Setting up world's largest wheel rim plant
After its dramatic foray into the truck segment, AMW is all set to script another success story in its component business. The company has announced expansion plans for its auto component division by setting up the world’s largest single location wheel rim plant adjacent to its truck manufacturing facility at Bhuj in Gujarat.
AMW has invested Rs. 500 crores on the auto component business and plans to produce components for the complete range of vehicles, including passenger cars, commercial vehicles and tractors.
Mr. Anirudh Bhuwalka, Managing Director, Asia MotorWorks, said: “AMW has received overwhelming response in the CV sector. The industry has transformed itself into a global hub for sourcing a range of high-value and critical automobile components. Tremendous growth in the Indian market has certainly contributed to a marked increase in demand for auto components. Thus, entering the auto component segment was a natural move in our expansion plan.”
Capitalizing on the growing demand of domestic auto companies, the Indian automobile components industry has emerged as one of India’s fastest growing industries, and a globally competitive one. The world auto component output is expected to touch $1.9 trillion by 2015, of which around 40 per cent ($700 billion) is potentially expected to be sourced from low-cost countries like India. “AMW hopes to garner a significant portion of the opportunity available in the auto component business”, he added.
In view of the growing domestic and overseas markets for auto components, the company has ventured into manufacturing of wheel rims and pressed components. Mr. Anand Mimani, CEO of AMW’s Component Business, says: “If you take the wheel rims business, the global demand for wheel rims for passenger cars is 270.49 million units and the current capacity available is 263.67 million units. This clearly shows a gap of 6.8 million units. In the commercial vehicle segment, the global requirement is close 164 million and the available capacity is around 160 million units reflecting a shortage of 4 million units. Also considering the fact that there is growing demand for automobiles these numbers are bound to increase”.
In fact, the same is true even in the Indian domestic market, and many of the Indian vehicle manufacturers, including Tata Motors, are importing wheel rims from China to meet their requirement. In India there are three wheel rim manufacturers, the major one being Wheels India with a capacity to manufacture 8.5 million units, next SSWL with a capacity of 4.25 million units, and Kalyani Lemmerz with a capacity of 0.8 million. This makes AMW’s new plant with a capacity of 15 million units the single largest manufacturing facility for wheel rims in India.
Having a single location derives significant advantages in terms of economies of scale, logistics, manpower and overheads. AMW is looking at all product segments like passenger cars, commercial vehicles and tractors. It can offer its wheel rims for both with tube and tubeless tyres.
The wheel rim facility has been set up with a capacity of 15 million units and started commercial production in November 2007. The company has already started supplying to a few customers in Europe. It is also working with Indian OEMs on new projects, and OEM supplies will start very soon.
The press shop has also been set up in Bhuj with a capacity of 1,00,000 tonnes per annum and commercial production of pressed components started in July 2007. The company is currently making OEM supplies to General Motors and also for white goods manufacturers like Videocon. A state-of-the-art Schuler press shop has been installed with 45 different presses.
Mr. Anand Mimani says: “Products from our auto component division are designed for ensuring economic solutions for virtually every manufacturing requirement for AMW’s clients. The complete cycle chain from raw material, designing to finished product makes AMW a cost effective choice. We take great pride in mentioning that world’s renowned OEMs like General Motors, Iveco and Volkswagen recognize us as potential suppliers.”
AMW has set up a complete design and engineering department for development of new products for its OEM customers. It has also established a state-of-the-art testing facility for testing and validation. The company is in talks with all the major OEMs, including Tata Motors, Mahindra, Suzuki, Nissan, Renault, General Motors, Honda, Ford, etc., for both the domestic and export business as well. The company has created huge capacity, so that they can meet both the domestic and export requirement of its customers.
In the passenger car segment, AMW is aiming at 30 per cent of the business from the domestic OEMs and 70 per cent from export. In the trucks and tractor segment, the company is looking at 70 per cent to come from the domestic OEMs and 30 per cent from export.
AMW has also set up a rolling line for manufacturing crash barriers. The same rolling line can also be used for vehicle chassis as well. This is another important business opportunity which the company is looking at.
AMW has invested Rs. 500 crores in the component manufacturing business. The company is already booked with orders for the current year and is targeting sales of Rs. 300 crores for the current year. For 2008-09, the wheel rim line will be fully operational and the company is targeting sales of Rs. 1,300 crores.
With high level of automation, the AMW wheel rim facility has the widest product range and ample production capacity.
With adequate availability of water, power and skilled manpower, the company hopes to cater to the needs of various businesses. It plans to engineer semi-faced and full-faced wheels which will appear like aluminum wheels made out of steel.
One of the most impressive auxiliary manufacturing facilities at the AMW component division is its press shop. The facility has a capacity of stamping 50,000 tons of steel per annum and is equipped with a range of optimized individual components that can be combined to form complete systems. It caters to the automotive and white good industry.
The AMW auto component division adheres to all quality standards and is the preferred quality vendor across the world. With the proposed exports to the US, the UK and other Western European countries, the division is all set to make a mark in the segment.
The company is also setting up warehouse across India to cater to all the major OEMs on just in time basis.
The AMW auto component facility at Bhuj with its automated styling of facility ascertains high standards of quality thus minimizing manual factors. The unit has the capability to produce a wide range of products with accessibility and control over raw material. It is close to the two major ports, namely, Kandla and Mundhra.
AMW will strive to replicate its truck success story in components business as well.
