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
Vol. 12 No. 24
6 August 2012
w w w. amo nl ine . in
FOCUS
TESTING
` 50
32 Pages
INTERVIEW ‘We Want To Make Safety Affordable For India’ Pg 12
V Balasubramanian, Deputy Managing Director, Bosch Chassis Systems IndiaServices India
Pg 8
Manesar-Gurgaon suppliers bleed over MSIL lockout Cut production by up to 50 percent, send employees on leave Nabeel A Khan New Delhi
A
n unsettled silence is spread across ManesarGurgaon stretch since the violence broke out at Maruti Suzuki India’s (MSIL) Manesar plant on July 18. Many of the component suppliers have cut down their production by up to 50 percent and are observing No Production Day (NPD), following the lockout at India’s largest car maker’s plant. MSIL announced a lockout on 21July, at its Manesar plant sighting security reasons after a senior official from the human resource department was killed and several others were injured in a violent confrontation between management and the workers. Since then, MSIL is reportedly suffering cumulative losses of around `90 crore per day. It buys 30,000 different components from over 250 vendors, which are assembled together on the shop floor to manufacture cars. The ill-fated Manesar plant started in 2007 can churn out 5.5 lakh cars per annum, which is about 40 percent of the company’s total capacity. It also has a diesel engine unit with a capacity of one lakh engines and transmissions. The Manesar and Gurgaon facilities have a
combined capacity of 14.5 lakh vehicles per year. Of the over 250 vendors, around 70 percent have production units in the ManesarGurgaon-Daruhera belt. “We have reduced our production by at least 30 percent since the lockout at the MSIL’s Manesar plant. Apart from that, we are observing no production days twice a week to compensate the losses by saving electricity and other expenses,” said Chairman & Managing Director, Uno Minda Group, NK Minda. Uno Minda Group is a Ma nesa r-based component maker and manufactures switches, electric mirrors, horns, lamps, blow molding components, electronics & sensors, CNG-LPG kits, alloy wheels, air filtration systems, seat belts, batteries, diecasting components and wheel covers for Original Equipment Manufacturers (OEMs). Some component manufacturers fear that the disgruntled workers and union might influence their workers too, as they are in close contact with the former. “The loss is not only financial but beyond that. The monetary loss will be recovered but the incident has put a blot on industrial history of the region. The officials are in anxiety; if I were an HR personnel, I might not have liked to work in this region,”
Group Executive Director, Emkay Industries, Varun Jajoo vented. Jajoo adds that an eerie discomfort is perpetual across the manufacturing units in the region. Emkay has trimmed the production shift for MSIL product line at Manesar plant to 16 hours from round the clock shifts. However, the industry people expect that operations will resume within 10 to 15 days at the
MSIL Manesar plant. MSIL’s Ma nesa r plant rolls out Swift, Swift Dzire, SX4 and A-star models from two assembly lines. A third line is in an advanced stage of completion and is expected to be operational by 2013. Last year, a series of labour strikes had led to a revenue loss of `2,400 crore. Echoing in the same voice, Executive Director, Technico Industries Ltd, Amit Gupta, while speaking to Auto Monitor said, “We have gone for a production cut by around 50 percent. We have reduced our shifts. The loss to the component industry is more than that of Maruti due to multiple additions of sale. We estimate losses to the component industry to the tune of `125 crore per day.” As a strategy, the management at Technico Industries is trying to minimise its losses by reduced work timings and giving leaves to the staff now, which they had accumulated so far. The company supplies sheet metal components and body parts
to MSIL. In the mean time, ten office bearers of Maruti Suzuki Workers’ Union (MSW U), including President, Ram Meher and General Secretary, Sarabjit Singh have been sent to police custody for seven days by a local judicial magistrate. Industry experts believe that MSIL will impact the entire value chain and cause losses to the entire automotive industry and also hamper the overall growth. “This is an unfortunate incident, which is going to impact and cause losses to the entire value chain. This will cause further delay in the delivery of vehicles. One of the main reasons for such an occurrence is that today’s human resources are young and aspirational, so we need to deal with them very carefully on every issue including compensation,” Partner, Risk Advisory Service, Ernst & Young, Kapil Arora said to Auto Monitor. However, t he industr y experts outrightly rejected the rumours that MSIL might shift its plants out of the ManesarGurgaon region. “They might set up a new facility outside this region but not possible to shift this one to a new location,” signed off NK Minda.
Spark Minda to navigate infotainment market
DATA MONITOR Top 5 3W makers Company
Jun-11
Jun-12
Change
BAL
15,650
17,590
12.40%
Piaggio
15,757
14,951
-5.12%
M&M
5,149
4,836
-6.08%
ATUL AUTO
1,980
2,440
23.23%
TVS
801
1,050
31.09%
Top 5 3W-Exporters Company
Jun-11
Jun-12
Change
BAL
28,180
9,195
-67.37%
TVS
3,022
2,205
-27.04%
Piaggio
969
369
-61.92%
M&M
332
236
-28.92%
Force Motors
42
126
200.00%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
Nabeel A Khan New Delhi
S
park Minda is looking for a major presence in the in-car infotainment segment. It sees a huge growth in terms of upgradation from the normal audio system to one with a touchscreen, mobile connectivity, navigation & TPMS. The component manufacturer’s JV Partners are already providing telematics solutions in Europe for commercial vehicles and with their support it is planning to provide solutions to Indian OEMs. Spark Minda is exploring merger and acquisition opportunities in telematics and navigation systems.
“We plan to become a major player in this segment. We see the growth both in OEM and aftermarket on the same platform. Although the current market scenario is a little bleak, but the silver lining, even in current scenario, is that sales of high-end audio systems are increasing rapidly,” Group Chief Executive Officer, Spark Minda Group, Ashok Minda told Auto Monitor. Telematics and in-car navigation—defined as the exchange of information between a satellite, fixed on a mobile asset through a wireless communication device with the external world—is a tool that helps in enhancing driver experience. The company is also eyeing
a breakthrough in technology to provide a low cost solution by integrating the fixed navigation to an instrument cluster or central information display. This can extend the market to mid-size and entry level cars and reverse the scenario as more than 50 percent of the navigation systems can be integrated units. Presently, 90 percent of the navigation systems are smart phone or portable devices, which are sold as aftermarket products. Currently, a car has about 35 percent of electronics and is expected to be 50 percent in next 10 to 15 years. The global trend with regard to in-car entertainment category is towards integration of devices
and functionalities. After integrating various product features like navigation, video, Bluetooth technology in one product that is wi-fi enabled. It is expected that in-car entertainment systems, which will work on in build wi-fi systems and transfer of music not only from within the car but from home or other cars. “Indian market is also catching up very fast with the changes, while new technologies are getting adopted both at OEM and aftermarket levels. New car models have been launched with integrated double-din touchscreen systems, which has in build navigation, Bluetooth, pa rk i ng a ssista nce etc,” Minda added.