorcycle segment, Royal Enfield sales were up by 49.51 percent in April-June period this fiscal, while Bajaj Auto’s sales were stagnent at 618,489 units compared to 623,175 units in same period last fiscal. In the Scooter segment, the sales of HMSI grew by 59.85 percent while TVS Motor sales declined by 3.85 percent in this fiscal. Hero MotoCorp reported its best sales for June at 521,810 units, registering a jump of 4.48 percent over the same month last year. Bajaj Auto witnessed marginal one percent growth in its June sales at 211,510 units against the same month in the previous fiscal. TVS Motor Company reported total domestic two-wheeler sales of 147,865 units in June registering a decline of 4.79 percent. Honda Motorcycles India registered the highest growth in domestic two-wheelers sales at around 56.96 percent to touch 216,208 units in June this year.
190,672
Electrotherm*
-1.73%
203,247
NA
- 0.00% 6.60%
MPV OEMs
2011-12
2012-13
-7.27%
Total
82
5
Total 82.96%
M&M
4073
7452
Maruti
40,749
28,074
Tata
12,750
16,590
Total
57,654
52,121
-31.11%
30.12% -9.60%
203,247
-6.12% 26.38%
-93.90% Force
190,672
0.83%
* Data not available since August 2008 onwards ** BMW monthly data not available
Auto Monitor
23 JULY 2012
INTERVIEW
14
“We need to look at a combination of A3 and A1” MD Audi India, Michael Perschke talks about expansion and getting volumes. Will the A3 be coming to India? And how would it be positioned? First let’s answer two questions—if the A3 is coming to India and when? And the third question I would add is—which kind of A3 will come? So we have a threedoor version, we have a five-door version, both being hatchbacks and we will have a limousine. And out of the three right now, we probably will see the biggest potential for the A3 limousine. As Peter Schwarzenbauer has said, we are intensively looking at a product clinic. We have some kind of gut feeling that we would like to be endorsed by customer interviews. We see that especially with Q3; we got a very strong feedback and we started booking. I would say the hatchback would be my priority number two. I would probably first opt for the limousine in India. But as I said, the decision has not been made. And if we go for the limousine, I think you have to look at both, you have to have a Quattro version, which is 100 percent Audi. But I think you have to also offer a front wheel drive version to allow a certain entry price so that you capture the entire potential of the segment. If you had to explore the limousine. Where would it be positioned? I think the strategic price position we have to look at is the `20-30 lakh segment. Now at the upper end, we have the A4 and then the Q3, which is about `25 lakh plus depending on features
and packages going to an early `30 lakh price-point. So definitely we have to be in the lower-end of the `20 lakh bracket. But as I said, we haven’t made a final decision on the product, we haven’t done the product clinic yet, we have some indications, and then you also need to carefully look at the packaging. There are lots of questions we have to ask yet because that segment is new and we are competing with a lot of premium players. How significant will the A3 be in Audi’s plans for India? I think the A3 will be definitely another very important building block for the strategy. But if you ask me to go all the way, then a lot of people always ask what about A1? And I think we need to look at a combination of A3 and A1—A3 probably a little earlier because you know we love the top-down approach—A8, A7, A6, A4, probably A3 at a certain point of time and I think once we have accomplished all that, then I think the A1 will definitely be another game changer. But the Q3 has just started, bookings are coming in, we had a couple of booking parties all over the country. We’ve seen phenomenal feedback, as you said, I think because of the pricing, especially considering that currently it’s still a CBU (Completely Built Up). We worked very hard and we had to convince our headquarters quite a bit that the pricing is meeting the market expectations and also to give us a certain volume. You don’t want to launch a car and then only have few numbers; you want to make an impact and I think this month we will have substantial deliveries already kicking in. So I think
our growth compared to last year should be significant. And you would need to manufacture the A3 here in India? If you look today, we have the A6, we have the A4 and the Q5. Currently, we are building the assembly hall for the Q7 and based on the market feedback we are getting and the strength of the response to the Q3.Probably that’s the next most likely product to be produced in India. We will then have five products. We are looking at one or two more to be added to our portfolio, but we haven’t decided that. Then you need to look at certain components, where either the Audi brand buys certain chunks so that it makes sense to localise, so you have obvious things like batteries and tyres and then we look at cross platforms. A3 is the first car with the MQB platform so we have of course synergies between the VW group brands. It makes a lot of sense to purchase components locally, maybe with larger volumes, pooling our demands across the
various brands. But luckily, I’m responsible for sales and marketing. I give my costing and pricing to my manufacturing guys and based on that they have to come back and say: okay, how much local content do we need to meet that price. And we also have global sourcing, I think that’s very important. Certain components today will be globally sourced out of India. Do you think there is enough interest in our market for products other than just the conventional saloon or SUV? If you look at our brand values, one is sportiness, which is where you have the Quattro GmbH, the S and the RS. Secondly, there’s progressiveness and that’s very much about the Quattros and the Qs. And the third brand value is sophistication, so that’s definitely our limousines. Looking at it, I would say crossovers are something where I think India is still not completely ready. Now in the SUV range, certain crossovers are there. Our competition has launched one on a large scale.
Number wise there is room between Q3 and Q5, which is Q4 or between Q5 and Q7 which is Q6. We don’t talk about these products in India because they need to be launched globally first. I see some potential, but again it’s a matter of what package you get, what pricing you get and where approximately you can position it in consumer’s mindset. Take for example, the A7, which is a beautiful car, still you speak to a niche audience. It’s not a volume seller because of the price point on one hand but it’s not a typical free form car with a classical saloon shape. So I think when you look at crossovers, this is something we need to further study in the market and then act. But I’m very bullish on the S and the RS models because they are pure Audi! We’re also talking right now about a project, which has been in the press, I can’t confirm it. For example an SQ5—could be an interesting idea, its not confirmed yet. Also, I can see that you can play so much more with diesel. I think the technology has so much more pedigree. You know, we were the first to take diesel to the 24 hours of Le Mans and this year we have the halo of our models, which is a Quattro—e-Tron, ultra lightweight, everything in one car. So that’s the pioneer of our technology. I think a diesel hybrid for example would be interesting: turbo powered, performance oriented, but still efficient. There’s so much to play around with diesel especially in a market like India and Italy, which are strong diesel heritage countries—the diesel performance cars will definitely challenge the petrol performance cars. (Courtesy: Overdrive)
Auto Monitor
23 JULY 2012
C O R P O R AT E
16
Fiat develops lighter auto component; Nabeel A Khan New Delhi
F
iat has recently developed gear box with engineered plastic replacing heavy metal and hollow antiroll bar (torsion beam), which the company claims will substantially reduce the weight as well as improve the NVH levels. The development comes when there has been a global trend to develop light weight vehicles to cut down friction and carbon emission by increasing fuel effi-
We have developed a gear box made of engineered plastic. Such a gearbox would reduce losses more than it reduces fuel efficiency. However five-eight percent reduction in fuel efficiency can be expected
ciency to comply with the stricter emission norms which are being formulated of late. Head-Engineering & Design of Fiat India, Jayant Kumar Deb speaking to Auto Monitor said “We have developed a gear box made of engineered plastic. Such a gearbox would reduce losses more than it reduces fuel efficiency. However five-eight percent reduction in fuel efficiency can be expected. The reduction in weight will not only reduce mass but will also contribute to durability and reduction of NVH levels.” The change in metal required a complete change of design that would rotate the gear and shaft on different axes. Engineered plastic has been used in planetary gears in the transmission and the new design engages more number of gear teeth that will help in reducing noise in the cabin and gearbox. This can set a new trend and a modern application of engineered plastic. The hollow anti-roll bar has been replaced with a new material, which has same stiffness as the solid rod. However, the
Punto At The Fiat Caffe In New Delhi
car maker is not sure about the adoptability of the new gear box and hollow anti-roll bar because of the factors like cost especially in the mass segment vehicle where the cost plays very important role.
The carmaker is also exploring the use of silicon rubber in tyre to have low rolling resistance tyres, which will enhance the fuel efficiency. There are 20-25 types of rubbers used in different locations of tyres, sili-
con rubber will help to improve fuel efficiency. However, the use of excessive silicon rubber can’t still be incorporated in India due to bad condition of roads. As silicon is more susceptible to cuts and is costlier as well.
HM introduces Cedia Select 2012 Our Bureau New Delhi
H
industan Motors Ltd recently launched new Cedia Select 2012 with a host of new features which include a seven-inch Mapmyindia androidbased carpad via 3G which is equipped with features like making calls, watching TV, surfing net, video-chatting with facility of rear-view and checking e-mails while travelling. The new Cedia Select 2012 is available in three colours namely white speed, black flash and rally red. It is priced at ` 8.90 lakh (ex-showroom New Delhi). The two-litre petrol car, comes with elegant interiors. Its three-spoke black leather wrapped hydraulic power-assisted steering and oyster leather seats for five raise the comfort quotient. The vehicle with 115 PS@5250 RPM power and 175 nm@ 4250 RPM torque offers a new two-tone beige interior and beige floor mats, sparkling 12-spoke alloy wheels, high-intensity clear lens halogen headlamps and two-stage horizontalslat matte black grille.
The Cedia Select comes with a four-speaker Kenwood DVD player with 6.1” touchscreen interface which is GPS compatible and has Bluetooth/ USB connectivity as well The Cedia Select also comes with a fourspeaker Kenwood DVD player with 6.1” touchscreen interface which is GPS compatible and has Bluetooth/USB connectivity as well. The rear-view camera, fitted at the back of the vehicle, offers output on the audio unit.
TII to buy 44 percent in Shanthi Gears Our Bureau Chennai
T
ube Investments of India (TII), part of the $4.4 billion Murugappa Group, plans to acquire 44.1 percent stake in Shanthi Gears. Coimbatore-based Shanthi Gears has finally agreed to sell their entire holdings to TII in a deal that values the
23 JULY 2012
Auto Monitor
C O R P O R AT E
17
considers silicon rubber for tyres Jayant Kumar Deb, who is heading engineering & design team of Fiat India, says that the days are gone when the capacity of a powertrain was decided based on the size. Today, it is measured on the basis of power and torque. He tells Nabeel A Khan that for the light weighting use of sheet metal, plastic parts and polyurethane are some common practices while aluminium and its alloys are also used extensively. Excerpts from the interview. Smaller capacity engines provide good power and torque output is almost as much as bigger capacity engines these days. Are you working on similar lines as well? Every engine has a threshold value and it produces a certain maximum power or torque rating. Power and torque ratings for a naturally aspirated engine can be increased by mating it with a turbocharger. While a Fixed Geometry Turbocharger (FGT) gives 13 times higher boost than a naturally aspirated engine a Variable Geometry Turbocharger (VGT) produces a Flat Torque Curve characteristic. MUVs and SUVs do not pull effectively without turbocharg-
ers that provide instant boost at certain RPMs. However, within city conditions, turbos aren’t very effective. Also, there’s a global concern these days to reduce emissions with stricter norms. The reduction in emissions also leads to better fuel efficiency. For that a lot of steps are taken like transmission management, engine torque characteristics, reduction of friction, use of alloys etc. A bigger engine is however used if the vehicle is heavier. What other practices are adopted to reduce the overall weight of the vehicle? Use of sheet metal, plastic parts and polyurethane are some common practices while
company at around `464 crore. Shanthi Gears Ltd manufactures a wide range of products that include gears, gear boxes, geared motors and gear assemblies. It has been designing, manufacturing and supplying various kinds of gears and gearboxes to various industries for a variety of applications for the past four decades. The company has manufacturing operations in Coimbatore spread across six units including a foundry division and markets its products in India and abroad. The company recorded a turnover of `178 crore in the financial year 2012 with a profit after tax of `28 crore. The company is a debt-free company as on 31 March, 2012. Commenting on the strategic fit of this acquisition, Chairman, Tube Investments and Vice Chairman, Murugappa Group, MM Murugappan st ate d t hat “Shanthi Gears is one of the L Ramkumar, MD, TII largest organised players in India in the gears segment and its product profile is targeted towards more of niche products and greater customer retention. We hope to leverage our understanding of the engineering space and our existing customer relationships to help scale the business further.” Announcing the acquisition, Managing Director, Tube Investments, L Ramkumar, said, “The addition of Shanthi’s product portfolio substantially enhances our ability to service other industry segments and reduce our reliance on the auto sector, at the same time growing our presence in the value added businesses.”
The addition of Shanthi’s product portfolio substantially enhances our ability to service other industry segments and reduce our reliance on the auto sector—L Ramkumar The promoters, who hold 44.12 percent stake, would net `292 crore from the sellout. Shanthi Gears Chairman & Managing Director, P Subramanian, who holds 34.57 percent of the stake in his individual capacity, would get around `229 crore. The total acquisition cost, including the mandatory open offer for a 26 percent stake, is expected to be `464 crore, assuming full response to the proposed open offer.
aluminium and its alloys are also used extensively. Overall, it increases the cost of the vehicle but increase in fuel efficiency and meeting crash regulations come hand in hand. Another important aspect is reducing friction, within mechanical parts as well as of the tyres. Tyres with less rolling resistance help to increase the fuel consumption considerably. Silicon rubber is used in the production of low rolling resistance tyres but silicon is not only costly but more susceptible to cuts. Hence Indian road conditions don’t permit extensive use of silicon in tyre preparation. However, lesser percentage of silicon is still used. When would such innovative technology come to India and in global markets? It might take less than 10-15 years since it is in the research stage only. Off late, we have seen the
use of hollow rods increasing so as to reduce the overall weight. What is your take on that? Hol low rods and bars can be used, but with different dimensions a nd d ia meter s. Application of such rods can be cheaper as wel l as lighter decreasing the inertia mass in the process. Will the hollow anti-roll bar be durable? Yes. Not just thickness, you also need durability. If the stresses can somehow be reduced, it would serve a greater life. The designing needs to be done accordingly. Any plans to implement this technology in near future? We keep working on different things but might not
necessarily introduce them. It is always better to design and develop something that is easily available. However, we can use it as soon as these give us a cost benefit, since customers don’t consider the technology beneath.
Auto Monitor
23 JULY 2012
VIEWPOINT
18
Akin to FMCG sector, auto companies are gearing up towards third party payroll Hussain Tinwala
T
he FMCG sector, India’s fourth largest sector in the economy, creates employment for more than three million people every year. India has one of the most promising consumer markets and the changes in income levels / lifestyles will accelerate the demand for consumer and automobile goods, which results in consistent investments in manufacturing & innovation to boost sales. The dealer and distributor segment in the auto / consumer industry plays an important role for the organisation. All the revenue generating employees are not necessarily on the company’s payroll. In fact, at times outsourced employees are the bread winners.
FMCG Third Party Payroll
Companies are also investing on training the dealer’s employees. They are offering permanent jobs on performance within the organisation by creating a future talent pool
The entry level representatives in this sector are on distributor’s payrolls. A distributor representative sells everything from confectionary to shampoos. They are responsible for sales ie order generation to dispatch, delivery and collections. Additionally, many distributors do not operate on exclusive basis for the parent organisation; they would ideally have a tie up with two or three companies. This dilutes focus on each brand, each client and each product. Companies are expecting value added services with a strong focus on its products, which seem to be getting diluted with the general distribution model. Exclusivity with a focus is the key to every company’s success in challenging markets. Additionally, understanding of the product and positioning it against competition is also vital. Hence companies expect even indirect employees to know the competition and their products well. Selling is all about skills, which develops through training and understanding, which is completely missing in employees in distributor roles. The indirect representative who does the endto-end task of generating orders to delivering products chokes the bandwidth. Further, ongoing manpower shortage and the increasing attrition rate have also impacted the company’s sales revenues. It’s all about Headcount + Productivity management = Sales. Lastly, the companies also need to ensure compliance for its indirect employees. To address the challenges,
Exclusivity with a focus is the key to every company’s success in challenging markets. Additionally, understanding of the product and positioning it against competition is also vital. Hence companies expect even indirect employees to know the competition and their products well FMCG companies are gradually exploring possibilities of employees on staffing company’s payroll instead of distributor’s payroll. This leads benefits for the company as well: s $EDICATED SALES FORCE s !TTRACTING THE RIGHT TALENT s )NVESTING IN TERMS OF SOFT SKILLS and product training s 4IMELY REPLACEMENTS AND RIGHT headcount to ensure business continuity s %NSURE STATUTORY COMPLIANCE s 'OAL SETTING PRODUCTIVITY AND performance management s &UTURE TALENT POOL FOR SALES positions on direct payroll s 4RANSPARENCY ON HEAD COUNT and it’s costs
Challenges In The Automobile Industry Similar to the distribution model in the FMCG sector, the sales of automobile companies are driven through a retail channel managed by its dealers. And hence, managing the staff on dealer’s payroll is one of the major challenges faced by automobile industry as well. These challenges are resulting into loss of business, low market penetration and low brand image. The retail business focuses primarily on head count versus sales. Hence shortage of manpower will result in lack of sales, which would have an adverse impact on the company’s revenues and market share. No doubt, India is a growing consumer market and has a lot of business potential for automobile companies. The auto retail sector comprises an extensive network of 8,500 automobile dealerships and their workshops with a combined investment of `25,000 crore and employing five lakh people directly. They are an important stakeholder in the growth of automotive industry.
The automobile industry also has seen a splurge due to the change in consumer approach. Earlier, buying a vehicle was either a status symbol or a luxury. Today, buying a vehicle could be for luxury, status symbol, necessity, comfort, technology or it could be for fun as well. Further, the easy availability of various finance options has made owning a car much easier. Just like the consumer industry, the common challenges faced by automobile companies are: s 3HORTAGE OF MANPOWER ,OW sales volume s !TTRACTING THE RIGHT TALENT s $EALER S FOCUS IS SALES AND NOT recruitment, hiring challenges in remote locations s (IGHER ATTRITION RATE s #USTOMER CENTRIC APPROACH s ,OW SALARY PACKAGES #OST saving approach by dealers s ,ACK OF TRAINING RESULTING INTO Lack of product and company knowledge s ,ACK OF TECHNICAL SKILLS DUE TO lack of training s %MPLOYEE S ABILITY TO POSITION the product and create a value image s .ON ADHERENCE TO STATUTORY compliances s $EALER S FOCUS ONLY ON EMPLOYee’s ROI The HR honchos are working towards addressing these challenges. They are crafting policies or incentivising
Facilitating The Auto Industry Like a shift in FMCG, auto companies are gearing up towards a radical move of transitioning dealer employees to third party payroll as well. The initial facilitation and transition costs are borne by the auto company. The initial costs includes hiring expenses, payroll processing fees, transition costs, training expenditures and on the job training. The monthly recurring salary cost is paid by the company but adjusted with dealer payments.
Advantages s -EETING REQUISITE STATUTORY compliances s 3TANDARDISATION OF HIRING parameters to ensure qualitative hiring s /N TIME HIRING ACROSS LOCAtions, including remote areas s #REATING A TALENT PIPELINE by associating with various institutes s 3OFT SKILLS PRODUCT AND technical training which includes field visits s !TTRITION MANAGEMENT TO ensure business continuity s %ASIER SALES PLANNING VERsus head count plan s $IRECTLY MANAGING PEOPLE performance and people productivity s 4RANSPARENCY IN MANPOWer cost dealers to ensure an adequate headcount. Companies are also investing on training the dealer’s employees. They are offering permanent jobs on performance within the organisation by creating a future talent pool. They are also facilitating support towards hiring. However as companies don’t have a control on the productivity or performance management of the dealer’s employees still remains a main concern. (The author is the General Manager, TeamLease Services )
Auto Monitor
23 JULY 2012
NOR T H INDI A
20
Fully automated GNA facility in Jalandhar becomes operational Nabeel A Khan New Delhi
J
alandhar-based, drive line component manufacturer GNA Udyog has recently set up a Greenfield precision forging plant in Jalandhar, Punjab with an investment of `50 crore with full production capacity of 30 lakh units a month. The automated facility can be run by only 15 people and it commenced production recently with an initial capacity of 10,000 units a month. “We are looking to expand in to precision forged components, as we have the desired equipment and know how to design and
GNA has bagged an order for steering columns from an Italian car maker. After the go ahead from the Italian car maker, GNA will export five lakh units
manufacture tooling for same,” CEO, GNA Udyog, Maninder Singh Seehra told Auto Monitor. The plant spread over 38,000 square feet will start production with full capacity utilisation by 2015 and will cater to the demands coming from commercial vehicle and car manufacturers. “Over the next few years, we plan to invest up to `25 crore, mainly to debottleneck the downstream processes and putting additional technology and achieve sales target of `250 crore by 2015. Given the current market scenario, we are readjusting the growth projection to 33 percent. Earlier it was projected to grow by around 40 percent,” Seehra explained. Last year our company closed at `115 crores achieving a growth of 12 percent whereas GNA Group turns over was `698.68 crores. The component maker, which has envisaged growing at the rate of 40 percent, has moderated its growth projection to 33 percent, looking at the current sluggish situation. The company has bagged an order for steering columns from an Italian car maker, which has been delayed by six months. After the go ahead
from the Italian car maker, GNA will export five lakh units. GNA at its new R&D centre has developed new propeller shaft designs for LCVs and ICVs, which has been approved by a number of commercial vehicle makers. The new propeller shaft is lighter by five percent in comparison to standard shafts available in the market. The reduction in weight was possible by using advanced design techniques and finite element analysis. It has already procured a trial production order from some India OEMs The R&D facility was established around two years ago with an investment of close to `seven crore on technology and equipment, is enabling the company to face the competition. It foresees competition for propeller shafts heating up in India and also globally. There are some customers who would give only the vehicle specifications and the component makers are supposed to design and develop the products. For such customers, the R&D and design centre will act as a boon. Now it has made a major technology shift because of the changing demand in order to be
Maninder Singh Seehra, CEO, GNA Udyog
globally competitive. The company has already reaped the benefit of this R&D centre designing and developing its first propeller shaft and eventually becoming an end-to-end solution provider. Based in Jalandhar, the company has the advantage of getting easier access to manpower and easy availability of land
for expansion. “The major problem we face is that logistically, we are away from customers and hence need to maintain higher inventories. Other challenges like unavailability of power and lower amount of big automotive projects being put up in state, gives geographical advantage of players in the industrial belt.” Sheera added.
Triumph to set up bike assembly plant in Karnataka Bhargav TS Chennai
U
K-based Triumph Motorcycles has signed a memorandum of understanding (MoU) with the Karnataka government to set up a bike assembly plant in the state. Initially the bike manufacturer will be assembling its Bonneville, Street Triple, Speed Triple and Daytona 675 models locally. Later, by looking into the response it may consider to manufacture their bikes locally here. According to a company official, the government has allotted 40 acres land at Narsapura in Kolar district, which is 52 km away from the capital city, Bangalore. The location has been aptly shortlisted for the proximity of the port for both importing completely knocked-down (CKD) kits from its Britain plant and later exporting of bikes. The company will be initially investing `215 crore towards its new facility and expected to commence its production in another couple of years. The company is all set to launch its motorcycles in the Indian market in the next few months and expected to price four of its models very competitively, despite them being brought into India as CBU initially. These models would later be assembled by Triumph once the assembly unit is up and running. Triumph had showcased its India range of products at the Delhi Auto Expo in January this year. The product line displayed at the motor show included the parallel-twin, Bonneville, the iconic naked roadsters Speed Triple and Street Triple, the off-roader Tiger 800XC, class-leading super sport bike Daytona 675 and the cruisers Storm and Rocket III, which will be rolled out as CBU models. Triumph Motorcycles has always set the pace for category winning machines that offer a blend of design, character, desirability and performance combined to create truly distinctive motorcycles. The cheapest motorcycle from the motorcycle manufacturer, Bonneville comes with a price tag of `five lakh.
Auto Monitor
23 JULY 2012
NOR T H INDI A
22
Maruti steers towards new exports markets and rural India Nabeel A Khan New Delhi
M
aruti Suzuki India L i m ited (MSIL) has stepped up its focus on the rural market and steered its exports business to non-European countries to counter the sluggish market trends. The car maker has recently increased its exports focus on South East Asian Countries, South Africa and Latin America. MSIL’s rural sales segment claims to have been growing continuously and faster than the industry overall. A few years ago, the carmakers’ rural sales contributed about six percent of its total sales, which has now gone up to 25 percent. “The growth in rural sales is due to our aggressive strategy of greater penetration in the rural markets and our very good marketing initiatives. The share of
The growth in rural sales is due to our aggressive strategy of greater penetration in the rural markets and our very good marketing initiatives— Shashank Srivastava, Exe Director, MSIL rural markets in the overall market has been increasing because of the increase in rural incomes and also because our rural economy is largely isolated from some of the global downturn phenomena.” Executive Director, MSIL, Shashank Srivastava told As far as urban markets are concerned, the dynamics are
quite different and the portfolio of sales is also quite different and requires a different strategy. MSIL is trying to increase market share in the urban areas also. The success of the new Swift and the new Dzire as well as the Ertiga augurs well for the company. The Indian currency has been depreciating against almost all major currencies recently. This has taught the company a bitter lesson, and thus increased exports came as a natural hedge against these fluctuations. In the recent past, it has reduced dependence on the European markets from 75 percent of exports by volumes to about 20 percent. This was possible because it developed new markets in the non Europe area. The company will look at introducing new products for exports. For example, it recently launched the Dzire in Algeria and also launched Ertiga in Indonesia.
Shashank Srivastava, Executive Director, MSIL
Maintaining Market Grounds Last year, MSIL experienced a slump in the market share to below 40 percent mainly because of the labour issues and a shortfall in supply of diesel vehicles. Other reason was the increasing share of new players in the mass segment like Toyota, VW and GM. Going forward, the country’s largest car maker will be looking at a market share between 40 to 44 percent. MSIL has been maintaining a market share of around 44 to 45 percent for almost a decade despite the entry of many OEMs and a huge number of competing brands. As the MUV segment has grown dramatically this quarter, which was in the first quarter smaller than the Sedan segment. Ertiga, in this segment has got good response and company has got almost 50,000 bookings so far. The demand is largely in diesel variants where MSIL now has a long waiting period.
In The Pipeline The OEMs are trying to create excitement with new launches and variants, responding to this trend, Srivastava pointed out, “We have been introducing new products regularly and have also been upgrading the older brands. In fact in 2007, we introduced the Swift diesel and the SX4 , in 2008 the Dzire and the Astar, in 2009 we had the Ritz, in 2010 the Eeco, Alto K10, the CNG models, New WagonR, the new Estilo, in 2011 we had the New Swift and very recently the New Dzire and the Ertiga. This is testimony of our commitment to bring the latest and the new models to the Indian consumers. We will continue to have a similar philosophy in the future also.” In order to reduce the waiting period, primarily because of the high demand of diesel vehicles, the company has increased the supply of diesel vehicles from 245,000 last year to a planned 400,000 this year. At the same time, MSIL is also educating the customers that diesel may not be the right choice especially if the distances driven by the consumer are not large.
Increasing Capacity The company doesn’t plan to make any change in the investment plans. “What we see today is actually a temporary blip and the long term growth story is largely intact. In fact, in the last few years, the Indian domestic car market has grown at a CAGR of about 12 percent and we see it growing at a similar rate in the near future also. Thus, we should see the Indian car market touch the four million mark by 2015-16,” added Srivastava. To reduce the waiting period, MSIL is increasing assembly capacities, diesel engine supplies by way of increasing productivity at the suppliers’ side and also increasing diesel engine supply by new contractual terms.
Auto Monitor
23 JULY 2012
NOR T H INDI A
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“India is better than Europe. We have good buying power; we just need cheaper financial options” Land crisis and power shortage remains a major cause of concern for the automotive manufacturers in the northern regions. However, Chairman, ACMA (Northern Region), Rattan Kapur, instills hope as he says that the highway connecting Gurgaon to Gujarat (NH8) is an industrial potential area and he thinks that in the next five years, it will surely come up if the FDI is allowed. Nabeel A Khan & Jagdev Kalsi Why do we continue to witness labour unrest? There is an improvement in the labour relationship. But it just means that one year has gone past peacefully and it doesn’t point towards a shift in the attitude of labour towards management. There is still a tussle going on and until and unless both sides change their perspective and make it for the growth elopment of the counand development n’t think the issue try, I don’t can be resolved. At the her government end, either body has to take or somebody tep and look into a firm step er. the matter. This is problem has ere for quite been there ime now. a long time he govWhy is the ernmentt not looking into e? the issue? The government can give a better
answer as to why they are not inclined towards open discussions. It should lay down the guidelines for both parties, not just for manufacturers. There should be guidelines for labour as well. Delhi-NCR has been a kind of automotive hub in northern region but there is an acute shortage of land here now. What is the future of industrial expansion? We can’t have indust i ndust r ies iin n urba n a reas and they have to move out. In a way it is good here si nce we fall short of amenities like big
roads. But upcoming areas have to be well connected, not only by roads but also by rail. A fast linking metro or something would enable people to stay anywhere and work and will save time and fuel as well. The government’s policies are good, but they aren’t complete. What are the major challenges faced by component manufacturers in North India? Firstly, the land is far too expensive. Second, water, third, electricity and fourth is transportation. Just look at the whole setup, everything seems to be on paper, nothing is concrete. In other countries, industry imbibes R&D, training institutes, hostels, hospitals so you don’t need to move out. That brings everything closer and reduces the talent cost we Model townships here as well. ju on papers and don’t get are just world world-class features. If you want pro to promote the industry, promote full it fully. So what steps are being taken to address these issues? We We’ve been requesting governm ernment to provide gas since it is chea a cheaper source of power. It has come to places like Tapukara and nearb areas. Gas is far cheaper nearby than electricity and we can generat our own power. That will erate be much cheaper than diesel a well. Highway connecting as Gurgaon to Gujarat (NH8) is all industrial potential area. Foreign countries are investing in a very big way in what is called the
industrial corridor. All along the highway industrial belt is being made. I think in the next five years, they’ll surely come up if the FDI is allowed. Since other markets are going towards saturation, this is the place to invest in infrastructure. Foreign investment can do complete infrastructure planning. They’ll put up the industry and will have highways going across and will be well connected by rail. What potential does Gujarat offer to industry? Gujarat has surplus power. They have a single window clearance for everything and land is cheaper. The only problem is manpower. But that can be resolved if you give amenities to the ones who work there. How are manufacturers offsetting European slowdown? Maybe on the OEM side, the volumes are falling down a little bit, but replacement and aftermarket is booming. There is surge in demand of replacement products as people are extending the life of their vehicles. That is where we will sustain. India is however better than Europe. India has good buying power. We just need cheaper financial options. But falling ‘Rupee’ does have an impact. The government provides benefits for R&D. Overall, its okay for India and we should grab as much R&D technology from
European countries and make ourselves strong and independent. This is the right time to do that. Earlier, we were talking about marriage between Tier II and Tier III. How has that progressed? That is still the priority of all the companies and mine too, being the chairman of ACMA. We are doing initial developments, employee involvements, problem-solving and quality circle competitions. We not only involve Tier I companies, but also Tier II and some Tier IIIs. We don’t see any difference between Tier I and Tier II companies. Thankfully, manufacturers like Maruti Suzuki and Honda are also on same lines by going directly to the Tier II companies and imparting training and knowledge to them. So, the movement has started. Tier II quality has started to improve and the chain is becoming stronger. What are the logistic challenges faced by companies? There are not many problems for companies based near the mother unit, or even within a 15-20 km radius. Most of the OEMs prefer this only, so this new expressway (Kundli bypass, Haryana) will cater the traffic from north moving towards industrial area. Infrastructure will be ready soon but it is still important to be placed closer to the parent unit. Till that doesn’t happen, warehousing is an option to meet time slots.
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NOR T H INDI A
Fiem signs two new JVs Nabeel A Khan New Delhi
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utomotive lighting and signaling equipments manufacturer, Fiem Industries is in the process of finalising two joint ventures with Japanese and Korean companies for product diversification. The manufacturer is planning to diversify into new components like wipers, batteries and control cables. The company has also recently added dedicated plant in Rajasthan for manufacturing painted plastic parts. The company declined from divulging the details of JV partners at this stage because of the non-disclosure agreement.
However, it expects to conclude the deal in a couple of months. “We are planning for substantial increase in our product range, diversification into new products, enhancing the share of export business. We are expecting that the market situation will definitely improve and there is great potential for business in the coming days,” said Director, Fiem Industries, Rahul Jain to Auto Monitor. The Sonepat-based component maker has diversified product range and manufactures LED lamps, LED home lighting, LED panels, solar lantern, multi-function flash lights, LED information display panels for railways, metro, state transport buses, and taxies etc. Fiem is also
looking at cutting a high chunk of revenue from the exports market and it is setting up a new plant in Thailand. Fiem claims to have no impact of the sluggish market because its major business comes from the two-wheeler industry, which has growing quite well. It has all eight manufacturing units under full capacity utilisation. “We have been having about 25 percent CAGR and in the FY12 we had a turnover of about `585 crore. We anticipate a growth projection to the tune of 25-30 percent in coming years.” pointed out a senior official from the company. Fiem is OEM suppliers both in India and abroad and currently get around three to five percent of revenue from exports.
S Narayanan, Head (Commercial & International Operations), Fiem have four ma nufacturing facilities in Northern India and four manufacturing units in Southern India, located in Haryana, Rajasthan, Himachal Pradesh, Tamil Nadu and Karnataka. This only gives advantage to our customers as we have our units situated close to their facilities, which will enable us to offer them just-in-time delivery.
As a North India-based company, what are the challenges and advantages that you you face? Even though our headquarters are situated in Northern Part of India but actually we
Auto Monitor
What kind of trend do you see coming in the lighting industry? Going forward, in place of incandescent lamps, we see LED-based lamps being preferred for both interior and exterior application. Besides, HID-based lamps for head lamp applications are also in use. It is expected that the usage of such components in the Indian
car industry will boost the growth because of performance efficiency, reduced power consumption, high reliability, longer life, ecofriendly etc. Input material costs are rising. What are the steps you are taking to be cost competitive? The increased costs of raw materials and continuously increasing exchange rates have put us in a dangerous situation. We are making efforts to control our costs through value engineering, developing indigenous sources for supply of components, improvised manufacturing process control, automation etc. However, the situation is precarious and quite alarming for which, we will look upon our esteemed customers for their help to cover the increased costs.
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Exide to renew focus on aftermarket Our Bureau Mumbai
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xide Industries is looking to renew its focus on the replacement market to achieve higher realisation and achievement scale. It has earmarked capital expenditure plans for the current financial year at around `270 crore. The company pointed out that the prevalent depressed conditions in the automotive OE segment have eroded the beneficial impact of the higher sales volume achieved in replacement market. “Being a significant player in the automotive OE business, any negative swing in auto sector is a matter of concern for us. Still we have been able to modestly improve its overall margin levels,” said Managing Director and Chief Executive Officer, Exide Industries, TV Ramanathan in a statement. The company’s penetration strategy into the replacement market for commercial vehicles and tractor segment is paying off and sales grew by 14 percent. Among other segments, motorcycle battery sales showed significant growth, improving 27 percent in volume terms. “To cater to the increased demand for our motorcycle customers, we are going to start production at our new motorcycle battery manufacturing plant at Ahmednagar in Maharastra,” he said. The company’s volume growth in the four-wheeler battery division was 10 percent, and the volume growth of industrial batteries was 19 percent for the
quarter. The company’s motorcycle battery business continued with its improved performance showing 28 percent volume growth. Price of lead continued to remain under check in the international markets during the period under review. However, the depreciation of rupee visa-vis dollar negated most of the advantages. The company’s turnover during the last quarter rose by 25 percent to `1,551 crore. The profit from operations during the same period at `205 crore rose 10 percent sequentially and three percent as compared to the corresponding period of the previous fiscal. “The Indian market for batteries across segments is fast maturing and customers are becoming more quality rather than price conscious. This positive trend will continue and gain momentum in future to help technology focussed companies like Exide Industries,” he added. During the current financial year, the company’s automotive battery SBU showed a growth of 28 percent and the industrial battery SBU showed a growth of 26 per cent in value terms. The growth in value terms far outstrips the growth in unit terms in all the segments. The Exide board also approved in the acquisition of the shareholding in Leadage Alloys India, a lead smelting unit, where it presently holds 51 percent stake. With such an acquisition, it would have two wholly owned smelting units for captive consumption to cater to its requirements of lead and lead alloys.
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C O R P O R AT E
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Ford India expands engine plant by 36 percent Our Bureau Chennai
The plant is the first Ford facility with a single flexible production line manufacturing petrol & diesel engines, and first to run a crank shaft production line producing crank shafts for petrol & diesel engines
Photographs: Bhargav TS
Photographs: Bhargav TS
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ord India has expanded its engine production capacity in its Chennai plant to 340,000 units per annum. Ford India, whollyowned subsidiary of Ford Motor Company, was earlier producing 250,000 engines at its Maraimalai Nagar plant near Chennai. With this expansion, the company can manufacture additional 80,000 diesel engines and taking the total diesel engine capacity to 160,000 units annually.
(L) Flexible Manufacturing Engine Line (R) Michael Boneham, President & MD With The 400,000th Engine
The demand for diesel engine vehicles has been growing in the last few months and the increased capacity is sure to help meet that demand. Ford India’s President and Managing Director, Michael Boneham said, “In the first quarter of this year, we had some constraints in meeting the surging demand and the waiting period stood up to 90 days. With the help of this capacity expansion of our engine plant, we will reduce the waiting period to two-three weeks.” For expanding its engine plant, the company has invested around
`396 crore. In this, most of the investment has gone in creating infrastructure like a flexible crankshaft production unit, flexible cold and hot test benches, and a dynamometer test facility. “We are at an interesting phase of growth with the markets demanding swift responses from manufacturers, and I am proud to say that with this plant’s amazingly flexible production lines of both petrol and diesel engines, we are well-poised to move quickly,” Boneham said.
Single Flexible Production The Chennai plant is the first
Ford facility to feature single flexible production line manufacturing of both petrol and diesel engines. It is also the first Ford plant to run a flexible crank shaft production line producing crank shafts for petrol and diesel engines. With this capacity extension of the engine plant, the car maker will strategically position Chennai as a regional hub for small engines. Commenting on the advantages of the flexible production, Boneham said that the flexible single crank line that can produce both diesel and petrol
engines. Later if the customer rolls back to petrol, we can respond to them immediately. But it will be difficult for the manufactures to respond immediately, if there is a huge gap in the government policies.” Currently, the plant manufactures 17 variants of petrol and diesel engines (12 Duratec petrol engine variants and five Duratorq diesel engine variants), 40 percent of which, are being exported. The 1.6 TiVCT, 1.4 HC and Duratorq engines will be exported to markets such as South Africa, Thailand and Taiwan.
Flexible Testing The facility is equipped with a fully flexible Cold test, Hot test and Dynamometer test facility for petrol and diesel engines. The Cold test helps in enabling early detection of defects using signature analysis and carbon fuels are not used. In the Hot test, engine is fuelled and tested and leaks are also tested with the help of UV lights. The IDS (Integrated Diagnosis System) are also used to diagnose the faulty engines. Ford India commenced producing engines from its Chennai plant from 2008 with an initial capacity of 60,000 units. Later in January 2010, Ford India expanded its engine capacity to 250,000 units for producing both petrol and diesel engines. Recently the company’s Power Train facility rolled out its 400,000th engine within just four years of its existence.
Future Plans The EcoSport SUV displayed at the Auto Expo in January this year will come in both petrol and diesel variants. The company is contemplating on introducing EcoSport in both diesel and petrol variants in India. According to Ford, EcoSport will be a ‘growthpad’ for the company in compact SUV segment in India and it will also be exported. The new product is expected to be rolled out in first quarter of 2013. Boneham said, “We are not present in certain growth segments in India, the compact SUV will be our growthpad in India and we would like to see at least 80 percent of localisation for the new SUV.
(Above) Engine Machining Line (Below) Assembly Line
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23 JULY 2012
G L O B A L WAT C H
Ford puts the brake on 10K Escapes
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ord Motor Co is recalling more than 10,000 redesigned 2013 Escape SUVs because mispositioned carpet padding may lead to interference with braking. The recall covers 8,266 Escapes in the US and 2,193 in Canada. The Escapes being recalled were built at the Louisville Assembly Plant from March 8 through June 7. The redesigned Escape went on sale in June and is a key vehicle for the Dearborn automaker. Ford plans to add a third shift in Kentucky by September to meet additional demand for the vehicle. Ford said in early June, an employee noted the space between the brake pedal and the centre console left-side trim panel, which may result in the driver contacting the edge of the brake pedal while transferring the foot from the accelerator to the brake pedal. Ford said the issue could increase braking distance but says it has no reports of the problem happening with customers. Owners were notifies recently. Ford dealers will remove the carpet padding and replace the left-side console trim panel with
Ford dealers will remove the carpet padding and replace the left-side console trim panel with a new panel that has a new surface contour
a new panel that has a new surface contour. Ford spokeswoman Marcey Evans Zweibel said recently that the recall also covers “a few hundred” Escape vehicles in Mexico. No vehicles outside North America are affected. She said no reports or complaints from customers have been received. In June, Ford had its best ever month for Escape as it offered incentives to clear out 2012 Escape SUVs. Sales were up 28 percent to 28,500 in June. “The new 2013 Escape is off to a very
strong start, with vehicles selling on dealer lots in less than five days,” said Ford Vice President for US Sales, Service and Marketing, Ken Czubay in a statement earlier this month. Ford sent the National Hig hway Tra f f ic Sa fet y Administration notice on July 2 in a letter that it was recalling the vehicles. But the notice didn’t show up on a government website for more than 10 days. Separately, Ford said it is recalling 783 2012 F-650 and F-750 medium-duty trucks built
at an Escobedo Assembly plant in Mexico. The clear and black primer may be missing on windshields that may result in an insufficient bond between the glass and cab—and could result in the windshield separating from the vehicle. Ford dealers will inspect and replace or reinstall the windshields. Ford said last year it is moving production of the Ford F-650 and F-750 from Mexico to its Ohio Assembly Plant in Avon Lake. Ford has built the medium-duty trucks at its decade-old Blue Diamond Truck LLC joint venture between Ford and Navistar International, which builds the Ford F-650 and F-750 trucks in Mexico.
VW CVs achieves 3.7% growth
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olkswagen Commercial Veh icle s ha s delivered 270,000 units worldwide by the end of June. Compared to the corresponding period last year (January-June 2011: 260,300 vehicles), this represents an increase of 3.7 percent. Global customer deliveries of the Amarok went up by 24.8 percent to 36,400 vehicles, while Crafter deliveries rose by 38.7 percent to 23,900 vehicles. Deliveries of the T5 series increased by 1.3 percent to 81,500 units and Caddy went down by 2.5 percent to 78,100 vehicles. In Western Europe, deliveries of the brand from January to June 2012 went up by 1.9 percent to 144,800 vehicles, and in Eastern Europe rose by 29.2 percent to 21,000 vehicles. Vehicle deliveries in Europe as a whole increased by 4.7 percent to 165,800 units and in South America, the brand delivered 1.8 percent fewer vehicles to customers, handing over 67,700 vehicles .
NHTSA probes Escape, Mazda for throttle issue
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he National Highway Traffic Safety Administration (NHTSA) opened an investigation recently into 730,000 Ford Escape and Mazda Tribute SUVs for possible unintended acceleration, after an Arizona crash in which, a 17-year-old girl died in January. In December 2004, Ford recalled 2002-04 470,000 Escapes, describing an accelerator cable assembly defect that could cause the throttle to stick. That same month, Mazda, which sold a nearly identical vehicle, recalled 121,000 200204 Tribute SUVs. Ford formerly owned 33.4 percent of Mazda before it started in 2008 to reduce its involvement. It now has an ownership stake of 3.5 percent. Ford sent dealers an updated repair procedure in October 2005, with updated illustrations and a warning to help prevent damage to the speed control cable while replacing the accelerator cable. Mazda did not issue a similar notice. However, by that time, nearly 320,000 Escapes from the 2002-04 model years already were fixed, and their owners never were informed of the updated procedure. The 2002 Ford Escape that crashed in Payson, Ariz., killing Saige Bloom, was fixed in January 2005, before the repair update. NHTSA has been investigating the crash since early this year. It obtained the police report and has sought additional information from the teen’s family. “The defective accelerator cable caused high idles, but the damaged cruise control cable caused far worse openthrottle accelerations by breaking the cruise cable protective guide, which allowed the connector end of the cable to jam against the engine cover,” said Executive of the Centre for Automotive Safety, Clarence Ditlow recently to Ford CEO, Alan Mulally. Mazda North America said it is “cooperating with NHTSA and will work with them to evaluate this situation.” NHTSA has 99 reports alleging incidents of stuck throttles in 200104 Ford Escapes and Mazda Tributes with V6 engines.Of the total, 68 reports are from Escape owners; 31 are from owners of model year 2001 through 2004 Tributes. Thirteen crashes and nine injuries were reported. Escapes from the 2002 model year have been the subject of eight previous NHTSA investigations, according to the agency’s database. Sudden unintended acceleration made headlines in 2009 and 2010 when Toyota Motor Corp. recalled more than 10 million cars worldwide for sticking accelerator pedals and pedals trapped in f loor mats.
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G L O B A L WAT C H
Fire risks, rear seat issues smokes Porsche, Nissan to order recalls
Nissan said it discovered the problem during testing and immediately corrected it in May. The automaker will replace the seatback strikers with new ones
Nissan carves business partnership with Stanley, Dewalt
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orsche AG and Nissan Motor Co are issuing new recalls to address concerns of fire risks and faulty rear seats. The German luxury automaker said it is recalling 270 vehicles in the United States to address fire concerns after 37 incidents have been reported worldwide. Porsche said the turbine wheel of a turbocharger may fracture because of a casting defect, which will lead to a decrease in performance. If the driver doesn’t stop, the damage may intensify and the turbine shaft may fracture. If
23 JULY 2012
the fractured shaft moves out of a bearing, oil may be drawn into the exhaust system, which could result in smoke and possible fire. The recall covers some 2012 Panamera Turbo S, 2011-12 Panamera with optional Turbo Kit and 2012 Cayenne with optional Turbo Kit models. Porsche said the first report of a fire was in Syria in October. During its investigation, it learned that a second incident had occurred in August on a race-
track. After an investigation, the first defects using computerised “X-rays” of turbine wheels were discovered in June. As a result, Porsche halted production and delivery of the three models last month. The titaniumaluminium alloy turbine wheels in the turbochargers were discontinued, and a new wheel with a different alloy material is being used. To date, there have been 37 failures reported worldwide, including three in the US The first US fire was reported on June 26. Porsche dealers will replace the turbine wheels in the turbochargers with new ones. Nissan said it is recalling 11,076 2012 Juke crossovers built between February and May because of an incomplete weld. The rear seat back striker may separate in a crash. Nissan said it discovered the problem during testing and immediately corrected it in May. But it continued to investigate to discover whether a recall was necessary. The automaker will replace the seatback strikers with new ones.
issan Motor GB has signed an exclusive three-year deal with hand tools expert Stanley and leading power tools brand Dewalt for 13 Nissan Navara 4x4s for use by their retail, trade and roadshow teams. The black 2.5dCi diesel Navara pick-ups have been specially adapted for the tool brands and feature fitted internal racking, secure shelving and product storage space as well as space for branding, demonstration tents and merchandising materials.
Stronger Presence Stanley and Dewalt will be using the branded Navaras for a variety of experiential activities to promote a stronger presence at trade counters, dealer days and national trade shows. The initiative forms part of Stanley and Dewalt’s strategic aim to engage with trade professionals and highlight the benefits their products offer. The brands will appear at many key Screwfix stores
across the UK, as well as product demonstrations at B&Q and Homebase stores for trade professionals and enthusiastic DIYers. Corporate Sales Director at Nissan Motor GB, James Douglas said, “The partnership with Stanley and Dewalt enables us to work with two of the best brand names in the DIY sector. It will help further build Nissan’s strong reputation for serving the business community with its extensive range of vans and pick-ups.” General Manager at Stanley Black & Decker UK & ROI, John Cowley commented, “We are very excited about getting the newly Stanley and Dewalt branded Nissan Navaras on the road. Not only are these vehicles ideal for our sales and roadshow teams in terms of providing ample storage, the branding on the vehicles is eye-catching, which will help us to create a stronger brand impression at demonstration days. The three brands form a great partnership.”
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TECHNOLOGY
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Artificial muscle as shock absorber Engineers are working on intelligent materials that can diminish vibrations and extract power from the environment. These electro-active elastomers could dampen annoying vibrations in a car, for example, or supply wireless power to sensors in otherwise inaccessible places.
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t is not very fun to ride a bicycle on a street plastered with cobblestones. At least the bike has a saddle seat filled with silicone. That lessens the shocks and bumps, and counteracts some of the annoying vibrations. In a professional‘s eyes, the material in the saddle is an “elastomer”— a material that is yielding and malleable, like a rubber band. Engineers at the Fraunhofer Institute for Structural Durability and System Reliabilit y LBF in Darmstadt are now working on the next generation: They are designing components made of elastomers that actively respond to unwanted vibrations, and dampen them more effectively than ever before. E la stomers have been used in engineering for decades, such as shock absorbers in mechanica l engineering or in the bearings for vehicle engines. Until now, they have had a purely passive effect on vibrations or impact collisions. It would be more effective if the elastomers were to respond proactively and counteract vibrations. In the same way, a tennis player slows down the ball on a drop shot by pulling back on her racket, an active elastomer draws out the energy from the vibration in a targeted manner by swinging in precise push-pull mode. Theoretically, this would make the vibration dissipate completely.
Elastomers Vibrate Under Alternating Current There are already materials that are good for this purpose. “They are called ‘electroactive elastomers’,” explained LBF Scientist, William Kaal. “They are elastic substances that change their form when exposed to an electrical field.” The trick: apply an alternating current, and the material starts to vibrate. If there are smart electronics controlling the elastomers, making them vibrate precisely in push-pull mode, then unwanted vibrations in equipment or an engine will dissipate for the most part. To demonstrate that the principle works, the Darmstadt-based researchers created a model. Smaller than a pack of cigarettes, it comprises 40 thin elastomer electrode layers. The experts call it a “stack actuator”. “The challenge was the design of the electrodes with which, we apply the electric field to the elastomer layers,” as Kaal‘s colleague Jan Hansmann clarified. Usually, electrodes are made out of metal. However, metals are relatively rigid, which impedes the deformation of the elastomer. Fraunhofer experts deliver an elegant solution to the problem: “We put microscopicsized holes in the electrodes,” said Hansmann. “If an electric voltage deforms the elastomer, then the elastomer can disperse into these holes.” The result is an actuator that can rise or fall a few tenths of a centimeter upon com-
Elastomers are elastic substances that change their form. When spiked with an alternating current, the material starts to vibrate. The smart electronics controlling the elastomers can make them vibrate precisely in pushpull mode, and the unwanted vibrations in the equipment will dissipate mand—several times a second, in fact. To demonstrate these capabilities, William Kaal attaches a small mechanical oscillator to the device. When he turns it on, the oscillator begins shaking powerfully—the actuator has hit its resonance frequency perfectly. On the other hand, the instrument can actively absorb vibrations: If the oscillator is tapped by hand, it quickly settles down when the actuator vibrates in push-pull mode. The LBF engineers believe one potential application for their stack actuator can be found in vehicle construction. “An engine‘s vibrations can be really disruptive,” said William Kaal. “The vibrations are channeled through the chassis into the
Artificial Muscle As Shock Absorber
car‘s interior, where the passengers start to feel them.” Of course, engines are installed meticulously, and yet: “Active elastomers may help further reduce vibrations in the car,” Kaal asserted.
When Vibrations Turn Into Power The function of the stack actuator can also be reversed: rather than produce vibrations, the device can also absorb vibrations from its surroundings to produce energy. The principle works, and researchers have proven it. As they placed an electromagnetic oscillator on their stack actuator, it converted the vibrations into power. “That would be of inter-
est, for example, if you wanted to monitor inaccessible sites where there are vibrations but no power connections,” Jan Hansmann believed—the temperature and vibration sensors that monitor bridges for their condition. The stack actuator technology has been largely perfected: “The manufacturing process can be readily automated. That is important for industrial mass production,” thinks Kaal. Nevertheless, endurance tests still have to show what the long-term viability of the intelligent actuators is like. Ultimately, they must be able to withstand harsh environments of the kind found in the engine compartment of a car.
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G L O B A L WAT C H
Federal-Mogul pistons higher outputs Federal Mogul sparks
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ederal-Mogul Corporation has developed a lightweight, high-strength aluminium piston that enables engine manufacturers to increase the power density and efficiency of boosted, direct injected gasoline engines. The new piston to equip next generation gasoline and natural gas engines and the design helps to achieve higher power, improved emissions and fuel economy. The company will commence its series production later this year in a new European passenger car, where it contributes to significant gains in fuel economy and reductions in CO emissions. “Federal-Mogul’s innovative Advanced Elastoval II piston is lighter and better equipped to help deliver the higher power outputs our customers need to improve the CO emissions and fuel economy of gasoline powertrains,” said Vice President,
Federal-Mogul’s innovative Advanced Elastoval II piston is lighter and better equipped to help deliver the higher power outputs our customers need to improve the CO emissions and fuel economy of gasoline powertrains—Gian Maria Olivetti, Vice President, Technology and Innovation, FederalMogul Powertrain Energy
Technology and Innovation, Federa l-Mog u l Power t ra in Energy, Gian Maria Olivetti. “The application of our expertise to key technologies that enable the development of the next generation of downsized powertrains, aligns with Federal-Mogul’s strategy for sustainable global profitable growth.” The new Advanced Elastova l II piston is lighter, delivers increased power outputs and can withstand the higher pressures that occur late in the combustion cycle of highly charged downsized engines. In the coming years, specific power outputs will increase from current levels of around 95 kW/L to 130 kW/L. Peak combustion pressures will rise from 110 Bar to 130 Bar and even 160 Bar in engines using alternative fuels like E100, Compressed Natural Gas (CNG) or others. The Advanced Elastoval II piston architecture is up to 20 percent lighter than previous generation pistons. Whereas previous wall sections measured four mm, the latest piston achieves wall sections as thin as 2.5mm.”Any reduction in wall thickness requires the entire piston structure to be redesigned,” said Chief Engineer Product Engineering, Federal-Mogul Powertrain Energy, Arnd Baberg. “Advances in piston design, analysis tools and testing at Federal-Mogul’s global development centres have led to a series of new features that achieve a better stress distribution, enabling a weight optimised design.” The complex cur ved side
business with Borgwarner
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panel forms of the Advanced Elastoval II piston are inclined in two planes and are closer together at the top to support the piston crown, using multiple weight-reducing pockets and crown reinforcing ribs. The piston pin bosses are curved towards the side panels and boss distance is reduced to the minimum possible. The piston’s design uses asymmetric geometries to enable maximum weight reduction. All Federal-Mogul Elastoval pistons use different skirt widths for the thrust and non-thrust sides of the piston, to achieve the best compromise of light weight, superior NVH and scuffing performance. Advanced Elastoval II reduces skirt width to 50 percent of bore diameter on the thrust face and just 45 percent of the bore on the non-thrust face without compromising NVH or increasing scuffing risk. Several vehicle manufacturers are validating the Advanced Elastoval II piston, with the first scheduled for series production later this year.
ederal-Mogul recently signed an agreement to purchase the Beru spa rk plug business from BorgWarner Inc. The purchase includes spark plug manufacturing sites at Chazelles sur Lyon, France and Neuhaus, Germany. The acquired units will add approximately $80 million annualized sales and increase FederalMogul’s annual spark plug production capacity to more than 350 million per year. The two locations employ approximately 500 people. The newly acquired sites currently manufacture the product line of Beru branded spark plugs sold to European original equipment manufacturers and the automotive aftermarket. Federal-Mogul will integrate the acquired facilities along with related technical and commercial resources into its global ignition business, which includes Champion ignition product line. The Champion brand portfolio includes spark plugs for combustion engines including small garden equipment, motorsports, automotive, commercial vehicles and industrial machinery. The company operates six manufacturing sites and three technical centres within its ignition product line at facilities in the US, China, India and Mexico. It sells spark plugs and other ignition products to several leading global automotive manufacturers and to aftermarket distributors and retail outlets in more than 90 countries.
Federal-Mogul’s ignition business has continued to grow in original equipment, industrial and aftermarket segments, especially in the last five years, as the company has introduced new spark plug designs featuring platinum and iridium electrodes, high-energy insulators and smaller diameter plug bodies. For commercial and industrial engines, the company has introduced a line of specially designed spark plugs capable of burning a wide variety of alternative fuels. The company has also introduced an innovative Advanced Corona Ignition System (ACIS) that is expected to help automakers improve fuel economy and reduce emissions by enabling combustion of previously unattainable levels of lean and highly-diluted fuel mixtures. ACIS is a future specialised ignition technology for highly-loaded engines and will be positioned along with conventional and premium spark plugs as part of FederalMogul’s core portfolio of engine technologies serving the global powertrain market. Federal-Mogul Corporation is a supplier of powertrain and safety technology and innovation and serves the world’s foremost OEMs of automotive, light, medium-, heavy-duty, aerospace, marine, rail and offroad vehicles; and industrial, agricultural and power-generation equipment. The company is headquartered in Southfield, Michigan, United States and employs 45,000 people in 34 countries.
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Škoda Auto deliveries up by over eight percent
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koda repor ted an increase in worldwide deliveries to customers by 8.4 percent to more than 493,000 units from January through June (1st half of 2011: 454,700). At the same time, the brand posted its best ever deliveries figure for June at 87,400 cars (June 2011: 81,300) and its second-best monthly figure ever. The brand outpaced the market in June 2012 and in the first half of 2012 in almost all sales regions.
Growth Course “Škoda has continued on its growth course in the first half of the year despite an increasingly
Škoda has continued on its growth course in the first half of the year despite an increasingly difficult business climate– Winfried Vahland, Škoda CEO
difficult business climate,” said Škoda CEO, Winfried Vahland. “We outperformed the market in almost all sales regions, thus improving our favourable position. The second half of the year, however, will not be easy. We are closely watching the markets, and we think there will be a significantly stronger headwind.” Vahland added, “Our model offensive has started at just the right time. The Škoda Rapid, our new compact saloon which will be launched in Europe in autumn of 2012, will play an important role in this connection.” Škoda made a strong showing in the markets in Western Europe, some of them marked by significant decline. As early forecasts showed the overall market shrank by almost five percent in June, Škoda slightly increased sales by 1.2 percent to 35,600 units (June 2011: 35,100). The largest increases in June were in the markets of Switzerland (up 31.7 percent), Austria (15.5 percent), Germany (10.5 percent) and Great Britain (9.8 percent).
Europe In Switzerland, sales grew to almost 1,900 units, setting a new monthly sales record, while market share grew to around 5.6 percent in six months. In Germany, Europe’s largest market, Škoda sold over 14,600 cars in June 2012. At 11,600 and 10,700 units sold r e s p e c t i v e l y, t he Škoda Octavia and the Škoda Fabia were the most popular models in Western Europe. For the first half of 2012, Škoda ‘s sales in Western Europe, at around 195,400 units, were down only slightly, retreating by 0.7 year on year. However, as preliminary forecasts said the overall market in Western Europe was down by 7.5 percent in the same period, Škoda’s market share increased to more than three percent. At 21.2 percent, Škoda posted strong double-digit growth in Eastern Europe in June 2012. The brand sold almost
12,600 cars as against around 10,400 in June of last year. Russia retained its rank as the region’s strongest market, with Škoda deliveries there rising 36 percent to a new monthly high of almost 9,600. Škoda’s growth was almost triple that of the overall market, which grew an estimated 13.7 percent. Around half of the brand’s sales involved the Octavia, which posted 19.3 per-
cent growth at more than 4,500 units. Deliveries of the Škoda Yeti in Russia increased by more than 180 percent, topping 1,900. The Superb also benefited from rising popularity with customers in Russia, deliveries shooting up 173.3 percent. In the first half of 2012 Škoda grew by 31.1 percent in Eastern Europe as deliveries topped 65,200 as against 49,700 Škoda sold in the first half of 2011.
Market Share Škoda’s deliveries were also up in Eastern Central Europe in June, rising 2.7 percent to almost 11,700 (June 2011: 11,400). This means that almost one car in five sold in Eastern Central Europe in June 2012 was a Škoda. The brand’s Eastern Central European deliveries in the first half of 2012 were up 4.6 year on year to more than 66,600 units (January through June 2011: 63,700). Deliveries to customers in the Czech Republic, the brand’s home market, were up 7.6 percent to over 5,800 units (June 2011: 5,400). This means Škoda strongly bucked the trend as the overall market shrank by five percent. Škoda’s share of the market in the Czech Republic reached 37.9 percent in June 2012. The brand also grew in Slovenia (up 16.6 percent) and Croatia (up 6.2 percent). At more than 4,900 units delivered, the brand’s most popular model in Eastern Central Europe in June was the Škoda Octavia, followed by the Škoda Fabia at 3,300 and the Škoda Roomster at almost 1,100 units. Škoda also continued on its growth course in China with deliveries growing by 5.5 percent to 20,100 (June 2011: 19,100) in June 2012. Total sales in the first half of 2012 were more than 120,700, up 7.6 percent year on year (January through June 2012: 112,200). Škoda’s by far most popular model in China in June was the Škoda Octavia, as it had been, advancing by 20.3 percent to almost 12,400 units delivered (June 2011: 10,300).
India Sales advanced briskly in India, with Škoda posting a 39.3 percent increase to just under 3,200, strongly outperforming the market which is estimated to have grown by 15.4 percent. The brand also outperformed the market across the entire first half of the year as sales rose 40.1 percent year on year, reaching a total of around 20,500 (January-June 2011: 14,600). The Rapid, the brand’s new compact saloon, which has been selling well in the local market as an Indian variant since late 2011, accounted for almost two thirds of Škoda’s sales in India. Overall, almost 2,000 customers took delivery of an Indian Rapid in June. Deliveries of the model totalled over 11,800 in the first half of 2012. In the United Kingdom, it’s a record start for June YTD. Overall sales are up 3716 on 2012. Order Take is up 5721 over 2011 and Market share is up 0.24 percent. ŠKODA is also outperforming the market by 8.8 percent for retail, 19.2 percent for fleet and 13.9 percent market. Škoda also posted gains in other markets in June 2012 as sales rose 73.7 percent to almost 1,300 units in Israel. Deliveries in Turkey were up 29.3 percent, topping 800 units. In Australia, the brand advanced by 87 percent to far more than 400 units sold.
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More stringent vehicle testing drives on the cards
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ehicle checks are fundamental to road safety. More than ďŹ ve people die on Europe’s roads everyday in accidents linked to technical failure. Thus, the European Commission has adopted new rules to toughen up the testing regime and widen its scope recently. Technical defects contribute heavily to accidents. They are responsible for six percent of all car accidents, translating into 2,000 fatalities and many more injuries yearly. Eight percent of all motorcycle accidents are linked to
If you’re driving a car which is not fit to be on the road, you’re a danger to yourself and to everyone else in your car—your family, your friends, your business colleagues— Siim Kallas, VP
technical defects. The main problem is that there are simply too many vehicles with technical defects on the road. Recent studies from the UK and Germany indicate that up to 10 percent of cars at any point in time have a defect that would cause them to fail the tests. Moreover, many technical defects with serious implications for safety (such as ABS and Electronic Stability Control) are not even checked under current rules. Existing EU rules setting minimum standards for vehicle checks date back to 1977, with only minor updates. Cars, driver behaviour and technology have developed a lot since then.
New Proposals The new proposals aim to save more than 1,200 lives a year and to avoid more than 36,000 accidents linked to technical failure. Vice President, Siim Kallas responsible for Transport said, “If you’re driving a car which is not ďŹ t to be on the road, you’re a danger to yourself and to everyone else in your car—your family, your friends, your business colleagues.
What’s more, you’re a danger to all the other road users around you. It’s not complicated; we don’t want these potentially lethal cars on our roads.�
Key Elements s #OMPULSORY %5 WIDE TESTING for scooters and motorbikes. Motorbike and scooter riders, particularly young riders, are the highest risk group of road users s )NCREASING THE FREQUENCY OF periodic roadworthiness tests for old vehicles. Between ďŹ ve and six years, the number of serious accidents related to technical failure increases dramatically (see graph in MEMO/12/555 attached) s )NCREASING THE FREQUENCY OF tests for cars and vans with exceptionally high mileage. This will bring their tests in line with other high mileage vehicles such as taxis, ambulances etc s )MPROVING THE QUALITY OF vehicle tests by setting common minimum standards FOR DEFICIENCIES EQUIPMENT and inspectors
s -AKING ELECTRONIC SAFETY COMponents subject to mandatory testing s #LAMPING DOWN ON MILEAGE fraud, with registered mileage readings s )N ALL CASES THE PROPOSALS SET common EU wide minimum standards for vehicle checks, with Member States free to go further if appropriate
History Existing EU rules on vehicle checks date from 1977, they set minimum standards for vehicle checks and have only been marginally updated since. There are three main pieces of legislation: Directive 2009/40/EC fixes minimum standards for the periodic roadworthiness tests of motor vehicles—these are the REGULAR VEHICLE CHECKS REQUIRED by law. The Directive applies to passenger cars, buses and coaches and heavy goods vehicles and their trailers, but not to scooters and motorbikes. Directive 2009/40/EC is complemented by Directive 2000/30/ %# WHICH PROVIDES THE REQUIREment to control the technical
state of commercial vehicles in between periodic inspections (with technical roadside inspections). These are additional on-the-spot roadside checks for commercial vehicles. Directive 1999/37/EC on registration documents for vehiCLES SETS OUT THE REQUIREMENTS for the issuing of registration certiďŹ cates, their mutual recognition and the harmonised minimum content of vehicle registration certiďŹ cates.
Iraq orders 250 Mercedes-Benz Actros
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RAQ S 3TATE #OMPANY FOR !UTOMOTIVE Industry (SCAI) recently purchased 250 Mercedes-Banz trucks to assist in reconstruction efforts in the country. The last of the ordered vehicles were delivered to SCAI recently. “We’re very pleased to help with THE RECONSTRUCTION OF )RAQ BY SUPPLYING Mercedes-Benz Actros trucks to SCAI,� stated Head of Mercedes-Benz Trucks, Hubertus Troska. “Our vehicles are perfect for use in rough terrain, where they clearly demonstrate THEIR QUALITY AND RELIABILITY v
Mercedes-Benz Actros
This was the ďŹ rst time that Mercedes-Benz Trucks has supplied vehicles to SCAI. The contract between Daimler and SCAI, which covers THE DELIVERY OF -ERCEDES "ENZ TRUCKS TO )RAQ represented a clear commitment to the country’s reconstruction efforts when it was signed in Baghdad in February 2010. The delivery of the 250 Actros trucks marks a further important step toward this goal. The 250 Actros were manufactured at the Mercedes-Benz plant in WĂśrth and delivered TO )RAQ AS COMPLETE VEHICLES 3#!) IS EQUIPPING THE TRUCKS ONSITE WITH EQUIPMENT FOR VARIOUS construction applications. The order can be broken down as follows: 100 Actros 3331K dump truck chassis and 150 Actros 3340S tractors for carrying water and fuel tanks or similar semiTRAILERS !LL OF THE VEHICLES ARE EQUIPPED WITH powerful Euro II V6 engines and a heavy-duty 16-speed transmission.
The 250 Actros were manufactured at the MercedesBenz plant in WĂśrth and delivered to Iraq as complete vehicles. SCAI is equipping the trucks onsite with equipment for various construction applications
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Seat launches new Leon
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eat has recently introduced Leon, which has been redesigned from the ground up; the third generation Leon is packed full of high-end technology, utilising an upgraded chassis, advanced infotainment systems and driving aids. The availability of full-LED headlamps for the new, third generation Leon is the first in the family hatchback class. “The new Leon condenses all the strengths of the Seat brand more than ever before. It brings quality and technologies from the full-size class
The new Leon condenses all the strengths of the SEAT brand more than ever before. It brings quality and technologies from the full-size class into the compact segment— James Muir, President, Seat SA
into the compact segment. The Leon is a step in Seat’s brand and growth strategy. It will be launched towards the end of this year as a five-door and will subsequently grow with further variants into a fully-fledged family,” said President of Seat SA, James Muir. “With the all-new Leon, we have designed and developed a car which perfectly captures the meaning of ‘Enjoyneering’. This mix of design, technology, athletic performance and premium quality is certain to seduce existing customers, as well as bringing a new generation of car-buyers to the brand,” he added. Leon combines a more compact exterior with a more spacious interior. The premium materials and the level of craftsmanship place the Leon squarely at the forefront of the competitive field. Also, it has an average fuel consumption of just 74.3 mpg and a CO2 figure of just 99 g/km. “The new Leon is an all-new car and opens a new chapter for Seat. It combines Seat’s dynamic new design language with the latest technology. Fine details and
precise design, especially in the interior, reflect the high standard of craftsmanship of the new Leon,” explained Vice-President of Research and Development for Seat SA, Dr Matthias Rabe. Dr Rabe added, “Built on the Volkswagen Group’s MQB shared architecture which benefits from systematic lightweight design, the new Leon offers an impressive performance, with low CO2 emissions and fuel consumption. In summary, the new Leon provides emotional driving fun, excellent efficiency, a stunning design and a high degree of utility.”
Design At 4.26 metres long, Leon is around five centimetre shorter than its predecessor, yet the wheelbase is up by almost six centimetre. This clever packaging enables short overhangs and enhances the strong visual presence of the wheels, while giving practical benefits such as improved interior space, particularly for rear Seat passengers, as well as in the luggage compartment.
The angular line of the headlamps is a typical feature of the new Seat design language, while also being integrated into the Leon’s sculptural form. Full-LED lights are available for the first time in the compact class. The new headlamps give an unmistakable look to the front end of the Leon. From the side, Leon looks like a precisely executed sculpture on wheels. The characteristic, unbroken ‘Línea Dinámica’ runs rearwards over the wheel arches.
It is reminiscent of the tension of a well-trained muscle. The trapezoidal C-pillars are characteristic to the Leon, as are the short, upwardspointing third windows. Also, its rear end has been intensively modelled; the large logo serves as an opener for the rear hatch. The slightly wedgeshaped rear light clusters highlight the car’s width and are also available in LED technology.
Contd. on page 42
Bentley enhances presence in Italy
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fter a strong year in 2011 and a successful first half of 2012 in Europe, Bent ley Motors now seeks to strengthen its presence in Italy. The new 250 square metre showroom has capacity to display up to six cars, and will offer both sales and aftersales services. A specially designed window between the showroom and workshop facilities allows customers to watch any work being undertaken on their car from the comfort of the dealership’s lounge.
Performance & Efficiency During the official dealership opening ceremony recently, Bentley also presents the new Continental GT and GTC V8 models in Italy for the first time. Powered by advanced four-litre twin-turbo V8 engines, the new models combine effortless performance with class-leading efficiency. Regional Director Europe Bentley Motors, Guillaume Chabin commented, “Milan has always been synonymous with luxury goods and iconic design, so it is an ideal location for a new Bentley showroom.
Brand Loyalty “The timeless design and exceptional craftsmanship of Bentley models have attracted many customers to our brand over the years, and with further representation in Italy we see significant potential to increase our sales in the market.” General Manager Bentley Milan, Luca Marzio Garavaglia added, “Bentley Milan’s location means it is convenient for our clientele based in the city centre while also offering easy access to major road networks for customer test drives. We have made significant investments in both our new facilities and our team of product specialists, so I look forward to welcoming customers to the showroom and giving them a truly first class Bentley experience.”
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Seat launches........... Contd. from page 40
Interiors The exterior design of the new Leon continues into the interior, which has a clear, light and uncluttered look. The dashboard is unconventional, with a two-tone design. Moreover, the luggage compartment has a volume of 380 litres, around 40 litres more than the preceding model. Describing the interiors, Head of Seat Design, Alejandro Mesonero-Romanos said, “We set ourselves the objective of developing an interior which would give an expressive, elegant and welcoming ambience. The quality of the material, the ďŹ t and ďŹ nish and the attention to details is at least as good as you can ďŹ nd in the segment above.â€? “The design of the dashboard respects our new interior philosophy, with a strong driver orientation. This enhances the ergonomics while giving the design an attractive, sporty feeling. The whole has been designed so the new Leon and its driver feel as one.â€?
Body Shell The Seat Leon uses a new vehi-
cle architecture that enabled development engineers to position the front axle 40 millimetre further forward. The results are a longer wheelbase and a balanced distribution of axle load—factors that signiďŹ cantly beneďŹ t comfort and sporty handling. Due to advanced construction techniques and the use of lightweight materials in the body’s manufacture, the overall weight has been reduced by 90 kilogram compared with the previous version.
Drive Leon will be powered by a series of powerful and fuel-efďŹ cient TDI and TSI engines, ranging from 1.2two litre. All engines feature direct injection and turbocharging, and have been engineered for low internal friction and fast warm-up. Compared with their respective predecessors, their fuel consumption is down by up to 22 percent. The 1.6 TDI generates 105 PS (104 BHP) and 250 nm (184 lb.ft) of torque. In the Ecomotive version with start/stop system and brake energy recuperation, it returns an astonishing 74.3 mpg on average,
equating to just 99 g/km CO2. The extensively re-engineered two TDI returns a hugely impressive 70.6 mpg in the Ecomotive version, yet develops 150 PS (148 BHP) and 320 nm (236 lb.ft) of torque. Seat will rapidly expand the engine line-up. Early 2013 will see the arrival of the 1.2 TSI in two versions with 86 PS (85 BHP) and 105 PS (104 BHP); a 1.4 TSI with 122 PS (120 BHP); and at the top of the petrol range, a 1.8 TSI with 180 PS (178 BHP) and a combination of direct and manifold injection. The diesel line-up will be augmented by the 1.6 TDI with 90 PS (89 BHP) and a powerful, range-topping 2.0 TDI with 184 PS (181 BHP). It delivers a maximum torque swell of 380 nm (280 lb.ft). Depending on the engine, transmission options range from ďŹ ve- and six-speed manual gearboxes or the renowned six- and seven-speed DSG dual-clutch gearboxes.
Chassis The chassis’ front suspension features a MacPherson front axle with sub-frame, while the rear uses torsion beam suspension for engines up to 150 PS (148 BHP). More powerful variants use a multi-link construction that handles longitudinal and transverse
loads discretely. The new Seat Drive ProďŹ le for the Leon FR allows the driver to vary the characteristics of the power steering, throttle control and engine sound (FR versions only) via a sound actuator using three modes: eco, comfort and sport. There is also a facility to tailor the settings according to the driver’s preference. The interior ambient LED lighting changes according to the selected setting: white in eco and comfort modes, and red in sport.
Infotainment In the new Leon, Seat offers a full range of up-to-date infotainment solutions. The basis is formed by the Easy Connect operating system, which controls the sound system entertainment and communication functions, as well as a wide array of vehicle functions, via a touch-sensitive screen in the cockpit. The entry level is the Media System Touch in the Reference line, which includes a CD radio with an SD card slot, four speakers and a ďŹ ve-inch touch screen. Style and FR come with the Media System Colour featuring more inscreen colours and higher quality, with a CD drive and six speakers as standard (eight speakers in the
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FR). It connects external devices via Bluetooth, USB or aux-in. Its ďŹ ve-inch colour touch screen also controls vehicle functions. The Media System Plus systems has a 5.8-inch touchscreen with three-dimensional graphics in high deďŹ nition, iPod connectivity, an optional DAB tuner, and voice recognition. The system comes with eight speakers. This system incorporates the navigation system, which also shows navigation information in the colour display between the speedometer and rev counter and can be controlled by voice recognition. The Seat Sound System has a clear, crisp sound reproduction thanks to its 10-speaker and sub-woofer set-up.
Driver Assistance Systems Leon’s drowsiness detection feature recognises when the driver is losing concentration and suggests taking a break. Additionally, an advanced camera mounted behind the rear-view mirror manages both the Full Beam Assistant, which switches automatically between full and dipped beam, and the ‘Heading Control’ lane-keeping assistant, which makes slight corrections to the electro-mechanical power steering to prevent the driver from crossing over lane markings.
BMW unveils Olympic Park Pavilion
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he ďŹ nal countdown to London 2012 has begun and BMW Group recently unveiled their Olympic Park Pavilion, expected to draw thousands of visitors each day of the Games. Conceived by an award-winning British architecture ďŹ rm, the BMW Group Pavilion represents a signiďŹ cant architectural addition to the Olympic Park, showing an exciting range of the company’s latest vehicles against the backdrop of the Olympic Stadium and Aquatics Centre. The structure also underlines the company’s longstanding commitment to design and sustainability with an array of individual rooftop pavilions exhibiting current models as well as concept cars of the future. The Pavilion is light and open, appearing to â€˜ďŹ‚oat’ on the river as water ows down the sides of the structure to create a constantly changing façade, whilst simultaneously accentuating its position on an elevated platform on the Waterworks River. Also on display are prototype models including the BMW E-Scooter and the BMW i Pedelec concept—a recently announced concept electrically-assisted bicycle, and a new-look Mini Rocketman Concept, a revised version of the original Rocketman concept, ďŹ rst seen at the 2011 Geneva Motor Show. The top deck, comprising nine individual rooftop pavilions, displays current and future BMW Group vehicles including the BMW i3 Concept, the BMW i8 Concept and the new generation BMW 3 Series Touring. Managing Director, BMW Group UK, Tim Abbott commented, “The role of the Pavilion is two-fold: to explain the support we’re providing as the OfďŹ cial Automotive Partner to the London 2012 Olympic and Paralympic Games, but also to provide a powerful visual symbol of our commitment to the highest standards of innovation in design and sustainability. We look forward to welcoming visitors and guests to the BMW Group Pavilion throughout the Games.â€?
Leading by Technology Shriram Pistons & Rings (SPR) is one of the largest integrated manufacturers of Pistons, Pins, Piston Rings and Engine Valves. The Company has access to world-class technology from global leaders at its state-of-the-art manufacturing facilities in the NCR, at Ghaziabad (30 km from Delhi) and Pathredi (50 km from Delhi). This is supplemented with comprehensive design and development facilities including advanced 3D modeling, FEA analysis, Simulation and Diagnostic software, Rig Testing, Engine Testing facilities, Advanced Analysis Laboratory etc. This enables SPR to offer end-to-end solutions and new designs of Pistons, Rings and Engine Valves for improvement in fuel efficiency, lower oil consumption and meeting the latest emission norms. SPR has provided several innovative cost effective solutions to OEMs in India and abroad that have won the Company more recognition and rewards for Excellence in Technology, Quality and Overall Performance than any of its competitors.
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Audi to develop auto retail network in UK—Audi City
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udi is prepa ring automot ive reta i l for the future and complementing its dealer network with a new format—Audi City. The first location opens today in London close to Piccadilly Circus. The brand’s entire model line-up is presented fully digitally in a compact space. The efficient use of space facilitated by this approach allows the four rings to be present in the heart of major international cities. Over the next few years, Audi will secure more of these attractive locations, opening more
Audi City combines the best of two worlds–digital product presentation and personal contact with the dealer—Peter Schwarzenbauer, Member of the Board of Management for Marketing & Sales, Audi AG
than 20 stores worldwide by 2015. In future, Audi City will also play a crucial role in the marketing of new mobility services and electric-drive Audi models. “Audi City combines the best of two worlds–digital product presentation and personal contact with the dealer,” said Member of the Board of Management for Marketing and Sales at Audi AG, Peter Schwarzenbauer. “This new retail format brings us even closer to our customers— geographically, of course, but first and foremost in terms of the quality of our relationship. Audi City offers new freedom for tailor-made services and an even more individual contact with the customer.” Due to the media technology, the vehicle manufacturer now has the ability not only to present its growing model line-up— including all colours, equipment options and functions—in its entirety, but also to offer customers the chance to experience the sheer breadth of the range in full. Visitors can digitally select their vehicle from several hundred million possible configurations and experience it in realistic 1:1
scale on screens that almost fill the entire space. Moreover, technical details such as the drivetrain, bodyshell or LED light technology can be presented individually in order to make innovations understandable on an intuitive level. With Audi City, the premium manufacturer is responding to customers’ changing needs. “People are placing greater emphasis than ever before on a direct and personal bond of trust with their vehicle brand—especially in respect of the increasing variety of products and available information,” explained Schwarzenbauer. “Thus, with Audi City, we are creating a onestop-shop for experiencing our brand. It is right in the midst of our customers’ lives, yet seamlessly connected to the online range offered by the four rings.”
One-Stop Experience This is particularly assured by the customer relationship manager, who will be deployed in future at Audi City locations. This individual will be the customer’s central and consistent point of contact for all needs—from the
A Perspective Of Audi City
first consultation to after-sales and ongoing services. Plus, every Audi City is also connected to an Audi dealership that provides the entire spectrum of Audi AG services as a single-point centre of competence. With this personalised customer dialogue and the provision of individual services, Audi City represents a substantial expansion of the retail experience. In support of this, Audi AG offers employee training targeted specifically at these urban stores and also supports the dealer in their selection and further train-
ing. Furthermore, employees increasingly have a more broadbased educational background —as IT experts, for instance, who are qualified to explain the digital world of Audi City. Audi City will also evolve into a meeting place for fans of the brand. The stores will also be used as a dialogue forum for issues outside of core automotive business. For example, following close of daily business, they will play host to round-table discussions and exhibitions on issues such as urban development and mobility or on matters etc.
Ford partners with Van Excellence
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an Excellence continues to go from strength to strength, as Ford is the latest to become a partner of the scheme. They join other operators including Mercedes, V W, Nissan, Fiat and Isuzu who are all part of the accreditation scheme that encourages high standards of van operation and driving, and combined now takes the ‘market share’ of new van registration to over 50 percent.
Partners As Support Partners promote the Code of Van Excellence amongst their customers and encourage its standards to be adopted and followed throughout the light commercial vehicle sector. “We’re delighted to welcome Ford as a Van Excellence Partner” said FTA Head of Vans and LCVs, Mark Cartwright. “Together with existing partners Volkswagen, Mercedes-Benz, Nissan, Fiat and Isuzu, our manufacturer partners now represent over half of the UK’s annual registrations. Their support is invaluable particularly as we develop a Van Excellence accreditation scheme for dealers.”
Good Practices The FTA scheme was launched in 2010 to promote high standards of van operation and driving by accrediting operators against an industry code of good practice. Accredited members are those who have successfully demonstrated that their f leet management and compliance systems can meet the demanding standards of the Code of Van Excellence, the voluntary code of practice for van f leet operators. Van Excellence continues to be recognised within the industry and continues to grow, as new members who have also recently joined include Carillion Construction, South Devon Healthcare Trust, Daniel Contractors and Corporation of London. Van Excellence was awarded the Best New Service Award at the 2012 Fleet News Awards.
Ford joins other operators including Mercedes, VW, Nissan, Fiat and Isuzu who are all part of the accreditation scheme that encourages high standards of van operation and driving
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Volkswagen increases global deliveries
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he first half of 2012 has spelled a positive note for the Volkswagen Group. The company has been reported to have increased vehicle deliveries—a total of 4.45 (JanuaryJune 2011: 4.09; +8.9 percent)* million vehicles were handed over to customers worldwide in the period from January to June. June was equally positive, with deliveries running
Deliveries by the Volkswagen Group developed very well in the first half of the year. But that is by no means cause for euphoria. The economic situation, particularly in Western Europe, remains tense and difficult— Christian Klingler, Board Member for Sales, VW Group
at 798,500 (June 2011: 719,400; +11.0 percent)* units. “Deliveries by the Volkswagen Group developed very well in the first half of the year. But that is by no means cause for euphoria. The economic situation, particularly in Western Europe, remains tense and difficult”, Group Board Member for Sales, Christian Klingler said in Wolfsburg recently, and added, “We remain on track and are entering the second half year, which will be altogether more challenging, with confidence.” The Group brands delivered a total of 1.93 (1.90; +1.8 percent) million vehicles to customers on the overall European market in the first half year. In Western Europe (excluding Germany), 1.01 (1.07; -5.7 percent) million customers took possession of a new vehicle. The Group brands once again reported vigorous growth in the Central and Eastern Europe region, handing over 322,900 (253,700; +27.3 percent) vehicles to customers there. In its home market of Germany, deliveries by the Volkswagen Group rose 4.4 percent to 606,100 (580,600) units. Developments on t he
Renault appoints new Vice President
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enault has appointed Béatrice Foucher as Vice President of the Electric Vehicle Programme, effective from 1 September, 2012. She will report to Philippe Klein, Executive Committee Member and Executive Vice President, Corporate Planning, Product Planning and Programmes. She joined Renault in 1989 working in the Quality Department. She moved into the Customer Research Department in 1993 and then in 1996 to the Product Department, where she successively held the positions of Deputy Product Manager for Laguna II, Product Manager for Espace IV and head of future projects, before being named Director of the M2S range in 2005 and Product Director in April 2007. Béatrice Foucher, 48, earned an Agro Paris Tech engineering diploma in 1988 and also holds a Masters in Quality Management from Centrale Paris / ESCP.
which, 1.30 (1.11; +17.5 percent) million units were delivered in China, the region’s largest single market. In India, 60,900 (55,100; +10.4 percent) customers took delivery of a new vehicle from the Group.
Outline Of Developments
Christian Klingler, Board Member Sales, VW
American continent were positive—unit sales in North America were up 22.1 percent in the period to June to 389,800 (319,100), of which, 275,200 (211,000; +30.4 percent) were delivered in the US. The Volkswagen Group handed over 469,500 (455,200; +3.1 percent) vehicles to customers in the South America region during the same period. Group figures for the Asia-Pacific region were also very encouraging. 1.48 (1.26; +17.6 percent) million vehicles were handed over to customers there in the first six months, of
The Volkswagen Passenger Cars brand delivered 2.79 (2.53; +10.2 percent) million vehicles to customers worldwide from January to June. The brand developed well in the US, where 208,700 (154,100; +35.4 percent) vehicles were handed over. Volkswagen Passenger Cars delivered 134,000 (92,300; +45.2 percent) vehicles in the Central and Eastern Europe region over the same period. Audi also reported an increase in Europe, where deliveries rose by 2.8 percent compared with the same period in 2011 to 393,300 (382,800). Škoda delivered 493,000 (454,700; +8.4 percent) vehicles worldwide from January to June. The company developed particularly well in the Central and Eastern Europe region, where customers took delivery of 131,800
(113,500; +16.2 percent) new vehicles. ŠKODA grew deliveries in the Asia-Pacific region to 144,900 (128,900; +12.4 percent) units. On the other hand, Seat delivered 163,300 (186,400; -12.4 percent) vehicles worldwide in the period to June. The company handed over 139,100 (167,900; -17.2 percent) models to customers on the overall European market where the situation remained difficult. There were encouraging trends in Germany, where 28,400 (26,300; +8.0 percent) units were delivered, the UK, where 19,800 (18,500; +6.8 percent) customers chose a Seat model, and Mexico, where deliveries totaled 10,200 (8,500; +20.5 percent) vehicles. Volkswagen Commercia l Vehicles grew deliveries 3.7 percent to 270,000 (260,300) units in the first half year. 63,000 (59,700; +5.5 percent) vehicles were handed over to customers in the home market of Germany. Volkswagen Commercial Vehicles also developed very well across Europe, with 165,900 (158,400; +4.7 percent) units delivered on the overall European market. * Excluding MAN and Scania
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Citroën appoints new Head of CVs & Business Centre Programme
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ith immediate effect, Citroën’s Scott Michael has been promoted to the position of Head of Commercial Vehicles & Business Centre Programme. Scott takes up his new role, which will be based at Citroën UK’s new Coventry head office,after 18 months as Commercial Vehicle Operations Manager. Scott (32) is a Business Studies and Spanish graduate of Hull University and has been with Citroën since 2003, when he started as Fleet Analyst. Subsequently, his Citroën career has seen him serve as an Area Fleet Sales Manager and as Commercial Vehicle Sales Manager. Reporting to Scott in his new role are Gillian Blair, Denis Golden, Andrew Hibbs and Jeff Rodger, Citroën’s field-based team of Regional Business Centre Managers, and Chris Jones, who is responsible for the company’s LCV conversion business. Scott commented, “I am delighted to take up this new role with all the opportunities and challenges it will bring. Since its inception, Citroën’s Business Centre programme has been a major success and our LCV sales performance has remained very strong. Both these factors have played key roles in enabling Citroën to expand its business, especially in the SME sector, and I am looking forward to working on maintaining this growth.”
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23 JULY 2012
G L O B A L WAT C H
Alfa MiTo loaded with TwinAir engine technology
A
lfa Romeo’s supermini, the Alfa MiTo, is now available with the 85 HP Twin Air engine—an 875 cc twin-cyl-
The MiTo TwinAir combines performance with efficient drivetrains on the road. Due to the Start&Stop device and ‘intelligent’ alternator, the MiTo with TwinAir engine has the lowest petrol CO2 emissions in its segment at just 98 g/km—up to 30 percent less than an engine with equal performance— combined with a dramatic reduction in fuel consumption
colour—Ametista black with a purple hue. Head of Brand, Alfa Romeo UK, Damien Dally said, “The Alfa MiTo TwinAir is an intelligent response to modern driving requirements—premium styling, a sporty and engaging driving experience, combined with outstanding ecological and financial benefits. It’s the last word in automotive engineering in terms of technology, performance and environmental consideration.”
Mito Twinair inder turbo powerplant with electro-hydraulic valve control technology that delivers fuel economy with sub-100g/km CO2 emissions. The introduction of the two-cylinder TwinAir engine into the Alfa MiTo range reinforces the MiTo’s image as a high-tech, sporty, compact car offering maximum driving pleasure whilst exceeding driver expectations. With a CO2 output of just 98g/ km and official Combined Cycle fuel economy of 67.3mpg, the
Alfa MiTo TwinAir is the cleanest and most economical model in its class. Business and retail customers can enjoy impressive financial benefits including zero road tax, the lowest 10 percent BIK rate, London congestion charge exemption and Group 9 insurance rating. The 85 HP TwinAir Turbo is the first of a series of two-cylinder engines developed by Fiat Powertrain. Complementing the introduction of the new powerplant, the MiTo TwinAir range is available in a new metallic body
Key to the Alfa MiTo’s innovative success is the marriage between two award winning technologies; the two-cylinder TwinAir engine, and MultiAir— winner of Best New Engine of the Year 2010. The TwinAir engine dominated the 2011 International Engine of the Year Awards, winning Engine of the Year, Best New Engine, Green Engine of the Year and Best Sub one-litre Engine. This is only the second time that a sub one-litre engine has taken the top award, with the judging panel praising the powerplant’s impressive innovation.
Environment & Economy The TwinAir has an optimised petrol engine performance with the consumption and running costs of a frugal diesel. The MiTo TwinAir is one of the cleanest and most economical model in its class, (three-dr, B-segment, petrol), with Combined Cycle fuel economy of 67.3mpg; CO2 emissions of just 98g/km, a zero road tax rating and just 10 percent BIK—the lowest possible banding meaning company car drivers can pay as little as £23.49 a month and save the three percent premium they would pay for an equivalent sub 100g/km diesel. Due to the 100 percent capital allowance on cars with CO2 emissions lower than 110g/km, companies are able to write off the whole cost in the first year, as opposed to 20 percent per year, bringing down the amount subject to corporation tax and significantly reducing a company’s liability. The low CO2 emissions mean London drivers also benefit from congestion charge exemption, potentially saving around £2,500 a year.
Performance & Dynamics Alfa MiTo takes everything Alfa Romeo knows about sports car dynamics and distils it into the supermini. The MiTo TwinAir’s powerplant uses MultiAir technology combined with specific fluid dynamics optimised for maximum fuel efficiency. The 875cc TwinAir Turbo engine, mated to a close ratio six-speed gearbox, delivers a maximum of 85 HP at 5,500 RPM and a torque of 145 nm at 2,000 RPM. Maximum torque is available from 2,000 RPM and is constant up to 3,500 RPM—between 10 percent and 25 percent more torque when compared to the 105 and 78 HP petrol engines in the current range. The MiTo TwinAir combines performance with efficient drivetrains on the road today. Due to the Start&Stop device and ‘intelligent’ alternator, the MiTo with TwinAir engine has the lowest petrol CO2 emissions in its segment at just 98 g/km—up to 30 percent less than an engine with equal performance—combined with a dramatic reduction in fuel consumption. The TwinAir Turbo engine also features a series of modifications intended to further improve both the level of comfort and the quality of driving. Technical refinements include a state-of-the-art flywheel and optimisation of the elements supporting the power unit, ensuring great acoustic comfort and freedom from vibration in all driving conditions.
Pricing & Trim Levels The new Alfa MiTo TwinAir is available in two trim levels—Sprint and Distinctive— priced at £14,150 and £15,350 respectively. A generous standard specification on the Sprint trim level includes 16-inch sports alloy wheels, cruise control, front fog lights, manual climate control, Alfa DNA (driving mode selector) and Alfa’s Blue&Me system with Bluetooth hands-free connectivity and USB media system. The Distinctive trim level also benefits from standard premium features including 17-inch sports alloy wheels, red painted Brembo brake calipers, rear parking sensors and chrome/aluminium detailing. In addition to the model’s impressive new drivetrain, the MiTo TwinAir is available in a new metallic Ametista Black body colour with a new design for the light alloy rims and a completely revamped interior.
Alfa Services All new UK Alfa Romeo cars sourced from Alfa Romeo UK come with three-years’ AA Contact, which includes Roadside Assistance, Home Start, Relay, Relay Plus, European Cover and Accident Management. This insured service is provided free of charge and is available 24 hours a day, throughout the year and also includes access to travel information, legal advice and technical information.
23 JULY 2012
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Tej Control Systems Pvt Ltd Plot No.329/331, Road No.25, Wagle Industrial Estate, Thane(W) - 400 604. Tel. +91 22 2583 8191 to 98, Fax: +91 22 25838199 Email: tivs@tejcontrol.com, vision@tejcontrol.com Website: www.tejivs.com
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THE OTHER SIDE
Getting Personal with N Krishnamoorthy, President, Dealership Business, TV Sundram Iyengar & Sons Ltd
If not in auto industry where would you be? An easy question for stardom, but a tough question for one who has spent 38 years in the auto industry. Let me think, I probably would have joined the pharmaceutical field, which was my first interview. This came up to me just after graduation even before joining TVS What car do you drive? What do you dream of driving? I drive a Honda City. The constraints of the town where I live do not allow me to dream of very big cars, at the most a superior SUV Your most recent indulgence… Last festival season, I spent three days in Kodai Hills, a real indulgence since the usually crowded Kodai was empty because everyone wanted to be at home for the festival What are you currently reading? ‘Seven Secrets Of Shiva’ by Devdutt Patnaik What is N Krishnamoorthy doing when not talking auto? I am with my daughters. The first is married and lives in Munich. I talk to her and my son-in-law about their future plans. The second one has just graduated and is pursuing her MBA in Retail Management in Noida. She considers me as her role model and I spend time trying to influence her thoughts Outdoor activity you would miss office for… An hour at the badminton court or walking for fresh air Where did you go for your last holiday? Already revealed—it was the Kodai hills You get angry when? When trust fails or openness is misunderstood for weakness What is the one thing you would like to change about you? I am aware that I am more impulsive, but trying hard to become data driven
Illustration: Sachin Pandit
Best thing to have happened to you… My harmonious family
23 JULY 2012
In Person N K r ishna moor t hy, President, Dealership Business, TV Sundaram Iyengar and Sons, ‘NK’ to friends and associates, has 33 years of experience in different divisions of TVS & Sons. He is responsible for establishing TVS Lanka (Private) Limited in Sri Lanka in 1997. He has also taken over as the Chairman of Confederation of Indian Industry, Madurai Zone, for 2012-13.
An experience I won’t forget… My first overseas assignment in Sri Lanka—a lovable country with ethnic problems at the peak, but it gave me the opportunity to learn so much
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:16th & 17th Fortnightly Issue. Date Of Publication: 13th of Every Month
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