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 ekly e W
NEWS IN BRIEF Gurpratap Boparai to take over as Fiat India CEO
G
urpratap Boparai is set to take over as CEO of Fiat India Automobiles Ltd f rom Rajeev Kapoor, who is retiring from his current position as President & CEO of the company. Kapoor joined Fiat India Automobiles Limited in 2007 and has overseen the formative years of the operations to its present level and is retiring on reaching 60 years. Boparai is currently heading the Powertrain Division of the company. He possesses the requisite skills and experience and will be responsible to scale the state-of-the-art Ranjangaon facility to further heights. Having joined Fiat India in 2007 as Assistant Vice President, Manufacturing and Powertrain Division, Boparai took over as Head of Powertrain Division in 2009 where he was responsible for business development and overlooking all the functions of powertrain plants like manufacturing, finance, HR, PE and others. He has worked in various capacities at Tata Motors, Ocap Chassis Parts Pvt Ltd, Iveco and Tata Cummins Ltd.
DATA MONITOR Top 5 CV Makers Company
Jul-11
Jul-12
TML
36,298
35,897 -1.10%
Change
M&M
10,959
11,721
6.95%
ALL
6,774
9,027
33.26%
VECV EICHER
3,935
3,492
-11.26%
FML
2,281
2,106
-7.67%
Top 5 CV Exporters Company
Jul-11
Jul-12
Change
TML
4,832
4,155
-14.01%
M&M
1,334
3,272
145.28%
ALL
1,060
758
-28.49%
VECV Eicher
217
110
-49.31%
FML
12
53
341.67%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
Vol. 12 No. 28
w w w.am o n l i n e.i n
3 September 2012
` 50
40 Pages
FOCUS
STUDY
TESTING
OUTLOOK OF EUROPEAN AFTERMARKET Pg 14-16
Pg 10
4W segment to pump Advik’s growth Nabeel A Khan New Delhi
P
u ne-ba sed component ma nufacturer, Advik Hi-Tech Pvt Ltd, after establishing a strong foothold in the twowheeler segment in the last 12 years, is looking forward to foray into the four-wheeler component business. It has entered a technical alliance with Germany-based Trochocentric Patentverwertung-GmbH and will be the sole manufacturing partner of the German research and design magnet, which claims to have over 40 IPRs for engine and transmission oil pumps. The company is setting up a new plant in Pune to manufacture oil pumps for fourwheelers with a total capacity of four million units. Eight acre has been acquired for the facility, which will be operational by January 2014. “This is a major expansion plan that we have planned. We are sure that our expertise and image as a leading global manufacturer of oil pumps for the two-wheeler
Aditya Bhartia, MD, Advik
segment will help us repeat the same magic in four-wheeler segment,” stated Managing Director, Advik Hi-Tech, Aditya Bhartia to Auto Monitor. Trochocentric has manufacturing partners worldwide including Magna in the US, SHW in Germany that supplies to Mercedes, Audi BMW and VW. Advik manufactures products like lifter tensioner assemblies, oil pumps, fuel pumps, fuel feed pumps, fuel cocks, decompression units, water pumps, one way clutches and precise machined components like
pinions, screws, nuts & control shafts for global two-wheeler OEMs. It has the license to produce an exclusive technology by HMSI—combi-brakes (front and rear brake together)—that are used in the Honda Activa. Thus the component maker perceives venturing into the four-wheeler segment as the next step forward. Worldwide, the two-wheeler market is about 50 million units per annum and Advik manufactures around ten million units per annum translating to around 20 percent share. It manufactures about eight million timing chain tensioners. Its customers include Ducati, Honda, HeroMotoCorp and Bajaj. It is in talks with Triumph Motocycles to become its supplier when Triumph kicksoff its Indian operations.
Bangalore Plant With an investment of `45 crore, a new facility will be operational near the Honda Motorcycles’ plant in Bangalore by March 2013. The greenfield facility spread across four acre will initially produce five million assemblies
a year. “All the new plants that we are putting up will have better machines and automation. We will be able reduce manpower by at least 15 percent,” Bhartia said. The company currently employs around 1,000 people across its three plants. Advik plans to invest around `150 crore by 2015 to attain a turnover of `500 crore by then. Exports contribute to around 20 percent of its revenue, while imports amount to around 10 percent of raw materials, thus limiting any siginifcant negative impact due to rupee depreciation. One of the major challenges for the company is dealing with the increasing cost of input materials. It further plans to increase its contribution in the export domain by increasing penetration in Vietnam and Indonesia and also enter Brazil. The company grew at a CAGR of 30 percent since its inception in 2000 but the current pressure has blown out its expectation and it is hoping to record a 20 percent growth this fiscal. It clocked a turnover of `200 crore in FY12 and hopes to touch around `250 crore in FY13.
Insurance cos rue unabated pricing pressure Abhishek Parekh Mumbai
I
nsurance companies are continuing to face unabated pricing pressure on motor insurance policies. The intense price competition among insurers has lead to diminished incentives for leading players in motor insurance to offer ‘innovative’ insurance products or coverage. “With low awareness of motor insurance, the scope of introducing differentiated or more complex insurance products may not be a good proposition. Basic policies with add on benefits as per requirements is what seems to be the need at this stage. One of the key issues is that customers need to be given a choice in terms of the policy that is suitable to his/her needs, but the current practice of bundling motor insurance at the time of sale of the vehicle may lead to denial of that choice,” said Member of Executive Management &
Head HR, Marketing CEM and Strategy Planning, HDFC Ergo General Insurance Co Ltd, Mukesh Kumar. He added that the current scenario of relatively standardised insurance offerings by most companies is likely to continue with few players opting to have ‘toppings’ or more specialised coverage depending on customer requirements. Insurers need to be consistent with their message and offer same pricing on insurance products irrespective of the channel of distribution. Kumar elaborated that most new players in the non-life insurance business enter the segment through motor insurance as it is mandatory for car owners. For insurance companies, motor insurance forms the bulk of the risk assured in its initial years. The proportion of motor insurance may subsequently stabilise to around 40 to 45 percent of the non life portfolio. “Different distribution channels are critical in order to impart
Mukesh Kumar, Member of Executive Management & Head HR, Marketing CEM and Strategy Planning, HDFC Ergo General Insurance
choice to customers. It is likely that the customers would lose out on a policy that may be otherwise suitable and affordable but may not be available with the concerned dealer. The choice should not be denied to customers,” said Kumar. Players also point to slower sales of new cars as a major concern for the growth of the business
in the coming months. Vice President, IFFCO Tokio, Abhay Kumar pointed out that severe pricing pressure has been leading to margin erosion for insurance players. Players need to have innovative products and distribution channels to reach out to customers in order to grow business.