I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor
Vol. 13 No. 27
www.a mo nl i ne.i n
29 July 2013
INTERVIEW “Our vision is an ultra low-cost car”
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Vision systems and barcode scanners to reduce defects and improve traceability.
Up the totem-pole India to surpass Germany, Brazil and Japan by 2016 to become third largest auto market.
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he Indian automobile market will surpass Germany, Brazil and Japan by 2016 to claim the third spot globally in terms of volume, global research and market information firm IHS Automotive said recently. Last year, China, the US and Japan were the top three global automotive markets and India was ranked sixth behind Brazil and Germany, at fourth and fifth positions respectively. Commenting on the findings, Charles Chesbrough, Senior Principal Economist, IHS
said, “With demand for vehicles declining in most mature markets in the face of the global recession, high fuel costs and urban driving restrictions, the industry is turning its attention more strongly towards the expanding middle classes in the new powerhouse of China, India, Brazil, Russia and other growing nations. We expect that by 2016, vehicle sales in India would surpass Brazil, Germany and Japan, making India the third largest market”. Remaining bullish on the Indian market in the mid to long term, IHS said, “Investment reform policy will induce better environment for domestic and
foreign enterprises. India light vehicle production is expected to reach 7 million by 2020.” It defined light vehicles as all the LCVs, MPVs, cars and CVs below 6 tones. The Colorado-headquartered firm emphasised that sales growth will come not only from the mass segment but also from the luxury segment. “The transforming Indian market conditions are acting as a catalyst for luxury and premium carmakers, which are receiving impetus from new launches. The top-end carmakers have posted double-digit growth for the quarter ended June 30, 2013,” said James Chao, Director, IHS Automotive
Consulting, APAC. The research firm anticipates that the purchasing power of the Indian citizen will increase in the coming year while markets will start reviving from the next quarter. The other benefit that India offers is a lower market penetration. However, it highlighted poor infrastructure as a deterrent for speedy growth. “It is going to take a little longer in India because of the lack of infrastructure support but going by the history of other developing markets we know the personal behaviour as people gain wealth, they want freedom, ability to go where they want to go and when they want to go,” Chesbrough said. In June, car sales in India declined 9 percent for the eighth month in a row to 139,632 units, and overall auto sales declined by 5.1 percent to 1.41 million units. In 2013 India will see 3.19 million light vehicles sold, IHS said. Cut Off In line with Auto Monitor’s past projections, IHS Automotive affirmed that as the market
Proactive. Tata introduces a slew of service offerings to entice customers. Our Bureau Mumbai
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s part of ongoing efforts to revive its flagging four-wheeler business, Tata Motors has kicked off an initiative to rejuvenate its service network. The company will offer a bouquet of services to existing and new customers with a promise of responsiveness, reliability and value. “We want our service to make the difference in the passenger car market and we are aiming to score high on all parameters to measure customer satisfaction across all vehicle categories,” said Dinesh Bhasin, Head (Customer Support), Passenger Vehicles Business Unit, Tata Motors. The company introduced biometric and RFID-based realtime tracking system of vehicles, called the ‘Vehicle Tracking and Bay Scheduling’ (V-TABS) sys-
tem, to provide live information about the location and status of vehicles while at the workshop. This tool will enable customers to keep track of the progress on their vehicles at the workshop and also improve workshop productivity. The company also introduced a dealer certification programme to help upgrade workshop quality at dealerships. The process is being piloted at the Concorde Motors workshops in Mumbai and Pune. Tata Motors’ service upgradation programme includes the Doorstep Service Van, designed and developed on the Tata Super Ace platform, to respond quickly to emergency calls and even provide periodic maintenance to busy customers. The Van has also been designed to meet minor repair requirements, stocking spare parts, with the abilty to perform over 30 minor repairs. The company plans to introduce
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Caught on camera
Carlos Ghosn, President & CEO of Nissan, following the launch of the Datsun GO.
Nabeel A Khan New Delhi
24 Pages
NEWS
At the launch of Tata Motors Service for passenger vehicles, Ankush Arora, Sr. VP (Commercial), Passenger Vehicles Business Unit, Tata Motors, Ranjit Yadav, President, Passenger Vehicles Business Unit, Tata Motors and MDinesh Bhasin, Head - Customer Support, Passenger Vehicles Business Unit, Tata Motors unveiling the Doorstep Service Van
up to 20 Doorstep Service Vans in India by the end of 2013. Tata Motors has also introduced an online service to enable customers to schedule the time, date and dealer of choice to service their vehicle. Further, the company has introduced ‘SpeedO-Service’ and ‘Quick Repairs’, which perform repair services in 90 minutes with two technicians and dedicated bays. Minor
repairs such as bulb change, fuse repairs and flat tyre replacement can be done within 30 minutes. The ‘24x7 On-road Assistance’ programme is available across their network of 2,700 authorised service providers, and accessible through a toll-free helpline. It offers turnaround time of 60 minutes within city limits and 120 minutes on highways and other places.
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grows, by 2020 market leaders such as Maruti Suzuki, Hyundai and Tata Motors will lose their share to give way to new players. Though Maruti Suzuki will continue to hold the biggest market share, it will be trimmed down to 26 percent from the current 30 percent in the light vehicle segment. Similarly Tata Motors, which currently has a market share of 19 percent, will slip to 13 percent by 2020. Homegrown Utility Vehicle manufacturer Mahindra & Mahindra will lose market share from its current 14 percent to 11 percent. According to IHS Automotive, the currently marginal players such as VW, Ford, Honda, Renault, and Nissan will grow their market share in coming years. The other interesting factor noted in the research was that with the increasing number of vehicle on the road, there will be more congestion and accidents, so that the demand for safety features, infotainment, and comfort will increase as people spend more time in their cars.
The company is looking to raise service quality levels by subjecting vehicles to standard quality checks to identify repair requirements not noticed or reported by the customer, ensuring that the complete health of the vehicle is assessed and customers are informed. Additionally, the company runs a comprehensive three-month program to shape up ‘Diagnostic Experts’ with advanced technical skills. Diagnostic experts service vehicles with high electronic connections. They also train other workshop staff. According to Bhasin, the key issue with service is that customers rarely see it as expensive or cheap, but whether it offers them any value. Another value offering is a customised maintenance plan for service and minor and major repairs with flexible payment options. The plan covers labour, parts, consumables, and guarantees substantial savings through price protection against inflation and ensures appropriate resale value. The company has also renewed its focus on making available its original parts with a one-year warranty. It has also extended warranty benefits to four years or 150,000 km, applicable to all passenger vehicles.
EDITORIAL Bring ‘em closer
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recent ICRA report estimates that over the next three years auto component companies may spend up to `70 billion in Greenfield investments. Most of these investments are likely to happen if they follow their OEMs where they in turn are planning to establish Greenfield investments of their own in regions other than where they are present. This is evident considering that when HMSI recently inaugurated its third plant in Karnataka; it insisted that its components suppliers set up manufacturing units close to the factory. Considering that the capacity of the plant is 12 lakh units (in Phase I) and a further six lakh units expected in Phase II sometime next year, it is a sensible request. Although I am not sure of the details, I would like to think that the OEMs have had a hand in helping the suppliers establish themselves. Suppliers are a critical chain to the OEMs. Moreover, today’s challenge for OEMs, especially MNCs, is building a supplier network that can deliver the same quality that they enjoy in other parts of the world. Seeking out new suppliers is also a long-drawn process.
In a world of just-in-time manufacturing, this presents a challenge to OEMs who set up new plants in out-of-the-way locations. In such cases, manufacturers would prefer that suppliers supplying major modules assemble them within minutes of the main facility. Mahindra, for instance, has its suppliers based close by to each of its plants. This allows the company to balance demand and supply aptly. Based on its ERP, the company considers the demand and accordingly begins manufacturing. Local content defined, it’s now only a matter of working out the delivery of the final product that continues to peeve OEMs. What’s spoiling the show in all this is the poor infrastructure.
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QUOTABLE QUOTES Dan Akerson, Chairman and Chief Executive Officer, General Motors on the car market in Europe
The demand-driven recovery is not in sight yet. So we have to keep working on cost, complexity and brand-building.
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Dr V Sumantran, Vice Chairman, Ashok Leyland and Chairman, Nissan Ashok Leyland Powertrain on difficulty of meeting targeted volumes in current environment
I will not be surprised if we drift below that, the severity of this down turn is pretty bad.
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CONTENTS 08
WHAT’S INSIDE “Our vision is to launch an ultra low-cost car”
08
Betting big
08
Beating the blues
10
Steady business
10
Caught on camera
12
“We offer a business opportunity for entrepreneurs”
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Automotive Resurgence
15
Interview with Carlos Ghosn, President & CEO, Nissan Motor Company
Mercedes launches E63 AMG in India, hopes to gain 40 percent of India sales from four new models.
Ashok Leyland is looking to counter the current downturn in heavy truck sales with regular, multiple launches in different segments.
Transfer cases for the new Ford Endevour is one among several newer projects undertaken by Pune based DivgiWarner, the country’s only supplier of 4x4 gears & a niche player in transmission business.
10
Cognex’s vision systems and barcode scanners are a useful aid to reducing manufacturing defects and improve traceability.
Polaris opened its latest dealership in Lucknow recently, and aims to open 50 more outlets by the end of 2016. Interview with Pankaj Dubey, MD, Polaris India.
JDA blog about supply chain management in the automotive industry.
Ambassador 1.5-lt diesel certified BS IV
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Hindustan Motors’ Ambassador 1.5-litre diesel model has been certified as BS IV compliant by Automotive Research Association of India (ARAI), Pune.
Maruti Suzuki Q1 report
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Maruti Suzuki posted Net sales (net of excise) of Rs 99,951 million during April-June 2013, a drop of 5.1 per cent over the same period in the previous year.
12
Toyota U Trust’s 50th outlet
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Europcar launches Business Connect for SMEs
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Toyota Kirloskar Motor has announced the launch of Toyota U Trust’s 50th outlet in India. Amana Toyota, Mallapuram, Kerala is the 50th Toyota U Trust Outlet.
Europcar is aiming to give small businesses access to many of the vehicle hire services usually just available to higher volume users.
BMW powers down the cost of electromobility
All-new BMW i3 will be delivered to customers in the UK in November, 2013.
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THE OTHER SIDE
22
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Nishant Behera, Director, RSB Transmissions (I) Ltd Behera has been associated with RSB for over a decade and has undergone extensive training in mergers and acquisitions, lean manufacturings, financial management, and leadership essentials
Auto Monitor
29 JULY 2013
INTERVIEW
8
After Datsun, our vision is to launch an ultra low-cost car:
Nissan CEO Carlos Ghosn Fifty years ago, the Datsun brand helped establish Nissan’s fortunes in the US. But in 1981, brand Datsun was discontinued globally in a bid by the Japanese carmaker to unify the model line-up under the Nissan brand. Today, Nissan is hoping that the resurrection of one of its most iconic brands in emerging markets such as India and Russia will replicate the same success that followed the launch of Datsun in the US. In what we assume will be the group’s largest offensive ever, Datsun has been relaunched in India, bringing with it a whole new value proposition. And from the first look of the new car, dubbed the GO, which will go on sale in 2014, we can safely say that they are on to something big here. OVERDRIVE’s Shereen Bhan speaks to Carlos Ghosn, President and CEO of Nissan Motor Co. Ltd., to find out more about the company’s plans for India. Is Datsun your new ultra low-cost car? No, the Datsun is not the new ultra low-cost car. Datsun is about reliability, modernity, affordability and high value. With the latest technology, the Datsun is about bringing back these values to highgrowth markets such as India. Is there a future for the ultra low-cost car? Yes. So you are not giving up on that? Not at all. You are going to see ultra low-cost cars coming. You are going to see
cars coming at a lower price points and addressing different kinds of markets. There is a huge demand for cars with high value and affordability. What gives you the confidence? I was the first one to recognise the value of the Nano because it addressed a need that nobody had. But the car failed? That is a different story. The car is the answer to the need and the need is still there. There is a potential for a car that can meet those needs and that is what we are pursuing.
Betting big Mercedes hopes to gain 40 percent of India sales from four new models. Nabeel A Khan Greater Noida
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erman luxury car manufacturer Mercedes Benz will get 40 percent of its sales in India from the new generation product range being offered in the country, said Managing Director and CEO, MercedesBenz India, Eberhard Kern, on the sidelines of the launch of the high performance lux-
ury sedan E63 AMG. “When all the new-generation models like A, B, CLA and GLA are launched, we expect them to contribute around 40 per cent to our total volumes in India,” he said. The company has seen enormous demand for both the B- and A-Class and it has recently launched a diesel variant in the B-Class. It has already delivered all 400 units of the first lot of the A-Class launched a few weeks ago and now has
When you are going to launch a lowcost car? Within the next two years. Will it be priced lower than the Datsun but higher than the Nano? Exactly. That is exactly the specific price-point that we will be aiming at. Will Nissan launch the model in association with a domestic partner? Let us first launch the Datsun. This is not the end of what we will launch in the high-growth markets. With a strong stable of models under the Datsun brand, we will then focus on our version of the ultra low-
cost car. Do you believe that you can continue your partnership with Bajaj Auto on the quadricycle? We do not think that we have to do everything that others do. I think Bajaj has a very original vision and have been very successful in the market. But I do not think we can replicate what they do. We will launch our own answer to those needs in the market. Though I do not think we are going to launch a quadricycle in India, but our vision is to launch an ultra low-cost car.
The E63 AMG The thrill of driving was at its best with the new generation E63 AMG at India’s only F1 race track where journalist were given a free-hand to put the machine to test. Priced at `1.29 crore (ex-showroom Delhi), the luxury sedan does 0 to 100 kmph in 4.2 seconds and can reach a top speed of 250 km/h. It also offers improved performance in other areas compared to its predecessors. The E63 AMG is equipped with a 5.5 litre V8 biturbo engine with a displacement of 5,461 cc. The luxury supercar delivers an output of 557 hp@5500 rpm and a torque of 720 nm@1,750-5,250 rpm. The race start function in the E63 AMG ensures shorter response times. The luxury sedan features an AMG speedshift MCT 7-speed sports transmission with modes like “C” (controlled efficiency), “S” (Sports plus) and “M” (Manual). The car also has a button which can adjust the suspension according to requirement. The AMG instrument cluster features a 11.4 cm TFT multifunctional display with a menu that includes racetimer, AMG start-up screen and a speedometer going to 320 kmph. According to Eberhard Kern, Managing Director & CEO, Mercedes-Benz India, “The E63 AMG combines the attributes of a sports car with the practicality of a luxury sedan. “The stunning new design idiom is in line with the new AMG design philosophy. Connoisseurs of Mercedes-Benz AMG vehicles will now experience the performance and driving dynamics of the E63 AMG more with the broader scope of standard equipment and appointments. The new E63 AMG continues to be the pinnacle of technical prowess with added power and enhanced performance making it a practical super car. With the launch of the new E63 AMG Mercedes-Benz India reiterates the philosophy of Best or Nothing for its customers.” sent a request for a new lot. Considering the increasing demand, Kern said they would decide on localization next year. Kern feels that the E63 AMG will also add to its volumes in India. “The business of getting a Mercedes Benz on lease is fast catching up in India,” he said, adding 5 percent of the leasing is to the corporate sector. Mercedes Benz has launched an aggressive product offensive in the past few months by launching six products in a row. It also plans to add at least 10 new dealerships in the country apart from the regular mobile outlets. Currently, there are around 57 outlets in 32 cities of India.
Talking about the plans for the Compact SUV-CLA which will compete with the BMW X1 and BMW Q3, he said, “We will showcase it at the Frankfurt Motor Show in September and around two months after that we will launch a left-hand drive and a few months later we will launch the right-hand drive model”. However, we feel that the launch could happen in India in beginning of the first quarter of FY2014-15. The company sold around 45 percent of their cars in Delhi and Mumbai, with the remaining 55 percent was sold in the rest of India.
Auto Monitor
NEWS
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29 JULY 2013
Beating the blues Ashok Leyland to counter downturn with product onslaught. Abhishek Parekh Mumbai
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hennai-based Ashok Leyland is looking to counter the current downturn in heavy truck sales with regular, multiple launches in different segments. The new launches would be in the heavy truck, engine, and light vehicle segments. The company is looking to maintain the lead it achieved in the bus and light commercial vehicle segment as well as enter and flourish in the new businesses it has entered over the last few years, according to company chairman Dheeraj Hinduja, during their recently convened annual general meeting. He pointed to multiple challenges in the domestic market for the CV segment but remained optimistic about the long-term potential of the segment in coming years. The company will launch a medium duty truck ‘Boss’ in the domestic market this month, and has lined up a new engine series as well as the ‘JanBus’ and a new truck codenamed the ‘N- truck’ to be launched around October this year.
Additionally, it has also lined up a slew of products in the light commercial vehicle segment including CNG and passenger carrier version of the ‘Dost’, a special application vehicle ‘Partner’, as well as a light bus on the same platform in addition to the recently launched ‘Stile’. During the last fiscal, the company incurred `725 crore towards capital expenditure, mainly towards development of additional infrastructure and other facilities at Pantnagar for setting up integrated manufacturing facilities. It also incurred capital expenditures relating to the manufacturing facility for light commercial vehicles (LCV) at Hosur under a joint venture with Nissan Motors, Japan. The company also allocated a significant sum towards capital expenditure for capacity optimisation programmes in existing plants. The company invested `80 crore in the Ashok Leyland-Nissan JV and `50 crore in the Ashok Leyland-John Deere JV. Around ` 90 crore was invested in Hinduja Leyland Finance, `300 crore in Hinduja Foundries and another `187 crore in Hinduja Energy (India) Ltd. Overall, the company invested
`862 crore by way of investment in associate, group and joint venture companies. The company’s sales, including the sales of LCV Dost, stood at 114,611 units in the last fiscal as compared to 101,990 units in the previous fiscal. The total industry volumes in the last fiscal fell by around 23 percent to touch 268,624 units as compared to 349,498 units in the previous fiscal. The contribution from selling spares and services grew by around 18 percent in the last fiscal to touch `1,004 crore
as compared to `852 crore in the previous fiscal. The power solutions business unit registered healthy growth with volumes touching 22,113 units in the last fiscal compared to 16,432 units in the previous fiscal. The company’s income from operations fell around 3 percent to `12,481.2 crore in the last fiscal as compared to ` 12,904.32 crore in the previous period. The net profit in the same period fell by around 23 percent to touch ` 433.7 crore as compared to ` 565.97 crore in the previous fiscal.
where the former would offer machines and the latter would provide land and a factory which it already had at Sirsi. DivgiWarner’s largest customers in India are Mahindra and Tata Motors. Ashwin Koppikar, Head – Commercial Operations at DivgiWarner says, “If they had to import transfer cases, it would cost them 1.5 to 2 times what we are offering.” DivgiWarner is the only manufacturer of 4WD system solutions, thus monopolising this niche market. The numbers may not be high but they aren’t complaining since the OEMs have no other alternative but to use Divgi’s systems. DivgiWarner sells about 2,000 transfer cases per month when the market is strong but in current conditions, the number hovers around the 500 mark. BorgWarner China on the other hand sells about 10-12,000 transfer cases per month. This gives you an idea of the popularity of 4x4s in other countries vis-a-vis India. Ashwin is confident that this number will grow in the coming years with the increasing popularity of SUVs. DivgiWarner doesn’t directly export to OEMs. It does it via its sister plants around the world and this accounts for 30 percent of its sales. “Especially now with the Rupee depreciating, exports are becoming more viable for us.” But it’s clear that it’s a low-volume business for DivgiWarner. Here the
question arises, how is it able to source components at viable prices? To this, Ashwin says, “It’s not possible to source them ourselves because the volumes are still low. So we procure them from our parent company. Global sourcing gives BorgWarner competitive rates and it then supplies to us.” This means that unlike most suppliers DivgiWarner cannot afford to accept last minute orders from OEMs. Being the only supplier for 4x4s transmissions helps here. It asks OEMs to give a three-month firm and two-month tentative schedule so that the company can plan its imports. Future projects Ford India will be buying transfer cases from DivgiWarner. At present it exports transfer cases that go into the Indian Endeavour to Auto Alliance Thailand, a JV between Mazda and Ford. But come next year with the new Endeavour hitting Indian shores, the transfer cases will be directly sourced from India to keep costs in check. The SsangYong Rexton is another car that DivgiWarner will be supplying transfer cases to. Till now, the CKD Rexton coming from Korea came with transfer cases from BorgWarner Korea. With the success of the Rexton, Mahindra is eager to localise more content and so have approached DivgiWarner to locally source the Rexton’s transfer cases.
Steady business As India’s only supplier of 4x4 transmission systems, DigviWarner can afford to run on low volumes. Anand Mohan Pune
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ar manufacturing is no longer what it used to be. Manufacturers want to increase production speed and they have realised that the fastest way to do it is by assembling systems instead of components. The time is gone when suppliers sent every small part to an OEM, which was then painstakingly assembled into the system at the plant. Several tiers of suppliers have been created who need to pass the test from OEMs to become suppliers to their tier 1 suppliers. DivgiWarner is one such supplier in the tier 1 bracket, and a very unique one at that. DivgiWarner is a joint venture between BorgWarner and Divgi Metalwares with a 60-40 split. The company has two plants, one in Pune and the other in Sirsi,
Karnataka. The two aren’t independent manufacturing units, however. Both plants form a part of the production cycle. Raw material sourcing and forging happens at Pune. It is then transported to Sirsi for soft-state machining, after which the material is sent back to Pune for heat treatment. Following this, the product is assembled and dispatched to either the local market or for export. BorgWarner has made some smart investment choices in the country. This can be seen with their emission systems business at the recently inaugurated Manesar plant and the same is the case with its Divgi Metalwares JV. In the mid-nineties, investing in a full-scale manufacturing setup for four-wheel drive (4WD) drivetrain systems wouldn’t have been a wise decision, given that the segment was in nascent stage. BorgWarner found a partner in Divgi Metalwares,
Auto Monitor
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29 JULY 2013
NEWS
Caught on camera Vision systems and barcode scanners can help manufactureres reduce defects and improve traceability.
Anand Mohan Mumbai
O
ne of the biggest advantages of manufacturing in India is the availability of cheap labour. In the automotive industry, for example, the Volkswagen plant in Chakan is 30 percent automated. By comparison, its European plants run at over 90 percent automation. The investment required to set up a factory with robots for every job is just too high but justifiable in Europe because of high labour costs. In India, it’s not. But ask a German if he’d prefer a robot to do the job humans do in India and he’d
give an emphatic ‘yes’. That’s because you cannot ignore human error in manufacturing. You may do as many QCs as you want but if a human is behind the job, there are going to be mistakes. Recent recalls in India bear testimony to this. Automation is the solution to this, and more precisely, devices that can ‘see’, says Cognex. Cognex Corporation manufactures machine vision systems, software and sensors that can be used in automated manufacturing to inspect and identify parts, detect defects, verify product assembly and guide system assembly robots. Detecting defects is an important goal
of Cognex’s vision systems. Patrice Denizard, VP MVSD Sales and Services, automotive industry, APAC and KIA region, Cognex Corporation says, “If there is a problem in the assembly line, you may not realise it till a while and this will cause defective parts to pass through the system. But with vision systems, these parts are detected at the source causing no loss in material, manpower and recall costs.” Cognex’s vision tools can be programmed to detect sequential applications such as gearbox assembly, where for example, each part has to follow a correct sequence. If in order, the product is passed and if not, it informs the operator to look into it. Vision systems aren’t as widely used in India as they are in developed countries and Patrice attributes this to poor knowledge in the manufacturing sector of its applications. He says, “Pick and place or vision at the paint booth are a few applications where we need to educate manufacturers to use our vision systems.” Cognex conducts over 25 seminars every year at various locations in the country to increase understanding of vision systems and give basic knowledge about traceability to the automotive industry. Patrice predicts that within the next three-four years, use of vision systems will increase. Large OEMs like Tata, Mahindra, GM, Ford and Nissan are already using them. Vision systems are still a niche product in the automation space but usage is increasing with every passing year. Patrice says that use of vision systems in India is at a level where China was ten years ago so there are indications of more OEMs now wanting to improve its processes. “What is happening right now is that OEMs want to stop rejections at the distribution level so they are asking vendors to use these products.” Other interesting products from the Cognex stable are fixed-mount and handheld barcode scanners. These Cognex products come into play in direct part marking. Codes on parts are hard to read and if they can’t be read, traceability will be an issue. These scanners make sure every part can be traced back to the supplier, making them more accountable. With laser scanners, the part has to be placed at exactly the right place because the beam scans it according to the distance from the source but with vision, the cameras have a larger playing field making it easier, quicker and more accurate. Cognex systems are about 25 percent costlier than their nearest competitor. Realising the market demand for low cost systems, Cognex developed the 7010 series camera for simple applications like checking colour variations or different wires in the electricals of a car. The company spends 20 percent of its revenue in R&D and has acquired over 400 patents. In a growing market, the demand for cars will increase and waiting periods need to be cut down. At such times, to ensure quality doesn’t suffer, OEMs and suppliers need to have the right systems in place for quality production. That’s a huge opportunity for Cognex in the coming years.
29 JULY 2013
INTERVIEW
“We offer a business opportunity for entrepreneurs” Polaris India Pvt. Ltd, a wholly owned subsidiary of Polaris Industries Inc, recently opened its 14th dealership in Lucknow, its first in the state of Uttar Pradesh. Polaris India plans to open 50 more outlets by the end of 2016. It also donated five off-road vehicles to the Uttarakhand Government to support relief efforts after the flooding and landslides in the state. The company has also announced plans to launch Indian Chief in 2014. Pradeb Biswas speaks to Pankaj Dubey, Managing Director, Polaris India to find out more about the company’s plans for India and its expectations from the off-road and all-terrain vehicle (ATV) markets. How big is the ATV/off-road market in India currently? What are you expectations in terms of growth? India as a market is booming. The country is witnessing a drastic change in lifestyle that has increased people’s inclination towards sports and adventure. This has opened up a wide scope for the off-road vehicle industry to achieve success. India is an emerging market and we wish to cater to the offroad market and gain the first mover advantage of this untouched market in India. In the last few years we have seen a surge in enthusiasm for off-road experiences and growth in opting for off-road vehicles. With the launch of our adventure vehicles, we have already kick-started an off-road revolution in India. Who are the target customers for Polaris in India? Apart from growing as a trend, owning off-road vehicles has also become a medium to express the passion for adventure and as way to reflect standard and class. Currently we have buyers from the luxury segment who already own top luxury cars. Besides business tycoons, we have track owners who buy our vehicles. Apart from taking adventure to the next level, we offer a business opportunity for entrepreneurs wherein they can join hands with Polaris to set up a business that is not only lucrative but also fun! Taking this forward we currently have 17 Polaris Experience Zones spread across the nation. What is the market share of Polaris currently? How many vehicles have you sold till now? Polaris is the world’s number one off-road vehicle company. It further gains an upper edge due to that face that the vehicles are completely built units (CBU) and are manufactured in the US. Though new in India, we are already an established brand in the rest of the world. The ATV market in India is witnessing significant growth and is expected to continue along this trajectory. With a strong history in off-road vehicles Polaris is well-positioned to penetrate this sizeable market on the strength of its global presence, technology prowess, and manufacturing capability. In terms of product portfolio, what is your strategy going forward? What are your plans for increasing volumes? We have launched a multitude of products covering various applications in India. Our range of products in India includes ATV, RANGER RZR sideby-side vehicles and snowmobiles. While a host of launches are in the pipeline, a lot of brainstorming and planning needs to be done to give them concrete shape. Currently, as per announcements made, we are working on plans to launch the Indian Chief in 2014. However, introducing our product range in India would entirely depend on customer requirements. Among your product offerings which one is the most popular? Out of the 14 cities that you are present in, which have contributed most to sales? In the ATV segment, the Sportsman 500 is the most popular, while in the side-by-side the RANGER RZR S 800 has acquired the maximum fame by becoming a favourite of adventure lovers aged 25 years and above, especially among high net worth Individuals. Additionally our excellent dealer network has added to the interest in ATVs. Our top five markets are Delhi, Mumbai, Bangalore, Chennai and Hyderabad. Among them, the three south cities are our top markets. What are your dealer network expansion plans? Apart from the recent Lucknow dealership, how many new dealerships are you planning by this year end? So far, we have 14 strong dealers spread across the nation. We plan to open 50 more outlets by the end of 2016. Dealerships in Ahmedabad, Bangalore, Chennai, Cochin, Dehradun, Jaipur, Jammu, Kolkata, Lucknow, Mumbai, New Delhi, Ludhiana, Indore and Hyderabad have been planned to optimise the availability of our products. Our deal-
erships are state-of-the-art and also have full-fledged workshops. We also have trained personnel at our dealerships to cater to our high end customers. Polaris managed to secure a commercial order from the Gujarat government for its police force. Are you in talks with any other state governments to secure a similar deal? The Gujarat order is our first commercial order in India. We will be supplying our ATV RZR S 800 to the Gujarat Police. The scope of the order includes a 1-year warranty, on- and off-site training, maintenance and support. The vehicle will help the Gujarat Police in areas like routine patrol in inaccessible terrain, coastal patrol and vigilance, rough terrain, rapid pursuit operations, maintaining vigil around sensitive and high-security zones, to name a few. Yes, we are in constant touch with various para-military and police forces across the country to make use of off-road vehicles on difficult terrain.
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Auto Monitor
29 JULY 2013
S A L E S A N A LYS I S
14
Passenger Vehicles
Passenger Cars
The first quarter of the year hasn’t been a bed of roses for the automobile industry. Passenger vehicle sales are down 7.2 percent with cars hit the worst at 10.4 percent. Compared to last year when UV sales were surging, sales are at a slow yet steady 5.3 percent growth despite steep rises in excise duties. Van sales fell by 6 percent in the first quarter of this financial year compared to the same period last year. In all, 6.07 lakh passenger vehicles were sold compared to 6.54 lakh units in the corresponding 2012-13 quarter. In the passenger car segment, Maruti continues to rule the roost with over 2.08 lakh unit sold, a drop of 3.8 percent. Hyundai is at a comfortable second position falling 2.4 percent to 95,000 units. Honda has grabbed third spot from Tata Motors with almost 29,000 units rolling out of the Japanese manufacturer’s factory, the credit for which goes to the diesel Amaze. Volkswagen is fifth with GM close on its heels, but expect that to change in coming months with manufacturing defects causing problems in GM’s new car range. The UV segment is going to see a major change in coming months for Ford with the EcoSport off to a strong start. This will further hit the passenger car segment and boost UV sales. After enjoying an extended run of positive growth, segment leader Mahindra is now seeing negatives. The company is coming up with innovative ways to combat extra excise slaps on the segment. Renault sales are strong with the Duster, while Toyota’s Innova has lost steam. Tata’s van sales are the company’s saving grace in these tumultous times giving Tata a 13 percent boost in sales in the segment.
LCVs (PC+GC)
OEMs
2012-13
2013-14
UV Growth
OEMs
2012-13
OEMs
2012-13
2013-14
Growth -100.00%
2,807
1,786
-36.37%
Force
1,054
704
-33.21%
Force
5
0
19,039
10,980
-42.33%
Ford
455
4,170
816.48%
M&M
7,452
7585
1.78%
GM
17,624
14,777
-16.15%
GM
3,704
8,490
129.21%
Maruti
28,074
22,701
-19.14%
HM
407
709
74.20%
HM
381
373
-2.10%
Tata
16,590
18,723
12.86%
Honda
19,993
28,901
44.56%
Honda
83
226
172.29%
Total
52,121
49,009
-5.97%
Hyundai
97,302
94,993
-2.37%
Hyundai
228
122
-46.49%
M&M
2,884
3,255
12.86%
ICML
132
-
-
Maruti
2,16,225
2,08,023
-3.79%
M&M
58,616
56,969
-2.81%
Nissan
10,743
6,095
-43.27%
Maruti
18,965
14,622
-22.90%
Renault
1,798
3,577
98.94%
Nissan
29
178
513.79%
Skoda
10,535
5,314
-49.56%
Renault
86
15,044
17393.02%
Tata
49,576
27,473
-44.58%
Skoda
325
115
-64.62%
Toyota
20,547
13,630
-33.66%
Tata
9,621
6,486
-32.58%
VW
15,546
15,038
-3.27%
Toyota
24,032
16,410
-31.72%
Total
4,85,026
4,34,551
-10.41%
Total
1,17,711
1,23,909
5.27%
Commercial Vehicles
3 Wheelers (PC+GC)
2012-13
2013-14
Growth
OEMs
2012-13
2013-14
Growth
OEMs
2012-13
2013-14
Growth
ALL
7,247
6,420
-11.41%
ALL
17,335
12,967
-25.20%
Atul
6,726
7,463
10.96%
Force
5,717
5,252
-8.13%
AMW
1,679
1,444
-14.00%
Bajaj
44,837
45,057
0.49%
HM
58
24
-58.62%
MTABL*
1,224
988
-19.28%
M&M
13,815
12,367
-10.48%
M&M
31,959
35,438
10.89%
Swaraj
2,330
1,794
-23.00%
Piaggio
39,441
38,761
-1.72%
MTABL*
2,234
1,611
-27.89%
Tata
34,943
31,255
-10.55%
Scooters
3,164
2,859
-9.64%
Piaggio
1,103
1,385
25.57%
VECV - Eicher
8,343
7,226
-13.39%
TVS
3,267
2,096
-35.84%
Swaraj
887
1,340
51.07%
VECV - Volvo
152
121
-20.39%
Total
1,11,250
1,08,603
-2.38%
Tata
64,973
57,800
-11.04%
Volvo Buses
214
150
-29.91%
VECV - Eicher
2,819
3,118
10.61% Total
66,220
55,945
-15.52%
Total
1,16,997
-3.94%
Two-Wheelers
Growth
Fiat
M&HCVs (PC+GC)
Two-wheeler sales are the best compared to other segments, but still in the red by 0.8 percent. Overall, 34.9 lakh units were sold in Q1 compared to 35.2 lakh units in Q1 2012-13. Scooter sales continue to rise at an impressive 14.3 percent selling 7.85 lakh units in Q1. Motorcycles sales fell 4 percent in the same period clocking 25.2 lakh units compared to 26.2 lakh in the same period last year. After years of strong performance, crude old mopeds are beginning to taper off, having fallen 11 percent in the first quarter. Hero MotoCorp is growing at a very fast pace of 50 percent in the scooter segment. Segment leader Honda clocked a steady 9.6 percent in the same period. Consequently, TVS, Suzuki and Mahindra have seen a drop in sales of 6.6 percent, 13.5 percent and 51.5 percent respectively. New entrant Yamaha is doing well in the segment clocking 34,583 units of sales. In the motorcycle segment, Honda is methodically inching closer to Bajaj. The Japanese major sold 3.15 lakh units this quarter compared to 2.6 lakh units in the same period last year. Hero sales fell 8.2 percent. Bajaj, hit by the strike at its Chakan plant, fell 7.6 percent in sales but expect this to improve now that production is returning to normalcy. Assembled Harley Davidsons are gaining traction in the Indian market clocking consistent growth. With a new plant up and running, more Enfields are now hitting the market and the numbers prove it. Sales grew 46.5 percent for the Chennai-based manufacturer.
2013-14
Ford
OEMs
1,12,388
MPV
Scooters/Scooterettees
CVs are always hit by slowdowns, so the 8.1 percent fall in sales isn’t much of a surprise. 1.68 lakh units were sold in the first quarter compared to 1.83 lakh units in the same period last year. Even LCV sales fell by 4 percent from 1.17 lakh to 1.12 lakh units. Clearly, the industry hadn’t foreseen the slide, since manufacturing actually increased 4.4 percent in the same quarter. Among M&HCVs, goods carriers are seeing dismal performance, falling nearly 17.5 percent. Passenger carriers on the other hand fell 7.5 percent. Mahindra continues to leech huge chunks from Tata Motors in the LCV space, growing 11 percent to a corresponding drop in Tata sales. 35,438 Mahindra LCVs were delivered compared to 31,959 units in the same period last year. Dost sales have slipped for Ashok Leyland, falling about 11.4 percent in the first quarter. It’s all red in the M&HCV space. The best performer in the falling market is Tata Motors, registering a 10.5 percent drop in sales in the segment. Ashok Leyland sales fell 25 percent in the first quarter. Inching closer to ALL is VECV, selling 7,226 units to 8,343 units in the corresponding period last year. Three-wheeler sales were poor too, dropping 2.4 percent in Q1. Atul Auto is bucking the trend with a 11 percent growth thanks to a new launch in the 0.35 tonne passenger segment. At this pace, the company is poised to catch up with M&M by next financial year. Segment leader Bajaj grew at 0.5 percent owing to the launch of its updated three-wheelers.
Motorcycles
Mopeds
OEMs
2012-13
2013-14
Growth
OEMs
2012-13
2013-14
Growth
OEMs
2012-13
2013-14
HML
1,08,971
1,63,434
49.98%
Bajaj
6,18,489
5,71,655
-7.57%
TVS
2,03,247
1,80,770
-11.06%
HMSI
3,60,862
3,95,673
9.65%
HDMC
326
400
22.70%
Total
2,03,247
1,80,770
-11.06%
Yamaha
-
34,583
-
HML
14,86,654
13,64,546
-8.21%
M&M 2W
30,487
14,803
-51.44%
HMSI
2,61,314
3,15,102
20.58% -8.54%
Piaggio
4,917
12,280
149.75%
Yamaha
77,549
70,926
Suzuki
76,730
66,389
-13.48%
M&M 2W
-
5,260
-
TVS
1,05,366
98,429
-6.58%
RE
26,415
38,706
46.53%
Total
6,87,333
7,85,591
14.30%
Suzuki
15,836
16,740
5.71%
TVS
1,42,392
1,40,981
-0.99%
Total
26,28,975
25,24,316
-3.98%
Growth
29 JULY 2013
Auto Monitor
VIEWPOINT
15
Kelly Thomas
A
fter a dark period of retrenchment caused by the economic downturn of 2008-2009, automotive companies across the globe are now investing to solve some of the most interesting challenges in supply chain management. Despite significant investments and improvements over the years, these challenges remain in most automotive companies. Renewed energy and leadership within automotive companies are now teaming with technology and process advancements to address these challenges and unlock billions of dollars of value. In January, I published a white paper addressing this very topic titled: The Automotive Industry in the New Normal: Analysis of the Industry and its Supply Chain Opportunities. I would be interested in your feedback to understand if reports of this type are useful to your work as supply chain management professionals.
My View on a Couple of Challenges Much of the attention in the world of supply chain management goes to high-tech and consumer industries; complex product industries such as automotive and industrial are seen as slow adopters. This is a failure to understand the different challenges faced by different industries. Furthermore, let’s face it; it was Henry Ford that brought us the assembly line
and Toyota that brought us lean manufacturing as well as synchronous material flow. These were watershed breakthroughs for manufacturers and supply chain management and widely adopted across a variety of industries. Anyone who has ever been in an automotive assembly plant should have an appreciation of the precision and synchronization required to build a high-volume product that weighs in excess of 4000 pounds and contains 20,000 detailed parts. It is this product complexity that is the major impediment to automotive companies achieving the same kind of velocity as high-tech and consumer industries. Most other manufacturing industries have the ability to provide visibility from orders and demand, to parts and supply. This is typically done through bi-directional pegging. High volume automotive manufacturers do not have the luxury of maintaining a bill of material for every order. Thus, horizontal visibility across demand and supply that is so critical to velocity and effective decision making is lost. Over the years, automotive companies across the globe have built various capabilities to cope with this challenge. The second major challenge is vertical visibility – the ability to disaggregate business plans to tactical plans and then to operational plans, and likewise aggregate in the opposite direction. This “telescoping” challenge is common across industries, but is even more challenging in the automotive industry due to the need to integrate with complex
Credit: Ford
Automotive Resurgence
multi-year product programs that leverage the same supply chain assets that are currently being used for production. JDA has been studying and working on these problems for years. Technologies have evolved making these challenges solvable in practical ways. As automakers enter a new investment cycle, I believe we will see breakthroughs that will lead to dramatic improvements in demand-supply and business plan-to-operations synchronization. This will lead to unlocking tremendous value for both car companies and their multi-tiered supply chains, which include
virtually every other manufacturing industry: metals, electronics, textiles, chemicals, semiconductor, tire and rubber, stamping, forging and other basic manufacturing. The report referenced above discusses how automakers have a unique opportunity with regard to these challenges and provides details on strategies for addressing them. For example, a couple of the key strategies for demandsupply synchronization are: Configuration-optimized option forecasting, in which true demand is understood and statistical techniques are combined with technologies that optimize
around vehicle configuration constraints across vehicle lines and regions. Dynamic constraint management using a synchronization tower-like capability that provides the ability to seamlessly move back and forth between sales and marketing option demand and supply chain part capacity constraints. I would welcome the opportunity to hear from automakers on how you are seizing this unique opportunity to improve revenue while reducing costs. This article appeared on jda.com
Auto Monitor
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29 JULY 2013
NEWS
Continental’s new highperformance injector Compliance with future emissions standards such as Euro 6b (from 9/2014) and Euro 6c (from 9/2017) will call for further improvements in engine combustion processes. As gasoline engines offer significant scope for reducing emissions through more efficient combustion, downsizing and turbocharging, they will play a significant part in realizing these improvements. This explains the ongoing worldwide trend of bringing increasing numbers of gasoline directinjection engines onto the market. The high-performance injectors required for this highly efficient type of engine are currently designed to operate at pressures up to 200 bar. International automotive supplier Continental has
developed a solution to meet the needs of such applications, in the shape of the XL3 solenoid injector which went into volume production this year in a new turbocharged 1.5-litre GDI engine. “The debut of the XL3 injector in a compact 4-cylinder gasoline engine is further proof of the potential of our injection technology,” says Wolfgang Breuer, Head of the Engine Systems Business Unit in Continental’s Powertrain Division. “Building on the level we’ve already reached, we are continuing to work on the XL3 injector with an eye to meeting the stringent requirements of Euro 6c,” adds Breuer. The refinements will focus among other things on designing the actuation system for fast injector open-
ing and closing, which is key to ensuring ultra-accurate metering performance, particularly in the small quantity range. “Precision metering, combined with mul-
tiple injection capability, helps to reduce the particulate emissions of GDI engines and can cut the costs of aftertreatment technology,” says Breuer.
RR’s Open Innovation program KTM 390 Duke unveiled Rolls-Royce has launched the India Open Innovation programme (IOiN-RR) which is designed to help identify and buy or license technologies or techniques outside Rolls-Royce’s traditional areas of operation, that are new and potentially beneficial to Rolls-Royce. IOiN-RR also provides Indian organisations with the opportunity to leverage their solutions globally. The challenges will focus on three critical areas: test and measurement; repair, inspection and servicing technologies; and novel designs and manufacture of large components and tools. Paul Stein, Chief Scientific Officer at Rolls-Royce explains, “Through this programme, we are seeking to identify technologies or techniques in industries outside of which Rolls-Royce usually operates, and in small and medium sized companies Rolls-Royce does not currently work with.” Kishore Jayaraman, President, Rolls-
Royce India said, “India is home to some of the world’s most innovative small and medium-size companies. We are looking to tap into that depth of expertise and knowledge to discover new solutions that can help us advance our own products, processes and services. RollsRoyce has an 80-year history of strong and successful partnerships and collaborations in India, and we hope to establish more partnerships of mutual benefit through this initiative.” Organisations that have been in existence for a minimum of two years are eligible to apply. The solutions submitted by the participants should be beyond concept stage and should lie between a successful prototype and ready for industry stage. Organisations can register their initial interest via email to FICCI (IOiN-RR@ficci.com) or NASSCOM (avinash@nasscom.in). After initial screening, shortlisted applicants will be invited to register online and submit a detailed proposal.
Bajaj Auto Ltd have announced the launch of the highly anticipated KTM 390 Duke in Gurgaon. The bike was launched at KTM’s exclusive dealership at IFFCO Chowk, Gurgaon. KTM 390 Duke is the second KTM offering in the Indian market from the Bajaj-KTM partnership. The 390 Duke offers 43.5 Ps of power, 35 Nm torque, agile handling, and features like ABS, Metzeler tyres, aluminum swing arm, and aluminum alloy wheels. At 373.2 cc the 390 Duke is the first midsize sports bike in the country. It will be
sold and serviced through 71 exclusive KTM showrooms and service centres, the country’s largest network for premium motorcycles. Speaking on the occasion, Amit Nandi, Vice President, Bajaj Probiking said, “With its powerful engine, light weight and easy handling the 390 Duke will be equally rewarding both for the professional rider as well as the enthusiast.” The KTM 390 Duke has been launched at an introductory price of Rs 1.82 lakhs (ex-showroom Gurgaon).
Farm mech the way forward: TMA The tractor industry has always been a barometer for the rural economy in India. At the 24th annual general meeting (AGM) of the Tractor Manufacturers Association (TMA) organised in New Delhi on 19th July 2013, saw Narendra Bhooshan, Joint Secretary, Ministry of Agriculture, declare that there was plenty of scope to increase the current low farm yields in India. Tractorisation will play a key role in increasing the farm power which is currently at 0.7 kw per hec, which should go up to 2.0 kw per hec. This will enable the
country to reach the foodgrain target of 280 mt to be achieved by 2020. He called upon the tractor industry to innovate in terms of design and cost, to reach out to small farmers across the country. “Given the saturated land resources for agriculture in the country, it is imperative that we increase the output per hectare by ensuring necessary interventions through farm mechanisation”, said L D Mittal, Past President, TMA and Chairman, International Tractors Limited (ITL).
Hero reports robust Q1 results Despite the sluggishness in the domestic two-wheeler market and the overall economic downturn, Hero MotoCorp Ltd. (HMCL), the world’s largest two-wheeler manufacturer, have reported robust top-line numbers for the first quarter (April-June) of this financial year (FY 2013-14). Profit-Before-Tax (PBT) was Rs 750.1 crore, ahead of the PBT of Rs 734.9 crore in the corresponding quarter (April-June 2012) and Rs 685.7 crore in the previous quarter (January-March 2013). Announcing the first quarter numbers, Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp Ltd., said, “The fact that our PBT has surpassed the previous as well as the corresponding quarter, despite a marginal de-growth in our volumes during the quarter and the overall economic downturn, is a strong statement of our
intent and vision. Our operating profit has also improved compared to the previous and the corresponding quarter. We are determined to sustain the trajectory of positive momentum in the coming quarters as well. “Q1 of this fiscal was an action-packed quarter for us when we rolled out a slew of innovative initiatives including the industry-first five-year warranty on our entire range of products, and our own retail financing arm. We had a record month in May, with our highest-ever dispatches in a month. Retails also kept pace with a record 1.1 million-plus retail sales in April and May – the highest-ever retails in a non-festival period. On the new market front, after entering Central America and Africa, we are now gearedup for Latin American markets of Peru and Ecuador which should be in the month of August.”
First ever CII India Innovation Summit held in Chicago “Diversity has always been the backbone of innovation in India. In solving the challenges of development, demography, and disparity, will need expansion, excellence and equity. Today, as a nation of a connected billion, a first in the history of the world, we need to leverage emerging technologies, including social media, to help alleviate the enormous problem of poverty,” said Dr. Sam Pitroda, Advisor to the Prime Minister on Public Information Infrastructure and Innovation, in his keynote address at the India Innovation Summit organized by the Confederation of Indian Industry (CII) in Chicago. The Summit, organized in partnership with the Chicago Council on Global Affairs (CCGA), the US-India Business Council (USIBC), PanIIT Alumni Association and TiE Midwest, brought together creative minds, experts and entrepreneurs, financing institutions and economic development officials, packing the halls with tremendous energy and enthusiasm. Discussions encompassed key policy interventions, funding mechanisms, and partnership opportunities between India
and the U.S. in the innovation space. Other agencies that participated in the exhibition included the Indo-US Science and Technology Forum (IUSSTF), Council for Scientific and Industrial Research (CSIR) and the National Small Industries Corporation (NSIC). The Government of India has declared 2010-2020 as the decade of innovation, and the upcoming launch of the India Inclusive Innovation Fund seeks to catalyze the creation of an entrepreneurial ecosystem, targeted at innovative solutions for the bottom of the pyramid. In this context, Chandrajit Banerjee, Director General, CII said that U.S.-India collaboration presents a huge opportunity. “A lot remains to be done in India on the innovation front, and we believe that the power of collaboration between India and the U.S. – two countries with a diverse, democratic and creative people – would yield tremendous results. We are delighted to hold the India Innovation Summit for the first time ever in Chicago, and hope to see many fruitful partnerships emerging from this interaction,” he said.
29 JULY 2013
Auto Monitor
NEWS
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Toyota’s 50th outlet Toyota Kirloskar Motor Pvt. Ltd. (TKM) has announced the launch of Toyota U Trust’s 50th outlet in India. Amana Toyota, Mallapuram, Kerala is the 50th Toyota U Trust Outlet. Toyota U Trust aims to offer potential customers an opportunity to exchange their cars of any make for a brand new Toyota, allowing them an opportunity to upgrade. It also caters to customers who want to exchange their cars for used Toyota cars. Customers are provided with a wide range of value-added services such as finance, Toyota genuine accessories and insurance at Toyota U Trust outlets. “The used car business is a part of our value added-services offered to our customers. The market for used cars is growing at a rapid pace and
ZF’s new US plant ZF Friedrichshafen AG has opened a new plant for automatic passenger car transmissions in the U.S. Located in South Carolina, ZF Transmissions Gray Court, LLC is the manufacturing site of the 8-speed automatic transmission, which is already successful in the market, as well as the world’s first 9-speed automatic transmission. “We are honored to present the U.S. home of the automatic transmission,” said ZF Chief Executive Officer, Dr. Stefan Sommer at the official plant opening in Gray Court on Friday. “This
plays an important part in attracting new customers and retaining existing Toyota customers. We aim to provide our customers a Toyota QDR experience and treat them at par with the new car customers as a result of which the customers can buy Toyota Certified used vehicles which are eligible for a warranty of up to one year or 15,000 km (whichever occurs earlier) across the Toyota dealer network. Certified vehicles pass through a 203-point quality inspection check. Additionally, the customers can avail of up to three free labour services at all Toyota dealerships”, said N Raja, Senior Vice President, Marketing, TKM. “We are also focusing on expanding our U Trust outlets across India to help more and more customers enjoy the Toyota U Trust experience.
is an important step toward bridging the distance to our customers and having an even better opportunity of accessing North America, an important foreign market for us.” About 1.2 million transmissions are expected to be produced at this plant annually; this includes 400 000 8-speed and 800 000 9-speed automatic transmissions. The new plant expands the existing capacities at the Saarbrücken location to produce 8-speed automatic transmissions.
Maruti Suzuki Q1 report Maruti Suzuki posted Net sales (net of excise) of Rs 99,951 million during April-June 2013, a drop of 5.1 per cent over the same period in the previous year. The fall in unit sales was in line with the overall industry, and the company was able to maintain its market share. Favorable foreign exchange rates during the quarter helped improve export realization and limit the impact on Net sales. Net profit for the quarter stood at Rs 6,316 million, a growth of 49.0 per cent over the same period in the previous year. The increase was due to focussed cost reduction efforts undertaken by the company, favourable foreign exchange rates and the benefit from merger of Suzuki Powertrain India Limited (SPIL) with the company last fiscal.
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Pawel Szuflak has been appointed is the Director, Sales & Marketing of Skoda Auto India effective June, 2013. Pawel Szuflak, a veteran at Skoda Auto has been associated with the Czech automotive company for 16 years. Born in Poland, Szuflak has extensive experience in the global automobile industry. With his wide ranging expertise and valuable global experience, Szuflak will play a critical role in further strengthening Skoda’s position in the Indian market. Szuflak will be responsible for creating and implementing an aggressive strategy for improving the customer service function. One of the key focus areas for Szuflak will be to drive the new product launch strategy for Skoda in India. He will also be steering the network and marketing functions for the brand in India.
The 736HP-NV high-pressure dispense valve applies uniform amounts of thick materials like greases and silicones at pressures up to 2500 psi (172 bar).
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Skoda’s appoints new sales & marketing head
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Hindustan Motors’ Ambassador 1.5-litre diesel model has been certified as BS IV compliant by Automotive Research Association of India (ARAI), Pune. Equipped with an upgraded engine, the vehicle passed ARAI’s mass emission, OBD II (on board diagnostics) and other related tests as per Rule 115 of Central Motor Vehicles Rules (CMVR), 1989, effective from April 2013. The move opens for the new vehicle the 17 major metro markets, especially Kolkata, where sale of BS III cars has been banned since April 2010. Hindustan Motors has started work on the production of the newly certified BS IV car which will start rolling out of its Uttarpara plant in Hooghly from August 2013.
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Auto Monitor
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29 JULY 2013
T E C H N O L O GY
Dos and Don’ts When Buying a Second-Hand Machine Lower investment volume, adequate production capacity – the arguments for buying a second-hand machine are obvious. Is it that simple though? Particularly in the case of complex tube bending machines, there is a whole range of factors determining the efficiency of using a second-hand system. In the worst case, the new, secondhand machine becomes a “failure” in the production sequence because the component quality and output performance do not match.
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ho buys a car without a test drive and without knowing its features? Yet, investment in a second-hand system resembles precisely this scenario more often than you would think. This is particularly true if complex tube bending machines from a niche area are bought without consulting the original manufacturer. Pipe bending processing on an industrial scale is a good example of this: customer-specific system solutions
ties. If one of our tube bending machines has been designed for example to process thin-walled exhaust pipes in mass production, it might not be suitable for bending thick-walled high-pressure tubes for plant construction. Ultimately, whether the drive concept and machine design can produce perfect component quality under the new conditions can be judged only by one of our specialists.”
Exceptionally High Risks The fact that second-hand special-purpose machines are bought time and again without consulting the manufacturer is the result of economic considerations, as Stöhr knows: “It naturally sounds attractive if a machine from a prestigious manufacturer can be offered at an apparently very reasonable price for one’s own production.” Consequently, however, buyers of bending machines frequently take excessive risks. Machines are therefore taken over with no prior testing. Initial testing takes place only on the new pro-
Incorrect wiring and repair
Small Things Can Tip the Balance Time and again, the bending specialists are confronted with enquiries from users who have already bought a second-hand machine and encounter great problems a short time after the start of production. “We are contacted when the horse has bolted and the machine does not work,” Zorn says. Even small things can tip the balance here – for example if incorrect hydraulic filters are used, resulting in problems with the hydraulic pumps after a short time.
Information in the Manufacturer’s Database
Machine in dubious condition
are used in many sectors, ensuring highprecision bending results by means of CNC control, high performance drives and bending tools with a complex structure. The sophisticated plant technology cannot be simply dismantled and reconstructed to produce new components in a different company. “Detailed questions of component geometry, material and output quantity have a decisive impact on the possible applications of the machine,” explains Hartmut Stöhr, Managing Director of bending machine specialist Schwarze-Robitec (producer of machines in the brands Schwarze-Robitec, Robitec and Schwarze-Wirtz). “In our case, the procedure itself complicates the sale of second-hand machines by third par-
duction site. Under these conditions, it is of course impossible to verify whether the system has the required capacity. “Before buying, it should at least be ensured that the machine actually works properly. The control must show no errors, the mechanics must not be worn and the machine must be complete in terms of its components,” Schwarze-Robitec Managing Director Bert Zorn points out perhaps the simplest basic conditions. “It must then be presented in test mode, in order to be able to clarify for example that all of the axles still work properly. However, these criteria are really the absolute minimum and they are adequate in only the rarest of cases. There is generally a lot more to be considered.”
Resolve These Questions Before Buying a Second-Hand Machine: Is the machine suitable for the required component specification? (Ask the manufacturer.) z Can the machine achieve the output demanded at maximum load? (Ask the manufacturer.) z Is the rating plate in place and does it match the machine? z Are complete operating instructions pertaining to the machine present, including all maintenance documentation and wiring diagrams? In which language are the instructions? z When was the machine last used? z Does the machine control show errors in test mode? z Does the mechanical system seem stable in test mode (no play, disturbing noises or similar)? z Are all the current safety regulations (CE marking) completely fulfilled? z Can all spares be obtained easily? (Ask the manufacturer.) z Have no structural alterations been made to the machine? z
On the other side, rogue sellers sometimes exploit the ignorance of buyers: old plants are repainted then even given false type references and accordingly sold more expensively. It is also a problem if original components have been replaced or improper repairs or alterations carried out on the machine. Customers are additionally left in the dark about possible difficulties with obtaining spares for very old parts. In the event of production problems, even the original manufacturer’s fitters are sometimes baffled, as they cannot repair the foreign parts and the result may then be expensive downgrading to original condition. Ultimately, Schwarze-Robitec therefore recommends asking at some point before any investment decision. “There are various options if you contact us,” explains Jürgen Korte, Authorised Representative at SchwarzeRobitec. “We can look at our records to see exactly which machine is being offered. In addition to the delivery condition and the exact age of the machine, we can then also provide statements about whether the machine has undergone regular maintenance by the manufacturer. This is at least an initial indication of the current condition of the plant. Moreover, we can assess whether the machine type offered is an option at all for the application area.”
Focus on Safety Technology in the Case of Second-Hand Machines Of course, these indicators also provide no absolute guarantee. The ideal way when buying second-hand machines is therefore to buy from the original manufacturer. As well as factory-tested second-hand machines, Schwarze-Robitec also supplies reconditioned machines. In the case of the bending specialist, reconditioned means: the manufacturer restores the machine to mint condition by complete dismantling and reconstruction from scratch – naturally including the latest control, electrical installation,
hydraulics etc. Furthermore, the reconditioned system is also always compliant with the current safety regulations and therefore has CE marking. This is a very important topic, particularly when buying a second-hand machine. If machines display no CE marking and their safety technology is incomplete, they must not be placed in operation. In some cases, even the lack of operating instructions – with directions on the correct procedure in case of damage – might be enough for a second-hand machine to not comply with the safety regulations. “For an original manufacturer, such things naturally go without saying. The customer also receives a full guarantee on our reconditioned machines,” Authorised Representative Korte explains the advantages of buying from the manufacturer.
If There are No Spares The issue of spares is of similar importance when buying a second-hand machine. Here, of course, the older the machine, the less reliable our stock. Generally, only the machine manufacturer is able to say whether it is still possible to obtain vital components in case of damage. Here again, the database provides information on the components used in a machine. However, from this perspective, a reconditioned machine is always the first choice. In this case, all obsolete components are replaced – from the control to the smallest sealing ring. Moreover, the manufacturers guarantee lasting operation of the system through an extensive service provision. The question of spares is then resolved from the outset.
Better Brand New? In which case should a second-hand machine be avoided and a completely new system chosen? In the view of the specialists, the product range and daily use of the machine are critical. “If no series parts are to be produced and enough time is scheduled for maintenance and repair, a secondhand machine is certainly an option that can be considered,” Managing Director Bert Zorn states. “However, if production is dependent on a high level of availability of the plant and you want to benefit from the advantages of the latest control generation then the company is better advised to have a new machine or a reconditioned plant. A new machine can then also be completely customised to the requirements of the customer. We recommend that any company interested in a tube bending machine or wanting to pass on their old machine first contact us, the manufacturer.” Text and images courtesy: Schwarze-Robitec
Auto Monitor
Europcar launches Business Connect for SMEs Europcar is aiming to give small businesses access to many of the vehicle hire services usually just available to higher volume users. The new Business Connect service gives local businesses and SMEs more choice and flexibility, as well as competitive rates on a wide range of Europcar’s vehicle hire services. There are several options available in Business Connect, focused on the flexibility so often needed by SMEs. A fixed service option enables companies to select the rental product that will be most suitable for their business needs throughout the year. A defined set of competitive rates is then provided to make it easier to budget for the annual costs of car hire. Alternatively, businesses can choose a flexible product, with variable rates, including discounts on Europcar’s standard web offering. A choice of payment options, including credit facilities or nocontract credit card payment, are offered as part of Business Connect which also provides access to Europcar’s online booking system to reserve vehicles at the company’s network of 200 locations across the UK. Plus an Affinity scheme is available for SMEs to provide their employees with access to competitively priced car hire for personal travel. Other benefits usually only available to larger volume buyers of rental are also included in Business Connect including a guaranteed diesel option, a light damage option which waives any damage costs up to £400 and dedicated account manager support. Delivery, collection and one way rentals also come as part of the Business Connect package which provides access to over 45,000 vehicles across the UK.
Workshop for govt and fleet industry co-operation With a fleet of around 2.8 million cars, vans and trucks and an informed customer base making rational business decisions, the vehicle rental and leasing sector represents a powerful ally in delivering the government’s transport and emissions targets. This was one of the conclusions of a recent workshop hosted by the BVRLA and consultants PwC. The event was organised to spread awareness of the size and
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scope of the fleet leasing market, assess the impact of the government’s tax regime and explore ways in which policymakers and industry can work together more productively. The workshop included representatives from the following organisations: ACFO, Alphabet GB, BVRLA, Committee on Climate Change, Ecolane Transport Consultancy, Energy Saving Trust, GE Capital Fleet Services, Hitachi Capital Vehicle Solutions, HM Revenue & Customs, LeasePlan, Lombard Corporate Finance, PwC, TRL, among others.
Suzuki eyes fleet growth as sales soar Sales growth of 34 per cent in the first half of this year has catapulted Suzuki into the UK Top 20, ahead of Volvo and Mazda and nibbling at the heels of Renault. That growth with more than 17,000 cars sold and a 1.5 per cent market share has also elevated Suzuki GB to top dog in Europe, ahead of Russia and Germany with both best sales and biggest market share. The success is all the more remarkable given the fact that it has been achieved with no major new models, said Ed Norman, product planning manager, speaking at the launch of the five-door Swift Sport and Swift 4x4. The Swift, launched in 2010, was Suzuki’s last all-new model. The company is now gearing up for more sales growth with the arrival of the S-Cross in September which Suzuki believes will help it gain traction in the fleet market, especially Motability. The S-Cross is the first in a series of new models; a new city car comes next year followed by a B-segment SUV to rival the Nissan Juke in 2015 and a new B-segment hatchback in 2016. Of the 30,000 cars Suzuki sold last year, only 2,000 were fleet sales. The man tasked with changing that is Andrew Wale who joined Suzuki’s Milton Keynes team as national corporate sales and remarketing manager after a two-year spell with Nissan. Before then he spent 18 years with Honda helping to shape that company’s fleet sales policy in the early 1990s. “Suzuki today is like Honda was 20 years ago when I joined them,” he explained. That means plenty of opportunity to expand the corporate and fleet sales business, without hurting profitability.
BMW powers down the cost of electromobility BMW UK today announced the pricing of one of the most anticipated cars in its history The all-new BMW i3 will be delivered to customers in the UK in November, 2013 with a leasing price starting from just £369 a month. Ian Robertson, Member of the Board of Management, Sales and Marketing BMW, said: “The BMW i3 heralds the dawn of a new era for individual mobility and for the BMW Group. True to a genuine BMW, the BMW i3 has strong emotional appeal, outstanding product substance and a guarantee of sheer driving pleasure. With this leading-edge vehicle and compelling price, we will provide customers with an attractive offer for electromobility.” Customers can embark on electric motoring by signing up to a 36 month contract and paying an initial £2,995 (incl. VAT) followed by monthly payments of £369 (incl. VAT) and contract mileage of 24,000 miles. Those customers who wish to buy the BMW i3 outright
How to double sales when times are tough
The last four years have been tough for the motor trade - but one Mazda dealer has managed to double sales and turnover in that time and says that profits are “well on the way to doubling” too. That dealer is Floyd Timms, a former National Sales Manager for Mazda, who now owns Lodge Garage in Buckinghamshire. Was it a case of liking the business so much he bought into the franchise? “Something like that,” says Timms who bought the 30-year-old dealership in Kingswood, between Aylesbury and Bicester, in 2009. “Being a car dealer is something I was always minded to do and working with Mazda for 13 years gave me the background knowledge and opportunity. It had to be the right fit, I was looking for an owner driver type of business that required some attention, and, very important, had potential.” Despite a very rural location Floyd has pulled the business up and it is now regularly among Mazda’s top performing dealerships. He added: “We are now approaching our fourth year and we
Fiat’s growth potential ‘lies with fleet sales’
It’s much easier to warm up a cold potato than it is to handle a red hot potato, because the hot potato will always go cold. That’s how Karl Howkins, the new commercial director at Fiat Group Automobiles in the UK, describes his task. Howkins joined Fiat last month after a 25-year career with General Motors. His last posting was a two-and-a-half year stint as managing director of Opel in the Netherlands. Despite the titles, Howkins describes himself as a simple sales guy. The potato analogy was one told to him by a former boss. “I like a challenge, and Fiat is a challenge, but it has great product coming,” said Howkins, speaking at the launch of the 500L Trekking. “You can be the best salesman in the world but you need the
have seen sales and turnover double and our profits are well on the way to doubling as well. “There have been challenges particularly in my early days in ownership while we were waiting for new product to come through. That is now happening and particularly with the arrival of the new CX5 last year and Mazda6 this year we are in a good position to push on.” Having seen the dealer business from both sides of the fence, Timms said he has a high level of understanding as to “how the whole machine ticks”. He continued: “I suppose I have an inside track to a degree on how things work from the manufacturing end. Things such as the ordering process, where the cars have to come from and when they land in the UK. “That said, I don’t think this has given me a huge advantage over other dealers but it has allowed me to educate the rest of the team in how things work.” Being “in the middle of nowhere” as he puts it, how has Lodge Garage been able to double its sales and attract new customers? Floyd said: “The internet plays a big part and we have a very strong presence on the web. This has been particularly important in terms of used car sales and we attract customers from Land’s End to John O’Groats. “We also have strong affiliations with local sports clubs and that helps get the garage and Mazda’s name out there. Support from Mazda in terms of TV and national advertising also helps drive footfall.” While support from Mazda UK has generally been first class, Timms believes that the increasing level of technology on cars is going to make training for dealership staff even more important. “Customers are aware of SKYACTIV technology but it is still up to our sales people to get the message across and that’s where Mazda’s Academy training can play an increasing role. Sales people need training in demonstrating and articulating better the ever increasing technologies on the cars.
products to sell,” he said. He describes the 500 as still flying, five years after its launch. It has also built up customer loyalty. Fiat is very strong in the retail market which accounts for almost seven out of ten sales leaving plenty of scope in the fleet market where Fiat’s sales - at 34 per cent - are well below the industry average. “But you need product to have fleet sales and we now have B, C and SUV segment vehicles,” he said. He sees scope for the 500L in the rental and Motability markets. “If it makes sense, we’ll do it. If it doesn’t make sense we won’t do it. There is a lot of good fleet business out there,” he said. His remit covers all six Fiat Group brands and he admits that the company needs to do better with Alfa Romeo - and will, with new Giulietta, Mito facelift and 4C on the near horizon as well as the new sports car being developed with Mazda. “Jeep is hugely exciting; everyone knows Jeep so that’s the draw to Chrysler,” he said adding that the big push on Chrysler will come next year. Howkins points to June sales for Fiat being up 22 per cent year-on-year as one reason for his optimism. The 500L is winning new customers to the brand and is now the third best-seller in its segment while the 500 has outsold MINI for five of the first six months this year and only lost out in June by 50 sales. Next month comes the 500L MPW which is 20cms longer than the 500L but about 20cms shorter than the average station wagon in this segment. Fiat describes the car as being the link between MPV and estates. It is the most compact seven-seater on the market boasting the best interior-exterior ratio.
can do so from £25,680 OTR for the all-electric car, while the price for the hybrud version will be announced at a later date. BMW i3 products and services will be sold via a multi-channel sales model, comprised of authorized BMW i partners, a Customer Interaction Center (CIC) as well as an online platform. All sales channels will be fully networked and customers will be able to personalise their entire purchasing process to suit their needs.
Charging and maintenance The BMW i3 comes as standard in the UK with AC Fast Charging which sees a 7.4Kw charge power up the BMW i3 from zero to 80 per cent within three hours. This can be performed by the optional BMW i Wallbox. The exclusive Wallbox has been created to give customers a comprehensive and premium sustainable mobility experience. Installation will be provided at the customer’s home and “green” power options will be offered via selected BMW i partners, for emission-free home charging. AC Fast Charging is also the most widespread public charging option in the UK.
Occasional charging can also be performed using a pre-supplied cable, fitting a standard household socket at 3.7 Kw, when a 32 Amp AC Fast Charging port is not available. Charging this way takes eight to 10 hours. DC Fast Charging is the third and final option available to owners and allows a BMW i3 to get an 80 per cent charge in just 30 minutes to one hour.
29 JULY 2013
Auto Monitor
CLASSIFIEDS
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ADVERTISER’S LIST Advertiser’s Name & Contact Details ACE Micromatic Group
Pg No 1, BC
Advertiser’s Name & Contact Details Ferromatik Milacron India Pvt Ltd
Pg No 15
Advertiser’s Name & Contact Details
Pg No
Larsen & Toubro Limited
FIC
T: +91-80-40200555
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Ballkings
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Fox Solutions
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Nordson India Pvt Ltd
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Carl Zeiss India (Bangalore) Pvt Ltd
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Dhoot Transmission Pvt Ltd
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Tata Motors Ltd.
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Engineering Expo
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Jyoti CNC Automation Pvt. Ltd.
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29 JULY 2013
OTHER SIDE
Getting Personal
In Real Life
with Nishant Behera, Director, RSB Transmissions (I) Ltd If not in the auto industry, where would you be? I would be either a farmer or a teacher. What car do you drive? What do you dream of driving? I drive a Honda City. I would love to have a Lamborghini. Your most recent indulgence… No Indulgences. Love spending time with the family and quality time with family is the best indulgence, the one I always crave for. What are you currently reading? Interventions: A Life in War and Peace by Kofi Annan What do you do when not talking auto? Tell us about your hobbies and other interests in life. Movies. I love watching movies and I jokingly call it my meditation! Other hobbies are reading books, playing cricket, badminton, etc. An outdoor activity you would miss office for… Taking my son to a game zone (not really a outdoor activity). Where did you go for your last holiday? Australia and Singapore. You get angry when… When people blame others. What is the one thing you would like to change about yourself? Nothing. The best thing to have happened to you… My getting selected for the GE-Gannon Masters program in USA, which was a sandwich program where I was working for 4-5 hours and studying in the second half of the day.
Illustration: Sachin Pandit Compiled by: Jayashree Mendes
Nishant Behera has been associated with RSB Transmissions (I) Ltd for more than a decade. He holds a masters degree in mechanical engineering from Gannon University, USA, and has undergone extensive training in mergers and acquisitions, lean manufacturings, financial management, and leadership essentials.
Regn. No. MH/MR/WEST/20/2012-2014. RNI No. MAHENG/2000/11414 Licenced to post at Mumbai patrika channel sorting office G.P.O. Mumbai 400 001. Date Of Mailing: 1st & 2nd Fortnightly Issue. Date Of Publication: 28th of Every Month
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