Auto Monitor - 2 April 2012 by Infomedia18

I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S

Auto Monitor ns Tur w o N

ekly e W

Vol. 12 No. 06

w w w.amonl ine.in

2 April 2012

40 Pages

FOCUS

TESTING

` 50

INTERVIEW YOU NEED A BREATHER TO MAKE THE GROWTH MANAGEABLE Pg 10-13

VC Sehgal, Chairman, SMG

Pg 8

Maruti bows to diesel car demand Ssangyong revival gains momentum Our Bureau New Delhi

Abhishek Parekh Mumbai

DATA MONITOR Domestic Top 5 PV-makers Sector

Feb-11

Feb-12

Change

MSIL

101,543

107,653

6.02%

TML

35,544

40,961

15.24%

HMIL

32,629

36,805

12.80%

M&M ^

15,749

22,984

45.94%

TKM

9,308

16,659

78.98%

Domestic Top 5 2W-makers Sector

Feb-11

Feb-12

Change

HML

462,953

510,458

10.26%

BAL

205,145

203,919

-0.60%

HMSI

132,762

197,496

48.76%

TVS

151526

152796

0.84%

IYM

23,384

27,050

15.68%

Domestic Top 5 CV-makers Sector

Feb-11

Feb-12

Change

TML

36,995

45,743

23.65%

M&M

9,593

11,111

15.82%

ALL

8,984

9,751

8.54%

VECV Eicher

3,663

4,186

14.28%

FML

1,757

2,241

27.55%

* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL

Swift Dzire Launch

utilise a car production line for manufacturing engines. Growing congestion in the Gurgaon industrial belt coupled with sustained demand for diesel cars could have led to the company looking to de-risk itself from depending on engine suppliers and choosing to spread manufacturing activities across Gurgaon and Manesar and also in Gujarat in the near future, according to a Mumbai based analyst. The new facility will be built in

a phased manner and in the ﬁ rst phase it will become operational by the middle of next calendar year with an annual production capacity of 1.5 lakh units. The capacity will be doubled by 2014. MSIL sources diesel engines from Suzuki Powertrain India Ltd (SPIL) and Fiat India. The announcement comes after the union budget as it had put on hold the plans of investments on new plant to get clarity over tax on diesel.

hough it may be a bit early to pronounce Mahindra’s acquisition of Ssangyong Motors as a success or a failure, the Indian utility vehilce major is making all out effort to assimilate the Korean company within its fold and yet maintain its individual identity. After almost a year post acquisition, M&M remains positive on outcome of the acquisition and future that lies ahead for both partners. “In any business, aligning with people and their hearts and minds is as important as proﬁtability. If you don’t do the former, the latter will never happen. We have always kept this as our priority. We don’t want Mahindra to run Ssangyong. Our role will be conﬁ ned to helping them manage and not manage. This is a Korean company in Korea, run by Koreans,” said CEO, Automotive Sector, M&M, Pravin Shah. He added that the effect of synergy

between both the ﬁ rms in product development to be visible over the next three years. The Indian parent has quietly but doggedly made several long term changes to ensure the Korean company’s long term health and survival. Mahindra South Africa, a subsidiary company of the Mahindra Group, will begin distributing Ssangyong vehicles shortly. Several other projects are also being pursued cooperatively by both organisations to leverage synergies in R&D, technology, sourcing and overseas markets. Ssyangyong nominated the board of directors with experience and credibility, comprising 50 percent independent directors. It was also one of the ﬁrst Korean companies to complete 2011 wage negotiations with its union. The company is investing around `1,780 crore in a new its product portfolio and facilities (including a `1,317.20 crore) investment in a next generation compact SUV and a new engine to gain momentum in global markets.

GM India to launch Chevrolet Enjoy in December Our Bureau Chennai

M India is looking to launch its multi-purpose vehicle (MPV) ‘Enjoy’ before the end of this year. The company unveiled the new vehicle at the Auto Expo recently, which is codeveloped by its Chinese partner SAIC (Shanghai Automotive Industry Corporation). SAIC has 50 percent stake in GM India and the Chevrolet Enjoy will be coming from Wuling Automobiles, a JV between GM and SAIC in China. GM’s JVs in China include Shanghai General Motors Co Ltd (Shanghai GM) between GM and Shanghai Automotive Industry Corp Group (SAIC), in which GM holds a 49 percent stake. In 2011, it had record domestic sales of 1,200,355 units. SAIC-GM-Wuling Automobile Co Ltd (SAIC-GMWuling) is a joint venture where SAIC has a 50.1 percent stake;

Photograph: Bhargav TS

aruti Suzuki India Ltd (MSIL) is looking to adapt itself to the market reality with unabated demand for diesel powered cars. It is looking to invest around `1,700 crore for setting up a new facility for production of diesel engine in Gurgaon. It will also invest an additional `900 crore towards expanding its Research & Development centre at Rohtak, Haryana by 2014. While announcing the plans, Chairman, MSIL, RC Bhargava said “We are going to invest `1,700 crore to set up the diesel plant, which will be constructed inside our Gurgaon manufacturing facility. The board has also approved an additional investment of `900 crore to set up various facilities, including testing for emission and safety. This will be over and above the `1,500 crore earlier announced to set-up the test track.” The company is looking to reduce the capacity at its Gurgaon facility from around 720,000 units to around 500,000 units and

GM China a 44.0 percent stake and Wuling Motors, a 5.9 percent stake. The JV is based in Liuzhou, Guangxi Zhuang Autonomous Region, in southwestern China and has notched up domestic sales of around 1,285,820 units. GM India President and Managing Director, Lowell C Paddock said, “Enjoy will be

Chevrolet Enjoy

launched by the end of the year and will be manufactured at our Halol facility in Gujarat. The new MPV will be powered by 1.4-litre petrol engine and a new GM diesel engine. Our engineers are working on developing new diesel engines for emerging markets at our Talegaon plant, and these engines will power Sail hatch-

back and Enjoy in India. After the Sail hatchback, this will be the second product to be launched in India under the association with SAIC.” Being a seven-seater, Chevrolet Enjoy will cater to the needs of large Indian families. UK’s Lotus worked in tandem with the GM Technical Centre in India for more than one and a half years to tune the chassis. The frame of this MPV is rigid while being light-weight due to usage of high-strength and ultra-highstrength steel materials in the body and chassis. To increase the market share in India, the company has lined up a slew of new launches for this year. The company is targeting a growth of around eight to ten percent in the domestic market and has already launched Tavera Neo 3 BSIV earlier this month. Chevrolet Sail hatchback will be launched by July this year, followed by the MPV Enjoy in December. The company will also launch Sail sedan and Captiva facelift soon.

EDITORIAL Rethink?

hile presenting the Union Budget, the Finance Minister, Pranab Mukherjee said that Indian manufacturing appears to be on the cusp of a revival. He added, “I know that mere words are not enough. What we need is a credible roadmap backed by a set of implementable proposals to meet those objectives. I expect India’s GDP growth in 2012-13 to be 7.6 percent with +/- 0.25 percent. A year of recovery interrupted.” According to industry experts, the Budget’s focus has been on growth with an objective to restrict subsidies to two percent of GDP. While the objective is praiseworthy, the focus was not on growth as the increase in excise duty and service tax across board, except for those in the negative list, will certainly make things more expensive and fuel the inflation further. This is especially for the auto industry since everything that is proposed in the Budget is negative except taxing diesel cars, which was rumoured for some time. As a rollback of stimulus, the government has increased the excise duty on large cars to 24 percent from 22 percent. And there is three percent more for cars having more than 1500 cc engines, which was `15,000 earlier. And the hike in customs duty on the flat-rolled steel from five percent to seven percent will affect the industry as this is one of the key input materials for the industry.

For the salaried class, the amount of spending will be more than the savings that they accrue on account of increase in income tax slabs. Increase in service tax and excise duty will not only eat up common man’s savings on income tax, but also force him to spend more now. The Budget will trigger a higher inﬂation, which had shown moderation in the last two months. Therefore, the higher taxes have to be balanced out with suitable corrections in the cost of ﬁ nance. Should the RBI not look at reducing the interest rates in a phased manner, which can provide relief to the industry as a whole? From this issue onwards, your favourite news magazine Auto Monitor is now changing from fortnightly to weekly. It will greet you every Monday. Wishing you much pleasure reading. Do send us your feedback

T. Murrali t.murrali@infomedia18.in

QUOTES Dan Akerson, General Motors Chairman & CEO, on Detroit’s losing lustre as the automobile manufacturing hub

“We all closed plants and, look at us... we’re healthier. But we had to come to the brink”

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RC Bhargava, Chairman, Maruti Suzuki on plans for adding diesel engine capacity in The Economic Times

“The only way to grow is to make more diesel cars”

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CONTENTS SPECIAL REPORT OEMs capitalise on opening of defence sector

Exhibitors spanning from global defence giants to small Indian players, unveiled products from their defence portfolio during the seventh Defence Expo 2012

GLOBAL WATCH Ford’s Limiter resets speed through safety cameras

Ford’s Adjustable Speed Limiter enables drivers to set a maximum speed to reduce the risk of speeding fines or bans through inadvertently exceeding the legal limit

GM receives $288 m subsidy

Australian government announced $288 million subsidy for GM to guarantee it continues to make cars in Australia for another decade through its subsidiary Holden

FOCUS: TESTING

China’s SAIC to co-develop Opel minicar engine

Froude Hofmann offers simulation upgrade

Froude Hofmann is pushing itself beyond its existing product portfolio to cater to automotive testing industry by offering newer technologies and advanced solutions

Faster engine development on AVL cards

Opel/Vauxhall’s new 1.4 litre gasoline engine family, developed by GM and SAIC, is set to debut in the Junior minicar at the Paris auto show in September this year

AVL plans to invest in technology that would not only shorten the development time of engines but also reduce the cost of the development process and improve the quality

iCAT installs Mileage Accumulation Chassis Dynamometer

THE OTHER SIDE

HiCAT recently added a Mileage Accumulation Chassis Dynamometer (MACD) to its facility to conduct vehicle running-in during endurance trials

Pepperl+Fuchs dresses factory automation

Pepperl+Fuchs has recently augmented its Indian outpost with with its worldwide ERP system in a bid to bring global products and services to India

CORPORTE Ford India banks on new technology for Sanand plant

Ford India’s second manufacturing facility coming up in Sanand in Gujarat will be fully integrated to support stamping, body assembly, paint, trim and final assembly

JLR scripts China journey with Chery JV

JLR’s deal with Chery would include manufacturing cars branded under the JV, R&D facility, engine manufacturing and sale of vehicles manufactured at the JV facility

A Director, Key Account Management and Industrial Verticals at Schenker India, Tuteja has been involved in new product development in order to provide customised logistics solutions to the customers

GM launches BS IV compliant engine

(L-R) Lowell Paddock, President & MD, GM India; Sumit Sawhney, VP, Sales, Marketing & Aftersales, GM India & P Balendran, VP, GM India at the launch of the new Chevrolet Tavera Neo 3 BS IV in New Delhi recently

General Motors recently launched its Bharat Stage IV emission norms compliant engine of its Multi-Utility Vehicle (MUV) Tavera. The new variant, known as Tavera Neo 3 BS IV is priced between `7.51 lakh to `10.34 lakh (ex-showroom). With the launch of this variant, the company expects to sell upto 25, 000 units of the MUV as compared to 21,000 in calendar year 2011. It has sold 150, 000 units of Tavera in the country till now. Tavera’s 1.2 litre BS IV engine is sourced from International Cars and Motors (Sonalika Group). The designing and engineering have been done at GM’s technical centre in Bangalore and Pune. The company will now be able to sell Tavera in the 13 Indian cities where BSIV norms are applicable. “The level of localisation in the new Tavera is 98.5 percent. Only some critical plastic parts are imported,” Vice-President, GM India, P Balendran said. President and Managing Director, GM India, Lowell Paddock added that the new Tavera demonstrated the company’s commitment to listening to customers and continuously upgrading the products.

Auto Monitor

EVENT of the week

Union Budget 2012: A Report

Sateshwar Tuteja, Director, Schenker India

Auto Monitor

2 APRIL 2012

INTERVIEW

“You need a breather to make the growth manageable” With presence in over 26 countries, and 40 percent of its total revenue coming from Germany, Samvardhana Motherson Group (SMG) is ready to follow its customers to any geographical location. Chairman of SMG, VC Sehgal told Nabeel A Khan that their latest acquisitions of two companies—Peguform and Visiocorp (Samvardhana Motherson Reflectec or SMR) is a step towards becoming future ready. The group will follow organic growth to achieve its revenue target of $10 billion by fiscal 2014-15. How do you see the slack of the industry in the past few months? What you call slack, I call a breather. Over the last two years, we have grown over 30 percent and if we had grown 30 percent this year, we would have probably been 60 ft under. So we are grateful that there is a breather for us. I think this is very important; every two-three years when you grow, you need a breather to make the growth manageable. We believe there was no slack because production was all right. Unfortunately, one of our customers had some issue, which was beyond our control but that’s now behind us. We believe that globally our customers are doing very well. We just follow that and we are in safe hands. What kind of revenue contribution do you get from Indian operations? At the moment India, at the lower side is about 20-25 percent of our global turnover but we think that by 2020, it should increase to 45 percent. We have over 700 products so talking about proﬁt margins becomes very confusing. We talk about Return on Capital Employed (ROCE); last year it was around 27 percent for Motherson Sumi and for the group, a bit higher. The other target which we have is of

$10 billion top-line and a ROCE of 40 percent. From which country do you get the maximum contribution for the total revenue globally? The maximum share of the total revenue that is around 40 percent comes from Germany. The next big production opportunity we see is in China. Currently, we have around six plants and we hope that in the next ﬁve years we will have close to about 25 to 30 plants in China. What factor is going to drive a bigger share from India? We are talking of a big pie. We should not think that the outside demand will go down; in fact the outside demands keep going up. The pie size will become bigger and bigger. We have around 70 plants here and this country is going to be top on the list for growth and expansion. How do you think would the ﬁscal 2012 end for the industry? We are coming from a background where we grew by 30 percent for two years back-toback, and no vendor can handle that kind of growth. All the component makers have done a phenomenal job to support their customers with this kind of break-neck growth. We believe that a growth rate of 10-12 per-

cent is manageable for the component industry. Will you continue to sign new JVs and be open to new initiatives at this time? Always. Motherson always follows the customers. We really don’t know what we are going to get into but by and large, whatever the customer tells us we would try to follow. How do you see the development of new automotive ve hubs in India? I think it’s a good thing. g. One, we are getting more spread d out in India that will bring happiness ness to the people. Second, the process could create job opportunities. unities. Thus I am very happy about ut this. Third, the land prices in the big cities have gone up astronomionomically but in these emerging merging locations, it is still reasonable. onable. I think the cost will deﬁ ﬁ nitely come down while logistically cally it will also be better. Are you entering Gujarat arat as two new OEMs have made de their inroads into the state? If they are there, we are e there. As far as SMG group is concerned, cerned, we will be within 15 km periphery of our customer. Whenever henever our customers start operations, ations, our plant will be there. Could you elaborate ate on your strategy to be futuretureready amidst the fast changing ging trends in the automobile bile industry? I think, if you look at the last four acquisitionss of Motherson, you get the clear feeling that we are following changing trends in terms of

maximum use of electronics and sophisticated gadgets. We have to be in sync with the customers. They want exciting products and we are into a lot of exciting products. We acquire companies, which our customers (OEMs) asked us to take over. We have brought in Peguform and SMR. We are doing a lot of work on the electronic side of the whole product offering. Deﬁ nitely, we are in for it. How do you plan to achieve these objectives? As our balance sheet always gives us ﬁveyear projections and we are very much on track for our ultimate target of $10 billion by 2014-15. I think most of our acquisition is already done; its mostly organic growth now. Our customers are growing all over the world and we want to keep growing with them.

Have you considered getting into industry segments where you are not present, like powertrain and other related products? We are not into that just now. However, if the customers want us to get into the business, we will get into the powertrain related business as well. I think it is important to emphasise, that we are not into a business where we want to catch some product or get into something like that. Our prime objective is to be a customer focused company and wait for the customers to give us opportunities and the direction they want us to go. In that sense, we are open to any product segment, but only if the customers require it.

2 APRIL 2012

Auto Monitor

SPECIAL REPORT

OEMs capitalise on opening of defence sector Our Bureau New Delhi

n the midst of about 580 exhibitors, spanning from global defence giants to small scale Indian players, several Indian automobile majors unveiled products from their defence portfolio during the seventh Defence Expo 2012 held at Pragati Maidan in the national capital recently. Among them were Tata Motors, Ashok Leyland, Mahindra and Mahindra and Asia MotorWorks (AMW). Tata Motors showcased a new Micro Bullet-Proof Vehicle (MBPV), a highly mobile combat vehicle for indoor combat inside airports, railway stations and

other such infrastructure. The concept is the ﬁ rst-of-its-kind design to assist the country’s elite forces in indoor combat. In addition, the company has launched four other defence vehicles— the Tata 12x12 Prahaar Missile Carrier, the Tata Light Armoured Vehicle, the Tata Mobile Bunker and the Tata 6x6 7kl Refueler and displayed a range of other concept vehicles, such as the Tata Quick Deployment Mobile Communication Terminal. The Managing Director, India Operations, Tata Motors, PM Telang, said, “The launch of our new combat and tactical vehicles and equipment, leveraged from our strength in design and

FICV To Boost Market Share For Tata Motors Nabeel A Khan Delhi With the view to compute a higher share of revenue from the defence sector, home-grown Tata Motors is mulling to invest about `600 crore on development of Futuristic Infantry Combat Vehicles (FICV) and for setting-up of a manufacturing plant for the same. “If we get a nod from the government, then the investment in FICV could be around `300 crore and another `250 crore or above for setting up a plant for the same,” Business Unit President, Tata Motors, Commercial Vehicles, Ravi Pisharody said. The company that was hitherto mainly into logistic vehicles, is now ready to offer combat vehicles for various applications. Tata Motors has 26 acres of land at Dharwad in Karnataka where it can consider setting-up the new plant. However, the deci-

sion for the plant will depend on getting the orders. Tata Motors is one of the four companies that has received Expression of Interest (EOI) to supply around 2,000 units to the government. It earned revenue of around `1,000 crore in this ﬁscal year from defence business, which is a 50 percent growth over the last year. While in the next ﬁ nancial year, it expects to grow by 25 to 35 percent. Tata Motors with orders around `250 crore is also looking to supply landmine protected vehicles to states like Maharashtra and Jharkhand. In the case of small armoured vehicles, the company is planning to developed left hand drive to export to Middles East part. Currently it was exporting to Sri Lanka, Nepal, African Nations and US agencies in Afghanistan. “We get sizeable revenue from the exports but can disclose the exact revenue,” added Pisharody.

development of a wide range of commercial vehicles, now enables us to cover the entire defence mobility spectrum.” The Hinduja group company, Ashok Leyland, said it is planning a foray into aerospace business, both defence and civilian, and is talking to foreign players for technology partnership. “We are looking at opportunities in the aerospace business,” said Vice Chairman, V Sumantran, Ashok Leyland. The company also unveiled High Mobility Vehicle (HMV) Super Stallion 8X8. This is the heavier version of the Stallion of which, more than 65,000 vehicles are already deployed by the Indian Army. It is propelled by 360 hp (265 kW) Neptune engine, which has torque of 1,400 nm. Its joint venture company, Ashok Leyland Defence Systems that is engaged in the manufacture of specialised tactical and armoured vehicles, unveiled Light Tactical Vehicle (4x4). This is the ﬁ rst product from the Colt tactical range of vehicles and is being developed through the company’s strategic partnership with Panhard General Defense, France. In addition, a new range of product concepts and systems developed with Krauss MaffeiWegmannGmbh (KMW), Germany, were also unveiled. Heavy commercial vehicle manufacturer, Asia MotorWorks (AMW) unveiled its new range of military vehicles called ‘AMW Defence’. This includes a 4x4 general service and logistics truck, with engines ranging from 180bhp to 270bhp. It offers greater mobility over difﬁcult terrain and has a permanent all-wheel drive

Tata Motors’ Mobile Bunker

AMWs’ Fire Fighter

Ashok Leyland’s, Super Stallion 8x8

system for improved traction. In addition, its tilt-able cabin is airconditioned to enhance comfort, which is a unique feature for the Indian defence vehicles. The second vehicle on display was a Fire-fighting truck, which can control any fi re incidence at vital installations and can be offered with engine options ranging from 180 bhp to 270 bhp. It also showcased a 6x4 Heavy Duty Recovery Vehicle, which would also be available in 6x6 configuration. Manufacturers such as Polaris showcased a snow sledging vehicle at the expo. Another manufacturer, Beml announced its intention to venture in to all terrain vehicles and logistics for defence purposes. India’s defence expenditure in

the recent past has been around two percent of the GDP, which is consistent with the security needs, as well as the country’s requirements in the area. With the projected growth of the Indian economy expected at a trajectory of eight to 10 percent for the next two decades, expenditure on defence in absolute terms is bound to increase, the Defence Minister AK Antony has said. Inaugurating the Defence Expo India-2012, the 7th Land, Naval and Internal Security Systems Exhibition, he said that enabling policy framework has been put in place to develop indigenous capabilities through harnessing the potential and utilising resources available, both in the public and the private sector.

Auto Monitor

2 APRIL 2012

TESTING

Froude Hofmann offers simulation upgrade Bhargav TS Chennai

est equipment manufacturer, Froude Hofmann is pushing itself beyond its existing product portfolio to cater to automotive testing industry by offering newer technologies and advanced solutions. With a substantial investment in R&D, the company is developing a new dynamometer, which will address speciﬁc requirements of the automobile industry. The company’s International Marketing Head, Simon Drain said, “Traditiona l chassis dynamometer test systems can be seen in vehicle manufacturing plants throughout the world. However, this equipment does not provide the ﬂexibility to keep up with the standards now being

The new dynamometer technology compels the designers and manufacturers of test systems to develop solutions to replace the traditional methods

demanded. The technology involved in the latest hybrid developments, with complex energy distribution strategies is pushing the limits of the traditional dynamometer test cell. The technology is developed, combined with the demand for testing the vehicles under realistic operating conditions, and compels the designers and manufacturers of

test systems to develop solutions to replace traditional methods. The designers and manufacturers of test systems are developing such solutions to replace traditional methods.” According to Drain, the company offers R&D and testing equipment, which has the ability to test all powertrain conﬁgurations including electronic driving

aids, under ‘real world’ conditions in one development system. These multi-vehicle solutions are now installed in facilities throughout the world and have been shown to exceed the emission standard accuracy, while achieving the ﬂexibility and versatility that facilities demand for testing their state-of-the-art driveline conﬁgurations.

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With more emphasis being placed on evolution of new energy sources and powertrains, it is becoming increasingly important to have testing systems that accurately reflect ‘real world’ driving conditions. Keeping this in mind, Froude Hofmann is actively supplying advanced 4x4 ‘all independent’ chassis dynamometers for hybrid and fuel cell vehicle development. The unique roll synchronisation control capability of these chassis dynamometers enables various powertrain configurations to be tested accurately as simulated in road conditions. The Froude Hofmann test systems provides a highly flexible, multi-purpose test system with four individual motor-roll assemblies, whereby all four wheels of the vehicle are effectively controlled independently. During normal operations, all four rolls are accurately synchronised to present a “through the road” simulated condition to the test vehicle’s powertrain. This is achieved while ensuring the sum of the forces applied to all the rolls to correctly simulate the total vehicle inertia and road-load force. The actual forces applied individually to each roll by the AC motors are automatically and dynamically adjusted to ensure that the four rollers operate at the same speed. The movement of forces is highly responsive to the force distribution produced by the vehicle through the specific powertrain configuration. It ensures accurate roll speed synchronisation and thereby enables the powertrain to perform as if it is operating on the road condition. Due to the real test conditions, the energy flow management strategies of the vehicle will function correctly. Drain said, “We have two vital products to enhance the flexibility and accuracy of the system. vDriver is an innovative and unique software package that is designed to reduce the product development cycle by simulating the variability associated with particular driving styles and routes. This, together with the automated robot driver, brings real world simulation testing directly to the development engineer in the test facility.” When compared to the other test equipments, vDriver records any route driven anywhere in the world, based on distance. Time becomes the variable dependent on traffic conditions and driver styles. When vDriver is compared with traditional timebased systems, the latter test cycles contain no information on route activity or gradient and so compromises the accuracy of the results. Once recorded through vDriver, the route can be loaded and driven precisely and repeatedly in the test cell, providing accurate real world simulation of road conditions and different driver characteristics.

2 APRIL 2012

Auto Monitor

TESTING

Faster engine development on AVL cards Investment in new technology to optimise process Nabeel A Khan New Delhi

AVL’s focus is to shorten the whole process by limiting the tools from simulation to in-vehicle testing. The process is expensive and that’s why it is squeezing the process, which would help the company cut costs. It is also trying to increase the efficiency of the OEMs by addressing each step carefully

s the pressure on OEMs is increasing with respect to expenses and process cycles, to bring some respite, AVL plans to invest in technology that would not only shorten the development time of engines, but consequently, reduce the cost of the development process and improve the quality, which would in turn optimise the overall costs. The development process of powertrain of a car includes—establishing simulation, hardware and software in the loop, test bench, chassis dynamometers and ﬁnally, in-vehicle testing. Executive Vice President, AVL List GmbH, Michael Blickle, in

AVL to develop HeroMotoCorp engines Austria-based automobile engine manufacturer, AVL, has recently signed an agreement with HeroMotoCorp to help the two-wheeler maker in development of engines, transmissions and the entire bike, Managing Director, AVL India, Shashi Singh told Auto Monitor. The company will assist HeroMotoCorp with designing, design certiﬁcation and homologation of products. Moreover, it will provide training to engineers of the Indian bike maker for engine development. AVL’s support will encompass all the existing models as well as the future products of HeroMotoCorp. The company is also providing similar support to a number other OEMs, although it did not disclose further information. an interview with Auto Monitor said that the company’s focus is to shorten the whole process by limiting the tools from simulation to in-vehicle testing. The process is expensive, and that’s why it is squeezing the process which would help cut costs. “We are also trying to increase the efﬁciency of the OEMs by addressing each step carefully,”he added. He elaborated that a lot that is tested in-vehicle will be shifted to the chassis dynamometers stage. And a number of procedures that are executed at chassis dynamometers stage would get shifted to the test bed stage. Similarly, many procedures that are carried out at the test bed stage will be shifted to simulation. This approach is called ‘front-loading’ approach, he said. AVL is trying to shift the procedure to the earlier stage with the help of new tools as the process gets costlier when it moves to the later stage. “We are not going to skip steps but more of what is done at the chassis dynamometers and on road stages will be shifted to the simulation stage to reduce time. This is the strength of our company. This can happen only if you have right tools, hardware and software,” Michael explained. Would it not impact the quality of development? According to the company, it would not. AVL has developed a methodology to shift the process on a test bed

simulation to get the same quality of data as it gets while doing it on the roads. Another agenda for the company is to increase fuel

efﬁciency for which, it is using different metals to reduce the weight and friction. “The challenge is obtaining the

technology to effectively manage reduction fuel consumption and CO2 emissions. Fortunately, we have state-of-the-art technology

and our expertise comes from computer induced technology to help in this particular direction.” Michael concluded.

Auto Monitor

2 APRIL 2012

TESTING

iCAT installs Mileage Accumulation Chassis Dynamometer Shambhavi Anand New Delhi

The Mileage Accumulation Chassis Dynamometer can provide highly effective, advanced endurance or rapid development test facility round the clock

he I nt e r n at ion a l Centre for Automotive Technolog y (iC AT), set-up under t he National Automotive Testing and Research and Development Infrastructure Project (NATRiP) in Manesar recently added a Mileage Accumulation Chassis Dynamometer (MACD) to its facility. It now has three MACDs to conduct vehicle running-in during endurance trials. The move is in line with iCAT’s plans for rapid expansion of providing better testing facilities in the country. “iCAT facilities and capabilities are under massive expansion. Commissioning of the new MACD facilities marks the beginning of NATRIP delivery. We are get-

Dinesh Tyagi, Director, iCAT

ting better equipped to serve our customers in their product development work,” Director, iCAT, Dinesh Tyagi said. The MACD can conduct endurance trails on all kinds of vehicles including—two-wheelers, threewheelers and four-wheelers. It can produce more intricate simulations of real world situations

under controlled conditions, which can give manufacturers a real idea of on-road driving conditions even without taking the liability of driving on the road. “With the ongoing development in automotive industry and the increasing demand for more sophisticated test requirements, such as research and

development projects, mileage accumulation, endurance and durability testing of automobiles, these MACD’s have evolved into a fully ﬂexible Automated Test Facilities,” he added. The MACDs at the centre include a chassis dynamometer, an integrated robot driver, Automated Fuel Filling units, and comprehensive Data Acquisition systems, Airspeed Simulation Fans, automated safety guards and interfaced communication systems. These can provide highly effective, advanced endurance or rapid development test facility round the clock. The MACDs, which are of AVL make, are equipped with Stahle SAP 2000 and Burke E and the porter chassis dyno is equipped with CP Engineering driving robot systems, which can follow cycles on various vehicle orien-

tations and customised vehicle gear shift patterns. They are also capable of creating, editing and executing the automated drive cycles in conjunction with the Robot Driver systems. “This facility can ensure customers repeatable tests without any variability like road, driver, temperature and wind speed. Not only are the results repeatable but also ensure a safe method of logging miles thus ensuring safety of test property and test. This facility with robots provide the capability where we do not have manual variability from test drivers and hence a safe method of testing vehicles. Overall, they provide a highly capable ‘real world’ or regulatory simulation package with human driving capability and fully automatic operation of all the vehicle functions,” Tyagi added.

Dow, Graco launch NVH solution for GACFiat Our Bureau Mumbai

ow Automot i v e Systems and GRACO, jointly launched the Betafoam NVH solution at the Automotive NVH New Products & Technologies Conference in the Graco Asia Pacific Training Centre. Incorporating Dow’s Betafoam technology and Graco’s HFR system, the solution is engineered for automotive manufacturers to apply in vehicle acoustical cavities to reduce air and road noise which improves the NVH (Noise, Vibration and Harshness) performance of the vehicle. This provides a quieter and pleasant riding experience. This NVH solution will be fi rst utilised by GAC-Fiat in their upcoming model line-up. The solution is a two-component polyurethane foam that can be used in NVH, stiffness and energy management applications. Along with its cavity blocking performance, the foam is adhered to primed metal surfaces, delivering insulation and sealing benefits in a single product. As a result of the 34 times higher volume expansion rate that gives the foam its low density, it provides barrier protection against airborne noise, achieving a noise reduction two to five dB less than its counterparts in the market. The solution also contributes to the total mass reduction of the vehicle body. Graco, in cooperation with Dow, developed Hydraulic Fixed Ratio metering system that enables accurate measurements of specific ratio and volume. As the material is being dispensed, the system is automatically fi ne-tuning and adjusting the process to achieve consistency in material flow and pressure, while the fi xed ratio results in better foam quality and less scrap and rework. Dow Automotive Systems, a business unit in the performance materials division of The Dow Chemical Company, is a provider of collaborative solutions and advanced materials for OEMs, Tier suppliers, aftermarket customers and commercial transportation manufacturers.

2 APRIL 2012

Auto Monitor

TESTING

Pepperl+Fuchs dresses factory automation Our Bureau Chennai

World class rack die manufacturing facility in collaboration with ESCOFIER, France Features: Dual Servo Drive for both the rack holders Servo drive for job feeding axis (optional) Compact foot print (vertical type machine) Hardened and ground guideways Ball screws with continuous oil circulation (with oil chiller) Robust and ergonomic design

Other products: Circular die Thread Rolling Machines Circular die Spline Rolling Machines Incremental Spline Rolling Machines Incremental dies Circular Thread/Spline rolling dies

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MTE INDUSTRIES PVT. LTD. 58/A SVCIE, Balanagar, Hyderabad 500037, A.P. INDIA. Phone: 040-23777571 Email: info@mteindustries.com

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azaki North America Inc, a Tier I automotive supplier, is looking to partner with PTC as the software systems platform for its electronic instrumentation. Frost and Sullivan estimates that cars will require 200-300 million lines of software code in the near future. Yazaki has recognised the value of a solution that enables global software development collaboration and code reuse, the company said in a statement. PTC’s platform ‘Integrity’ accommodates Yazaki’s other product lifecycle management applications. Yazaki’s decision has been the outcome of PTC’s certification of Integrity for developing safety related systems in ISO 26262 compliant development processes, an automotive safety mandate that requires safety-related embedded systems to qualify the tool chain being used to produce these systems. Additional resources that would be available to Yazaki include automotive business challenges, PTC’s Integrity resource centre, PTC’s Product Information Lifecycle Management (PLM) Resource Centre, Tech-Clarity Perspective, embedded software and Gartner report. Yazaki Corporation is a leading provider of vehicle power and data solutions for various applications. It supplies electrical distribution systems, vehicle information products, solid-state power centres, connection systems and electronics. The company employs around 200,000 people in 39 countries. PTC provides systems and software for entire product lifecycle—from conception and design to sourcing and service.

BMW and Volkswagen. The new plant has a fullﬂedged training facility and latest equipment to train customers and to realise appropriate application solutions. It is well integrated into company’s mainstream factory automation operations and competency centres in Germany and few other locations. With this, P+F in India is slated to be one of the core subsidiaries of the group and strives to have a fair chunk of its market share in India. P+F invests majorly into new and reliable technologies to provide products with increasing performance and applications. Around 20 percent of company’s revenues are annually ploughed back into research and developing newer products. This helps the company to have a competitive edge.

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Our Bureau Mumbai

to multiple cultures. The manufacturing environment in India is bound to adopt appropriate automation in times to come and that companies like P+F will have ample opportunities to partici-

Yazaki selects PTC

P+F Management Team

decade of engagement with India has been a good learning experience. All these years have helped the company to realise the true potential of India and also to develop as a company adaptable

n a bid to bring global products and services to India, the Germany-based Pepperl+Fuchs (P+F) has recently augmented its Indian headquarters with a new facility for its factory automation with its worldwide ERP (Enterprise Resource Planning) system. This means that the users and customers in India will have information related to applications and solutions at their fi ngertips and will eventually benefit from an integrated supply chain. The company that manufactures and supplies factory automation products, electronic sensors and components for the global automation market has recently inaugurated its Indian headquarters for its division in Gurgaon. It also designs and manufactures identification systems, logic control devices, sensor mounting connecting accessories and software. Managing Director and CEO, the Pepperl+Fuchs group of companies, Dr Guenther Kegel said, “The new facility would help us to bring better quantum and quality of support to the market and leverage its staff to deliver its best to the customers.” He believes that a country of size and legacy of India has its own dynamics and that the

pate and contribute to its positive development, he said. With the growing importance of India in the international arena, growth of the domestic and export, the local arm of P+F is further gearing up to provide better quality of service and raising the market standards. Director and Head, Factory Automation business, P+F, Ravi Agarwal feels that the new facility is designed to handle latest technologies, applications and products from the mother company of P+F in Germany and Singapore and relay the same to all over India. The company hopes to provide better services to its customers due the opening up of its new facility. Currently the company supplies to a wide range of customers including Tata Motors, Maruti, Diamler,

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Auto Monitor

2 APRIL 2012

C O R P O R AT E

Ford India banks on new technology for Sanand plant Our Bureau Chennai

ord India’s second manufacturing facility coming up in Sanand in Gujarat will be fully integrated to support stamping, body assembly, paint, trim and fi nal assembly. According to company sources, the paint shop will be equipped by the company’s environmental friendly rotational dip technology and three wet technology paint processes, which enhances quality, depth and durability besides, significantly reducing volatile organic compounds, CO2 emissions and waste. The fi rst plant, located in Chennai and its second plant in Gujarat, are strategically located to optimise distribution. While the new plant will prima-

rily cater to the markets in the northern and western regions while the rest will be managed by the existing plant. The strategy is to primarily reduce the logistics cost for the company. Recently, the company laid the foundation stone for the new

facility, which will come up at an investment of $one billion. The state-of-the-art assembly plant, which will be ready by 2014, will manufacture 2.4 lakh cars and 2.7 lakh engines per year for India and export markets. Ford India’s President and

Managing Director, Michael Boneham said, “With this new Ford Integrated Manufacturing Facility in Sanand, we are committed to significantly increasing our manufacturing output and aggressively expanding our business in India. The vehicles and engines produced at Sanand with India-based, global suppliers and partners, will add greatly to the full range of safe and fuelefficient vehicles available to Indian customers at tremendous value.” Boneham was joined by Industry Secretary, Government of Gujarat, Maheswar Sahu and Ford’s Executive Director of manufacturing, for Asia Pacific & Africa Felix Guillen, for the ground breaking ceremony. According to Guillen, “Ford is very proud to invest in India during these momentous times

Workers protest dismissal Bhargav TS Chennai Ford India is the latest victim of labour unrest with around 700 employees protesting from 27 March, demanding reinstatement of nine dismissed workers. It dismissed nine employees for violating the company’s code of integrity. However, the production at the car manufacturing plant at Maraimalai Nagar, near Chennai is not affected so far, according to a company statement. According to sources in the know, the dismissed employees belong to the production associates who are paid on hourly basis. The company sacked them due to the submission of fake medical bills for reimbursement. Speaking to Auto Monitor, the Treasurer of Ford Employees Union, Selvaraj said, “At present the production is not affected, since the company is managing to continue the production with the help of temporary employees. However, the quality of the products will be affected.” of rapid development, economic growth and profound change of India. Both in Chennai and in Sanand, Ford will create a lasting investment, not just in the physical manufacturing facilities that will be constructed here, but an investment in our workforce and in their communities, our suppliers and our partners, in Gujarat and across India.” Ford’s total investment in India to date is approximately $two billion, which is expected to grow with the completion of the Sanand integrated manufacturing facility. In addition to the 5,000 direct employment jobs created with completion of the manufacturing facility, the new manufacturing facility will spur the creation of thousands of additional indirect jobs in the Gujarat area. To provide for maximum local sourcing for parts, Ford India’s operations in the state has already attracted 19 high level supply commodities to date that will manufacture components close to the Sanand facility. In Chennai, the company has already started expanding its powertrain facility, which will increase its annual production capacity from `2.50-3.40 lakh a year.

Akash Passey elevated

olvo Bus Corporation has promoted its India Head and Managing Director, Akash Passey to Senior Vice President, Region International to oversee growth in emerging markets of India, China, Asia Oceania, Middle East and Africa. Passey, who will take over the position from Rune Lundberg, has also been named on the bus executive committee of the Volvo. Chief Operating Officer, Manish Sahi has been appointed as the new Managing Director of Volvo Buses India and Head of South Asia region.

2 APRIL 2012

Auto Monitor

C O R P O R AT E

SME Exchange to help raise equity Shambhavi Anand New Delhi

ith the launch of the SME Exchange on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange), the automotive component manufacturers, many of whom belong to the category of Small and Medium Enterprises (SMEs), have a new option to raise funds. “The BSE has recently started a platform for the SMEs and investors to come together and raise equity capital. The main objective of the Exchange is to enable the companies in the SME category for growth and expansion. Such an exchange will bring forth the valuation of a company and hence will help attracting investors and in the process create

JLR scripts China journey with Chery JV Our Bureau Mumbai

aguar Land Rover (JLR) recently struck a deal with Chery Automobile Company as partner to form an equal JV in China. The scope of the proposed joint venture would include manufacturing JLR and cars branded under the joint venture, establishment of a research & development facility, engine manufacturing and sale of vehicles manufactured at the JV facility, according to a company release ﬁ led with the stock exchange. “JLR and Chery Automobile Co have reached agreement on a proposed joint venture in China. The agreement follows extensive talks between JLR and Chery on establishing an equal partnership company,” according to a joint statement issued by CEO, JLR, Dr Ralf Speth and Chairman and Chief Executive Ofﬁcer, Chery Automobile Co, YinTongyao. The plant of the JV is expected to be set-up in Changshu, Jiangsu province, a city about 100 km northwest of Shanghai.

JLR and Chery JV in China will include engine manufacturing, sales and an R&D facility Established in 1997, Chery Automobile Company Ltd is headquartered in Wuhu, Anhui Province, China. It is a leading vehicle manufacturer in China and exports to more than 60 countries globally. It manufactures cars, Sports Utility Vehicles (SUVs), engines and transmissions. In 2011, the company notched up sales of around 643,000 units making it sixth largest passenger vehicle manufacturer in China. JLR is a wholly owned entity of Tata Motors and is headquartered at Coventry, UK. Compared to 2005 when China accounted for around one percent of JLR’s global sales, the country is now the third largest market for the British car maker. JLR sales in China increased by around 60 percent to touch 42,000 units last year.

wealth for themselves and other stake holders. The funds can be utilised for expansion and other areas to drive growth,” CEO,

BSE SME Exchange, Lakshman Gugulothu said. “Access to funds has always been an issue for auto component

manufacturers and therefore a major bottleneck in the growth path. As a concept, the idea of the SME Exchange sounds great. Companies should try to leverage the advantage and list themselves,” Executive Director, ACMA, Vinnie Mehta said. Talking about the other advantages of the listing on the exchange, Gugulothu said, “It is not easy for SMEs to leverage debt capital as most of them ﬁ nd it difﬁcult to deal with the banks. In such situations, the best way to raise funds is through equity. This will also help in reducing the debt equity ratios and make the balance sheet look healthier.” He added that another advantage of going public will be to improve transparency and corporate governance. Listed companies can also have easy access to alter-

nate funding options. Also, the ownership of a listed company is shared and so is the risk. Going public also reduces the liability of the owner to return equity as ownership is shared. All investors become owners. However, some industry insiders are also wary that reasons like increased transparency and shared ownership might act as a deterrent for automotive component manufacturers in going public. The BSE SME is expecting around ten companies to list themselves on the exchange within two months of its launch. “One needs to have a vision and patience for at least ten to ﬁ fteen years if they are listed on the exchange. With patience and vision, they can help in wealth creation, for themselves as well as other stake holders,” Gugulothu signed off.

Auto Monitor

2 APRIL 2012

C O R P O R AT E

Mitsubishi to assemble Pajero Sport in Chennai Nabeel A Khan New Delhi

itsubishi Motor Corporation (MMC) is gearing up to launch an offensive in the SUV segment in India with assembling Pajero Sports at its Chennai plant by September. The Chennai plant where the new SUV will be assembled is jointly owned by the Japanese manufacturer and its Indian partner, Hindustan Motors. According the company, the move will help bring down the vehicle costs as currently, the car is being imported as Completely Built Unit (CBU), which attracts higher duties and taxes. The company aims to sell around 5,000 units in India this year. “We are planning to start CKD (Completely Knocked

A Sankara Narayanan, Director, HM & Masahiko Ueki, Executive Officer & Corporate GM (Asia & ASEAN), MMC with the Pajero Sport

Down) units of Pajero Sport by September and it will deﬁ nitely help us bring down the cost, which we will pass on to our customers,” Director, HM, A Sankara Narayanan said. The Pajero Sport was recently launched in India priced at `23.53 lakh (ex-showroom Delhi). The vehicle is equipped

with 2.5 litre VG Turbo DiD engine, which produces maximum power of 178 PS, maximum torque of 400 nm, on-demand four-wheel drive facility, rear stabiliser and a turning radius of 5.6 metres. The Japanese manufacturer will stop sale of its existing Pajero SFX after four months, and only the Sport vari-

ant will be available. Based on interactions with dealers, Pajero Sport has received over 300 bookings till date. It was also revealed that the company had imported less than 50 units in the fi rst lot, and customers may have to wait for three months. However, the company did not confi rm the same. In other Asian markets. MMC last year sold 17,600 units, 14,000 units, 8,000 units in Thailand, Indonesia and Philippines respectively and around one million vehicles globally in CY2011. According to sources, HM has also been exploring a contract manufacturing option at its Chennai plant as much of the facility remains unutilised. It was also in talks with Asian manufacturers for the same but the deal could not be fi nalised yet. The plant is spread across 172

acres. Its available capacity is 12,000 units a year in one shift. In the FY 2010-11, it produced around 3,000 vehicles and hopes ramp up the production to at least 6,000 units by this year. MMC has 17 manufacturing facilities across the world of which 12 plants are co-owned with partners. The company has its major plant in Thailand, but with the increased minimum labour costs due to a new policy, MMC is looking for a new site in Malaysia, India or Asia to set-up a new global production hub. In FY11, the company sold around 897 units of Pajero SFX, 448 Lancers, 143 Cedias, 1,025 units of Outlander, 42 Monteros and 12 Lancer Evolution X in India. Here, HM manufactures and markets Mitsubishi’s products through a licensing agreement signed in 1998.

Tata Motors tops, Maruti not in Fortune global list Shambhavi Anand New Delhi

ata Motors ranks number one in the list of India’s 50 most admired companies in the auto sector while Maruti, which is the largest car manufacturer in the country does not fi nd a place in the list. The list has been compiled by business magazine Fortune and global management consultancy Hay Group. Though Fortune and the Hay Group compile global lists every year since 1960s, this is the fi rst such list for India. “Most of the Indian companies were rejected, as on the global platform due to their sizes, Indian companies could not fi nd place in the global list,” MD, Hay Group India, Gaurav Lahiri said. The duo will publish the list every year, henceforth. Tata Motors is closely followed by German vehicle manufacturer Mercedes-Benz and Japanese car manufacturer, Toyota Kirloskar Motors. While Tata Motors overall score was 8.25, Mercedes-Benz scored eight points and Toyota Kirloskar scored 7.92. The other automotive companies that figure in the list are Hyundai Motors India, Honda Siel Cars India, Ashok Leyland, BMW India, General Motors India, Fiat India, Bajaj Auto. A point to note is that most of the companies in the list are either subsidiaries of foreign companies or joint ventures for foreign players with domestic companies. The list has been prepared on the basis of a survey of 507 executives across 291 companies that were carried out. The companies were judged on several factors including endurance, corporate governance, performance and investment value, financial soundness, innovation, product and service quality, leadership, talent management and corporate social responsibility. To compile the list, companies across 15 industries were selected on the basis of various factors including size, contribution to national GDP, growth rate and national presence. The participants, who have rated companies, were CEOs, MDs and other top officials of the competing companies.

2 APRIL 2012

Auto Monitor

C O R P O R AT E

Delux coaches line Tata Motors order the front axle, resulting in more seats for the same length of bus and subsequently better returns for the operator. The bus is powered by the company’s 497 engine along with a viscous fan (used for the ﬁrst time in this class of buses), resulting in higher fuel efﬁciency and lower NVH levels. The six speed gearbox with overdrive and

Our Bureau Mumbai

he bus market has been witnessing increased attention from OEMs with slew of newer launches in different segments. Tata Motors recently launched its offerings in a bid to consolidate its position as a provider of a range of transport solutions. The company recently launched its city commute and inter-city vehicles in a bid to garner a higher share of growing bus segment. The BS III version of Divo, an inter-city bus, starts from `66 lakh (ex-showroomThane) and is targeted at the tour operator segment for catering to passengers for inter-city transportation. Its body design comes from Hispano Carrocera, a fully owned

With the Tata Divo & Tata Starbus Ultra, the company will more comprehensively address the burgeoning need of public transportation subsidiary of Tata Motors and it is powered by 285 HP Cummins engine. The engine is mated with a six-speed overdrive gearbox for higher fuel efﬁciency and 430 mm diameter clutch for enhanced life. It also comes equipped with DVD player and two LCD screens, on board refrigerator, mobile charging points, destination board and public address system. “With the introduction of the Tata Divo and the Tata Starbus Ultra, the company will more

Voith transmission for Mercedes city bus Our Bureau Mumbai

oith is introducing its transmission technology for heavy vehicle segment. As part of its ongoing plans the company has supplied Diwa transmission technology for the Mercedes Benz city bus. According to industry reports, the bus market in India is expected to reach 70,000 units in 2012. The company’s transmission technology is already available in markets with similar conditions like South America, North Africa and the Middle East. Diwa automatics allow smooth start-ups across a speed range with minimal gear shifts, which in turn implies lesser wear and higher driving comfort. Voith provides technology solutions in key sectors like infrastructure, hydro power projects, public transport system, automobile, industrial services and paper industry. The company’s turbo division has played a role in raising the designing and manufacturing standards of mechanical and hydrodynamic power transmission equipment developed for various industrial applications. Founded in 1867, Voith employs almost 40,000 people, generates €5.6 billion in sales and operates in around 50 countries.

cable shift mechanism ensures higher mileage, more speed selection options and a higher maximum speed, while also providing 30 percent more life. The luxury variant comes with engine-driven individual AC vents, for each passenger. The deluxe variant features a hi-back reclining seats for extra comfort.

Ravi Pisharody, President, Commercial Vehicles Business Unit, Tata Motors with BSIII Divo

comprehensively address the burgeoning need of public transportation. These two buses are sure to migrate the world of passenger transportation to a completely new level of class and technology coupled with comfort and convenience,” President, Commercial Vehicles Business Unit, Tata Motors, Ravi Pisharody.

Tata Starbus Ultra (BS III version) has been offered for `15 lakh (ex-showroom Thane). It is targeted at the city commuting needs of ofﬁce goers, hotel guests, tourists and school children as well as occasional inter-city travel. It is available in three variants. It is among the few buses in the segment with the front door ahead of

An inside view of the luxury coach

Auto Monitor

2 APRIL 2012

STUDY

Passenger cars slowdown: CARE Revati Kasture Head, Industry Research

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Source: SIAM and CARE Research Motors, Volkswagen, Nissan to some extent, most of the customers still preferred to either delay purchase until the supply of MSIL cars was restored to normal or accepted long waiting periods. This can be established from the current waiting period for the Swift and Swift Dzire models that is approximate four-six months and was close to eight-nine months during the time when the production was disrupted. The car sales witnessed a sharp slide in growth levels following the production

disruption in MSILâ&#x20AC;&#x2122;s manufacturing units. However, with the production restoration at MSIL, the sales once again started witnessing northward trend. This signiďŹ es the fact that the drop in sales growth was not solely linked to economic down turn, but also got aggravated due to production disruption from MSIL.

Passenger car demand deferred due to market preference for MSIL Vehicles Post Januar y FY12, sales

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around 44 percent in FY12 (till Feb). The labour unrest at MSIL ended in the month of October 2011; however, the normal production only could be restored from December 2011.

Labour unrest broke down at MSILâ&#x20AC;&#x2122;s plant at Manesar, Haryana in June 2011, forcing Maruti to shut the plant for more than four months. The shutdown at Manesar plant resulted in production losses for the top selling models like Swift, Dzire, A-star and SX4. The ďŹ rms overall production from the four plants dropped to around 80 thousand units per month from 102 thousand units per month resulting in a decline of around 16 percent in FY12(April- Dec). MSIL witnessed a decline in market share from 51 percent in FY11 to

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Source: SIAM and CARE Research

Units (in mn)

fter witnessing a high grow th scenario of around 25 percent and 27 percent in FY10 and FY11 respectively, the passenger car industry faced a road block during FY12 as it witnessed the worst ever slowdown in growth levels during the last decade. The PC industry bore the brunt of economic slowdown during FY12 on account of high interest rates coupled with spiralling fuel prices and inďŹ&#x201A; ation eating up the disposable income of the consumers signiďŹ cantly. In order to compensate for the increased cost to customers, OEMs offered various discounts and freebies. However, sales refused to revive until January 2012. The beginning of CY12 saw most of the OEMs increasing their vehicle prices by up to three percent due to rise in input cost. However the sales in January 2012 witnessed a healthy growth of seven percent followed by a healthy growth of 13 percent in February 2012, irrespective of the price hike and negative fundamentals. CARE Research observed the two major changes industry witnessed post December 2012 ie MSILâ&#x20AC;&#x2122;s restoration of production and the increased demand on back of probable hike expected in excise duty as well as extra tax likely to be imposed on diesel cars in the budget. Being the market leader in the industry and commanding close to 50 percent of the sales till FY11, any disruption in the production of MSIL, affects the overall industry supply. Further, supply constraints faced by HSCIL and TKML production during second quarter of FY12 on account to ďŹ&#x201A;oods in Thailand also added to drop in industryâ&#x20AC;&#x2122;s production levels.

Units

Vishal Srivastav Vishal Srivastav Samay Ganhar Analyst

Maruti regaining market share

Car Sales Chasing Production 3,00,000

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Source: SIAM and CARE Research ďŹ gures of the passenger car industry imply that once the production at MSIL was back to normal, the MSIL started growing again where as the other players growth moderated from previous high levels. MSIL also started regaining its market share from December 2011. CARE Research foresees with the restoration in MSILâ&#x20AC;&#x2122;s production the growth levels in passenger cars sales will revive gradually. Although rise in excise duty might dent the sales to some extent as most of the major players are expected to increase the price, CARE Research believes it would be a short term phenomenon and healthy growth levels would be restored in medium term period. Any positive changes in fundamental drivers such as Interest rate, income level etc will further boost the industry growth to the levels observed previous to the slowdown of FY12. (Views expressed are personal)

Auto Monitor

2 APRIL 2012

C O R P O R AT E

Sharing information helped tide over crisis faster Japan to support India with technology for robust modern railways Nabeel A Khan New Delhi

apanese government is open to lend technological support to India especially for bullet trains and other infrastructure related works, the representative of Intellectual Property Strategy Headquarters of the Cabinet Secretariat of Japan, Kenichiro Takemura told Auto Monitor in an interview recently. Kenichiro Takemura was in India to host Japan Next–Quality Product Show. The show was designed to establish that Japan is back with a bang after the tsunami. During the three-day event, many products were displayed including Maruti Suzuki’s soon

to be launched Multi Purpose Utility Vehicle—Ertiga and Toyota Prius.

Facing A Crisis The devastating earthquaketsunami on March 11 last year, crippled several industries including the automotive industry, largely because many of them and their vendors were based in the affected northeastern parts of the country that was destroyed. Car manufacturers, both in Japan and around the world, were expected to suffer shortage of parts at least until the end of this year. However, the efﬁciency of the Japanese and companies helped the companies and the economy recover faster. Within

six months from the disaster, Japan’s giant automotive groups were back in action, showing off their latest models at the Frankfurt Motor Show.

Path To Recovery In India, Japanese automobile companies like Toyota Kirloskar Motors, Honda Siel Cars are competing with South Korean vehicle maker Hyundai Motor India. Hyundai has become India’s second largest carmakers while no Japanese carmakers (except Maruti Suzuki) have been able gain major share in terms of volume. Honda Siel Cars was severely affected by tsunami but resumed normal global production within six months of the disaster

The Opening Ceremony of ‘Japan Next’ in New Delhi

globally despite having major component supplier’s base in Japan. However, Thailand ﬂoods affected parts supply to several locations including India.

Honda Siel bore the brunt as it depends on Thailand for major supplies. The most affected models were recently launched Brio, Jazz (hatchback) and City (Sedan). Similarly, Toyota Kirloskar had also suffered due to supply constraints.

Sharing Information On asking about the process of recovery in the country after the natural calamity, he stated that the main reason behind the speedy recovery from the devastating tsunami and earthquake was that the Japanese government shared as much information as they could with its people and other global entities and nations helped in bettering the situation faster. Kenichiro Takemura said “Hiding things makes situation only critical so we disseminated every piece of information on the status with the people across the world.” He added that the greatest contribution came from the people of Japan whose spirit never dies and they become stronger every time they face a tragedy. In order to take the bilateral relations with India further, the Japanese government is ready to support India with technology for modern railways apart from many others including bullet train which not affected even during the earthquake and tsunami.

Indo-Japanese Partnership Speaking on the occasion, Japanese Ambassador to India, Akitaka Saiki, said “India and Japan have enjoyed the interaction of culture, people and economies since a very long time. It is our responsibility to further deepen and mature a partnership of solidarity that has been built on basic values as well as the strategic beneﬁts for the good of both the countries. ‘Japan Next’ will be an expression of our nation’s determination to overcome the current challenges and rise above adversity”.

Uttam Bose joins HM as MD, Manoj Jha moves to Cimmco

ttam Bose will be replacing Manoj Jha as new Managing Director of Hindustan Motors by 2 April, 2012. Prior to this, Bose was serving as Group CEO of Hero Motors. Meanwhile, Manoj Jha has taken over as managing director of Cimmco Ltd. The company is in the business of Railway Wagons and Heavy Engineering Projects.

2 APRIL 2012

Auto Monitor

C O R P O R AT E

Nissan to play volume game by evoking Datsun Our Bureau Mumbai

n a bid to regain lustre, Nissan is looking to reintroduce the Datsun brand in India, Indonesia and Russia and may take the brand to more markets. According to a company spokesperson quoted in a media report, the company discontinued the brand in 1981. The company is looking to revive its ﬂagging fortune under a ‘value’ brand strategy for growth markets like India. “We are looking to position the brand below Nissan in the price range of around `four lakh to make it accessible to larger number of people who are looking to by a car for the first time, looking to upgrade to a fourwheeler from a two-wheeler as

Nissan Motor India appoints new MD Our Bureau Mumbai

issan Motor Company Limited has announced that Takayuki Ishida, current General Manager-India Department in Japan will relocate to Chennai and take over as Managing Director, Nissan Motor India Pvt Ltd. Present Managing Director, Kiminobu Tokuyama will now return to Japan where he is scheduled for an executive role at Yorozu Corporation, one of Nissan’s main suppliers of automobile compo-

General ManagerVehicle Production Engineering, Toshihiko Sano at Nissan Motors, Japan will become MD, Renault Nissan Automotive India Pvt Ltd (RNAIPL) nents. Current President, Nissan Motor Asia Paciﬁc Co (NMAP) and Nissan Motor (Thailand) Co Ltd and Regional Vice President, Asia & Oceania Operations, Toru Hasegawa will now execute the role of Corporate Vice President, Africa, Middle East and India (AMI). Present Senior Vice President-Manufacturing, Supply Chain Management, Production Engineering and Purchasing for Europe, Trevor Mann will henceforth be in charge of Africa, Middle East and India. President-Nissa n Motor Asia Paciﬁc Co Ltd and Nissan Motor (Thailand) Co Ltd, Toru Hasegawa is to hold position of Vice President-Africa, Middle East and India. Managing Director of Nissan’s Chennai Plant, Kou Kimura will also return to Japan where he will be appointed in a senior position at Nissan Motor’s Manufacturing and Industrial Engineering Division. General Manager-Vehicle Production Engineering, Toshihiko Sano at Nissan Motors, Japan will become Managing Director, Renault Nissan Automotive India Pvt Ltd (RNAIPL). He has been working in various capacities with Nissan for the past 30 years.

The capacity of Nissan’s Chennai facility, which has already been raised to four lakh units per annum, would be tapped for the first two models under the Datsun brand and will be available in India by 2014 (L)Kiminobu Tokuyama, MD & CEO, Nissan Motor India & (R)Ashwani Gupta, Programme Director, Control Corporate Plan Group, Datsun Business Unit

well as those who are looking for a more contemporary car,” sa id Prog ra mme Director, Datsun brand, Nissan India, Ashwani Gupta. He added that the capacity of Nissan’s Chennai

facility, which has already been raised to four lakh units per annum, would be tapped for the first two models under the Datsun brand and will be available in India by 2014. Nissan is

looking at several additional models under the new brand but is unlikely to export ‘Datsun’ branded models. “We are not looking at global models, but rather we are

working on a portfolio of local models keeping in mind local market realities in growth markets like India, Indonesia and Russia to begin with,” said Chief Executive Officer, Nissan, Carlos Ghosn in a recent conference to launch the Datsun brand in Indonesia. Datsun brand would be targeted at a growing population of distinct car buyers in these three markets. The company is looking to address around 50 percent of the total industry volume in India, 40 percent in Indonesia and 30 percent in Russia. The company has already sold around 284,000 units of models manufactured on the company V platform in all major emerging automobile markets including India, Brazil, Indonesia, Thailand, Russia, Mexico and China.

Auto Monitor

2 APRIL 2012

UNION BUDGET

The Union Budget 2012 presented by the Finance Minister, Pranab Mukherjee has very little to cheer about, especially for the auto industry. The announcements were far from encouraging, except that the diesel car was left untaxed. The Budget included all the three forces that control a vehicle—accelerator, brake and clutch. A report...

The Accelerator There is no extra duty on diesel cars as was rumoured; so there is no threat to the increasing demand for compact diesel cars. Weighted deduction on expenditure on R&D and skilling will certainly catalyse the focus on innovations and new product development. The Union Budget has given thrust to the manufacturing sector, especially the MSMEs, infrastructure development and skill development. MSMEs constitute over 80 percent of auto component manufacturers (70 percent of ACMA

Industry Voice

The Brake

members are MSMEs!) and access to capital has been one of the major constraints for the sector. Setting-up of the `5,000 crore ‘India Opportunit y Venture Fund’ will enable the sector access the much-needed capital. Further, shortage of skilled manpower has been an issue of signiﬁcant concern to the industr y; the introduction of weighted deduction of 150 percent on expenditure on skill development of employees will help in mitigating the concern.

The passenger car industry that is already slumping, received another blow as the overall excise duty for cars has been increased to 12 percent from the existing 10 percent. This has led to an increase in car prices. The Finance Minister has proved that he is impartial to any fuel as he increased excise duty for large cars—both petrol and diesel driven—24 percent from the current 22 percent. However, large cars with engine capacity above 1.5 litre will attract an additional three percent ad valorem rate,

which is signifi cantly higher than the previously fi xed `15,000 additional excise duty on such vehicles. The increase in customs duty on cars and MUVs valued above $40,000 from 60-75 percent seems to be a step to encourage local manufacturing, value addition and employment. The prices of mean machines like the Aston Martins, Bentleys, Ferraris and Lamborghinis will increase significantly due to the 15 percent increase on customs duty and two percent increase in countervailing duty.

The Clutch The FM has outlined concrete steps towards implementation of Direct Tax Code (DTC) and the GST. However, it all depends up on how soon it is implemented. Customs duty remains unchanged for auto components—however, it may not help the sector as the expenditure will be increased due to increase in service tax and excise duty. Increase in customs duty on the ﬂat-rolled steel from ﬁve percent to seven percent could unfavourably impact the auto component sector.

Leading experts of the industry offered their insights and analysis of the Budget. Here are excerpts …

he President of SIAM, S Sandilya said that while there are several positive things, the auto industry had expected that the FM will come out with specific timelines for introduction of DTC and how petroleum subsidies would be addressed. The road map for implementation of Goods & Services Tax (GST) has not been given except for stating that the necessary constitutional amendments will be taken up and the platform for implementation will be operationalised by August 2012. The Executive Director,

ACMA, Vinnie Mehta said, “We are glad that the Finance Minister has outlined concrete steps towards implementation of DTC and the GST. We do hope that these critical reforms are undertaken and implemented at the earliest.” While the auto industry appreciates that there was a compulsion to increase base rates of service tax and excise duty, SIAM hoped that the excise duty on large cars would have come down from 22 percent to 16 percent rather than going up. The 27 percent excise duty will increase tax signiﬁcantly for large premium cars, SIAM

S Sandilya President, SIAM

Vinnie Mehta Executive Director, ACMA

Auto industry hoped that the excise duty on large cars would have come down from 22 percent to 16 percent rather than going up

The increase in customs duty on non-alloy flat rolled steel products could unfavourably impact the auto component sector

stated. The increase in Customs Duty on cars and MUVs valued above US$40,000 from 60 percent to 75 percent seems to be a step to encourage local manufacturing, value addition and employment, Sandilya added. SIAM also welcomed the five years extension of 200 percent weighted deduction of R&D expenditure under Income Tax Act and the introduction of weighted deduction of 150 percent for expenditure on skills development. Mehta viewed that this move would motivate the industry to focus on innovations and new product development. The concession given for skill development of employees will help in mitigating the concern. The other area, which SIAM had not expected was the increase in customs duty on non-alloy flat rolled steel products, which will influence the price of steel and impact costs of manufacturing in India. According to Mehta, this could unfavourably impact the auto component sector as this is one of the key input materials for the industry. He said the enhancement of excise duty would adversely impact the prices of vehicles and in turn their consumption. This is of concern to the auto component sector as the sector grows in tandem with the vehicle industry. For the commercial vehicles, the body building of commercial vehicles has now got an ad valorem duty of three percent, but “I need to go through the fi ne print to comment on this. If it is promoting the unorganised sec-

tor then it is not very healthy,” Sandilya added. According to the President (Automotive & Farm Equipment sector), Mahindra & Mahindra, Pawan Goenka, the auto industry is relieved that the FM did not take any retrograde step like imposing a tax on diesel vehicles. The excise duty hike was in a way expected and we will have to pass on the price increase to the consumer. However, with all the surcharges and special levies, the top excise duty rate is as high of 29 percent. “I believe this is simply too high! We expect some short term nega-

tive impact on demand but with time we think it will wear off.” The MD and CEO, Maruti Suzuki, Shinzo Nakanishi, said given the ﬁscal challenges, slowing GDP growth, inﬂation and an uncertain global economic environment, the FM had limited options. “The FM has been pragmatic. In his service tax initiatives, he has been bold and forward looking,” he said. They may cause some short term pain, but they will improve government revenues in a sustainable way. This is also a

Pawan Goenka, President (Automotive & Farm Equipment sector), M&M

Michael Boneham, President & MD, Ford India

With all the surcharges and special levies, the top excise duty rate is as high of 29 percent. “I believe this is simply too high!

We are pleased with the Government’s decision about not levying extra tax on diesel vehicles as any additional tax would have been a regressive step

Contd. on page 24

Auto Monitor

2 APRIL 2012

UNION BUDGET

Sandeep Singh, Deputy MD Sales & Marketing, Toyota Kirloskar Motor

Venkatesan Subramanian Director, Metals & Minerals Practice, Frost & Sullivan

A rise in excise and import duty and input costs will not be very conducive for the auto industry

Increase in BCD on flat-rolled products of non-alloy steel will protect domestic steel plants as it will shield them from the competitive pricing from imports

Contd. from page 22 decisive move towards a uniform GST. The increase in excise duty will hurt automobiles, specially when industry is battling a slowdown and high interest rates. The focus on rural growth and infrastructure, along with tax waiver for investment in skill development, are positive initiatives. The beneﬁts will be visible over the medium to long term. The President and Managing Director, General Motors India, Lowell Paddock said, “we are a little concerned; the industry did not expect any increase in excise duty on passenger cars. In fact, we expected the government to announce some other measures to fuel demand of vehicles, which have also not happened. Some of the other announcements made by the ﬁnance minister for the manufacturing sector, R&D activities, hybrid vehicles, skill

development etc should help enhance the competitiveness of Indian industry and generate employment opportunities.

industry. This will lead to increase in prices of our products and will have negative impact on consumer conﬁdence. The increase in excise duty for large cars up to 27 percent is again not favourable though we are assessing its full impact on our product portfolio’’ “A rise in excise and import duty and input costs will not be very conducive for the auto industry as the additional burden of increased duty will directly affect the buyers and hence would lead to slowdown in sales. We have no choice but to pass on the price increase to the consumers,” said Deputy Managing Director, Sales and Marketing, Toyota Kirloskar Motor, Sandeep Singh. He added that CBU prices will also be affected on account of a rise in customs duty. Joint Managing Director, Hero MotoCorp, Sunil Munjal, said the excise and service tax should not have been increased, especially at a time when the growth is nebulous already. This may lead to increased pricing. But the focus on SMEs and other manufacturing sector is positive.

Progress Impediments Silver Lining According to the President and Managing Director, Ford India, Michael Boneham, one of the clear takeaways from the Union Budget is the impetus it will provide to infrastructure development, with its focus on improvements in areas like the power sector and road network development. The stimulus to social sector is progressive and a welcome step towards development of the economy. “We are also pleased with the government’s decision about not levying extra tax on diesel vehicles as any additional tax would have been a regressive step. However the announcement of a two percent increase in excise duty is disappointing and not favourable towards the auto

Price Revision (ex-showroom Delhi) Company

Price Range (pre-Budget)

Price Range (post-Budget)

Maruti Suzuki

`2.4 lakh to `9.39 lakh

`2.45 lakh to ` 9.56 lakh

Skoda Auto

`4.35 lakh to `18.65 lakh

`4.6 lakh to `19.6

Toyota

`4.75 lakh to `20.5 lakh

`4.84 lakh to ` 20.85 lakh

Honda

`3.95 lakh to `26.43 lakh

`3.99 lakh to `27. 38 lakh

Prices indicative / Tata Motors increased price of CVs by `5,000 to `60,000

“I am disappointed that due to political compulsions, the FM has not been able to implement the many steps required to give a strong boost to the economy. One would wish that the politics of the country was better coordinated, with a consensus on economic policies among various political parties, to enable bold economic measures to be implemented,” said Chairman, Force Motors, Dr Abhay Firodia. He added that the impact of the budget on the automotive industry will be adverse, on account of the increase in the basic rate of duty by two percent. This should be seen as a 20 percent increase in the content of the duty, and not just as two percent. On the positive note, he pointed out that the extension of the weighted deduction of R&D expenditure, and the introduction of weighted deduction for expenditure on skill development, besides the concession in import duty on speciﬁed parts of hybrid electric vehicles. The Managing Director of Scania Commercial Vehicles India, Henrik Fagrenius said that the government has taken a step in the right direction in placing emphasis on developing the infrastructure in the country. However, “we believe that this will gain momentum when the GST regime is implemented and the FDI into multi-brand retail entry into the country is approved. We do hope to hear positive news on this at the earliest that will go a long way in the development of the Indian economy. According to the Managing Director of Schwing Stetter, Anand Sundaresan, the increase in service tax and excise duty from 10 percent to 12 percent was expected and didn’t come as a surprise. There are several positive points to boost the infrastructure industry like ECB on low cost housing, irrigation and dam projects, increase in Infrastructure debt funds to `60,000 crore, announcement of the Delhi-Mumbai freight corridor with the Japanese investment of $4.5 billion and implementation of 8,800 km of National Highways. However, many projects have been identiﬁed and are waiting for bureaucratic clearance or land acquisitions. Clear policies and reforms should be made for faster implementation of these infrastructure projects.

Dr Abhay Firodia Chairman, Force Motors

Anand Sundaresan MD, Schwing Stetter

I am disappointed that due to political compulsions, the FM has not been able to implement the many steps required to give a strong boost to the economy

Clear policies and reforms should be made for faster implementation of the infrastructure projects

According to the Director, Metals & Minerals Practice, Frost & Sullivan (South Asia, Middle East and North Africa), Venkatesan Subramanian, steam coal (classified under CTH 2701 19 20) is being fully exempted from basic customs duty along with one percent CVD; full Basic Customs Duty (BCD) exemption is being extended to coal mining projects. The BCD is being reduced to 2.5 percent for the capital goods/ equipment required for setting up or substantial expansion of iron ore pellet plants and iron ore beneficiation plants. On account of these initiatives, steel plants will benefit since good quality coal imports could be used as fuel. With the exemption of customs duty and CVD, price of coal will reduce and keep domestic coal prices under check. This will in turn reduce the production costs of steel and thereby improve steel companies’ profitability. Also, the duty exemption for coal mining projects and duty reduction of mining equipment for iron ore plants would promote coal mining activity and iron ore pellet plants and enhance the availability of coal and iron pellets for the steel industry. Secondly, the BCD on flatrolled products of non-alloy steel whether or not clad, plated or coated falling in headings 7208, 7209, 7210, 7211, and 7212 is being increased from five percent to 7.5 percent. Due to this the imported flat rolled products will become more expensive. This will protect domestic steel plants as it will shield them from the competitive pricing from imports.

and labour by ensuring timeliness of farm operations and increased work output per unit time. TMA is evaluating making a representation to the government to consider rolling back the rise in excise duty, keeping in mind the interest of the farming community at large. In the event of this raise being given effect, the tractor manufacturers in India would be constrained to pass on the two percent hike to the customers, with immediate effect. India is one of the largest tractor market globally with around 450,000 odd tractors sold in the last ﬁscal and growing at double digit rate in volume terms over the last two to three years.

Tractor Segment Tractor Ma nu fact u rers Association (TMA) recently announced that the hike in excise duty from 10 percent to 12 percent, in the Union Budget 2012-13 would lead to a hike in tractor prices. “The hike in excise duty will adversely affect farm mechanisation and agricultural productivity,” according to Chairman TMA Marketing Committee&SeniorVicePresident, Sales & Channel Development, Farm Equipment Sectors, M&M, Avinash Patankar. Due to NREGA, availability of farm labour has decreased during farming season, which can only be addressed through farm mechanisation, according to a release from TMA. Tractors, farm implements and machines enable the farmers to employ the power judiciously for production purposes, which increases productivity of land

Warehousing Segment Frost & Sullivan, in its research note pointed out that the wide range of supporting measures announced in the Union Budget 2012-13 for the warehousing segment of Indian Logistics sector could help in reduction of losses of food grains and other agricultural produce. The country loses an estimated `50,000 crore of agri produce every year due to lack of sufﬁcient warehousing and storage facilities as per ministry of food processing reports. Programme Manager, Transportation & Logistics Practice, Frost & Sullivan (South Asia, Middle East and North Africa), Srinath Manda said that the measure announced in the Budget of investment linked deduction of capital expenditure incurred in the following businesses is proposed to be provided at the enhanced rate of 150 percent, as against the current rate of 100 percent for the cold chain facility and warehouses for storage of food grains is likely to make investments into these segments a further attractive option, thereby driving their development.

Finale It is evident from the muted response elicited by the auto sector that there is nothing significant from the Union Budget. While the pundits say that the minister has tried to strike a balance between the necessity for growth and fiscal compulsions, with the vision to achieve the GDP target of 7.6 percent in 2012-13, it seems that the goals may not be achieved unless there are some ammendments made on the financial document. The industry is looking forward to hearing from the FM. -With inputs from Abhishek Parekh, Nabeel A Khan, Shambhavi Anand and Bhargav TS

Auto Monitor

2 APRIL 2012

SPECIAL REPORT

Geneva Show 2012

T Mark Carbery Automotive Consultant

The lesson of Geneva was clear— every car maker has good products, but they are all struggling for differentiation and relevance

The Geneva Salon international de l’Auto, is Europe’s only annual auto show that takes place on neutral soil. It has none of that strutting, which the German brands indulge in at Frankfurt, with their own halls stuffed with everything in their armoury. And it’s small. That forces the carmakers to focus on their core messages, and right now they are fighting to establish points of differentiation in an increasingly competitive market

he thing about Geneva Salon international de l’Auto, Europe’s only annual auto show of note, is that the event takes place on neutral soil. None of that strutting, which the German brands indulge in at Frankfurt, with their own halls stuffed with everything in their armoury. And it’s small. That forces the carmakers to focus on their core messages, and right now they are ﬁghting to establish points of differentiation in an increasingly competitive market. All of the above means that if you were looking for a theme at this year’s Geneva show, which took place at the start of March, you would have struggled. If there was one, it was off-stage, away from the lights and corporate pomp, and it was alliances and acquisitions. Just before the show’s doors opened, VW was revealed to be close to acquiring the remaining stake in Porsche it does not already own, Fiat is busily sweating the asset of its alliance with Chrysler while looking for further partners, and GM has been forced into working out a deal with PSA Peugeot-Citroen including buying a seven percent PSA stake, partly to resolve a future for its troubled Europeonly Opel brand (Vauxhall in the UK). However, enough of the mundane realities. This was Geneva, the outlook-positive season opener with a product-centric, can-do attitude as sunny and fresh as the snow-capped mountains surrounding the show venue. The Hyundai Kia group’s collective message may not have been overt but was pretty clear— We’re coming to get you. The two brands have had huge success in Europe over recent years but are now moving to a different level, with very attractive products offering a genuine alternative to mainstream brands like Toyota. And with Hyundai at one end of the show and Kia at the other, it looked like a pincer movement. The fact that the Hyundai’s stand was where the defunct Saab used to be seemed rather symbolic, and as if to rub it in, its star was the I-Oniq electric sports hatch concept, which was also very Saab-like at the rear. The company also showed a new, estate variant of the i30, the Tourer. Kia seemed even hungrier. The brand’s styling is as good as it gets, and the new Cee’d unveiled at Geneva not only looked superb in its own right but was easily a match for the latest A-Class revealed on the Mercedes-Benz stand just a few feet away. Renault occupies probably the biggest and most prominent stand at the show. And if you went there you would have been in no doubt about its theme—pure electric vehicles (EVs). Renault

has made the biggest commitment of anyone to EVs, but these sit uncomfortably alongside a range hard-to-shift internal combustion engine-driven cars, and the company has backed itself into something of a corner. Renault brand sales were down 9.2 percent in Western Europe last year and have collapsed by 28.4 percent YTD (Year Till Date) in 2012, and meanwhile the market simply has no appetite for EVs. So it was somewhat ironic that the undeniably attractive Zoe B-segment EV effectively previewed the company’s new styling and the next-generation Clio in particular. Fellow French brand Peugeot’s message is increasingly one of alternative-fuel powertrains, albeit of a rather different kind— diesel hybrid. It’s a relatively expensive solution but avoids range anxiety and makes for a far easier sell than pure EV. Peugeot used Geneva to launch two new models, the 208 small hatchback and the 4008 4WD crossover, based on a Mitsubishi and shared with sister brand, Citroen. Citroen had little news other than the Aircross variant of Peugeot’s 4008 on display, but the brand has been transformed in the space of just a couple of years: its Geneva stand was dedicated to the new, premium message. The DS sub-brand has spun off some highly successful premium versions of its core ranges and all now have impressive interior quality as well as styling ﬂourishes for style’s sake. It’s an impressive marketing shift, in which PSA’s diesel-hybrid technology has been packaged as premium technology feature rather than merely a necessary move into alternative powertrains. By contrast Lexus, which has been dedicated to the premium-luxury hybrid cause for some years, cut a somewhat less vibrant ﬁgure in Geneva. Parent company Toyota has realised the need to re-establish the fun factor alongside the hybrid message, and to do so in the form of a true enthusiast’s car, the FT-86, rather than rely on marketing straplines and funky names like Aygo and iQ. The FT-86, shown in its pro-

duction form prior to launch later this year, is a throwback—rearwheel drive, normally-aspirated gasoline engine, low-tech, simple. It eschews current thinking for the sake of driver-focused elan it hopes will sprinkle some fairy dust on the rest of the range. In contrast, it would have been quite possible to walk past the Lexus stand and barely notice the new GS luxury sedan or LF-Lc hybrid sports car concept, or even register its market leadership in to gasoline hybrid technology. If you had walked past you’d have ended up on the Fiat stand, always a tribute to the small-car ethos. Fiat rarely steps outside the small car segments with success—the brand’s halo car is the little 500, not some executive express. Geneva saw the debut of the 500L. It has little to do with the 500 in truth, being larger than the new Panda, but if it’s badge engineering it’s entirely sensible badge engineering—creating a whole range of small cars at a time of economic uncertainty, austerity and down-sizing. A year or so ago, Fiat Group’s

Ferrari unit was giving us unfamiliar messages about four-wheel drive, four-seaters and incorporating environmental technologies. At Geneva this year, it rammed home its traditional virtues of red-hot speed, power and glamour, undiluted in the form of the new F12 Berlinetta. The bestlooking, best-proportioned car it has designed for some years, the 599 successor is the most powerful, fastest car the brand has ever produced, producing 730 BHP and good for over 210 mph. Geneva also saw Aston Martin return to form with the V12 Zagato after straying off-piste last year with the Toyota IQ-based Cygnet mini car. Lamborghini unveiled the Aventador J, a $two mln, one-off, rooﬂess and rebodied version of the standard supercar bedecked with winglets and diffusers, intended to be an extreme incarnation of the brand. It’s much easier for the exotic brands to remain true to their core ethos of course. On the other hand, it’s harder to diversify. Yet go forward a few weeks,

and this kind of intensely focused brand expression goes out of the window: At April’s Auto China event in Beijing, Lamborghini is expected to show an SUV concept. At Geneva, Bentley got in ﬁ rst with its own SUV concept, a model set for a 2015 launch unashamedly aimed at the luxury SUV-loving Chinese market, which has helped transform Porsche’s fortunes through sales of the Cayenne, a car now responsible for account half the company’s global volumes. The Bentley, code-named EXP 9 F, may turn out to be right for China but its styling got a big thumbs-down in Geneva, and the company has already admitted that it will be restyled. Tata’s premium Land Rover unit is bucking the trend and diversifying rather nicely how-

ever. Hard on the heels of the Evoque baby Range Rover, which is ﬂying out of the showrooms, the company unveiled a convertible version, a near certainty for production. A convertible boutique SUV from the maker of the Defender—that’s proper nichebusting. Sister brand Jaguar was at it too, introducing the Sportbrake, an estate version of the XF. Estates are on the up in Western Europe—at Geneva Audi unveiled the latest RS4, a 444 BHP car available only as an estate—

and the Jaguar’s brand heritage provides enough premium sparkle to overcome any lingering reluctance to driving what is, essentially, family transport. Geneva is also the European show the Tata brand comes to every year. Star of the stand was the latest Megapixel concept, showing the likely design direction for a European version of the Nano, which could be launched by 2015. The concept has a range-extender drivetrain with an electric motor in each wheel, giving about 300mpg and, remarkably, only around 25g/km CO2. Perhaps more signiﬁcantly, the car also demonstrates the way forward for the Tata in Europe: focus the brand on attractive, low-cost small cars and coming trends in market demand. As what will be effectively a new entrant, Tata has the chance to get it right from the start. The lesson of Geneva was clear—every car maker has good products, but they are all struggling for differentiation and relevance. (Views expressed are personal)

Auto Monitor

2 APRIL 2012

G L O B A L WAT C H

Daimler honours 13 for outstanding performance

aimler AG has recently honoured its best vendors w ith the Da i m ler Suppl ier Award 2011, to recognise the outstanding performance of its suppliers. The awards were presented at this year’s key supplier meeting in the Mercedes-Benz Centre in Stuttgart. As in previous years, the award was given in a variety of categories to 13 suppliers. This year’s special prize was presented in the ‘Partnership’ category and honoured the outstanding commitment demonstrated by the Japanese suppliers in the wake of

the natural disaster that struck the country in March 2011. With the annual Daimler Supplier Award, the company recognises outstanding performance in the areas of quality, costs, logistics, technology, and innovation. The company has deﬁ ned these value drivers as well as the principles for supplier collaboration in its globally standardised cooperation model known as the Daimler Supplier Network. In addition, the values of fairness, reliability, and trust are further aspects of the evaluation. In his opening speech at the event, Chairman of the Daimler

Daimler Supplier Award 2011 Winners Mercedes-Benz Cars & Vans • Exterior: Voestalpine AG • Interior: Autoliv Inc. • Electrics/Electronics: Nexans Autoelectric GmbH

International Procurement Services • Energy: Enovos Energie Deutschland GmbH

• Assembly Systems: Atlas Copco Tools

• Central Europe GmbH • Chassis: Brembo SpA • Telecommunication: NTT • Powertrain: KSPG Automotive Communications Corporation • Manufacturing Equipment: Daimler Trucks and Buses Grob-Werke • Exterior: BASF Coatings GmbH • GmbH & Co. KG • Electrics/Electronics: VOSS Automotive GmbH Special Award for Partnership • Chassis: GMF Umformtechnik Gmb

• Powertrain: Craftsman

Collective award for all Japanese suppliers of Daimler AG

Automation

Board of Management and Head of Mercedes-Benz Cars, Dr Dieter Zetsche provided an overview of business development and the strategies for the years ahead, thanked the suppliers for their close cooperation, and highlighted what the company expects of it partners. “We have set ambitious goals for Daimler in the coming years. To reach them, we need strong partners with the will to innovate and grow with us.” The fact that success must not only be measured by economic terms but also by looking at the manner of how it is achieved was emphasised by Member of the Board of Management of Daimler AG for Integrity and Legal Affairs, Dr Christine HohmannDennhardt. He felt, “Good business is our common responsibility, both in terms of quantity and of quality. This does not only apply to our employees, but includes you as our suppliers as well.” In their speeches, Member of the Board of Management responsible for Manufacturing and Procurement Mercedes-Benz Cars & Mercedes-Benz Vans, Dr Wolfgang Bernhard and Member of the Board of Management responsible for Daimler Trucks, Andreas Renschler explained the importance of close cooperation based on mutual trust and drew listeners’ attention to the upcoming challenges. “With our product offensive, we want

Daimler Supplier Award 2011 winners

to develop new markets around the globe and grow together with you,” said Bernhard. “It is essential for us to have reliable partners in these times, as we need to ﬂexibly adapt to volatile demand and are at the same time operating on all continents,” stated Renschler. Together with the heads of the procurement units, Dr Klaus Zehender (Procurement Mercedes-Benz Cars & Vans), Dr Holger Steindorf (Procurement Daimler Trucks & Buses), and Wendelin Wolbert (International Procurement Services), the Members of the Board of Management subsequently presented the awards to the 13 winning suppliers. Daimler also presented a specially designed trophy to

Second consecutive double-digit spike for Skoda

WGroupcompanyŠkoda, has repeated growth rate through January and February, 2012. In February alone, worldwide sales grew by 13.1 percent to reach more than 72,100 units. The brand’s world market share is thus slightly below 1.5 percent. Sales advanced in all regions, with an especially strong growth posted in Europe, India and China. In Switzerland, Škoda has been reported to be the number two selling brand. “Our repeat double-digit growth in February 2012 confirms Škoda’s sustained growth path,” said Škoda Board Member for Sales and Marketing, Jürgen Stackmann. “We are continuing a high rate of growth and are wholly on the course of our 2018 growth strategy. In the first two months of this year, we have shown an excellent performance both in absolute and relative sales figures,” Stackmann added. “In this context, it is important to note that the overall sales climate in Europe has cooled noticeably this year. This amounts to 147,500 Škoda cars, that’s an increase of about twelve percent in the fi rst two months of this year,” he went on. “Our model offensive is in full swing. The Škoda Citigo has made its debut in Geneva and will soon be introduced to major European markets.” The new subcompact is to be the brand’s entry for new target groups. Škoda has just introduced it as a five-door version at the Geneva Auto Salon. In February 2012, Škoda’s sales in Western Europe’s contested markets proved very stable. While total deliveries there were down more than eleven percent, Škoda’s

Škoda has sold over 3,500 cars in India in Feb’12, which is equivalent to a 48.6 percent growth. Its new Rapid has been designed for local customers and been pivotal for the brand’s growth strategy in India market Skoda range on display

sales rose 0.8 percent to 27,700 units (February 2011: 27,500 units). Škoda thus increased its market share in Western Europe yet again—from 2.85 percent in February 2011 to about 3.2 percent in February 2012. Škoda UK also continues to grow, with 2012 year-to-date sales of over 5,370, an increase of 13 percent in the ﬁ rst two months of 2012 compared to 2011. The growth in market share continues from 2.5 percent in 2011 to 2.8 percent YTD. Sales in Switzerland were especially dynamic (plus 24 percent/1,500 cars), with Škoda now the number two selling brand behind VW. In France (plus 15.9 percent/1,800 cars) and in Finland (plus 19 percent/ about 1,000 cars), Škoda also posted double-digit growth. In Germany, Europe’s largest car market, Škoda continued its successful run, with sales growing by 8.6 percent year-on-year in February to almost 9,900 cars. In Austria, sales were up 8.5 percent to close to 1,700 units. In February, the brand’s bestselling models in Western Europe were the Škoda Octavia and the Škoda

Fabia, but demand for the Škoda Yeti and Škoda Roomster also rose considerably—by 12.1 percent and 6.4 percent, respectively. Škoda posted strong growth in Central Europe as well. Sales rose by 7.7 percent to almost 11,000 cars. In the Czech Republic, the brand’s home market, Škoda sales were stable in February at almost 4,800 cars. In Croatia, sales were up 22.0 percent, in Poland up 21.1 percent and up 17.4 percent in Slovenia. The Škoda Yeti (plus 26.9 percent) and the Škoda Roomster (plus 17.2 percent) proved especially popular in Central Europe. Škoda again scored strong percentage growth in Eastern Europe, with more than 8,900 deliveries in February translating into an increase of 30.9 percent against February 2011, which saw 6,800 units delivered. Russia remained the region’s growth engine by far: at more than 6,300 deliveries, sales rose 39 percent against February 2011. The Škoda Octavia was the brand’s most popular make yet again in February 2012, posting 3,500 deliveries (plus 37.3 percent).

The Škoda Yeti (plus 132.4 percent), Škoda Roomster (plus 132.7 percent) and Škoda Superb (plus 72.5 percent) showed exceptional growth in Russia. Škoda also posted above-average growth in other major growth markets: in China the brand sold about 17,100 cars in February 2012, advancing 19 percent yearon-year. At plus 40.9 percent and plus 27.7 percent respectively, Škoda Fabia and Octavia were especially popular in China. In India, the brand has sold more than 3,500 cars in February. This is equivalent to a 48.6 percent growth in the month. Škoda’s new Rapid compact saloon accounted for more than half of sales in India. The Rapid has been designed especially with Indian customers’ needs in mind and has been pivotal for the brand’s growth strategy in the Indian market. Other foreign markets also posted strong growth: Sales in Egypt were up more than 500 percent year-on-year to almost 700 Škoda cars. At 138.2 percent, the brand’s advance in Australia was also outstanding.

honour the great commitment shown by all of the Japanese suppliers following the natural disaster in that country in March 2011. On behalf of Daimler, Wilfried Porth, Member of the Board of Management responsible for Human Resources & Labor Relations Director, thanked the Japanese partners for their outstanding efforts to safeguard supply chains and production at the Daimler facilities in Japan. “Not only did we manage to cope with one of the biggest challenges in the history of the Japanese automotive industry, but together, we can overcome it and even grow stronger due to the fact that we work together so closely and with such extraordinary engagement,” said Porth.

Honda resumes production at plant in Thailand

onda Automobile (Thailand) Co Ltd (HATC), the subsidiary of Honda in Thailand, resumed production of automobiles from 26 March, 2012. The production was suspended since October last year, due to damage sustained from the ﬂooding in the country. HATC has been putting effort in restoring the plant since the flood water was drained out in November 2011. The process involved cleaning, inspecting and replacing plant facilities and manufacturing equipment which were damaged due to ﬂood. The plant is now ready to resume automobile production.

Regaining Lost Ground Honda has been supplying automobiles alternatively from Japan to some countries in the Asia Oceania Region including Thailand, which were impacted by the disruption of production due to the f looding. However, all plants have resumed production and are expected to normalise by April. The pla nt is located in Ayutthaya province in Thailand and employs approximately 4,000 associates and has a production capacity of 240,000 units per year. The plant was established in December 2000 with a capital investment of 5.46 billion baht. Honda will maintain the same positioning of HATC in the future and further promote business operations in Thailand.

Auto Monitor

2 APRIL 2012

G L O B A L WAT C H

Ford’s Limiter resets speed through safety cameras

orsepower, precision handling and advance technology may stir the passions of car buyers, but with the number of speed cameras increasing across Europe, a Ford feature that allows drivers to limit their top speed has become an unlikely favourite. Ford’s Adjustable Speed Limiter enables drivers to set a maximum speed in order to reduce the risk of speeding ﬁ nes or bans through inadvertently

exceeding the legal limit. More than 220,000 Ford cars equipped with this technology were sold in 2011, outstripping other driver assistance features in the Ford range. In the UK alone, 20 percent of customers enjoyed the beneﬁts of the speed limiter device. “At the press of a button this technology helps you to limit the speed of your vehicle,” said Technology Supervisor, Ford of Europe, Dr Torsten Wey. “It only

takes a momentary lapse of concentration to exceed the speed limit which is why the Ford Adjustable Speed Limiter technology gives drivers so much peace of mind.” Adjustable Speed Limiter, introduced in 2010, enables drivers to set a top speed of anywhere between 10 mph and the legal limit. Exceeding the self-selected limit results in a reduction of the fuel supply to the engine and the vehicle slowing down. There are an estimated 35,000 safety cameras throughout Europe. One in ﬁve motorists in the UK alone has been caught by safety cameras since 1996. During 2008 and 2009, UK safety cameras generated £87 million in ﬁ nes. “Adjustable Speed Limiter is now available on the majority of cars we produce and the demand proves just how valued it is,” Wey added. “If you set a maximum speed you don’t have to constantly look at the speedometer.” Further Ford models featuring Adjustable Speed Limiter include Galaxy, Focus, C-MAX and Grand C-MAX.

Ford ’Speed Limiter’ provides peace of mind through safety cameras

How It Works The driver activates the system by using switches on the steering wheel. The speed limit can be raised or lowered by 3mph increments. The system works by smoothly limiting fuel supply to the engine when the

pre-set speed limit is reached. If speed increases because of a steep gradient, audio and visuals warnings are given. If the driver needs to overtake a vehicle, the system can be temporarily over-ridden by pressing the accelerator ﬁ rmly.

Illegal car sales on the increase

elling a car, which you do not yet own is the most common type of car fraud, according to figures released by the Finance and Leasing Association (FLA) to coincide with Car Crime Awareness Week recently. ‘Conversion fraud’—where motorists sell cars they do not own—accounted for almost 40 percent of all car fi nance frauds in the last three months of 2011. This represented around a 10 percent increase in this type of fraud over the same period in the previous year. If one buys a car on fi nance, he/she is not the legal owner of that car until he has made all the payments. Until that point, the fi nance company owns the car, and he is the registered keeper. If he sells the car, he is committing fraud, as he is selling property that is not his. Motor finance fraud cases overall fell by two percent in 2011 compared with 2012. The value of motor fraud cases also fell in 2011 to £13.6 million, down by seven percent on 2010. There were a total of 197 cases of motor finance fraud in the last quarter of 2011, and 815 over the year as a whole. FLA member fi nance companies prevented around 7,400 cases of attempted fraud in 2011. This avoided £95 million of fraudulent deals, which helps keep fi nance costs down for car buyers. FLA’s Head of Motor Finance, Paul Harrison, said, “While it may be tempting to sell your car if you are in financial difficulties, if you do so without speaking to your finance company fi rst then you may be classified as a fraudster. It’s important that the owner of the car—the fi nance company—knows who is driving that car at all times, as required under the terms and conditions of a credit agreement. “As part of this week’s third annual Car Crime Awareness campaign, we are telling car fi nance customers about their rights and how to protect themselves against being the victim of fraud, or inadvertently committing fraud.”

Auto Monitor

2 APRIL 2012

G L O B A L WAT C H

International auto round-up Mercedes to drop R-class wagon in US Mercedes-Benz will drop the slow-selling R-class wagon from its US line-up after the 2012 model year, though it would continue to build the R class at its US plant in Alabama for export to other markets. Mercedes dealers sold 293 units of the R class through the first two months of this year, one-third less than the number sold in the first two months of

GM receives $288 m subsidy Au st ra l ia n gover n ment announced AU$275 million ($288 million) subsidy for GM to guarantee it continues to make cars in Australia for another decade through its subsidiary Holden. As part of the deal, US-based GM said that it has agreed to invest more than $one billion in car manufacturing at its Melbourne and Adelaide plants until at least 2022. Holden will use the government assistance to design and build two new cars for the global market after 2015, the statement said. Prime Minister Julia Gillard said GM had considered closing its entire design and manufacturing operations in Australia, costing 12,000 Holden jobs. The government is not becoming a shareholder in Holden. Aust ra l ia n ma nu fact u rers including Holden have been losing exports due to the strong Australian dollar, which has been bolstered by record Chinese industrial demand for minerals and energy. Holden is one of seven global GM operations that designs, builds and sells vehicles for domestic and international markets. The federal government will provide AU$215 million while the Victoria and South Australia state governments will provide the remainder. Australia’s three carmakers— GM Holden and the Australian arms of Toyota and Ford—have all cut jobs due to falling sales and exports, blamed on the global downturn and a record high Australian dollar, which has traded above parity with the US dollar. The funding will secure the jobs of 12,000 people employed by GM Holden’s Adelaide car plant and engine manufacturing plant in Victoria, and shore up thousands more manufacturing jobs in the components sector. GM Holden cut 140 jobs from its Adelaide car plant in February, while Toyota said in January it was cutting 350 jobs at its Australian manufacturing operations. The latest government figures show Australia produced nearly 250,000 cars in 2010, falling steadily from about

2011. In 2011, R-class demand in the US dropped 19 percent to 2,385. It will continue to sell the wagon in other markets. The automaker sold 4,421 R-class models in Europe last year, a rise of 26 percent on 2010, according to market researchers JATO Dynamics. January sales slipped 31 percent to 272 units.

320,000 in 2008 and more than 400,000 in 2004. The industry employs about 55,000 people and supports 200,000 other manufacturing jobs. The government has been determined to keep the industry aﬂoat and protect jobs after Japan’s Mitsubishi Motors closed its Australian car plants in 2008. The funding for GM Holden comes from the national government’s 12 year car industry support package, announced in 2008 and budgeted at AU$5.4 billion to 2020, which commits the government to co-invest with car makers to support manufacturing jobs.

Volt power cords to be replaced GM said it is replacing the 120-volt charging cords in most of the nearly 10,000 Volts that it has sold since late 2010. The company will not replace optional 240-volt power cords. Separately, GM told its Volt owners that they can start getting upgrades to protect their batteries during severe crashes. In a letter this month, GM told Volt owners they could start making appointments with their dealers. In early January, GM said it would strengthen an existing portion of the Volt’s vehicle safety structure to further protect the battery pack in a severe side collision, adding a new steel structure to guard against severe side crashes. GM will also add a sensor in the reservoir of the battery coolant system to monitor coolant levels, and a new a tamper-resistant bracket at the top of the battery coolant reservoir to help prevent potential coolant overfi lls. But the automaker declined to stop selling vehicles without the fi x, because it said it wasn’t a safety issue. GM will upgrade all vehicles that don’t have the new features. The OEM resumed production after more than a month shutdown with the new upgrades. But citing slow demand, It halted production of the Volt at its Detroit-Hamtramck Assembly plant for fi ve weeks. The safety upgrades came after the National Highway Traffic Safety Administration investigated the

risks of ﬁ res in post crash Volts. NHTSA closed its investigation in January without ﬁ nding any safety issue. GM fell short of its 2011 goal of 10,000 sales — selling 7,671 for the year. GM CEO Dan Akerson repeatedly said last year that GM expects to sell 45,000 Volts in 2012 in the US.

China’s SAIC to codevelop Opel minicar engine Opel/Vauxhall’s new small gasoline engine family is set to debut in the Junior minicar at the Paris auto show in September’12. Opel parent GM and its China partner, SAIC, are co-developing a small engine family of three and four cylinder units with displacements from one litre to 1.4 litre in the fi rst joint powertrain development between the two companies. The engines are Euro VI compliant and have direct injection and turbocharging capability. Opel has not said which will be the fi rst car to use the small engine, which it says has a compact, lightweight design, but the brand’s new minicar, codenamed the Junior, is a strong candidate. SAIC will produce the engines in China for use in its MG and Roewe brands. Opel will build the engines in Hungary. The engines will improve fuel economy over existing engines by 10 percent, Opel said. Torque will increase by 20 percent. The engines, along with new medium-sized engines including a 1.6-litre diesel and a 1.6-litre turbocharged gasoline unit, will have replaced a substantial amount of our current engines by the end of the decade. The new small engines will be used across Opel’s model range. The Insignia mid-sized car, whose entry-level engine is the current 1.4-liter turbocharged gasoline unit, is a candidate. The powertrain range will also be used by other GM brands. Opel is expanding its plant in Szentgotthard, southwest Hungary, to build the small- and medium-sized engines to boost annual production capacity to 500,000. GM and SAIC are also developing a dual-clutch transmission. The transmission can accept torque of up to 250 newton meters initially, with bigger outputs planned in the future. He said the transmission will help improve fuel economy and reduce CO2 emissions but declined to provide estimated figures for the improvements.

Skoda to boost annual production to 1.5 million Skoda is on its way to meeting its goal of producing at least 1.5 million cars a year by 2018, helped by new models and rising demand in India, China and Russia. The Volkswagen Group brand expects to continue a trend of robust sales seen in the ﬁ rst two months of the year, Skoda CEO Winfried Vahland said. Skoda sold 147,500 units in January and February, a 12 percent increase over the same period in 2011. “March will continue this trend. We expect a good ﬁ rst quarter for 2012,” Vahland told a news conference in Prague recently. He added: “The environment for our business has recently cooled slightly,

especially in some markets in Europe. The overall picture remains positive and we’re cautiously optimistic regarding the years ahead.” Skoda expects to continue to grow in all its regions, he said. The Czech brand’s global market share grew to more than 1.4 percent last year as its car sales increased 15 percent to 879,200. In Russia, Skoda’s fastest growing European market, the carmaker’s 2011 sales rose 63 percent to 74,100. In China, which continues to be the company’s largest market, sales advanced 22 percent to 220,100 units. India, where sales rose almost 50 percent is a “growth market par excellence,” Skoda said. Skoda said its 2011 operating profit rose 66 percent to 743 million euros ($985 million), up from 447 million euros the year before. Skoda’s board is likely to propose a dividend of about 7.1 billion koruna ($382 million) from 2011 profit, the company said. Skoda aims to boost production to one million cars by 2014 at the latest after making 902,000 vehicles in 2011. The brand’s best-seller in 2011 was the Octavia compact car, with sales of 390,000, a rise of 10.7 percent. The Fabia subcompact was the second most popular model, with sales up 16.5 percent to 267,000. Skoda sold more than 100,000 units of its Superb flagship sedan for the fi rst time last year. Superb sales rose by 18.1 percent to almost 117,000, of which 48,000 were sold in China alone, the carmaker said. The brand is currently introducing its Citigo minicar in Europe and last year it started sales of the Skoda Rapid model in India. It will present a European version of the Rapid this year.

VW bought Skoda in 1989 shortly after the fall of communism.

Volvo China may recall S60 and XC 60 To prevent potential fuel leaks and to ﬁ x faulty wiring that could cause airbag failure, Volvo Cars will be recalling 12,798 units of its 2012 model year vehicles imported to China, a Chinese quality regulator said recently. The 11,119 S60 vehicles and XC60 cars will be recalled in China to ﬁ x a wire harness under the front seats, which might interfere with the car’s airbags. The vehicle manufacturer is also recalling 1,679 S60 and XC60 cars to inspect the underbody coating that may penetrate the fuel lines and cause fuel leakage, Reuters said in a report.

Prius Japan’s top selling car, Fit follows Toyota Prius retained its top position as the best selling car in Japan for the ninth consecutive month. According to the data released by the Japan Automobile Dealers Association and the Japan Mini Vehicles Association, the vehicle has nearly doubled its sales in a year to 35,875 units. Followed by Prius is Honda Motor Company’s subcompact, Fit, with sales of 24,973 units, up to 48 percent. Daihatsu Motor Company’s mini-vehicle Mira, is the third largest selling car in the country, which posted sales of 22,023 units, marking a 3.2 fold year-on-year increase. The rankings of the top three best sellers remained unchanged from January’12. Toyota’s Aqua hybrid, which was released in December’12, rose to fourth place with sales of 21,951 units.

Peugeot-GM joint panel to steer alliance PSA Peugeot Citroen and GM have created a joint steering committee, including five executives from each company, as part of the companies’ pa rtnership. Last mont h, GM and Peugeot announced the alliance, which will last at least 10 years and include sharing vehicle platforms, components and modules. It creates a global purchasing joint venture to buy goods and services from suppliers. The alliance aims to achieve $two billion annually in savings by 2017. The savings would be shared about equally. GM also will spend about $423 million to buy seven percent of PSA Peugeot. The steering committee will manage alliance activities and any exploration of areas the companies may further work together. Work

on joint projects is expected to start by the end of 2012. GM’s representation includes Vice Chairman, Steve Girsky; Chief Financial Ofﬁcer, Dan Ammann; Senior Vice President of Global Product Development, Mary Barra; Vice President, Global Product Planning and Program Management, Stephen Carlisle; and President, GM Europe, Karl-Friedrich Stracke. Peugeot’s leadership on the steering committee includes Jean-Christophe Quemard, executive vice president programs; Jean-Baptiste de Chatillon, executive vice president and CFO; Guillaume Faury, executive vice president research and development; Yannick Bezard, executive vice president purchasing; and Denis Martin, executive vice president industrial operations.

Type III Composite Cylinders ADVANCED LIGHTWEIGHT STORAGE SYSTEM

Driving range of Commercial Vehicles up tp 1500 km without refuelling Benefits of Dynecel速 Cylinder Includes Lightweight 70% lighter than Type 1 cylinders.

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Resistant to Hydrogen embrittlement.

Non-Permeable,Seamless aluminium liner.

Extreme resistant to chemicals.

Size Flexibility.

No Retesting for 20 years.

True fast fill capability.

Improved driving behaviour.

Highest Storage Capacity for given diameter of any

More space to add 9-10 seats for buses.

lightweight cylinders on market.

8*W205 = 1640 liters

4*W320 = 1280 liters

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Advertiser’s Name & Contact Details

2 APRIL 2012

ADVERTISERS’ LIST

36 Pg No

Ace Manufacturing Systems Ltd

Advertiser’s Name & Contact Details

Pg No

Advertiser’s Name & Contact Details

Guhring India Private Limited

BIC

MTE Industries Pvt Ltd

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E: ams@bgl.vsnl.net.in

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ADEA

Haas Automation India Pvt Ltd

Pg No 13

W: www.mteindustries.com 3

Ningbo Jialilai Machinery Manufacture Co., Ltd

T: +91-22-66098830

W: www.adea.in

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Auroral Sinter Metals Co., Ltd.

E: indiasales@haascnc.com E: bennyjin@chinajll.com W: www.haascnc.com

T: +886-37-542-988

W: www.chinajll.com Igus India Pvt Ltd

E: sh69032.tw@msa.hinet.net

18 Osram India Pvt Ltd

T: +91-80-39127800

W: www.auroral-sinter.com.tw

T: +91-09871474036

E: info@igus.in Bony Polymers (P) Ltd

E: pankaj.pandey@osram.com

W: www.igus.in T: +91-129-2211701 IMTMA

E: bony@bonypolymers.com

T: +91-80-66246600

Premier Ltd

W: www.bonypolymers.com E: imtma@imtma.in Damco India Pvt. Ltd.

W: www.osramindia.com 33

T: +91-20-66310000

W: www.imtma.in

E: mtdsales@premier.co.in

T: +91-22 3308 8249 Indian Oil Corporation Ltd.

E: vaibhav.jain@damco.com W: www.indianoil.co.in

Shapers India Pvt Ltd

W: www.damco.com ITW India Ltd Dynetek Cylinders India Pvt. Ltd.

35 T: +91-9560764455

T: +91 22 3226 6868

T: +91-2137-668911 E: mail@shapersgroup.com

E: sanjay.marwah@itwindia.com W: www.shapersgroup.com

E: write2us@dynetekindia.com

W: www.binkspce.eu

W: www.dynetek.com

Sreelakshmi Traders Jyoti Cnc Automation Pvt. Ltd.

Ecocat India Pvt Ltd

T: +91-129-4266500

T: +91-44-24343343

T: +91-2827-287081

E: sreelakshmitraders@gmail.com W: www.sreelakshmitraders.com

W: www.jyoti.co.in

W: www.ecocat.com

Legris India Pvt Ltd FIC

Tata Motors Ltd.

T: +91-124-4590600

T: +91-22-66561866

T: +91-124-4951300

E: legris.india@parker.com

E: charu.gulati@tatamotors.com

E: kaushil.ganguly@exxonmobil.com

W: www.parkerlegris.com

W: www.tatamotors.com

W: www.exxonmobil.com Forging Machinery Manufacturing Co

MAG Industrial Automation Systems 11

T: +91-80-40677000

T: +91-161-5011755

E: sales-India@mag-ias.in

E: info@nkhammers.com

W: www.mag-ias.in

E: info@jyoti.co.in

E: alok@ecocatindia.com

Exxon Mobil Lubricants Pvt Ltd

W: www.premier.co.in

The Supreme Industries Limited

T: +91-9892569003 E: protec@supreme.co.in W: www.supreme.co.in

W: www.nkhhammers.com Fox Solutions

Mahindra & Mahindra Ltd (Auto) 6

World Courier India Pvt Ltd

T: +1800-2096006

T: +91-80-43438607

W: www.mahindrasmallcv.com

T: +91-253-6618100

E: ripudaman@worldcourier.co.in

E: sales@foxindia.net

Metro Tyres Ltd

19 W: www.worldcourier.com

T: +91-120-4147414

W: www.foxindia.net G W Precision Tools India Pvt Ltd

Micromatic Grinding Technologies Ltd

Yamazaki Mazak India Pvt Ltd

T: +91-80-40431252

T: +91-120-2712137

T: +91-2137-668800

E: info@gwindia.in

E: info@micromaticgrinding.com

E: sudhir_patankar@mazakindia.com

W: www.gwindia.in

W: www.micromaticgrinding.com

W: www.mazak.com

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THE OTHER SIDE

Getting Personal with Sateshwar Tuteja, Director, Key Account Management & Industrial Verticals, Schenker India Pvt Ltd If not in the industry, where would you be? The reason I landed up in this industry is due to the dynamic nature of the industry. It is an induced industry, but that’s what makes it interesting and challenging. The world has become more than flat commercially; factories and consumers are closer and better connected than ever. It’s great to be part of the industry, which have strings attached to almost all the global and regional events—be its Arab spring, Chinese new year, devaluation of currencies, government policies, weather conditions—keeps me on edge and I love it and would like to remain part of global supply chain What car do you drive? What do you dream of driving? It’s a pleasure to be driven in my Nissan than to drive, and in my dreams I don’t drive, I just fly, flying swiftness of supersonic jet and the might of A380, both attracts me, so both have found place in my dreams Your most recent indulgence… I have just taken the work-life balance very seriously and that I would say, is my recent indulgence What are you currently reading? ‘Steve Jobs’: The Exclusive Biography’ by Walter Isaacson What are you doing when not talking about the industry? I like to listen to music, watch movies; some TV channels specially Discovery & TLC besides exploring apps on my iPAD An outdoor activity you would miss office for… I love to walk, provided it’s not very hot Where did you go for your last holiday? Singapore & Malaysia—these are amazing cultures and offer something for everyone You get angry when… Careless attitude & corruption make me very angry

2 APRIL 2012

In Person Sateshwar Tuteja is Director, Key Account Management and Industrial Verticals in Schenker India Pvt Ltd. He has an MBA in Marketing and possesses a PG Diploma in Shipping and Export Management. He has also been selected as a coach in the Asia Pacific Region for bridging up leadership competencies for the Schenker Asia Pacific. He has represented Schenker India on various global platforms like India–EU Chamber of Commerce in various locations across the Europe, Indo-Canadian Indo Canadian Chamber of comcom merce in Vancouver and Export promotional romotional chamber at Toronto & Chicago. Tuteja has been involved in new w product development in order to provide customised logistics ics solutions to the customers. He is credited with turning ing many loss making functions and units into the profit making propositions for Schenker India and has been aggressively gressively representing the company in global platforms and nd business reviews. He has been instrumental in nurturing competence centres by exploring knowledge-based sed management concepts for Schenker India in the industry stry verticals. Starting with automotive, aviation, marine parts, consumers, electronics, telecommunications and retail & fashion, he successfully expanded the foothold oothold of Schenker India through all these year. ear. Tuteja has been an attendee for the ‘Leading Oneself & Leading Others’’ course in Germany with the objective of leading transnational teams with different ent cultures, functionalities and backgrounds grounds and a part of prestigious International national Development programme for DB Schenker top executives across the world. He e is a life member of Indian Institute of Export & Import Management, IIEIM.

What is the one thing you would like to change about you? I am happy with myself but would deﬁ nitely like to be ﬁtter physically, mentally & spiritually Best thing to have happened to you… Still waiting........

An experience I won’t forget…

Illustration: Sachin Pandit

Many experiences... but my visit to Niagara Falls is one amazing experience that I can never forget. Wildness, energy, beauty of nature, magnitude, swiftness and velocity of part of nature was just amazing—the hollowness & triviality of human existence was personified in its full form.

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