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. 18
25 June 2012
w w w.am o n l i n e.i n
FOCUS
48 Pages
` 50
INTERVIEW
FOUR-WHEELER Pg 12-18
‘‘WE ARE WORKING ON TECHNOLOGIES AND PRODUCTS THAT CAN HELP IMPROVE FARMING PRODUCTIVITY FURTHER’’ Bishwambhar Mishra, CEO, Farm Equipment Sector, M&M
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Pg 8
ICML to launch two SUVs, mini truck in foreign collaboration Nabeel A Khan New Delhi
I
nternational Cars & Motors Ltd (ICML), owned by Sonalika Group, is planning to launch a 0.8 tonne mini truck (pick-up) by November this year. The vehicle developed in collaboration with a foreign partner, will be priced in the Tata Ace and Mahindra Maxximo range. “The mini truck has already been developed and tested. We hope to launch it latest by November this year. We will be pricing it very competitively,” Chairman, Sonalika Group, LD Mittal told Auto Monitor in an exclusive interview. The company did not reveal the name of the partner and said “we don’t want to disclose the name of the partner but we can say that it’s a foreign collaborator,” Mittal
pointed out. Initially, the vehicle manufacturer expects to sell around 500 units per month. The truck will be manufactured at the company’s Himachal Pradesh plant. “We will focus on the Tier II and Tier III towns first as we see great potential here,” Mittal said. The truck has been developed at an investment of `60 crore. ICML has also developed two high-end Sports Utility Vehicles (SUV) with the same foreign collaborator and is put under regression testing for last couple of months. The vehicles will be a seven to eight seater and will be priced at `eight lakh and `15 lakh (approximately). The vehicles are already under test and expected to be launched by the end of 2013. The vehicle maker is trying to ensure quality and troublefree ownership experience and
is looking to test the vehicles for around a year before launching it in the market. “The SUV priced at around `15 lakh will be fully loaded and compete with the SUVs from other manufacturers, priced in the range of `25 lakh and `30 lakh,” Mittal said. The vehicles have been developed at an investment of `400 crore. The engines of vehicles will be Euro IV compliant. The other vehicle to be priced around `eight lakh will be competing with Tata Aria, Mahindra XUV 500 and Mahindra Scorpio. The SUVs will be manufactured at the Hoshiarpur plant. Last year, the company sold around 3,000 units of its existing MUV Rhino and the company claims to have reached the breakeven point. “The customer of the car is totally different from the customer of a tractor. The cus-
LD Mittal, Chairman, Sonalika Group
tomer of car doesn’t tolerate even small issues. We have resolved most mechanica l/technica l issues and hope that the model will pick up in the market,” Mittal added.
ICML displayed three new vehicles at the 2012 Auto Expo in Delhi, which were different from the two SUVs discussed here. GM is also using engine made by ICML for their MUV—Tavera.
M&M to play prominent innings in 2W segment
M
ahindra 2 Wheelers is aiming to grow its marginal presence in the segment with a slew of launches.
DATA MONITOR Top 5 2W Makers Company
May-11
May-12
Change
HML
483,439
538,988
11.49%
HMSI
135,744
212,457
56.51%
Bajaj Auto
218,321
206,751
-5.30%
TVS
158,829
151,980
-4.31%
29,528
36,746
24.44%
Suzuki
Top 5 2W Exporters Company
May-11
May-12
Change
Bajaj Auto
99,668
115,171
15.55%
TVS
23,062
21,112
-8.46%
HML
16,795
17,656
5.13%
IYM
10,853
10,669
-1.70%
HMSI
9,881
9,060
-8.31%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
After unveiling the new Rodeo RZ in Chennai, the company’s Senior Vice President (St rateg y a nd Ma rket ing Development) 2 Wheelers, Viren Popli said, “As part of our strategic plan, we have launched this new 125 cc scooter and we have also planned to launch three more motorcycles including the Mahindra Mojo, later this year. With these launches, we are hoping to increase our market share to eight to ten percent from current six to seven percent in the scooter segment. The environment is challenging, but there is never a bad time to launch the products and give consumers a choice.” The new Mahindra Rodeo RZ, retains the 125 cc Z-Series engine but now features Mahindra’s Dual Curve Digital Ignition system that helps the scooter put out a little more than eight ps and nine nm, while still returning a claimed fuel efficiency of 59.38 kmpl. With the help of these systems the company is targeting urban youth, looking for style and power.
“During our market study, we found that the members in Indian family are increasing and riders are demanding more power. Apart from that, Indian roads, with steep flyovers require good pick-up. Therefore we see a significant growth in the high power scooter segment,” he added.
Customer Preference According to Popli, the twowheeler market is not about cc segmentation and our focus will not be on that. We would like to focus on consumer needs as well as we are also studying the rural segment and we will be looking out for the special product for this particular market. Earlier this year, the company launched Mahindra Duro DZ, which also comes with a 125 cc engine. Popli said that the new model is expensive by ` 2,500 compa red to Duro DZ. But Rodeo R Z offers additional features like fuel lid for petrol in front, electronic cluster and engineering changes have been done by replacing the metal
Viren Popli, Senior Vice President (Strategy and Marketing Development) Two Wheelers, M&M
to ABS plastics in order to reduce the weight of the scooter.
Manufacturing Capacity The company manufactures the scooters at its Pithampur facility near Indore, which was
Photograph: Bhargav TS
Our Bureau Chennai
recently upgraded to produce one million units annually. Mahindra has sold more than 350,000 two wheelers since 2009. And it is selling 10,000 units of Duro DZ a month since its launch in February 2012.
EDITORIAL Policies should be clear
R
ecent visits to passenger car manufacturing facilities leaves one with a scary impression as some of the assembly lines are at a stand still. The scene is very prevalent at the manufacturers making petrol powered cars. Quite a few OEMs have utilised the spare time for maintenance of assembly line, while those manufacturers who have diesel vehicles, have optimised the resources by shifting them to the diesel section. At the end of the day, the situation is not conducive for the auto industry, as it has been affected by the prohibitive petrol price and interest costs. The industry was looking for some relief but the Reserve Bank of India did surprise the markets again by not attempting to reduce interest rates. Couple of months ago, the apex bank has surprised positively by delivering a higher than expected 50 basis points cut in repo rate. As it kept its policy rates unchanged, the banks will only maintain status quo on lending and deposit rates. This will further trigger ination. Though the sales of petrol cars are affected, the diesel siblings give a helping hand. The situation is worse for those vehicle manufacturers who do not have a diesel option. Though the OEMs are burning the midnight oil to optimise resources and try to address the prevailing issues, their investments plans are intact so far. However, the new investments, especially on producing diesel engines / variants, are put on hold as there is no clear policy from the government. Also, quite a few global Tier 1 companies have invest-
ed substantially or are looking at options to invest in India. This is despite our anxiety about the GDP growth that has moderated to a nine-year low of 5.3 percent in January-March 2012. I was talking to a French journalist who was curious about the Indian auto industry in general. When the discussion turned to poor GDP growth in India, he emphatically expressed that for him, India’s growth rate was still relatively promising as many countries in EU register only 0.05 percent growth. Though the same might be encouraging for the moment, it may not work for long term as growth levels of emerging nations should always be higher. And clear long term policies are quintessential for continuous growth. Wishing you much pleasure reading. Do send us your feedback.
T. Murrali t.murrali@infomedia18.in
QUOTES Carlos Tavares, Chief Operating Officer, Renault on Renault-Nissan’s $5.6 billion investment on electric car development
Viren Popli, Senior Vice President of strategy and development, Mahindra 2 Wheelers in The Economic Times
“This is not a bet; it is an insurance policy. Just wait until the oil price jumps�
“Too long we have been driven by engineering; we need to be driven by the consumer.�
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CONTENTS FOUR-WHEELER ACT 302 pays rich dividends for Hyundai Motor India
12
Hyundai Motor India’s initative on waste reduction—ACT 302 stands for Achieve Challenging Target of 30 percent improvement in two years
12
GLOBAL WATCH JD Power drops Chrysler, Ford quality ratings
30
Ford and Chrysler, dogged by technology and quality problems, fell several notches in the JD Power and Associates’ 2012 Initial Quality study
Aston Martin unveils sports car Vanquish
32
Vanquish, the latest Aston Martin sports car, features the next generation of the VH architecture and design, as well as an upgraded six-litre V12 engine
Land Rover perks up Tata Motors lacklustre PV business
14
32
Increasing competitive intensity and costs poses a significant challenge to the passenger vehicle industry, with higher inflation, interest costs, fuel price increases dampening the demand
Scorpio records highest sales in tenth year of existence
15
M&M’s ‘flagship’ development project—the Scorpio—notched up its highest ever sales of 50,844 units during FY 2011-12 as against 43,451 units during FY 2010-11
Honda will continue to increase the localisation levels
16
Honda R&D centre in Japan is currently developing a small diesel engine but it may be too early for its Indian arm to regain its sales momentum
CORPORATE Anticipating, addressing HR challenges of tomorrow is crucial: SIAM
9
Speakers at the recent SIAM HR conclave stressed on the need for creating a simpler organisation structure for effective flow of ideas and initiatives
Lexus receives innovation award for new AC technology
Murugappa Group to push capex
Lexus’s new GS series features nanoe technology for air conditioning that can deodorise the cabin, while at the same time moisturising the skin and hair of anyone on board
20
Murugappa Group plans to spend nearly `1,000 crore capex for expanding various businesses and is on the lookout for viable acquisitions in the current financial year
UK designed Ford EcoBoost named ‘International Engine of the Year’
36
38
Ford’s new one-litre EcoBoost engine—which was launched in the Ford Focus, in Europe—is named 2012 ‘International Engine of the Year’
20
Renault Zoe sets new world record: 1,005 miles in 24 hours Renault’s 100 percent electric supermini, Zoe, has set a new world record for the longest distance travelled in 24 hours by a production electric car
How does Rane Madras contain rejections in new products?
24
The Puducherry plant identified various processes that can identify potential rejections and develop appropriate methodologies like Quality Circle (QC) to contain them: Case study
41
Auto Monitor
25 JUNE 2012
INTERVIEW
8
‘‘We are working on technologies and products that can help improve farming productivity further’’ Tractor growth has slowed down for the first time in more than two years. In an interaction with Abhishek Parekh, Chief Executive Officer, Farm Equipment Sector (FES), Mahindra & Mahindra, Bishwambhar Mishra elaborates on the outlook for the industry and the way forward for the FES. What is your take on the current downturn in tractor sales? In the first seven months last year, the overall tractor sales grew by double digit almost every month compared to the corresponding months in the previous year. In October last year, the tractor sales for the industry grew by forty percent compared to same month in the previous year. Such high rate of growth cannot be sustained month after month and what we are seeing in the recent months is a moderation of this growth due to higher base. The industry has grown by around 32 percent and 20 percent respectively over the last two fiscals and it is difficult to maintain such a growth momentum. What were the reasons for this growth? There was a confluence of positive factors that came together leading to high growth over the last two financial years. High Minimum Support Price (MSP), bumper crops on the back of normal rains and better irrigation practices, infrastructure improvement and most importantly, major shortage of farm labourers leading to higher level of mechanisations. This has lead to the industry growing from around 300,000 tractors per annum sold three years ago to around 535,000 tractors sold last
year. Even though we were preparing for a lower growth since last fiscal, we were still taken by surprise by the sudden degrowth in the tractor sales in the fourth quarter last fiscal. We cut back on our production in March and April for two weeks this year for two days a week for the entire month, and we have already climbed back to our normal production schedule now. The step was taken to ensure that customers were not sold vehicles from the older stock even as vehicles piled up at the dealership level. What is the future outlook? One likely scenario is that overall tractor sales are likely to regain their secular growth trend of around eight to nine percent in the coming months. There could be some segments or pockets of faster growth within the industry but overall sales this fiscal are unlikely to be as high as those seen in the last two fiscals. Depending on factors like monsoons, crop prices and other incentives, the overall growth in the current fiscal may not exceed five to six percent. Unfortunately, we are currently staring at a gloomy scenario of lower income in the hands of farmers. It may sound ironical to many industry watchers but bumper crops leads to fall in the income of farmers as they have to
invariably resort to distress sales to clear the unsold inventories. The market is clearly shifting to higher HP and ultra low HP tractors in the recent years. Our 15 HP brand ‘Yuvraj’ has grown by around 86 percent last fiscal and this is likely to continue in the future. On the international front, we have been able to grow by around 16 percent last year and most markets where we have a presence have grown significantly. There is some stress in the neighbouring countries like Bangladesh and Sri Lanka but overall the scenario is optimistic on exports. Additionally, we are working on many newer products and technologies, which can enhance the farm equipment landscape in coming months and years. We are evaluating on below 15 HP tractors that we offer now, to enable marginal land owners on dry and wet land farming operations. This segment of farmers prefer power tillers but may switch to a better alternative if we offer additional advantages to them in terms of more operations and better durability. Similarly, we are looking at other technologies and process enablers for increasing the productivity of the farmers. What is the distribution strategy for ‘Yuvraj’ to enable its accesbility across India? We are evaluating several options for this. Our existing dealership set-up may not serve this purpose as it is tuned to cater to different set of customers with different needs. Moreover, our
We are working on newer products & technologies to enhance the farm equipment landscape soon. We are evaluating on below 15 HP tractors that we offer now, to enable marginal land owners on dry & wet land farming operations existing dealers are finding it difficult to cater to even our existing range of tractors which is largest range for any manufacturer in the country by far. We are in the process of evaluating separate set-ups for micro tractors but it is still too early to say anything for certain on what shape such a distribution set
up could take. We will evaluate dealer suitability and strength on a case by case basis in order to put in place a suitable distribution set-up for micro tractors. But clearly we will have to do something about this issue. Has M&M’s outsourced production model for micro tractors worked to your expectations? It has certainly worked well for us. It is not a complete outsourced model as M&M is very much involved with planning and quality assurance and other major bits in the production cycle and that would continue to be the case going forward. We have joined hands for production of ultra low HP tractors with the entrepreneurs as per pre-agreed terms but provide technology and managerial support to them. Hence this (outsourced production) model has worked for us.
25 JUNE 2012
C O R P O R AT E
Anticipating, addressing HR challenges of tomorrow is crucial: SIAM Automotive HR conclave get more critical to keep employees with different background and age group engaged in an organisation,” said President, Automotive uman resource proand Farm Equipment Sectors, fessionals within the M&M, Dr Pawan Goenka at automotive sector the second Automotive HR will need to measconclave organised by the ure up to newer challenges in Society of Indian Automotive terms of attracting and retainManufacturers (SIAM). ing manpower in an increasingly He elaborated that HR head challenging environment. The in an organisation with global task has become much more ambition would need to take difficult with most automobile account of aspects like result manufacturing company housorientation, quality consistency, ing employees with diverse effective project management cultural and geographical backand ability to work in a virground, wider geographical tual environment due to wide presence and larger organisaspread organisational structures. tional structure. Some of the major behavioural “It would be imperative for attributes that are required in organisations to have a clear and manufacturing sector include well defined career path and goal preparation for failures, mindset orientation for employees. This is for searching alternatives, in order to help them meet their “One of the major issues that developmental objectives as well are getting increasingly comas organisational goals. It would mon is the tendency to recruit over qualified or over skilled employee for many tasks. The need of the hour is to downskill to tide over the impending manpower cr unch a nd ensuing fight for talent in the automotive sector,” said Dr Goenka. Most speakDr Pawan Goenka, President, Automotive and Farm Equipment Sectors, M&M ers at the
Our Bureau Mumbai
H
Auto Monitor
conclave stressed on the need for creating a simpler organisation structure for effective flow of ideas and initiatives. Class differences in an organisation also have the potential to become a major factor affecting the growth and well being of an organisation. It is critical for any organisational head to realise that what could have worked in contributing to success of an organisation may not be appropriate or relevant for the future, according to some of the prominent participants at the conclave. This obsolesce needs to be acknowledged and addressed. Several case studies and experiences shared by chief executives and HR heads during the discussion pointed to the need for multi-dimensional approach and preparation for unanticipated outcomes. A major part of the proceedings also came to be dominated by strategy sharing among participants and speakers on keeping younger employees and trainees engaged in an organisation. Initiatives with social orientation, opportunities for training and skill enhancement and a defined career path are among the issues that tend to attract youth in an organisation. Employee retention becomes a challenging task when higher emphasis is placed on monetary compensation rather than softer issues that have become increasingly important to employees in current workforce across the automotive and manufacturing sector.
9
ALL bags order from Bangladesh for AC buses Our Bureau Mumbai
A
shok Leyland has bagged a major order f rom Ba ng ladesh Road Tr a n spor t Corporation (BRTC) for 88 AC buses for a value worth $6.5 million under the Indian Line of Credit (LoC) scheme offered for the improvement of urban transportation in that country. This order comes close on the heels of the recent order to supply 50 vestibule buses to BRTC. The contract was signed by Special Director-International Operations, Ashok Leyland, Antony Lobo and ChairmanBRTC, MM Iqbal in the presence of Director-Technical, BRTC, Abdullahel Karim and Chairman, Ifad Group, IA Tipu at Dhaka recently. MD, ALL, Vinod Dasari said that winning this order was yet another significant
step towards achieving Ashok Leyland’s vision to be globally among top 10 truck and top five bus manufacturers. “This also represents our commitment to partner BRTC in the process of taking urban transportation in Bangladesh to a new level and underscores our preeminent status as the leading CV player in that country. At this juncture, I would like to express my thanks to our Bangladesh dealer, Ifad Autos, of over two decades for their continued support and cooperation,” he added. This order will add to 11,000 odd vehicles (of different models) that have been exported to Bangladesh. The order also takes ahead the company’s international operations, volumes for which touched a new peak last year of 12,852 vehicles reflecting a growth of 25 percent.
Auto Monitor
A N A LY S I S
10
The passenger car segment grew by 3.1 percent during the April-May period this fiscal, while the utility vehicles grew by 51.05 percent and the multi-purpose vehicles declined by 5.31 percent in this fiscal. Honda led the passenger car segment with a growth of around 304.64 percent from 4,293 units to touch 17,371 units this fiscal, as compared to the previous period. Maruti registered the highest growth in the utility vehicle segment with 911.92 percent growth to touch 13,327 units in April-February 2012 period. Passenger Cars OEMs
2011-12
2012-13
BMW**
1,025
NA
Fiat
4,197
2,014
Ford
13,979
12,915
GM
14,323
11,045
HM
694
150
HSCI
4,293
17,371
HMIL
62,605
66,939
6.92%
M&M
2,297
2,444
6.40%
MSIL
150,779
145,248
Merc
967
NA
Nissan
2,761
6,585
Renault
-
1,054
4,901 35,824
35,981
TKM
9,293
13,886
The overall commercial vehicles segment registered a growth of 6.81 percent in April-May, 2013 as compared to the same period last fiscal to touch 118,282 units. M&HCVs sales declined by 11.07 percent to touch 42,141 units compared to 47,386 units in the same period in the previous year. The LCV segment grew by 20.18 percent to touch 76,141 units in this fiscal, compared to 63,358 units in the same period last fiscal. Three-wheeler sales were marginally lower at 69,170 units in April-May period compared to 69,781 units in same period last year. Passenger carriers rose by 3.82 percent in April-May while goods carriers fell by 15.77 percent. ALL registered the highest growth in the LCV segment to touch 4,621 units. TVS Motors registered highest growth in three-wheeler segment to touch 2,217 units.
-52.01%
LCVs (PC+GC) -7.61%
OEMs
-22.89%
ALL
2011-12
2012-13 7009.23%
65
4,621
3,089
3,528
14.21%
36
38
5.56%
-78.39% Force 304.64% HM
-3.67%
M&M
17,233
21,512
MNAL
1,565
1,453
Piaggio
1,849
757
Swaraj
510
412
Tata
37,428
41,917
VECV - Eicher
1,583
1,903
20.21%
Total
63,358
76,141
20.18%
Domestic two-wheelers sales witnessed a growth of 11.17 percent in this fiscal to touch 2,349,796 units against 2,113,613 units during the same period in the previous fiscal. Mopeds, motorcycles and scooters grew by 8.04 percent, 6.89 percent and 32.35 percent respectively. The motorcycle sales grew to 1,749,236 units in April-May period as compared to 1,636,474 units in corresponding period in the previous fiscal. In the Motorcycle segment, Royal Enfield sales were up by 48.65 percent in April-May period this fiscal, while Bajaj Auto’s sales declined by around 1.77 percent to touch 406,979 units compared to 414,292 units in same period last fiscal. In the Scooter segment, the sales of HMSI grew by 60.57 percent while TVS Motor sales declined by 0.87 percent in this fiscal. Hero MotoCorp reported its best sales for May at 538,988 units, registering a jump of 11.49 percent over the same month last year. Bajaj Auto witnessed decline in its May sales at 206,751 units against the same month in the previous fiscal. TVS Motor Company reported total domestic two-wheeler sales of 151,980 units in May registering a decline of 4.31 percent. Honda Motorcycles India registered the highest growth in domestic two-wheelers sales at around 56.51 percent to touch 212,457 units in May this year.
24.83% -7.16% -59.06%
Scooter/Scooterettees
-19.22
OEMs
2011-12
2012-13
HML
64,241
76,666
HMSI
149,444
239,969
M&M 2W
20,509
19,286
-
2,386
68,267
67,672
138.50%
17.94%
5,780
Tata
Two-Wheelers
Commercial Vehicles
Passenger Vehicles
Skoda
25 JUNE 2012
11.99%
BAL
0.44% 49.42%
-
Piaggio Audi
513
NA
VW
13,171
10,168
M&HCVs (PC+GC)
-22.80
Total
321,622
2011-12
2012-13
ALL
9,849
10,808
AMW
1,454
1,256
JCBL
-
-
11
NA
0
0
Total
3.10%
331,580
TVS
OEMs
UV OEMs
2011-12
2012-13
BMW
462
NA
Force
533
711
Daimler* 33.40%
M&M
386
-26.49%
GM
3,990
2,933
324
321
-0.93%
HSCI
53
38
-28.30%
HMIL
154
141
-8.44%
ICML
66
102
M&M
29,864
39,268
MSIL
1,317
13,327
Merc
131
NA
Nissan
24
Renault Skoda Tata TKM
157
6,866
6,267
377
31.49% 911.92%
1,073
1,314
Tata
29,467
22,280
4,976
VECV - Volvo
-
VW
4
-
Total
52,725
79,643
2011-12
2012-13
49
-8.72% 103.53%
-100.00%
4796
Maruti
28,567
21,158
8,137
10,988
39,016
36,946
Tata
2012-13
414,292
406,979
0
197
-1.77%
HDMC 22.46%
-
HML
922,719
997,149
HMSI
117,969
165,999
8.07%
56
Volvo Buses
123
10.37%
79
41.07% 3.25%
127 -11.07%
Total
47,386
42,141
IYM
53,772
53,231
RE
11,702
17,395
SMIL
11,062
10,248
TVS
104,958
98,038
40.71% -1.01% 48.65% -7.36% -6.59%
1,749,236
6.89%
OEMs
2011-12
2012-13
Atul
3,524
4,286
Bajaj
26,626
27,247
Force
4
-
M&M
8,909
8,979
Piaggio
26,778
24,490
-8.54%
Scooters
2,156
1,951
-9.51%
TVS
1,784
2,217
Total
69,781
69,170
21.62%
Mopeds/Electric OEMs
2011-12
2012-13 8.04%
-2.33 TVS
127,223
Electrotherm*
0.79%
137,451
NA
- 0.00% 8.04%
-
-25.94%
35.04% -5.31%
Total
BAL
2011-12
51.05%
111.93% 2263
00.00%
-100.00%
4
M&M
OEMs
3-Wheelers (PC+GC) 48.69%
-91.84% Force
Motorcycles/StepThroughs
16.67%
MPV OEMs
-13.62%
5,492
-100.00% 387
34.23%
302,461 405,979
Total 1,636,474
15,993
Audi
-0.87%
9.74%
785
Swaraj
VECV - Eicher
43
306
-5.96%
-24.39%
54.55%
20 -
7,858
MNAL
322
HM
60.57%
108.22%
-16.58% Ford
19.34%
Total
127,223
137,451
24.27%
-0.88%
* Data not available since August 2008 onwards ** Data not available for current year
Auto Monitor
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25 JUNE 2012
F OUR-W HEEL ER
ACT 302 pays rich dividends for Hyundai Motor India Improvement programmes help the company to manage volatility, maintain competitiveness T Murrali Chennai
A
Photographs: T Murrali
s the vision of the world’s fifth largest passenger car manufacturer Hy unda i Motor Company goes—new thinking new possibilities, the Indian subsidiary’s vision to save costs through continuous improvement projects has paid rich dividends. Hyundai Motor India (HMI) introduced a concept—ACT 302—last year for manufacturing operations. As it turned out to be a roaring success, the company is looking at extending the concept to sales, service and marketing operations of the company. With the company aim to extend ACT 302 to other divisions, Vice PresidentOperations, HMI, T Sarangarajan told Auto Monitor that the company wanted to involve everyone in the shop floor to follow 3 Rs— Reduce, Recycle and Reuse so that the waste of any form could be eliminated. ACT 302 stands for Achieve Challenging Target of 30 percent improvement in 2 years. “This programme has helped us in galvanising the support from all the people working in the shop floor. Only those on the shopfloor know the nitty-gritty of the manufacturing operations and can come up with improvements that can make a difference in 3Rs.” The project that began in early 2011 saw over 4,500 improvement projects garnering about `21 crore worth of savings. As the projects were successful the involvement of employees at the shopfloor increased resulting in a savings of about `10 crore in the first five months itself of this calendar, out of about 2,000 projects. When asked to elaborate on certain projects that became a benchmark for Hyundai Motor Company, Sarangarajan said that there is a spindle in the machines that is extensively used in the engine machine shop. There are about 45 machines having these kinds of spindles. When the spindles become defective, they have to be sent to Germany for repairs. The repairing process takes about two months and costs about $1,000 per spindle. A team worked on this and found a methodology to repair the faulty spindle with the spare parts available locally. This resulted in setting right the spindles within a week and spending only about $70. It has made tremendous savings for the company, as the machine availability time is significantly higher. The project was forwarded to the company headquarters, who insisted for its plants across the globe to emulate similar methodology. “What originated as a small project in Hyundai Motor India plant in
Chennai has become a benchmark for the headquarters due to significant savings,” he said. Secondly, the waste metal from aluminium foundry is usually sent as scrap. However, when the company was commissioning its second foundry, it was designed to be highly mechanised and capable of smelting aluminium with higher iron content. “We have invested in the initial stages itself to take care of the future requirements. Therefore the scrap is effectively used by us now,” saving significant costs. HMI has created rainwaterharvesting pond with a capacity to store 10 lakh kilolitre to reuse rain water. In addition, it has invested in high-solid content clarifier that helps use the water even while raining, which is otherwise wasted due to high turbidity. Rainwater with lot of turbidity is taken through the clarifier, which converts into water for industrial use, after subsequent cleaning process. This helps the company to reduce the purchase of water from other sources. In the case of air-conditioning, the company has commissioned a centralised control system, which maintains about 26 degrees Celsius through. Besides, it also has a timer to switch on and off and the predetermined time. The investment towards the controller has been amortised in couple of months. Even on the shopfloor, the company has changed the lighting to compact fluorescent lamp or slim tubes and LEDs in some cases. Though the initial investment is higher the incremental cost can be amortised due to energy savings. Due to increase in power tariff in Tamil Nadu, the company’s spending has increased by about `600 per car. With several initiatives to conserve energy the company hopes to save at least `200 per car. Yet another attempt is to recover heat during the painting process. There are three ovens in the painting process and after exit from every oven, the car shells go to the buffer area to get the heat dissipated as it is impossible to work on the body when it is hot. The innovation is that the company has installed heat extraction system to recover heat and utilise the same for preheating purpose in the oven. This way, about 50 percent of the heat required for preheating is met. The company has been deploying robots even in places where it is not functionally required. This is primarily to reduce employee fatigue. For instance, the tyres that weigh around 10 kg had been manually lifted and fixed in the vehicle. As it is a stressful job for the people involved, the com-
Door Intake Module Facilitates Easy Assembling Of Doors For All Models
T Sarangarajan, Vice President-Operations, Hyundai Motors India How does ACT 302 function? The shopfloor is divided in to small group activities with four to five members preferably representing production, engineering,maintenance and quality. The activities of the groups and are evaluated every month by a different group of people to assess the suitability of improvement projects, actual cost savings and effects. Those successfully evaluated projects are approved and the groups involved are rewarded. Everyone is tied up in regular work. How can the workforce involve themselves in the improvement programmes? They can work both during the working hours by optimising the manpower or even afterhours.
There is some additional manpower to manage absenteeism and the excess workforce will get in to the improvement projects. How do you motivate people? The company carries out general education focussing on the automotive industry. Currently, we are organising a programme on ‘Realising the Reality’ exclusively for supervisors and technicians where we present the current scenario in the automotive industry, competition, HMI’s level in the domestic market in terms of market share and quality, what has gone wrong in some places earlier, like Detroit. The idea is to instigate them to think on the options to safeguard the society. The idea is to get better in every aspect every day. Going forward, where do you see opportunities for improvement programmes? We are looking at optimising resources and commonisation of parts within models. The optimisation level is to maintain up to 60 percent common parts amongst model. However, the challenge is to perform this task without endcustomers realising it.
MAJOR IMPROVEMENTS EXECUTED Dual Gun & Cap Tip Height Adjuster In the sill area welding dual guns are deployed to save time. However, there were frequent errors either in water flow or in the absence of cap tip or both, resulting in spot separation and equipment breakdown. Rectifying the errors consumed more time affecting the manufacturing process. Initially, the team came out with some improvement projects providing separate flow control valve for water lines. Though the error is eliminated the problem could not be solved fully. Therefore, the team came up with a system providing sensors in each station to ensure the presence of cap tip. The sensor checks after each weld cycle and this made the system fool proof, eventually eliminating breakdown completely.
with conveyor if oil hole is missing. A transmitter is introduced on the top end and a received on other end of oil hole, which in no time checks based on the signals received from the transmitters. By this way, the testing is carried out online so that there is no additional time taken for testing. The company has invested `7.97 lakh in the project, which was completed within four months. It ended up in an immediate saving of about `8.6 lakh, besides, it eliminated the rework in this process completely.
Spark Plug The company has also introduced a checking system for the correct installation of spark plugs in engines that use leaded and unleaded petrol. The testing is done based on the inherent wave length of specific colours.
Cylinder Block After the final machining process of cylinder block, it is generally assumed that the oil holes are clear. Sometimes the holes were blocked by the burr fold as there had been no thoroughness checking system. There are several possibilities for the cylinder block with blocked oil hole being passed to the assembly section as there was no alert for operator if oil hole is missing. As this may end up in serious quality issues, the ACT 302 team developed a system to eliminate this issue. Automatic cylinder block oil hole thoroughness checking machine has been introduced. The checking system interfaced pany has decided to mechanise not only tyre changing but every operation that demands lifting parts or equipment that weight more than seven kilos. “We do not mind compromising on spending more time provided the mechanisation helps people to reduce fatigue. For instance, it takes about 15 seconds to lift a tyre and fix it. However, it takes about 25 seconds if fixed through a mechanised system. When asked if the increased time will not affect the TAKT time, Sararangarajan said, “Of course it will, but we have to do the balancing accordingly.”
Door ECoS In order to check different parameters of door modules including the window regulators, automatic rear view mirror/ integrated turn light and speaker, one of the ACT 302 teams has developed Door ECoS—Electronic Check out System. The system simulates the entire operation thereby eliminating failures at the quality check at the end of the assembly line. The checking is carried in a dynamic lane—when the doors move in an assembly conveyor, thereby eliminating specific time taken for testing.
Today, spot welding no more done by people as everything is robotised. Though spot welding is not a complicated technology for people to learn, it may, however, affect them in the long run, he said. Yet another team has introduced ‘Door intake module’ which helps the operator to assemble the door without much effort. Besides, the module is capable of handling doors of all models manufactured by the company. According to Sararangarajan, the company has nullified the changeover time in paint, engine, body, assembly shops.
Dual Gun & Cap Tip Height Adjuster
Major changes, to support new model introduction are done during maintenance while minor changes to accommodate variants etc, happen during weekends. Before commencing the assembly of new models, the company follow ‘digital pre-assembly’ that allows the engineers to decide on the kinds of equipment and implements including hanger, for the particular model. This methodology helps the company to plan the production seamlessly and also to make the right product at the first instance itself.
Door (ECoS) Electronic Check-out System
Auto Monitor
14
25 JUNE 2012
F OUR-W HEEL ER
Land Rover perks up TML lacklustre PV business Our Bureau Mumbai
T
ata Motors appeared to be at the receiving end of the slowdown in the passenger car segment witnessed since early this year. The company had already been on the back foot with the Nano sales continuing to show lacklustre performance with sales perking up by four percent to 74,521 units in the fiscal ending March 2012 as compared to 70,431 units in the previous fiscal.
Tata Motors’ JLR division is looking to build sales lead taken by Range Rover Evoque and refreshed Jaguar XF with 2.2-litre diesel engine for a better consolidated performance in the coming months internationally
The company could sustain some momentum in the compact car segment comprising Indica, Vista, Indigo and Fiat’s range of cars with combined sales in the compact segment growing by around 10.5 percent to touch 176,104 units in the last fiscal compared to 159,412 in the previous fiscal. The volumes fell by around 48 percent and 43 percent in the mid-size (comprising Indigo, Manza and Marina) and executive segment (comprising Fiat Linea) with sales touching 19,645 units and 4,796 units respectively. According to a company presentation following its latest fiscal results, increasing competitive intensity and costs poses a significant challenge to the passenger vehicle industry, with higher inflation, interest costs, fuel price increases dampening the demand. The company also expects customer preference to be skewed towards diesel vehicles. The company further pointed out that the significant market initiatives which have resulted in improving retail sales for passenger vehicles and marketshare in Q3 FY12 and Q4 FY12
Telang retires as Tata Motors’ MD
PM Telang, MD-India Operations, Tata Motors
in to continue. The company’s international operations, comprising Jaguar and Land Rover, showed considerable improvement with combined sales of both brands growing by around 29 percent to touch 314,433 units in the last fiscal as compared to 243,621 units in the previous year. The sales growth was lead by around 36 percent growth in the sales of Land Rover from 190,628 units in FY11 to 260,394 units in FY 12.
JLR brands continued to display promising performance in China with 220 percent growth in Jaguar sales to touch 7,726 units in FY12 compared to 2,414 units in the FY11 while Land Rover sales grew by 85 percent to touch 46,806 units in the last fiscal compared to 25,187 units in FY11. The company is looking to build sales lead taken by Range Rover Evoque and refreshed Jaguar XF with 2.2-litre diesel for a better consolidated perform-
PM Tela ng, Ma nag ing Director-India Operations hanged up his boots after reaching the superannuation age and stepped down from the board of the company recently. In a related management reshuffle, the company appointed two new Executive Directors- Ravindra Pisha rody a nd Sat ish Borwankar. The former serves as President-Commercial Vehicles Business Unit and has been elevated to Executive Di re c tor ( C om merc ia l Vehicles). Senior VicePresident (Manufacturing Operations-Commercial Vehicles Business Unit), Satish Borwankar has been appointed Executive Director-Quality, Vendor Development & Strategic Sourcing. ance, according to a company’s presentation. The company has committed around Pounds two billion on capital expenditure for JLR mainly in the UK for FY13.
BMW Group launches recruitment programme in India Our Bureau New Delhi
B
MW Group has launched International Management Associates Programme (MAP) 2012 through selection of five management graduates from India after an exhaustive selection process comprising seven qualifying stages and three steps in the interview process. Around 57 Associates will be selected for the programme in 2012 across 16 countries including Austria, Switzerland, China, Spain, Indonesia, India, Korea, Mexico, Malaysia, Russia, Singapore, Thailand, United Kingdom, United States of America, Abu Dhabi and South Africa. The programme comprises two international assignments and three different rotations, where chosen associates will work in various strategic and operational projects with the BMW Group in India and internationally. It is meant to provide insights into business processes, strategy, culture, and BMW Group brands from both a local and global perspective. Furthermore, an experienced manager from BMW India will act as a personal mentor to support them throughout the programme. Management graduates with specialisation in sales/ marketing/ finance between 23-26 years with minimum work experience of two to four years are eligible for the programme.
Dr Andreas Schaaf, President & MD, BMW India
25 JUNE 2012
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Scorpio records highest sales in tenth year of existence Our Bureau Mumbai
H
av i ng completed a decade of existence, Ma h i nd ra & Mahindra Ltd’s (M&M) ‘flagship’ development project—the Scorpio—notched up its highest ever sales of 50,844 units during FY 2011-12 as against
43,451 units during FY 2010-11, growing by around 17 percent. “This is a very proud moment for us, as the iconic and trendsetting Scorpio has achieved yet another milestone in the 10th year of its journey. This achievement reaffirms the brand’s popularity and confidence that consumers have reposed in the brand,” said Chief Executive,
A ‘new’ Scorpio is already in the pipeline that is internally codenamed W105 and slated to arrive by around 2014 Automotive Division, Mahindra & Mahindra, Pravin Shah. The SUV was launched in 2002, with engine design sourced from AVL, Austria, marking a major evolution from the then MUV manufacturer in its first effort at developing a completely indigenous vehicle. It won several awards from automotive journalist community including ‘Car of the Year’ awards (BBC World’s Wheels, CNBC Autocar, BS Motoring) in its launch year and is one of the most awarded automotive brands in the country. Through 2010-11, it emerged ‘The Most Appealing Sports Utility Vehicle’ in the JD Power
Garmin to map North Indian market Our Bureau New Delhi
I
n-car navigation solution provider, Garmin Ltd has recently appointed a new distributor in New Delhi to ramp up its presence in the North India. The company has entered in an agreement with AutoForm to distribute the Garmin products in the aftermarket. The agreement will ensure increased market presence in Portable Navigation Devices (PNDs) in India for Garmin. “It has been done keeping in mind the increasing demand of GPS navigation. The GPS market is evolving at 100 percent rate with current demand being of around one lakh devices. North India with cities like Delhi and Chandigarh hold a huge market potential and will be among the cities with maximum market share,” said Garmin Senior Sales Manager, South East Asia and India, Daniel Chien.
Partnerships For Growth For West and South India, Garmin, already has partnered with ASPL and Elabs. “We have recently launched cost effective nüvi 40 LM and 50 LM with the price-tag of `8,450 and `9,990 respectively. We offer free lifetime maps with all our PND devices, which has already made an impact in the market and it is now the right time to make our devices available to the people through increased network of distributors,” said Chien. “We entered Indian market more than 15 years ago and since then have been able to have a good share in the growing GPS market here,” he added. Being a company which has reached a mark of selling more than 100 million products, Garmin enjoys 57 percent share in personal navigation devices in Americas and around 38 percent share worldwide.
Daniel Chien and Ali Rizvi
Asia Pacific 2010 India APEAL (Automot ive Per for ma nce, Execution and Layout Study). The model also topped the SUV/MUV category in the TNS Total Customer Satisfaction Study 2010. Further, the Scorpio was ranked highest in the SUV segment, in ‘Best Looks’ & ‘Best Resale Value’ in the HT-MARS Customer Satisfaction Survey 2010. The company launched
the next generation Scorpio in 2006 with refurbished interiors and styling and the new generation Scorpio continued to attract customer. Automotive news portals are already abuzz with feeders from the company that a new Scorpio is already in the pipeline that is internally codenamed W105, which is slated to arrive by around 2014.
BharatBenz trucks roll out Daimler India Commercial Vehicles commenced its commercial production and rolled out its first 25-tonne Rigid BharatBenz truck of f the assembly line at its Oragadam plant in Chennai. The first product scheduled for the market launch is the 2523 Heav y Duty Truck with 230 HP, based on the Mercedes Benz A xor platform. In the first phase, BharatBenz trucks
will be sold and serviced over a network of 70 dealer locations.
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“Our endeavour is to make all our points, whether it is through our As the pressure in the market is increasing, Honda Seil Cars India will continue to increase the localisation levels across its all models of cars to shield from rupee fluctuation. Further, the focus will be on educating its prospective customers on the concept of total cost of ownership of its cars. Commenting on the disparity between diesel and petrol prices, Senior Vice President, Sales & Marketing, Honda Siel Cars India Jnaneswar Sen, said that as far as diesel is concerned, Honda R&D centre in Japan is currently developing a small diesel engine but it is not possible to share timelines of its launch or the models it would be available in. Nabeel A Khan The difference between diesel and petrol prices is widening. Don’t you think that you need to be part of the diesel boom in India to increase your sales volume? We understand that with the big gap in diesel and petrol prices in India; there has been a spurt in demand for diesel
vehicles. Despite this spurt, our models like Honda City, are performing quite consistently and not just leading the petrol segment but also ahead of many competition cars that are available in both petrol and diesel variants. As far as diesel is concerned, Honda R&D is currently developing a small diesel engine but it is not possible to share timelines of its launch or the models it would be available in.
You have achieved five lakh customers in India. Do you find this progress satisfactory or is it slower than expected? We are extremely delighted to have crossed five lakh sales milestones in India and express our sincere gratitude to our customers who have trusted our brand and made it a success in India. To celebrate this success we have also introduced offers on Honda cars to delight our customers. Our endeavor is to make all our customers happy, at all touch points, whether it is through our products or services. There is a pressure in the market in terms of demand. How do you strategise to sail through it? We started this fiscal on a high note, which was clearly visible from our sales numbers in April and May 2012. The market
response to Brio, Jazz and City has been very good and we did exceedingly well. However, the recent petrol price hike, sharp depreciation of the rupee and high interest rates has adversely impacted the automobile industry. The industry is going through a severe slowdown. We, being part of the same industry, are also impacted. We will continue to increase the localisation levels of our models so as to shield ourselves from the rupee fluctuations. Further, our focus will be on educating our prospective customers on the concept of total cost of ownership of our cars. Our sales consultants at the dealerships have been trained to assist customers in their car buying decision based on this concept. The total cost of ownership associated with Honda cars is
The big gap in diesel and petrol prices in India has lead to a spurt in demand for diesel vehicles. Honda R&D is currently developing a small diesel engine but it is not possible to share timelines of its launch much less and very attractive. Honda cars have low maintenance and running costs, high fuel efficiency and an excellent resale value, which makes them an attractive purchase proposition. Do you plan to reconsider
VW launches new Jetta Our Bureau New Delhi
E
uropean carmaker Volkswagen recently launched the compact 1.4 L Jetta TSI. The vehicle available in petrol engine will be available for sales at the showroom by 1 July, 2012. The petrol variants Trendline and Comfortline are priced at `13.60 and at `15.07 lakh ex showroom, New Delhi. The Volkswagen TSI engines are designed to deliver maximum torque from engine speeds as low as 1,500 RPM. This is achieved by combining Direct Petrol injection and intake of high compress air with the use of turbocharger thereby giving high fuel efficiency. The car produces maximum power output of 90 kw @ 5,000 RPM and a maximum torque of 200 nm @1,5004,000 RPM with a six-speed gear box in manual transmission. Commenting on the launch of the Jetta TSI, Member of Board and Director, Volkswagen Passenger Cars, Volkswagen Group Sales India Pvt Ltd, Neeraj Garg said “In the current market scenario, fuel efficiency has become extremely crucial for every customer looking at purchasing a new car. Customers looking at buying a petrol vehicle are either postponing their buying decision or purchasing a diesel car. Under
Fuel efficiency has become extremely crucial for every customer looking at purchasing a new car. Customers looking at buying a petrol vehicle are either postponing their buying decision or purchasing a diesel car these circumstances, we strongly feel the need to provide the customer with a choice to opt for a value for money petrol car. The Jetta TSI is the perfect answer; a powerful car with an extremely efficient engine consuming less fuel.”
25 JUNE 2012
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customers happy, at all touch products or services” India is definitely among the key markets for Honda, and HSCI is committed to this market and has ambitious growth plans. However, we do not have any specific information to share at this moment you investment plans for India? India is definitely among the key markets for Honda, and HSCI is committed to this market and has ambitious growth plans. However, we do not have any specific information to share at this moment.
It’s generally observed that when the sales go down, the aftersales grow. What kind of plans you have in this direction? How do you want to penetrate the market? Aftersales service is an integral part of our business and our endeavor is to make all our customers happy, at all touch points, whether it is through our products or services. Good word of mouth has helped us a lot to establish our brand in the premium car segment and we would like to continually enhance this experience. The durability, quality and reliability of our models are already quite established in the market. Through improved aftersales service, we can improve the resale value of Honda cars even further. When are you planning to start exports from India? Could
CUMI ties-up with UK firms Our Bureau Chennai
C
arborundum Universal Ltd (CUMI) has entered into techno-commercial agreement with UK firms Sheffield Refractories and Anderman Ceramics to manufacture, supply and install a range of high-end refractory solutions for the aerospace component manufacturers and steel & glass industries. The manufacturing of these products would be done at Carborundum’s plant in Ranipet, Tamil Nadu.
Refractory Solutions According to the company’s statement, CUMI would be able to leverage its association with Sheffield Refractories to offer proven, world class refractory solutions to these industries. On the association with Anderman Ceramics, the company said CUMI would use their expertise to address the Aerospace industries and other industry segments. “With these agreements, CUMI would be able to offer its customers a complete basket of proven refractory products for all major industry segments,” the statement added. Sheffield Refractories is engaged in producing specialised refractories for integrated steel plants, boilers used in power projects and cement plants, while Anderman Ceramics is a distributor of technical ceramic parts and components with operations in the U.K., the U.S. and France.
SKF to supply bearings for Volvo V40
S
KF signed a seven-year contract with Volvo Car Corporation for the delivery of rear wheel bearing units and front suspension bearing units for the newly launched Volvo V40 car model. The contract covers the full production volume for the model series. “We have customised rear wheel bearings with our recently developed high performance seal for the newly launched V40 model,” said President, SKF Automotive, Tryggve Sthen. SKF has developed rear wheel hub bearing units specifically designed for the V40 and for the premium demands of Volvo Car Corporation. These, along with the MacPherson suspension bearing units, are reliable technical solutions developed for the tough requirements of the automotive market. The products are manufactured in Italy and France and SKF has already started delivering the products.
you share the markets you will be exporting to and when? Which are the preferred cars that you can exports from India? We primarily focus on sales in the domestic market in India. We are also exporting small volumes of Brio, Jazz and City to neighboring countries like Nepal, Bangladesh, Bhutan and Sri Lanka. Post-disaster in Japan and Thailand, how has the progress been? Ever since the resumption of production in mid-February this year, we have been posting good numbers and have registered a growth of 192 percent during the last four months. Brio and the new City have been very well received in the market. We have sold more than 18,500 units of Brio and 17000 units of the new City after resumption of production.
Jnaneswar Sen, Senior VP, Sales & Marketing, HSCI
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Faurecia’s Tech Centre to propel product development Our Bureau Pune
T
he recently inaugurated Tech Centre of Faurecia in Pune will offer the global company the prowess to leapfrog in new product development, eventually supporting its intent to be a major player in providing engineering solutions and automotive components in Asia Pacific region. The new centre is part of a global network of 41 R&D centres located in 33 countries around the world. The Tech Centre has seamlessly integrated the different streams of research activities right from concept to prototyping and validation enabling Faurecia to carry out full-fledged research activities in addition to working on alternate materials. Established in a small way in 2004, the Pune facility has been carrying out research activities and filed couple of patents last year.
Faurecia has four divisions— for automotive interior systems, automotive seating, automotive exteriors and emission control technologies. The new tech centre, created at an investment of Euro 16 million will work on the former three business divisions as the latter has a dedicated facility in Bangalore. The group invested around Euro 100 million, which is around five percent of its revenues, in R&D. A fully integrated facility with CAD/CAE and Product and Process Validation (PPV) activities, the Tech Centre is designed to accommodate about 1,000 automotive engineers, eventually supporting in expansion of its three core business groups in India. Currently, the centre has about 600 engineers and they will be part of the 5,000 dedicated engineers and technicians of the group offering support for its customers in the key automotive
regions of the world. By 2015, the headcount will reach 800 in the Pune centre. The objective of setting up the facility is part of the company’s global agenda of getting over 50 percent of revenues from outside Europe. According to last years’ sales report, Faurecia received about 62 percent of its revenue from Europe, 21 percent from North America, 11 percent from Asia, five percent from South America and the balance from the rest of the world. Emission control technologies gets maximum sales for the company with 36 percent followed by 31 percent from seating, 22 from interiors and 11 from exteriors. The Asia share of total sales is forecast to jump from nine to 17 percent from 2011 to 2015. It will make the revenues from Asia to cross Euro four billion by 2015 from Euro 1.8 billion reported in 2011. Faurecia expects majority of
(Inset) Christophe Schmitt, Executive Vice President of Faurecia Interior Systems, Faurecia Tech Centre, Pune
the revenue of Asian region coming from China, however, India is also in the reckoning. Presence of the technical centre will help the global Tier 1 major to garner sizeable market share in both India and abroad. The company believes that India will be a 10-million market by 2020 and being closer to customers will help it grow equally or better than the market. According to the Executive Vice President of Faurecia Interior Systems, Christophe Schmitt, the interior systems division is on top of the agenda for the company in Asia Pacific region. Asia region became priority for the company’s expansion programme since it registered 16 percent growth over the previous year, raising to contribute 11 percent of the group’s total sales. Every year, the group’s R&D teams at the Tech Centres in India mastermind over 200 innovation led projects focusing on safety, comfort, interior space management, environmental performance, perceived quality and cost control. Globally, Faurecia has registered 300 patents during the year 2011. “Faurecia is growing faster than the automotive market, enjoys growth potential, benefits from a diverse regional and customer mix and is continuously improving its cost structure. Our new Tech Centre in India is an extension of our commitment to the Indian consumers and our growing customer base in the country. Our aim is to develop high quality, high safety and high comfort products at this centre,” Schmitt said. The Vice President of Engineering, Faurecia Interior Systems, Nicolas Pechnyk, said,
“Since the inception of this Tech Centre in 2004, Faurecia’s engineering teams in India have developed the most-advanced automotive skills to perform the full-range of development activities for customers at home and abroad. The new centre in Pune is an instrumental part of our global R&D and engineering footprint.” The systems and technologies developed in India are in keeping with the overall group strategy for the company’s global requirements. “India is marked by a long-term commitment to grow teams and locations, to operate as centres of excellence, capable of developing hi-tech solutions for Faurecia’s global and local customer base. Everything from investment in infrastructure, recruitment of young engineers, comprehensive training processes and quality is testimony to our long term growth plans in India,” said the Managing Director, Faurecia Interior Systems India, Franck Euvrard. Faurecia entered India in 1995, with its emissions control business in Nasik. Currently, it is headquartered in Pune and in addition to two R&D centres in the country the company also has nine production facilities spread across automotive clusters of the country including Pune, Manesar, Chennai, Bangalore and Sanand. The company caters to the requirements of several OEMs including Ford, Hyundai, Mahindra, MarutiSuzuki, Tata Motors, Toyota and Volkswagen. It also suppliers to commercial vehicles such as heavy load trucks, together with its global partner Cummins. So far the company has invested about Euro 100 million in India.
MSIL drives on milestone terrains Nabeel A Khan New Delhi
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a r ut i Su z u k i appears to be making all the right moves to maintain its leadership position in the passenger car segment in India. The car makers’ highest selling brand Alto recently achieved 20 lakh units cumulative sales mark in the country. The car was launched 11 years and nine months ago and has been the highest selling car in the domestic market for the past seven years. It has also been rated as the highest selling small car in the world, for the past two years. Maruti Suzuki Alto was also the fastest to clock 10 lakh sales within eight years and three
Alto is the only car brand in India to cross the 300,000 units’ sales mark in an year in 2010-11. It repeated the feat in 2011-12. Also, MSIL sold 1.4 lakh units of Alto between January and May this year. In the five months, on an average 28,000 units of Alto have been sold every month
months of its launch in 2000. In June 2012, Alto broke its own record by clocking the next ten lakh units within a mere three years and six months. Managing Executive Officer (Marketing and Sales), Maruti Udyog, Mayank Pareek said, “Alto‘s superior fuel efficiency, compact sleek design, good maneuverability and overall low cost of ownership are the attributes that make it the best car for the first time buyers. Alto is the only car brand in India to cross the 300,000 units’ sales mark in an year in 2010-11. It repeated the feat in 2011-12. Also, MSIL sold 1.4 lakh units of Alto between January and May this year. In the five months, on an average 28,000 units of Alto have been sold every month with highest limit being at 50,000 units and lowest at 25,000 units. Recently, MSIL has released its extensive environment strategy to bring down emissions of its operations and reduce greenhouse emission of its vehicles. MD and CEO, Shinzo Nakanishi said, “We have a well thought-out plan to minimise resource use, to become a greener company and safeguard the environment. As we expand our business and put in newer facilities, our focus will be to adopt and invest in new environment-friendly technologies and practices to minimise the impact of our business on the environment.” The company intends to bring down carbon footprint of its man-
ufacturing operations through improved operational efficiencies and constant innovation. This approach in the recent past, has brought significant results. The power consumption per car for instance has come down by nearly 30 percent in Gurgaon plant in the last decade and by about the same percentage in Manesar plant in five years. In the latest instance of the new Swift and new Swift DZire, the company’s engineers have significantly reduced emissions by four-five per percent per kilometer and enhanced efficiencies by working on vehicle aerodynamics besides adopting several innovative weight reduction techniques. The recently introduced Ertiga claimed fuel efficiency of 20.77 kmpl. The carmaker has also pledged to invest in new, cost-effective technologies that bring down greenhouse gas emissions of its facilities. The Manesar B plant commissioned in September 2011 is the first car plant in the country that is 100 percent LED. In addition, for the Gurgaon facility, it has put in place an energy audit team, which is systemat ica l ly ident i f y i ng equipment and machinery with high energy consumption, and replacing it with more environment-friendly options. It has brought down water consumption per car by 62 percent in the last decade in Gurgaon plant and by almost similar levels in the last five years in Manesar.
Exports In 2009-10, the company exported a total of 1.47 lakh units out of which, over 75 percent was bound for Europe. However, in 2011-12 the share of non-EU exports shot up sharply from 23 percent to 66 percent. Some of the export destinations include Switzerland, Malta, Sweden, Algeria, Egypt and Morocco. The company has aligned its export strategy by focusing more on the non-European markets. Algeria has emerged as a key exports destination and the latest export shipment includes over 1,500 units for the North African nation. The company plans to expand its presence in newer markets including the ASEAN (Association of SouthEast Asian Nations) region. As the demand for diesel vehicle increases the company recently approved a proposal to
merge Suzuki Powertrain India Limited (SPIL) with MSIL. SPIL, which supplies diesel engines as well as transmissions for vehicles to MSIL, is a subsidiary of Suzuki Motor Corporation (SMC), Japan SMC holds a 70 percent share in SPIL and the remaining 30 per cent is held by MSIL. It signed an agreement with government of Gujarat for purchase of land near Mehsana (around 100 km from Ahmedabad) to set-up an all new manufacturing facility. The proposed facility, will have initial annual capacity of 250,000 units and will be commissioned by 2015-16 depending on the market conditions. MSIL may invest around `4,000 crore in the first phase for land and construction of the plant. This new facility will take its combined capability to two million units by 2015-16.
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Murugappa Group to push capex Our Bureau Chennai
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hennai-based Mu r ugappa Group plans to increase its turnover to `35,000 crore by 2013-2014 for which, the
The Group logged a top-line growth of 31 percent to touch a turnover of `22,314 crore up from `17,051 crore posted during 2010-2011. And with the Sabero acquisition, Coromandel International is one of the top five players in the segment and EID Parry is one of the top three sugar manufacturers in the country—A Vellayan, Executive Chairman, Murugappa Group
group company will be spending nearly `1,000 crore capex for expanding various businesses and is on the lookout for viable acquisitions in the current financial year. In 2011-2012, the group sales were stood to `22,314 crore, which is 31 percent higher than the previous year and the operating profit stood to `2,692 crore, a growth of 20 percent. Group Director (Finance), N Srinivasan, said, “Our capex for this fiscal will be around `1,000 crore, which includes the balance unspent during the last year. The investments will be by group companies—Tube Investments of India (`500 crore), Coromandel International (`280 crore), EID Parry (`50 crore), Carborundum Universal (`85 crore) and others (`85 crore). We will also look at domestic or external commercial borrowings (ECB) based on the cost of funds. Last fiscal the group’s capex excluding acquisitions was at `632 crore,” he added. In the last fiscal, the company’s engineering business performed better than the industry in top-line and bot-
tom-line leveraging capacity utilisation, operational efficiencies, higher market reach and string customer relationships. Tube Investments of India (TII) recorded a growth of 14 percent in EBITA and 17 percent turnover over the previous year despite the slowdown in the major customer industry, mainly in the auto industry. Precision tubes ma nufacturer, Tube Products of India (TPI) recorded a domestic volume growth of 15 percent in tubes and seven percent in cold rolled steel strips. TPI witnessed a healthy growth of 22 percent in turnover and 16 percent in profitability despite the slow growth in the auto industry. Meanwhile, the company’s metal forming division TI Metal Forming (TIMF) witnessed a drop of nine percent in volumes mainly due to lower growth of the passenger cars segment. The company also saw a growth of 14 percent in the automotive chain and 11 percent in the industrial chain. TIDC India also saw a growth of 40 percent in the export market mainly due
A Vellayan, Executive Chairman, Murugappa Group
to higher sale to the European market and better off-take from OEMs in the US. Murugappa Group, Executive Chairman, A Vellayan said, “The Group logged a top-line growth of 31 percent to touch a turnover of `22,314 crore up from `17,051 crore posted during 2010-2011. And with the Sabero acquisition, Coromandel International is one of the top five players in the segment and EID Parry is one of the top three sugar manufacturers in the country”.
The Mur ugappa Group has also grown its other businesses such as, its rural retail outlets (revenue `1, 300 crore), fa r m mecha nisat ion a nd nutraceuticals. Speaking about the Group’s suga r ref iner y project at Kakinada in Andhra Pradesh in joint venture with Cargill, Vellayan said the `500 crore project was shut down for a round seven mont hs for want of natural gas for its power plant.
AMW inaugurates KDM Motors dealership in Hubli Our Bureau Chennai
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sia MotorWorks (AMW) expanded its presence in Karnataka with the opening of its newest dealership, KDM Motors, in Hubli recently. Located on the National Highway between Hubli and Bangalore, the facility offers Sales, Service and Spares (3S) under one roof. It is AMW’s fourth dealership in the state of Karnataka with other dealerships located at Bangalore, Hospet and Bijapur. In addition, the company has 53 service touch points across the state. Rolling out its trucks in 2008, AMW has increased its presence in a competitive market place through its products and wide service network. It has a dominant presence in the fast growing tipper segment. Its vehicles are the preferred choice in the mining, construction and infrastructure sectors. The company has a widespread and growing dealer and service network across India with 123 dealerships and over 1,500 touch points. This network includes sales and service centres, authorised service outlets, mobile vans, workshops and a 24*7 helpline called ‘AMW Seva’ which ensures a rapid response to customer needs. AMW offers trucks ranging from 16 to 49 tonne. The AMW 49 tonne model created the segment and was India’s largest tractor trailer at launch. In addition, AMW also created the construction and mining segments in the Indian CV market with its range of tippers.
Plant At Bhuj AMW’s fully integrated manufacturing facility in Bhuj, Gujarat, has a planned capacity of 50,000 commercial vehicles per annum. It currently employs about 1,200 people and uses its production processes to build world class trucks for the Indian market.
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How does Rane Madras contain T Murrali Puducherry
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Implementable Kaizens 329
300
5.1%
250 200
3.9%
illustrations: Mahesh M Talkar
f ter t he Chenna i headquartered Rane (Madras) Ltd (RML), part of Rane Group, won the Volvo order to supply hydraulic cylinders, the company has been receiving orders from various customers domestic and abroad. This according to the President of the company, S Parthasarathy, is due to, “the quality systems and engineering capability of RML to understand customers’ needs and designing products to meet specific requirements in terms of cost, delivery and speed of development.” The challenge is to develop new products without rejections and deliver at a faster pace to support the OEMs intent in squeezing the time to market. The company has taken several initiatives towards achieving its objectives across plants.
350
Tool ToolCosts Cost
150 100 50
2007-08 However, the Puducherry plant of the company was taken as a sample for this study recently as it majorly deals with passenger cars OEMs. In order to reduce rejections, the Puducherry plant of RML has identified various
2010-11 processes that are likley to generate rejections and developed appropriate methodologies like Quality Circle (QC) to contain them. The Cross Functional Teams (CFT) comprising engineers from several departments including production and quality, handles chronic problems. The company carries out projects using QC methodologies by using tools like design of experiments, multi-regression analysis among others.
Maintaining Quality
R Balakrishnan, VP(Operations), RML’s Puducherry plant
Vice President (Operations), Puducherr y plant, RML, R Balakrishnan said, “Our focus is to primarily ensure that the problems do not recur.” Usually the ppm levels at its customers’ end will be high for the new products due to several processes involved in manufacturing. However, the company that manufacturers safety critical parts like steering gear and steering and suspension link-
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2005-06 ages, has been maintaining its rejections level at its customers’ end at 25 ppm despite adding several new products. When asked how the company could maintain such quality levels, Balakrishnan said RML has been practising Process Failure and Effect Mode Review (PFEMR) concept—executed by a CFT comprising representations from R&D, manufacturing and production. The team recommends certain actions, which were derived based on the history of rejections, to be taken to contain them. RML follows these testimonials before commencing series production of any new product. It documents these vital data as it can go to the genesis of every problem since inception. This becomes the benchmark for maintaining the quality. Though all the plants of RML practise the concept the Puducherry plant embraces it more as it predominantly
2010-11 RML has been practising Process Failure and Effect Mode Review (PFEMR) concept—executed by a CFT comprising representations from R&D, manufacturing and production. The team recommends certain actions, which were derived based on the history of rejections, to be taken to contain them caters to passenger car OEMs, where the sensitivity is higher. Besides, the company also carries out thorough and extensive Production Part Approval Process (PPAP). These initiatives help contain rejections
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rejections in new products? Operator Efficiency 70.3% 54.5%
2008-09 Earlier, the continuous improvement and poke-yoke programmes were taken based on customers’ complaints. Later, the company decided to look at the entire plant for introducing poke-yokes and kaizens to manage customers’ quality parameters significantly, he said. In the process RML has also contained the tool cost to 3.9 percent of the turnover in 201011 from 5.1 percent in 2007-08. Realising that the company does not have a control over raw
in certain low accuracy processes. Besides, it introduced new technologies in tools that enhance the life. “We work closely with our suppliers and develop tools that have optimum life,” he said.
Improving Productivity
2011-12 material prices it focussed on enhancing tool life. Involvement of operators is high in every cost reduction programme, he said adding that the inserts / tools were deployed depending up on the accuracy requirements of every job. This enables the company to deploy used inserts also
The plant has set itself a target to reduce sub-contracting work by `1.29 crore. It has evolved a twin pronged approach to accomplish the objective—firstly by improving the productivity of the plant and utilise the time and effort in making the jobs subcontracted earlier. Secondly, by bringing in those parts for inhouse manufacturing to which, the company has implemented cost reduction programme. As part of its initiative to efficiently manage raw materials, the company has reduced the inventory from 49 days in 2008-09 to 12 days in 2011-12 by adopting several methodologies. One of the key attributes of
Puducherry plant is number of kaizens that it generates every year. The total number of implementable kaizens was 11 in 2005-06 and it rose to 329 in 2010-11. The significant improvement is due to the phenomenal involvement of the people, he said.
Poke-Yoke Earlier, these continuous improvement and poke-yoke (mistake proofing) programmes have been reactive process ie corrective measures were taken based on customers’ complaints. Later, the company decided to look at the entire plant for introducing poke-yokes and kaizens to manage customers’ quality parameters. Therefore, it began to look at all the critical characteristics of its products. About three years ago, it introduced poke-yoke implementat ion system in the company that instigated the people to come out with several ideas. “Today all the
fit and functional dimensions and parameters as required by the customers are protected by poke-yoke. We are currently extending this to our suppliers,” he said.
Raising The Bar The plant has also increased the operator efficiency from 54.5 percent in 2008-09 to 70.3 percent during 2011-12. It has set itself a target to achieve 80 percent this year. Additionally, it also introduced ‘autonomous machine maintenance’ with which, the operators not only maintain their machines on a daily basis but also carry out minor repairs like changing the belt etc. Doubling up activities were possible for the company due to its lean approach through which, it continuously identifies and eliminates waste in the process. All the ideal time of operators has been utilised by taking several initiatives to reduce operator fatigue, he added.
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Bentley launches its fastest production model—Continental GT Speed
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entley is introducing a new performance flagship, its fastest production model ever, the Continental GT Speed coupe. The new 205 mph (329 km/h) GT Speed will appeal to driving enthusiasts who place a high value on outright performance, agile handling, distinctive design and sporting luxury. Orders for the new GT Speed are being taken now, with deliveries to commence in October 2012. At the heart of the new Continental GT Speed is an up-rated version of the unique Bentley 6-litre, 48-valve, fourcam, twin turbocharged W12 engine. For the new model, the legendary Bentley W12 develops 625 PS (616 BHP/460 kW) at 6,000 rev/min and 800 nm of torque to deliver thunderous, supercar performance with effortless overtaking capability. The 0-60 mph sprint is dispatched in a mere 4.0 seconds (0-100 kmh in 4.2s) and the GT Speed has a top speed of 205 mph (329 kmh).
The new Speed’s immense power is transmitted via a closeratio, ZF eight-speed automatic transmission. This state-of-theart transmission delivers quick yet imperceptible gear changes through intelligent adaptive control software to ensure the perfect combination of speed and refinement. The new gearbox also makes a significant contribution to an overall twelve per cent improvement in fuel economy and CO2 emissions. Channelling the extreme performance of the GT Speed is a unique chassis tune that includes uprated steering and suspension systems and a lowered ride height. The enhanced chassis is complemented by u n ique 21-inch Speed wheels, available in two lustrous finishes, and fitted with 275 35 R21 Pirelli PZero ultra-high performance tyres. The result is a sportier and more engaging Bentley driving expe-
rience with tauter handling and improved agility. Commenting on the new GT Speed, Wolfgang Dürheimer, Bentley’s Chairman and Chief Executive said, “For nearly a decade, the Bentley Continental GT has defined high luxury, high performance grand touring and the unique W12 engine has been so successful that Bentley is now the world’s largest producer of 12-cylinder engines” The muscular, elegant sculpted coachwork of the Continental coupe is subtly enhanced with design touches which reinforce the sporting character of the new model. Most notable are the dark-tinted matrix front grille and lower air intakes and the ‘rifled’ finish to the exhaust tailpipes. The new GT Speed delivers supreme levels of performance with no compromise in comfort, refinement, craftsmanship and quality. Using only the finest natural materials, the hand-
crafted cabin of the GT Speed features the Mulliner Driving Specification as standard as well as a number of signature Speed design cues that combine contemporary luxury with a distinctly sporting character. Standard fitment on all Continental models, the permanent all-wheel drive system, employing a central Torsen differential, harnesses the prodigious power and torque of the new GT
Speed and ensures huge levels of grip and stability whatever the road or weather conditions. Ahead of deliveries this autumn, the GT Speed makes its international debut at the prestigious Goodwood Festival of Speed from 28 June-1 July, 2012. Modern-day Bentley Boys Juha Kankunnen, Guy Smith and Derek Bell will pilot a pre-production GT Speed up the Goodwood Hill twice a day.
Europe’s new car market continues to decline as troubled economy bites
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ccording to the latest analysis from JATO Dynamics, the European new car market experienced no respite from the challenging economic climate last month. Overall, the market was down 7.3 percent on the same period last year and May superseded April with the greatest drop in month-on-month sales so far this year. The impact of economic uncertainty on new car sales can still be seen in key European markets such as Germany, Italy, France and Spain. However Great Britain, saw an increase in new car registrations up 7.9 percent in May, driven by a notable increase in private new vehicle sales. Amongst the top ten brands by volume, Renault, Peugeot and Citroen suffered the largest fall in sales during May, down 15.6 percent, 17.3 percent and 19.8 percent, respectively. The significant decline in the sales volume of these French brands can be attributed in large part to their heavy exposure in Southern Europe, which has been hit hardest by the European economic crisis. Volkswagen remains Europe’s top brand and ahead of Ford despite a decrease in sales last month. Audi is the only brand to record an increase in sales within the top ten brands in Europe, up 4.5 percent in May and 4.4 percent YtD, thanks to the new Q3 model and improved A6. Mercedes recorded a slight decrease in sales in May, down 0.5 percent, but models such as the new A-Class and new B-Class had strong local sales in Germany. Outside the top ten brands, Land Rover continues to perform well with sales increasing by 54.7 percent in May helped by the continued success of the Range Rover Evoque. Kia also recorded a 22.9 percent sales increase during the same period boosted by strong sales of the Rio last month. Despite a significant reduction in May sales, Volkswagen’s Golf, down 13.5 percent, and Ford’s Fiesta, down 12.4 percent, retain first and second place in the top ten models sold in Europe. New to the top ten models list this year, Renault’s Megane is the only model to see an increase in sales last month, up 2.6 percent, fuelled by strong sales in France, Spain and the Netherlands. Achieving 21,817 sales in May, Megane claimed seventh place ahead of the Renault Clio, Fiat Panda and Volkswagen Passat. Outside the top ten, Toyota Yaris, Audi A6 and Mercedes B-Class recorded significant increases in sales during May.
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TECHNOLOGY
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Dürr installs 155 painting robots at VW in Bratislava
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achinery and plant engineer Dürr has installed a total of 155 painting and application robots at V W in Bratislava, Slovakia, in 2011 and 2012. The 45 robots are for a new paint shop at the Slovakian auto plant. Dürr has installed another 110 robots to modernise two existing paint lines, on which V W will be able to paint both the body exterior and interior fully automatically in the future; the lines are due to be brought into operation by June 2012. The robot orders for V W Bratislava are worth Euro 36 million. Besides the painting robots, Dürr is also supplying the complete applicat ion a nd paint supply systems, featuring high-tech products such as electrostatic high-speed rotating atomisers, paint-sav ing colour changers, and software. The scope of supply also includes robots for welded seam sealing and for applying underbody protection. In addition to the luxury SUVs Volkswagen Touareg and Audi Q7, bodies for the Porsche Cayenne,
the new compacts Volkswagen Up, Škoda Citigo, and Seat Mii are produced in Bratislava. An increase in production capacity to 400,000 vehicles is planned for this year. Dürr AG’s CEO, Ralf W Dieter commented, “We won the order from VW on our good technical performance in terms of quality of finish, paint consumption, and total cost of ownership. Bottom line, our technology increases production efficiency in Bratislava measurably.” The Application Technology division, in which Dürr concentrates its robot and application systems activities, aims to grow its sales revenues from Euro 407 million to over Euro 500 million in 2012. Sales were already increased by 52 percent in 2011. The driver is the buoyant demand in the automotive industry, which has continued so far in 2012. Among the main investment motives in the automobile industry are the need for additional production capacity and the increasing automation of the painting process. For the group as a whole, Dürr expects
EcoRP L153 Robot
sales revenues in excess of Euro two billion in 2012. Dürr is a mechanical and plant engineering group that holds leading positions in the world market in its areas of operation. It generates a good 80 percent of its sales in business with the automotive industry. It also supplies the aircraft, machinery, chemical, and pharmaceutical industries with innovative production and environmental technology. The Dürr Group
operates in the market with four divisions. Paint and Assembly Systems plans and builds paintshops and final assembly systems for the automobile and aircraf t industr y. Application Technology provides automated paint application, sealing, and glueing with its robot technolog ies. Mach i ner y a nd systems from the Measuring and Process Systems division are used in balancing and cleaning processes, in engine and transmission manufacturing and in final vehicle assembly, among other areas. The fourth div ision, Clean Technolog y Systems, is focused on processes to improve energy efficiency and on exhaust air purification. Dürr has 50 business locations in 23 countries worldwide and approximately 7,100 employees. The Group achieved sales of € 1.9 billion in 2011. The Group has been active in India for nearly 50 years, with a local presence for over 20 years. Nearly all of its business units with their complete innovative product portfolio are active in
We won the order from VW on our good technical performance in terms of quality of finish, paint consumption, and total cost of ownership. Bottom line, our technology increases production efficiency in Bratislava measurably— Ralf W Dieter, CEO, Dürr AG India, offering high quality balancing and diagnostic machines, application technology, paint and final assembly systems, as well as environmental systems. Dürr’s array of activities in India include industrial cleaning and automation solutions and consulting. Dürr has made India an important hub for their worldwide engineering activities offering its customers international knowhow and local experience.
Anysys tapped for next-gen EV battery development
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ne year into a US Department of Energy (DOE) funded project, Ansys, GM, the National Renewable Energy Laboratory (NREL) and ESim are leveraging engineering simulation technology to optimise electric and hybrid vehicle battery performance. The team achieved significant milestones during the past year in support of the DOE’s Computer Aided Engineering for Electric Drive Vehicle Batteries (CAEBAT) project. GM awarded ANSYS a subcontract to develop battery software tools that will help accelerate development of next-generation electric vehicles (EV). The main goal of the CAEBAT project is to incorporate existing and new battery models into engineering simulation software to shorten design cycles and optimise batteries for increased performance, safety and life span. The project is driving EV innovation. The GM-ANSYS-ESim team’s achievements over the past year include prototyping and validating three electrochemistry modelling approaches. The partners also prototyped a co-simulation feature, which blends battery multiphysics and system simulation technologies that enable engineers to shed unnecessary details and increase simulation efficiency without compromising the accuracy of the model. “Traditionally, the EV batter y industry depends mostly on the expensive and time-consuming process of design-buildtest-break for prototyping and manufacturing these batteries,” said Director of the Vehicle Development Research Lab at GM Global R&D, Jan Aase. “However, the virtual development of engineered products has proven to be an effective way of evaluating many design alternatives. This specific team was selected because of their individual track records of success in their respective fields for providing reliable technologies that lead to efficient products.” The team is leveraging NREL’s considerable experience in multiphysics, multi-scale modelling of lithium-ion battery systems. The resulting design tools will be made commercially available through ANSYS. GM plans to validate and apply the model to its electric vehicles in development. NREL expects that the resulting systems will become commercial offerings in about two years. This initiative is funded by DOE’s Vehicle Technologies Programme in the Office of Energy Efficiency and Renewable Energy.
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G L O B A L WAT C H
International auto round-up JD Power drops Chrysler, Ford quality ratings Ford and Chrysler, dogged by technology and quality problems, fell several notches in the JD Power and Associates’ 2012 Initial Quality study. Industrywide, auto quality improved among the 2012 models at the fastest rate since 2009, despite ongoing problems with in-vehicle technology. The average number of problems per 100 vehicles, reported within the first 90 days fell five percent, to 102 from 107 last year. Chrysler brand had the steepest drop, falling nine rankings to 25, despite a successful launch of the Chrysler 300 sedan. Chrysler’s other brands, Jeep, Dodge and Ram, climbed two, three and eight spots respectively to help the automaker post a 6.6 percent improvement over its results in last year’s study. Fiat tied with Daimler’s Smart brand for last place at 33. Due almost entirely to complaints about its MyFord system, Ford ranked behind Chrysler, falling four spots to 27. Ford’s Lincoln brand, which is undergoing an overhaul, slipped one spot to 18 in the study, which is based on responses from more than 74,000 purchasers and lessees. Lexus was the top brand for the second consecutive year in the bellwether study, which is closely watched by the automotive industry. Jaguar vaulted from 20 last year to tie for second with Porsche. Porsche’s flagship sports car, the 911, had the fewest problems of all vehicles in the study, at 44 per 100 vehicles GM’s Cad i l lac bra nd improved five spots to 4 and Honda rounded out the top five. GM unseated the Ford F-150 LD
atop the large pickup segment with its GMC Sierra LD, followed by the Chevrolet Silverado HD, its Chev y Avalanche tied for third with the Nissan Titan. The Sierra and Silverado weren’t ranked last year. GM said it achieved its best-ever score compared to the industry average. The automaker also took the top spot in the important midsize segment with the Chevy Malibu, snatching top honours from the Honda Accord. The Accord and the Ford Fusion tied for second. In a related announcement, JD Power said Honda was the only automaker whose US plant won a citation in its Assembly Line Quality Award, based on models produced for the US market.
UK Ford workers to decide on further strike action Ford employees in the UK are likely to meet to decide whether to repeat the strike action that affected all Ford of Britain sites. The 24-hour strike was brought by white-collar members of the Unite union, who object to Ford’s plans to reduce salaries for new workers and block their access to the automaker’s final-salary pension scheme. The strike involved 1,200 salaried Ford employees out of 2,500 in the UK. Ford has a total of 15,000 employees in the UK. Workers paid hourly have already agreed to a new wage and pension scheme for those joining the company now. Ford is one of many automakers looking for cost-savings in a sluggish European market. Demand for new cars fell for the eight consecutive month in May this year, dropping 8.7 percent on the previous year. The UK was one of the very few markets to see growth,
posting a gain of 7.9 percent.
NHTSA expands Toyota probe to 1.42 million units Federal safety investigators have upgraded and expanded an investigation into 1.42 million Toyota vehicles for door fires sparked by power window switches. The National Highway Traffic Safety Administration said that it was adding 600,000 Toyota Camrys and some other vehicles to the investigation it opened in February. The issue is linked to 161 incidents, including nine injuries. No deaths have been reported. NHTSA says it is upgrading its investigation to an engineering analysis from a preliminary review. The investigation now covers the 2007-09 Camry, Camry Hybrid, RAV4, Yaris and all Highlander Hybrid vehicles. The vehicles under investigation were built between September 2006 and August 2008. NHTSA says some Toyota vehicles have a higher rate of fire and overheating among all Toyota vehicles that use the same power window master switch design. Fires or smoke can originate in the power window master switch assembly in the driver door armrest. In 2009, Toyota recalled power window master switches in various Toyota vehicles sold in China and Japan, including 2007 Camry vehicles sold in China. The recalls were because the switches can short-circuit, which can lead to overheating and melting of the component. In the wake of its recall of more than 10 million vehicles for sudden unintended acceleration, Toyota agreed in 2010 to pay nearly $50 million in fines to the US government.
Bentley Motors creates new sales company: Bentley Russia Bentley Motors has created a new exclusive sales company in Russia in one of the company’s most important markets. Bentley Russia is now in operation and reflects the company’s plans to strengthen and expand its presence in the Russian market, attracting new customers and also enhancing the brand experience for existing Bentley owners. “We believe that there are major opportunities for Bentley to expand our market and increase sales in Russia. For us, it’s important that we maintain the loyalty of existing clients and, of course, attract new ones and that is partly about expanding our regional presence. The Bentley Russia team will strengthen Bentley’s leading position in the high luxury car segment and build on the popularity of the brand among Russian customers,” said Head of Bentley Russia, Guenter Behringer. Bentley’s two official dealToyota paid $16 million in failing to recall vehicles in the US In 2004, Toyota conducted a recall in Japan for Hilux trucks with steering relay rods prone to fatigue cracking and breaking, causing the vehicle to lose steering control. NHTSA said it upgraded an investigation into more than 340,000 Chevrolet Trailblazer SUVs over electrical fires sparked in driver doors. NHTSA said it has reports of 28 door fires linked to
ers in Moscow and Saint Petersburg continue their current successful operations with Mercury. Bentley Russia’s plans to expand the regional presence are based on the outstanding results achieved in the Russian market in recent times. In 2011, sales in the country increased by 45 percent, making Bentley the best-selling luxury car brand in Russia. Bentley will be showcasing its impressive current model lineup at the Moscow Motorshow from 30 August to 9 September 2012. The new Continental GT V8 and the Bentley Mulsanne, with the new Executive Interior Specification (EIS) are among the cars presented on stand. the problem. Some of the fires allegedly happened when the vehicle was not running and unattended. NHTSA said. In a letter to NHTSA, GM said the predominant warranty issues were inoperative switches rather than a fire. GM says the power windows, door locks, window lockouts and optional heated switches may begin to function erratically and then become inoperative because of a short circuit.
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Ford to introduce fuel efficient vehicles
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ord is expected to introduce 15 new vehicles in Europe this year that achieve best-in-class fuel efficiency; new petrol and diesel powertrains and Ford Econet ic Technolog ies a re key enablers. Half of new Ford cars will carry the Econetic Technology badge by the end of this year, which means they are leaders or among the very best in fuel efficiency in their segment. Ford will provide one of the industry’s most comprehensive ranges of sub-100 g/km CO 2 cars; nine different vehicle powertrain combinations to be offered. Ford is leveraging its range of efficient EcoBoost petrol engines, TDCi diesel engines and low CO2 Econetic Technologies to introduce 15 new models in Europe in 2012 that are best-in-class for fuel efficiency. By the end of 2012, Ford of Europe also will have one of the largest portfolios of cars in the industry with CO 2 emissions of under 100g/km, including six Fiesta models (three diesel, three petrol) and two Focus diesel models. Ford also will launch its first ever all-electric, zeroemission passenger vehicle this year—the Focus Electric. “The introduction of our new EcoBoost petrol engines has really helped us to go further in our drive to reduce our total fleet CO2 emissions, while still delivering great performance and driving dynamics,” said Ford of Europe, Director of Powertrain Engineering, Sherif Marakby. Ford’s one-litre EcoBoost petrol engine, recently named winner of the “International
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Engine of the Year” award, is the driving force behind nine of the 15 new models with class-leading fuel efficiency. Ford’s new ST performance cars will also deliver leading fuel efficiency in its class with EcoBoost engines, which leverage turbocharging and direct injection. Focus ST, on sale later this summer, will produce 250PS from a two-litre EcoBoost engine, but emit just 169g/km CO2 . Ford TDCi diesel engines will also help Ford’s commercial vehicles, the Transit and the Ranger, offer unsurpassed levels of efficiency and emissions, including the one-tonne and passenger bus versions of new Transit outperforming their rivals, emitting just 174g/km and 168g/km of CO2 respectively. A 1.6-litre TDCi engine has already helped the Focus Econetic Technology to be Ford’s most fuel-efficient ever Focus, with best-in-class figures of 88g/km of CO 2 and 3.4l/100km (83.1mpg). That utilises the full range of Ford Econetic Technologies, including autostart-stop, smart regenerative charging, active grille shutter, eco mode, shift indicator light, and optimised gear ratios. Lower suspension, wheel def lectors and low-rolling resistance tyres reduce driving resistances. It also features a special catalytic converter called a lean NOx trap to help reduce CO 2 emissions by facilitating a leaner combustion process using a higher proportion of air to fuel. Special undershields for optimal aerodynamics and a water-cooled charge air cooler add further efficiencies.
Aston Martin unveils sports car: Vanquish
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he latest addition to Aston Martin’s sports car line-up, the Vanquish features the next generation of VH architecture and design, as well as an upgraded six-litre V12 engine. The design represents the latest take on Aston Martin’s iconic visual language. Vanquish sees the brand continue its tradition of producing some of the leading sports cars in the world. Styling cues such as its new waist, elongated side strakes and LED rear light blades are derived from the One-77 supercar. The Aston Martin design shows a clear and coherent lineage from its heritage while providing an equally clear pointer to the luxury car brand’s vibrant future. Closer inspection reveals details such as the stunning new Aero Duct on the rear boot lid. This elegantly devised passive engineering feature, which counteracts lift at the car’s rear when travelling at speed, is a triumph of both design and technical ability. Aston Martin Chief Executive Officer, Dr Ulrich Bez said, “Today’s Vanquish is the ultimate expression of Aston Martin design ethos, engineering innovation and technical ability. It offers luxurious, continentcrossing capability and pure driving excitement without compromise. Bearing the same name as the iconic original Vanquish that did so much to cement Aston Martin’s reputation as a maker of great GT cars in the modern era, I believe the car unveiled once again puts this great British brand at the top of its class.”
He continued, “The new Vanquish mixes beautiful design with impressive technology such as the superb new infotainment system. This is the latest incarnation of everything we know, informed and developed from One-77. It is the ultimate Super Grand Tourer—confident and assured—and is the newest representation of Power, Beauty and Soul.” The Vanquish offers a British luxury sports car that’s also suited to everyday use. Powered by a revised naturally aspirated six-litre V12 petrol engine mated to the proven Touchtronic 2 six-speed automatic gearbox, the V12’s power peak of 565 BHP (573 PS) makes it Aston Martin’s most potent production model yet, outmuscled only by the strictly limited edition £1.2m One-77 supercar. The latest engineering methods, technologies and classic British design come together to make the new Vanquish a super GT. For instance, each body panel on the car is constructed from
carbon fibre because of its high strength-to-weight ratio and flexibility of form. Meanwhile torsional rigidity is improved by more than 25 percent. Practical improvements such as a newly designed and significantly more spacious cabin and a boot that, at 368 litres, is more than 60 percent larger than that of the DBS, ensure the new Vanquish can carry sufficient luggage for the tourist. Designed and hand-built at Aston Martin’s global headquarters at Gaydon in Warwickshire, the new Vanquish, available as a 2+2 or 2+0, sits atop a broad line-up of world-class sports cars including the exquisite DB9, sporty V8 Vantage and luxurious four-door Rapide.
Corrigendum: In the 18 June issue, in the headline on Pg 1, the name of the company SPIL has been wrongly spelt as SMIPL. The inadvertent error is deeply regretted.
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Lexus receives innovation award for new air conditioning technology
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irst honour for S-Flow system w it h na noe technology, launched in new GS series Lexus has received the Production Vehicle Interior Innovation of the Year Award at the Automotive Interiors Expo in Stuttgarton recently. It has received an industry innovation award for new air conditioning technology that uses much less power to deliver the level of comfort expected of a luxury vehicle. The S-flow system, introduced in the new GS 450h full hybrid saloon, has been recognised in the first honours to be presented by the Automotive Interiors Expo. The unit, featured in the standard specification of the f lagship GS 450h Premier, is designed for performance and efficiency. With the new nanoe technology, it can also deodorise the cabin, while at the same time moisturising the skin and hair of anyone on board. At the moment it is available in just a single ver-
sion of the GS 450h, but the award recognises the fact that this is a technology that could easily be transferred to more models in the future. The system uses sensors to detect when the front passenger seat is occupied; if it isn’t, it automatically closes all the vents serving that seat. The same applies to the rear seats, when the S-Flow button is switched on. It measures the ambient temperature outside and inside the car to determine the optimum level of air conditioning required, and also calculates a target airflow volume for each seat. When the system has to work hard— when cooling down in summer or heating up in winter—it operates all around the cabin until the desired temperature has been reached and stabilised. At that point, it then adjusts automatically to focus heating or cooling only around the seats that are being used. Another innovation in the
The system uses sensors to detect when the front passenger seat is occupied; if it isn’t, it automatically closes all the vents serving that seat. The same applies to the rear seats, when the S-Flow button is switched on. It measures the ambient temperature outside and inside the car to determine the optimum level of air conditioning required, and also calculates a target airflow volume for each seat system’s design is the use of air purifying nanoe technology. This
operates automatically when the system is switched on, releasing minute nanoe particles— negatively charged ions wrapped in water molecules—through the driver’s dashboard air vent. These nanoe ions can clean the air and eliminate odours by attaching themselves to airborne
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particles and molecules. They can also deodorise the seats and roof lining to create a cleaner cabin environment. And because nanoe moisture content is about 1,000 times that of conventional ions, they can also have a moisturising effect on human skin and hair.
Green Flag wins Roadside Assistance Company 2012 Award
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he Institute of Transport Management who researches and identifies the top performers in the breakdown industry, announced the Roadside Assistance Company 2012 Award in order to recognise their efforts and recommend their services. According to the ITM, “Green Flag provides a round-the-clock breakdown and recovery service with rapid arrival times, roadside repair where possible, prioritisation for vulnerable drivers and text messaging to confirm crew despatch. As well as this, the company is harnessing the latest technology to continue to improve its responsiveness, with innovations like its ‘Rescue Me’ app for mobile phones.” “Green Flag is reliable, responsive and ultimately cost effective, and its high customer numbers are testament to its values. The ITM is very pleased to award it the title of ‘Roadside Assistance Company 2012’. Green Flag Director, Mike Bowman stated, “We are thrilled to win this award, particularly in a shortlist of such strong contenders. It is a tribute to the staff who work hard to ensure customers receive the best possible service and value for money every single day of the year. Help is never far away with Green Flag and, as one of the leading and trusted UK providers; we are delighted to be recognised for our efforts in the breakdown industry.”
Tesla prepares for Model S launch
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esla is building the Model S at the former NUMMI plant in Fremont, the site of a former Toyota-GM venture that it bought in 2010. The first 1,200 Model S vehicles delivered in North America will be from the limited-edition Signature series, which comes with an 85-kWh battery that Tesla said is capable of 300 miles per charge. Two Model S Signatures have already been delivered. Musk has his, which is black, and venture capitalist Steve Jurvetson, who sits on Tesla’s board of directors, has a red one with the license plate TSLA S1.
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UK designed Ford EcoBoost named ‘International Engine of the Year’
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ord’s new one-litre EcoBoost engine—which was launched to widespread acclaim this year in the Ford Focus, in Europe— is named 2012 ‘International Engine of the Year’. The small, high-tech, three-cylinder engine also received two other awards— “Best New Engine” and “Best Engine Under one-litre”—in the awards presented by Engine Technology International magazine, based on votes cast by 76 journalists from 35 countries around the world. This is the first time Ford has won International Engine of the Year in the 13-year history of the awards. Ford’s debut as International Engine of the Year winner in the awards’ 13-year history is marked by the one-litre EcoBoost engine also attaining the highest score ever. Ford Global Powertrain Vice President, Joe Bakaj said, “We set the bar incredibly high when we started to design this
engine. We wanted to deliver eye-popping fuel economy, surprising performance, quietness and refinement—and all from a very small, three-cylinder engine. The team responded to this challenge with some really exciting innovation and the result is a game-changer for petrol engines globally.” The International Engine of the Year judging panel of automotive journalists consider drivability, performance, economy, refinement and the successful application of advanced engine technology. The popularity of the one-litre EcoBoost with judges saw it receive 28 percent more points than its closest rival as well as the highest points total of any engine in the competition’s history.
One-Litre EcoBoost Engine The one-litre EcoBoost uses low-inertia turbos to deliver power quickly when the throttle is opened from low RPM and deliver high power at turbine
speeds of up to 248,000 RPM. Further, the one-litre EcoBoost innovations include an exhaust manifold that is cast into the cylinder head to lower the temperature of exhaust gases to enable the optimum fuel-to-air ratio across a wider rev band; a unique cast iron block that warms the engine more quickly than a conventional aluminium block to cut by 50 percent the amount of “warm-up” energy required, and cut fuel consumption; two main engine drive belts are immersed in oil to deliver a quieter, more efficient engine and finally offsetting the engine configuration by deliberately “unbalancing” the f lywheel and pulley instead of adding energ y-draining balancer shafts. Development of the awardwinning engine—small enough to fit on an A4 sheet of paper—was led by the UK’s Dunton technical Centre in Essex, with assistance from other Ford European techni-
cal centres. The engine is built in Ford’s plants in Craiova, Romania, and Cologne, Germany. The EcoBoost engine debuted this year on the Ford Focus in Europe and will be offered next in the Ford C-MAX and Ford B-Max later this year. The one-litre EcoBoost will be made available in Ford models in the US and in Asia Pacific and Africa next year. The new Focus one-litre EcoBoost 100PS delivers best-in-class fuel efficiency of 58.9mpg and CO2 emissions of 109g/km. The 125PS model returns 56.5 mpg with CO2 emissions of 114g/km. In its first full month of sales across Europe, more than 4,700 customers ordered a Focus onelitre EcoBoost, accounting for nearly a quarter of all Ford Focus cars ordered in Ford’s 19 traditional European markets. Ford of Europe plans to triple
Ford one-litre EcoBoost engine wins 2012 International Engine of the Year
annual production of vehicles equipped with efficient EcoBoost petrol engines to approximately 480,000 by 2015, from 141,000 in 2011. The company projects that more than 300,000 of those vehicles will be equipped with the one-litre EcoBoost.
Honda to recycle rare earths to be green
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onda will start recycling rare earths and other key materials in hybrid auto batteries this year. Japan is dependent on imports, mostly from China, for rare earth elements, which are essential for making high-tech products, but a steady supply has been periodically threatened over political disputes with China. Beijing, meanwhile, has defended its export curbs on rare earths as an environmental measure and rejected a WTO challenge by the United States, Europe and Japan. China has about 30 percent of rare earths deposits but accounts for more than 90 percent of production. Honda officials said the company was targeting September or October to begin recycling of rare earths. They said it would be a first for the auto industry. Honda’s efforts to reduce pollution and global warming, including experimental projects to combine solar with its fuel-cell cars, is meant to derive energy solely from nature and emit just water. Fuel cells are powered by the energy created when hydrogen combines with oxygen to produce water. They are still too expensive for commercial use and remain experimental. Honda’s roots lie in its determination to develop a fuel-efficient gasoline engine to clear US pollution-control regulations of the 1970s. The maker of the Odyssey minivan, Asimo humanoid robot and Super Cub motorcycle is undergoing a strong recovery from a disasterbattered 2011, a rebound playing out at other Japanese automakers, including Toyota and Nissan. Honda’s January-March profit rose 61 percent from the previous year and it is projecting record global sales of 4.3 million vehicles for this fiscal year. The earthquake and tsunami in northeastern Japan in March 2011 disrupted the supply of auto parts and sent sales plunging and battered profitability at all the Japanese automakers.
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Renault Zoe sets new world record: 1,005 miles in 24 hours
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enault’s 100 percent electric supermini, Zoe, has set a new world record for the longest distance travelled in 24 hours by a production electric car. Completing 363 laps of the Aubevoye speed ring in Normandy, France, a distance of 1,005 miles (1,618 km), it bettered the former record of 795 miles (1,280 km) by a quarter.
The launch of Renault Zoe marks the start of a new era in which, electric mobility becomes accessible to everyone. Zoe demonstrates the company’s ability to innovate with the clear aim of bringing technology to the masses
The Story Behind The Record Two Renault Zoes set out on the speed ring at the Aubevoye technical centre (CTA) in Normandy, with fifteen drivers from Aubevoye, Cléon, Sandouville, Flins, Douai and Grand Couronne taking turns at the wheel, driving and charging as necessary. Twenty-four hours later, they crossed the finishing line, with mileages of 1,618 km and 1,506 km respectively. In the process, both cars clearly highlighted the above-par performance and reliability of the French brand’s forthcoming EV. For this result, Zoe was also able to profit from a major technological breakthrough: the Chameleon charger. This original world-first system makes Zoe compatible with any socket and any power level. Zoe was therefore able to be fast-charged at 43 kW, regaining 80 percent of battery capacity in under thirty minutes. This challenge was
Rolls-Royce appoints new director for China
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olls-Royce Motor Cars has announced that Henrik Wilhelmsmeyer has been appointed Director for Mainland China with effect from July, 2012. The new role reflects the growing importance of the region to the super luxury automotive manufacturer. Wilhelmsmeyer has worked in senior roles for BMW Group for a number of years, the last six of which, have been in China. He is currently Head of the China South Region for BMW and was previously Head of Dealer Development. Paul Harris will continue in his role as Regional Director for the Asia Pacific Region, with responsibility for all Asia Pacific markets, excluding Mainland China. His portfolio includes growth areas for Rolls-Royce such as Hong Kong and Taiwan. Jenny Zheng, General Manager - Greater China, has chosen to pursue interests outside of the company. “I am delighted to announce this important new role for Rolls-Royce”, said Director, Sales and Marketing, Jolyon Nash. “China has become one of our most important markets globally and Henrik, with his broad experience and strong track record, is ideally suited to further develop our strong position in this region. I want to thank Jenny Zheng for her contribution over the past seven years.” He continued, “Our success in China over the last two years has been driven by the passion and dedication of Paul Harris and his team and I would like to extend my gratitude for their hard work and commitment.” In 2011, China became the leading sales region for Rolls-Royce Motor Cars worldwide for the first time, narrowly beating the United States to the top spot. The best-selling dealership was also located in the region, with Beijing leading the league table.
In 2011, China became the leading sales region for Rolls-Royce Motor Cars worldwide for the first time, narrowly beating the United States to the top spot
Zoe 24 Challenge Renault
also made possible by the bestin-class NEDC range of 130 miles (210 km, between 62 and 93 miles depending on conditions of use). Overall, the final Zoe was fastcharged 18 times in 24 hours. “This is a superb technical and human adventure. This victory is the result of a joint commitment to showcase the quality of Renault electric vehicles,” said
Customer Specifications Electric Vehicles Director and Challenge Coordinator, Bernard Dumondel.
Zoe Marks EV Accessibility Looking beyond the performance, which was conducted in the presence of an official observer and is pending Guinness Book of Records homologation, the feat is an answer to the question: How
far can Zoe go? “We completed this operation in two months. In April, we started calculations to check feasibility with the Group electric powertrain department. In early May, we started track runs and established a strategy. We decided to keep the production car without any changes,” sa id Reliabi lit y/Durabi lit y Coordinator, Philippe Vinot. The launch of Renault Zoe marks the start of a new era in which, electric mobility becomes accessible to everyone. It is a major step forward for cars and for Renault. In its 110 years of history, the brand has shown its ability to innovate with the clear aim of bringing technology to the masses. Zoe embodies Renault’s vision in electric technology. It is compact, attractive and affordable, with UK prices on-the-road from £13,650, plus monthly battery hire from £70. Zoe will appear in showrooms later in 2012.
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Automotive supply chain growth constrained by lack of finance: SMMT
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he growth of automotive supply chain companies is being constrained by restricted access to finance according to a new report published recently by the Smith Institute, commissioned by the Society of Motor Manufacturers and Traders (SMMT). “With over £5.6 billion pledged to the UK during the last 18 months, there is a ‘window of opportunity’ to strengthen the UK supply chain, creating jobs and prosperity for the long-term,” said SMMT Chief Executive, Paul Everitt.
Opportunity To Rebuild “A lack of expertise within the finance sector is holding back growth in the UK automotive industry. Vital opportunities for companies to grow and develop their businesses are being hampered, because banks have not responded quickly enough to the need for local knowledge
and sector expertise. There is a unique opportunity to rebuild manufacturing capability and capacity in the UK, but it requires industry, finance and government to shift gear and ensure growth businesses get the financial support they need.” Offering insight into the relationship between the domestic supply base and the availability of suitable finance products, the report represents the views of over 80 automotive firms operating at every level of the supply chain, as well a range of financial and lending institutions. The findings of the report draw upon comprehensive survey results and detailed case studies compiled from one-to-one interviews with owners and senior managers of automotive firms, including three UK-based vehicle manufacturers and financial experts from some of the largest business banks in the UK. Companies reported that many financial institutions
There is a unique opportunity to re-build manufacturing capability and capacity in the UK, but it requires industry, finance and government to shift gear and ensure growth businesses get the financial support they need—Paul Everitt, SMMT Chief Executive remained wary of the industry as a lending opportunity, despite the UK manufacturing sector performing strongly, exports achieving record levels and recently pledged investment confirming the long-term plans to base operations in the country. Building on a separate Smith Institute report released last
Paul Everitt, SMMT Chief Ececutive
year, the study highlights how improved dialogue between automotive companies and financial institutions could help to boost economic growth and rebalance the economy, if the two sectors work together to address the type of finance offered to businesses. Identifying SMEs in particular,
the report reveals how smaller companies find it difficult to target banks for their lending needs as many institutions were unclear about the key sectors they support and often decisions take far too long. The recommended crossindustry ‘Tooling for Growth Taskforce’ would form the twoway relationship that is needed to drive progress in the sector. The taskforce would consist of banks and supplier companies representing all tiers of the supply chain (including OEMs), providing a platform to explore more innovative solutions to funding growth, specifically for SMEs in relation to finance packages for tooling-up facilities to meet demand. The Smith Institute Report was launched at an event in central London attended by the representatives from banking and automotive sectors, government officials and industry stakeholders recently.
Five barriers to growth s ! LACK OF UNDERSTANDING OF THE AUTOMOTIVE sector, within the banks, particularly at a local level and in regions with a number of automotive companies in operation s &UNDING GAPS DUE TO HOW BANKS EVALUate the total assets owned by a company resulting in suppliers often missing out on the full amount of funding applied for, specifically in relation to finance tooling and capital equipment s 3ECURING lNANCE FOR TOOLING DEVELOPMENT costs due to a focus on the residual value of the machine tool over the long-term asset value it will produce s 2ELUCTANCE OF 3-%S PARTICULARLY THE PERcent of which that are family run, to seek external equity over internal cash flow and loan financing s &AVOURABLE PAYMENT TERMS OFFERED BY VEHIcle manufacturers to supply companies are often not reflected further down the chain.
Key recommendations to improve access to finance and support longer-term economic growth s "ANKS MUST MOVE QUICKLY TO BUILD LOCAL automotive expertise and relationships with individual companies seeking finance for growth, particularly in the main areas of the UK where there are clusters of automotive (eg West Midlands, North West, North East and Wales) s "ANKS AND VEHICLE MANUFACTURERS SHOULD work collaboratively to address the challenges in accessing finance for tooling s "ANKS NEED TO DEVELOP SPECIALISED PRODUCT and support packages for the automotive sector, based on a better understanding of the growth opportunities s ! SERIES OF @MEET THE FUNDER EVENTS SHOULD be arranged to allow banks and non-bank lenders that are interested in automotive investment, to meet companies seeking finance to discuss growth opportunities s ! CROSS INDUSTRY AUTOMOTIVE @4OOLING FOR Growth Taskforce’ should be established, which provides a platform for banks and vehicle manufacturers to explore more innovative solutions that would allow SMEs to access more finance, particularly for tooling s 'OVERNMENT SHOULD CREATE A MORE ENDURing framework of support that encourages greater investment and finance availability for business seeking to grow
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Brake honours life-saving developments at Fleet Safety Forum Awards
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he 10th annual Fleet Safety Forum Awards for Excellence, sponsored by fleet and fuel management company Arval, was held recently in Birmingham, UK. The awards are run by the Fleet Safety Forum, a division of Brake, the road safety charity, to recognise the achievements of those working in the field of road risk management. The money raised would go towards helping to fund the charity’s life-saving educational projects and vital support for bereaved and seriously injured road crash victims. Deputy Chief Executive at Brake, Julie Townsend said, “The Fleet Safety Forum Awards are now in their tenth year and we are proud that this important event continues to grow, showing the huge amount of commitment to managing road risk within the industry. The Awards are all about recognising hard work, innovation and achievement in fleet safety,
and they are a valuable way for us to review and share good practice. Throughout the coming year, we will be disseminating case studies on our winners through the Fleet Safety Forum, to inspire and assist other organisations to do more to drive down crashes and casualties. Brake congratulates all the winners for their work to reduce risk, prevent devastating deaths and injuries, and make our roads safer.” The Fleet Safety Innovation Award, recognising pioneering approaches to road safety, went to Royal Mail. The award recognised Royal Mail’s fleet safety programme that aims to achieve the goal of zero crashes through cultural change, and incorporates sharing of good practices with other fleets. Their crash rate per vehicle has reduced by 24 percent over a two-year period, while their fleet grew by 14 percent to more than 35,000 vehicles. Royal Mail also received the Fleet Safety Analysis and Action Award
The Fleet Safety Innovation Award, recognising pioneering approaches to road safety, went to Royal Mail. The award recognised Royal Mail’s fleet safety programme that aims to achieve a goal of zero crashes through cultural change, and incorporate sharing of good practices with other fleets for their use of data to identify the need for interventions and review the effectiveness of safety measures on an ongoing basis. Gateshead Council was awarded the Company Driver Safety Award for small fleets.
Gateshead has demonstrated a clear understanding of the need to engage drivers with safety measures rather than simply issuing rules. In the past year the organisation has built on its comprehensive risk management programme by introducing a ‘good driver’ reward scheme and installing vehicle telemetry, and has had a strong focus on improving young driver safety. Coca Cola Enterprises’ Iain McKay was awarded the Road Risk Manager of the Year Award for his dedication to road safety both in and out of working hours. Based at the company’s East Kilbride depot, Iain proposed the company’s Road Safety Awareness Campaign be instated as an ongoing programme and produced content for it including more than 70 information sheets and six presentations. These have now been distributed to more than 5,000 Coca Cola employees throughout the UK.
The Kevin Storey Award went to Martin ‘Nobby’ Clark of Balfour Beatty. ‘Nobby’ received the award after 27 years of engaging with road safety issues. A former police traffic officer and family liaison officer, Martin is committed to a vision of zero fatalities on UK roads and his work on road safety has ranged from running workshops in schools to influence young driver behaviour through to setting up Balfour Beatty Plant and Fleet Services’ driver risk management programme. His ‘Drive Survive’ workshops have been attended by more than 20,000 young people and vehicle incidents have halved since his arrival at Balfour Beatty. The winners were selected from almost 70 entries across the 10 categories. Many of the entries received by the Fleet Safety Forum will be used as best practice case studies in information and advice produced by the Forum over the coming year.
Honda gets Curious
H
onda launched a new ‘Curious’ TV campaign as part of the Channel 4 documentary sponsorship earlier this month. A series of short TV spots consisting of a 15, 10 and five-second ‘bumper’ between the adverts during the Channel 4 & More 4 documentaries, will celebrate curiosity and the importance of discovery, with the theme that ‘The More We Look, The More We Learn.’ The campaign showcases Honda’s innovative technology by highlighting how real life situations and activities resonate with key features of Honda products. For example, the movement of the CR-V’s adaptive headlights as it turns corners is inspired by the movement of the eye. Other features highlighted in the campaign include the magic seats in the Jazz, the airbag on the Gold Wing motorcycle and the dash design in the CR-Z. As the campaign progresses, new films will be introduced which feature other Honda products from the car, motorcycle and lawn & garden ranges. The TV campaign will be supported online at www.honda.co.uk/curiosity which will host a curiosity trail; inviting visitors to ask questions and follow a journey. There is also an opportunity to enter a competition to win a VIP trip for two to the 2012 Paris Motorshow for the public unveil of the new European CR-V. This is the second year that Honda has sponsored Channel 4 documentaries. Last year, it focused on stories of real people who used Honda products in an extraordinary way, in their everyday life. Martin Moll, Head of Marketing, Honda (UK) said, “This new campaign for our continued sponsorship of documentaries on Channel 4, focuses on how Honda looks at the world differently and takes inspiration from the world around, which ultimately leads to more innovative products. Stories identified are told in an interesting and visual way which really stands out and we hope is intriguing to the audience.”
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25 JUNE 2012
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