Tata Motors completes acquisition of Jaguar Land Rover

Tata Motors completes acquisition of Jaguar Land Rover Tata Motors announced acquisition of the Jaguar Land Rover businesses from Ford Motor Company for a net consideration of US $2.3 billion, as announced on March 26, in an all-cash transaction. Ford has contributed about US $600 million to the Jaguar Land Rover pension plans.

Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, was present at the handing over ceremony at the head quarters of Jaguar Land Rover at Gaydon in the UK along with Mr. Don Leclair, the Executive Vice President and Chief Financial Officer of Ford Motor Company, and Mr. Lewis Booth, Executive Vice President of Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover.

Commenting on the occasion, Mr. Tata said, "This is a momentous time for all of us at Tata Motors. Jaguar and Land Rover are two iconic British brands with worldwide growth prospects. We are looking forward to extending our full support to the Jaguar Land Rover team to realise their competitive potential. Jaguar Land Rover will retain their distinctive identities and continue to pursue their respective business plans as before. We recognise the significant improvement in the performance of the two brands and look forward to this trend continuing in the coming years. It is our intention to work closely to support the Jaguar Land Rover team in building the success and preeminence of the two brands."

Tata Motors confirmed that Mr. David Smith, the acting Chief Executive Officer of Jaguar Land Rover, would be the new CEO of the business. Mr. Smith has 25 years of experience with Jaguar Land Rover and Ford. Before recently returning to Jaguar Land Rover as its Chief Financial Officer, he was Director Finance and Business Strategy for PAG and Ford of Europe.

Mr. Smith said, "We are very pleased with the association with Tata Motors. We look forward to a sustained bright future for the company and its stakeholders."

Jaguar Land Rover has been acquired at a cost of US$ 2.3 billion on a cash free, debt-free basis. The purchase consideration includes the ownership by Jaguar and Land Rover or perpetual royalty-free licences of all necessary Intellectual Property Rights, manufacturing plants, two advanced design centres in the UK, and worldwide network of National Sales Companies.

Long term agreements have been entered into for supply of engines, stampings and other components to Jaguar Land Rover. Other areas of transition support from Ford include IT, accounting and access to test facilities. The two companies will continue to cooperate in areas such as design and development through sharing of platforms and joint development of hybrid technologies and powertrain engineering. The Ford Motor Credit Company will continue to provide financing for Jaguar Land Rover dealers and customers for a transition period. Tata Motors is in an advanced stage of negotiations with leading auto finance providers to support the Jaguar Land Rover business in the UK, Europe and the US, and is expected to select financial services partners shortly.

The story of redBus.com

redBus.com is an online portal for booking bus tickets for travel all over India. The company had its strange beginning some time in 2005. Its founders, all from BITS Pilani, one of India's top engineering colleges, were working then with different IT MNCs like IBM, Texas Instruments and Honeywell in Bangalore.

During Diwali that year, one of the founder Mr. Phanindra Sama, wanted to spend the festival in his home town. Since he didn't know his schedule till the end, taking a bus was the only choice. He ran around hunting for a bus ticket, but all the tickets had sold out before he reached the travel agents.

It was then that the idea of providing customers the convenience of booking a bus ticket over the internet flashed across his mind. The objective was two-fold – to ensure that they don't have to leave the confines of their comfort to book a ticket, and to give help them get a ticket when they needed it the most.

The idea was compelling. And why not? The internet was being voted as a medium people couldn't do without. PC and net penetration was increasing not only in urban areas, but also in rural India with innovative concepts like Shakti and e-Choupal. Also, people were getting used to booking tickets for travel using IRCTC and private airline websites. So, why not buses?

The most compelling reason was that nobody in India had done this! So, when he discussed the idea of starting a business on these lines, his friends were really excited and gave their go-ahead. However, they didn't want to take the plunge without understanding the full implications of the undertaking. Together they met bus operators, consumers and venture capitalists to gauge how well the concept could work.

When they received a favourable response, they started writing the code for the software that would be required to run the operations. Once this was ready, they put together a business plan and presented it to TiE, Bangalore Chapter.

TiE – the Indus Entrepreneurs – are mentors, to say the very least. They breathe lives into young entrepreneurs who have a working concept. The idea didn't need much selling to TiE members either. That was the beginning of a seemingly long journey. All the founders of the new venture quit their well-paying, secure jobs and started redBus.

Since those days there have been many ups and downs. It wasn't simple to change the mindset of bus operators who are used to dealing with their traditional brick-and-mortar travel agents. It wasn't easy to market the concept. It needed time and money and took a few months for things to fall in place.

All that was needed were a few people who used the website. Once that would happen, the user interface was bound to generate word-of-mouth. That's exactly what happened. Those who used it liked it, told others and the dominos started to fall in place.

To cut a long story short, redBus has come a very long way from the days of struggle to days of growth. It has the largest number of tie-ups (and growing) with bus operators and a large and satisfied customer base.

Being run by a team of young people, the culture is informal and everyone is ambitious and charged to make it larger than imagined. What started as a team of three grew into a team of 50 within nine months.

redBus has moved beyond providing value over the internet by reaching out to customers using all media that provide them convenience – be it the phone, home delivery, physical outlets or SMS.

The company ties up with partners that are strong in their domains and distribute bus tickets through them, thus providing convenience to its customers and adding value to the business of its partners as well. redBus has the largest network of bus operators in their list.

Nissan bid for LCV business leadership

The light commercial vehicle (LCV) business will continue to be a breakthrough driver of growth during the Nissan GT 2012 mid-term business plan, announced on May 13 by Nissan President and CEO Carlos Ghosn.

The company set bold commitments for the LCV business during the five years of Nissan GT 2012: doubling the revenue generated by LCV sales in fiscal 2012 compared to fiscal 2007 and achieving top level customer satisfaction performance in the global LCV market by 2012.

At the heart of the business plan is a substantial investment in new products. The company will launch 13 all-new light commercial vehicles by the end of 2012. As previously announced, it will start LCV sales in Russia in September and in India and the US during 2010.

“Nissan has grown LCV sales to unprecedented records for the brand, and we aim to become a leading player in the global LCV market by 2012,” said Andy Palmer, Corporate Vice President, Nissan Motor Co. Ltd., LCV Business Unit. “To grow our business further we will continue focusing on the unmet needs of the LCV customers around the world, offering them products that are smart and reliable partners for their daily professional endeavours.”

In fiscal 2007 the LCV BU sold 519,703 units globally with a consolidated operating profit (COP) exceeding eight per cent. The NP300 pick-up truck (also sold as the Frontier in selected markets) was the best-selling individual Nissan LCV with 71,678 units. China was the market with the largest portion of LCV sales (151,088 units), followed by Japan (121,790 units).

During the Nissan Value Up mid-term business plan period (2005-07), the LCV business had been identified for the first time as one of four business breakthroughs. Commitments included growing sales volumes by 40 per cent to 434,000 units and doubling the COP to eight per cent by the end of 2007. Both commitments were exceeded one year earlier.

Scania targeting sale of 150,000 vehicles by 2015

Selling 150,000 vehicles per year by around 2015 is Scania’s vision for the next decade. This growth will occur in an expanding market by means of a greater presence in markets and segments where there is potential for increased sales of Scania vehicles and services. The road to 150,000 vehicles will be via continued capital-efficient utilisation of Scania’s development and production resources.

There are suitable macro-economic conditions for continued expansion in commercial vehicle demand. In the next several years, the annual growth in mature economies is expected to be about two per cent, while the economies of emerging Europe, Asia, Northern Africa and Southern Africa are projected to expand by six per cent yearly. These fast-growing markets will be increasingly important to Scania, which expects this trend to be lasting.

“We will reach 150,000 vehicles by continuing to expand in a smart and cost-effective way. We can produce this many vehicles by 2015 using our existing production structure. With fewer production employees, today we manufacture twice as many vehicles as 15 years ago,” said Mr. Leaf Östling, Scania President and CEO.

He emphasized the strength that Scania derives from continuing to work according to its three core values – customer first, respect for the individual and quality. “A company that works in this way tends to be successful. That is also the case with Scania.”

Continued market growth and increased market share are the basis of Scania’s vision for 2015, but it will also depend on entering new segments and markets.

“Our growth strategy is based on finding customers, segments and product applications in all markets where Scania’s business model yields advantages. We focus on customers who demand vehicles with high productivity throughout their life cycle. We promise our customers the highest uptime at the lowest operating cost,” said Mr. Martin Lundstedt, Head of Franchise and Factory Sales.

Europe will remain Scania’s most important market in 2015. Here Scania foresees an annual sales potential of 95,000 vehicles (heavy trucks and buses) in a total market that will grow to 575,000 vehicles. The largest growth will occur in central and eastern Europe, including Russia, where continued expansion of infrastructure and greater prosperity will lead to high demand that last long.

Scania also expects the Latin American market to grow, reaching 180,000 vehicles per year. Here the company sees potential for annual sales of 16,000 vehicles in 2015. The largest growth is expected in the agricultural and mining sectors, but demand will also increase at the pace of economic expansion.

Asia and the Pacific are of increasing importance to Scania, which estimates its annual sales potential at 15,000 vehicles around 2015. Scania’s growth will primarily occur in segments where there is demand for efficient transport and for vehicles with high technology content, good performance and high uptime. These will mainly include vehicles for oil and chemical transport, mining and construction.

The growing markets of the Middle East, India and Africa are projected to total 430,000 vehicles per year in 2015. Demand is driven mainly by infrastructure investments in the Middle East and in Northern and Southern Africa. In these regions, Scania sees sales potential of 25,000 vehicles.

Doubling of service business

In Scania’s scenario for 2015, the number of Scania vehicles in operation around the world will have increased to one million. “This will mean a doubling from the level we have today. Taking care of them represents a major challenge for our service organisation,” said Urban Erdtman, Head of Sales and Services Management.

The challenge also includes meeting customer demands for greater uptime. Scania is thus continue to expand one-stop shopping, which means providing customers with service not only for their vehicles but also tyres, trailers and superstructures, as well as various services such as financing, transport planning and driver training.

“To meet greater customer demand and be able to take care of a doubled vehicle volume, we expect to continue annually investing SEK 1 billion in our own sales and service organisation and expect that our franchisees will be making investments on the same scale,” Mr. Erdtman said.

“In order to grow our business towards 150,000 vehicles, we must also offer a broader range of models and give customers greater opportunities to tailor their vehicles to their own needs,” declared Hasse Johansson, Scania’s Head of Research and Development.

Scania is continuing to expand its ReadyBuilt concept, which involves working closely with selected suppliers and being able to deliver complete vehicles including superstructures, for example construction haulage trucks, with short lead times. It is making extensive efforts to maintaining its prominent position in terms of environmental performance and engines that can run on renewable fuels as well as in hybrid technology.

“Reducing carbon dioxide emissions is a challenge, but also a business opportunity. I am convinced that we can halve such emissions by 2020,” Mr. Johansson said.

Mr. Per Hallberg, Scania’s Head of Production and Procurement, explained how the company would achieve annual capacity of 150,000 vehicles by around 2015.

“This implies that we will boost production capacity by 10,000-12,000 vehicles per year. The increase can be accomplished with limited investments in our existing production structure, and we will achieve it without sacrificing quality and delivery precision,” he said.

Scania’s 2006 decision to concentrate on European axle and gearbox production in Södertälje laid the groundwork for production capacity of 100,000 vehicles by the end of 2009. By outsourcing non-strategic components, it has reduced its in-house added value to about 30 per cent of total production cost. Meanwhile this has meant a more flexible cost structure.

“To meet the challenge, we must also continue to increase our productivity by 6-8 per cent annually. Here the dedicated efforts of our employees to constantly improve our working methods will continue to play a key role,” Mr. Hallberg added.

Bosch focus on training

Training is an important area of focus at Bosch, particularly for the automotive After Market (AA) division. The company has 16 training centers across India for the AA division, which includes one national training centre at Bangalore and four regional training centres in four metros each. The main purpose of this training school is to offer high quality training to Bosch Channel partners at their vicinity.

Bosch-AA has established a state-of-the-art training centre in Chennai for training mechanics and technicians from its Bosch Diesel Service and Bosch Car Service network.

Bosch recognizes that knowledge is a valuable asset for creating and sustaining competitive advantages, especially because change is inevitable in technology. Regular development and training programmes are key to keep employees abreast of the latest developments and bring about enhanced standards.

The Bosch AA training centre trains the largest number of candidates in the entire Bosch network. Bosch AA has been conducting numerous training sessions and customer contact programmes across the country. The training package has been upgraded with new product-specific knowledge guides. The four regional LTCs are well equipped to offer courses on latest and cutting-edge technologies in the automotive space. All these efforts have enabled Bosch AA to communicate better and reach out to a wider audience, especially in the aftermarket segment.

Every year the training centre prepares an Automotive Equipment Training Programme Guide which presents a detailed training calendar. The 2008 calendar is aimed at upgrading the technical and commercial skills of the company’s secondary sales and service channel. The trainers have meticulously developed this calendar and have designed the training programmes in a comprehensive manner to suit the varied needs.

Bosch feels that students who pass out seem to have very little practical orientation. There is a wide gap between the knowledge they acquire in colleges and what the industry requires. To bridge this gap, Bosch has taken the initiative to train interested students on Automotive Technology. The company has already trained many such students at its training centres. This could be a great opportunity for students to gain practical exposure to technology and systems before they enter the industry.

The Chennai regional training centre conducts training programmes on Diesel Systems, Gasoline Systems, Vehicle Electronics (ESP, ABS, ACC, Air Bag, etc.), Starter Motors & Alternators, Automotive Accessories (Bulbs, Horns, Batteries, Belts, Spark Plug, Filters, Wiper blades, Brake pad, Brake fluid, Lubricants, etc).

The centre also conducts specific programs on Vehicle Diagnostics Training using Bosch Diagnostic tools, Engine analysis using Bosch Engine Analyzer, Battery Service and Maintenance training. Bosch conducts these courses for the Bosch Network (Diesel Workshop, Distributors, Electrical Workshop, Bosch Car Service), Neutral Electricians, OE Customers, OE Customer dealers, Railways, Defense, State Transport Undertaking and Educational Institutions.

The infrastructure at the Chennai centre comprises Diesel Workshop, Electrical Workshop, Engine Workshop, and Automotive Accessories Workshop and is equipped with Bosch equipments like Diesel Pump Calibration Machine – EPS611, Vehicle ECM Scanner – KTS, Engine Analyzer – FSA450, Battery Service Equipments, Auto Electrical Test Bench, Injector tester, Beam Focusing Equipment and Ultrasonic Cleaning Equipment.

Bosch Ltd. (formerly Motor Industries Co. Ltd.) is the flagship company of Bosch in India. The company has grown over the years to become the largest auto component manufacturer in the country.

Bosch Ltd. operates in all the business sectors of automotive technology, industrial technology, and consumer goods and building technology. It manufactures and sells products as diverse as common rail injector and components, diesel and gasoline fuel injection equipment, industrial equipment, auto-electricals, gear pumps, power tools, packaging machines, special-purpose machines, security systems and Blaupunkt car audio systems.

Oriental-MyTVS tie-up for emergency road side assistance

Oriental Insurance Co. Ltd. and MyTVS, the customer-centric car services business division of TVS & Sons, have come together to launch a unique value-added service product called “Our Oriental – MyTVS Emergency Roadside Assistance”.

Mr. M. Ramadoss, Chairman and Managing Director, Oriental Insurance, and Mr. R. Dinesh, Executive Director, TVS & Sons, launched this unique service in Chennai. The service which will initially be available across Tamil Nadu, Kerala, Andhra Pradesh and Karnataka, will be extended to other parts of the country very soon. MyTVS has been offering 24x7 emergency roadside assistance since 2003 and is a pioneer in this service with a wide network including a dedicated 24x7 call center.

This is a first-of-its-kind scheme in the Indian general insurance industry, wherein all motor policy holders of Oriental Insurance can avail themselves of the 24x7 emergency roadside assistance from MyTVS at no extra cost. This value-added service from Oriental Insurance is available only for private cars and passenger carrying cars which are less than 10 years old.

In an emergency, all one has to do is to dial the toll-free / helpline number, give the basic vehicle details and inform the location / nature of the problem. MyTVS will then immediately organize one of its authorised service providers to reach the spot for attending to the problem and make the car roadworthy. Services include, apart from 24x7 roadside assistance, towing, cab arrangement, emergency fuel supply, etc. In case of accidents, Oriental has authorized all MyTVS workshops for providing cashless claim settlement for their policy holders.

Mr. Ramadoss said this is a unique service for the very first time in the annals of the history of Indian general insurance. This scheme is in response to customer needs during emergency situations when their cars break down or get involved in an accident. “With Our Oriental – MyTVS Emergency Roadside Assistance, help is just a phone call away”.

Mr. Dinesh commented: “TVS has always been associated with quality and trust and believes in setting benchmarks in customer satisfaction ahead of its times. With this association we aspire to reach out to the diversified clientele of Oriental Insurance throughout India offering them the best of our services. Now, all motor policy holders of Oriental Insurance have a friend they can turn to if their car gets stranded on the road”.

MTC installs Bosch EPS815 test bench for servicing

MTC, one of the fastest growing transport corporations in the country, recently installed the advanced diesel pump calibration machine, Bosch EPS815, to service its growing fleet of buses fitted with BS111 engines. This makes MTC the first transport corporation in India to invest on such a high technology machine. It has a fleet of over 3,000 buses, including more than 1,500 buses fitted with BS111 engines. The pumps fitted on these engines require high injection pressure for servicing.

The EPS815 is an advanced test bench used to check high-performance pumps for the newest generation and also common rail injectors from passenger cars to heavy commercial vehicles. It ensures that automobile manufacturers adhere strictly to emission norms.

The Bosch universal test bench is suitable for pumps up to 12 cylinders. As per the emission norms proposed by the Government, all trucks and buses in metros will have to be fitted with BS IV engines (currently it is BS III) by 2010. Once you move to BS IV, the engines will be fitted with common rail injectors, and to service these pumps you need advanced test benches like the EPS 815. It ensures increasing peak injection pressures, larger element diameters, new injection-pump types and injection systems (e.g., control-sleeve pump) resulting in heightened requirements and an increase in test-bench performance.

The EPS 815 is environmentally compatible and user-friendly due to reduction of oil vapour/oil mist. Outstanding rotational properties and speed stability ensure high repeat accuracy, especially during the injection process. Also ensured are high user comfort and high measuring accuracy. The weight compensation during vertical adjustment of the measuring device simplifies work considerably. It has longer service life because no rebending work has to be performed on the test lines (the measuring device can be adjusted in all three levels).

The EPS815 is fitted with integrated tachometer, stroke-counting mechanism and temperature controller which ensures ease of operation.

Amara Raja launches 2-wheelers batteries

Amara Raja Batteries Ltd. (ARBL) formally entered the two-wheeler battery segment with the launch of Amaron Pit Bike Rider batteries powered by VRLA technology from Johnson Controls Inc. (JCI) customized for the Indian markets. Offering the most powerful performance at 30 per cent higher cranking power than the best in the market, the Pro Bike Rider comes with the first-ever 60-month warranty.

Sporting Brand Amaron’s distinctive colours of Neon Green, Silver and Black, Amaron Pro Bike Rider was launched in Chennai by Mr. Jayadev Galla, Managing Director, and Mr. Ganesh Swaminathan, Head - Automotive, ARBL, amid a galaxy of Indian pro-racers and Amaron brand ambassadors – Narain Kartikeyan, Armaan Ebrahim and Aditya Patel. The company also launched a micro-site www.amaronprobikerider.com which would not just help disseminate information on the new product but also have sections on two-wheeler battery technology and maintenance for better understanding.

Speaking at the launch, Mr. Jayadev Galla said: “True to the personality of Brand Amaron, Amaron Pro Bike Rider offers the first-ever 60-month warranty in two-wheeler batteries. VRLA technology is the preferred choice for the luxury cars across the world, and today we have made this superior technology available to the two-wheeler customers in India. In all, Amaron Pro Bike Rider is a no-compromise combination of innovative technology, superior performance and appealing aesthetics.”

The combined OE and after-market two-wheeler industry is currently valued at Rs. 500 crores and is growing at the CAGR of eight per cent. In addition to the traditional segments, the growth is being fuelled by the increasing popularity of high end two-wheelers among Gen Y. There is also growth coming from new users of ungeared scooters among urban and semi-urban women.

“Two-wheeler riders traditionally were not required to pay much attention to the battery in the kick-start models. However, with increasing shift to self-start, the battery technology and choice is becoming critical. Amaron Pro Bike Rider with the breakthrough VRLA technology has been designed to give them the comfort of the longest life and highest power and saves them the added hassle of caring for the batteries in their bikes,” added Mr. Galla.

Amaron Pro Bike Rider is expected to raise the levels of awareness among customers and make battery replacement for their two-wheelers as a decision on which they have a role. Moreover, with ARBL’s extensive dealer network and PitStops, it will be a new, satisfying buying experience too.

Referring to marketing plans, Mr. Ganesh Swaminathan said: “Our network of 18,000 retailers, 120 pig stops and extensive service hubs is our huge strength. This will bring the Amaron Pro Bike Rider within easy reach of customers across the country along with the added comfort of highly efficient after-sales service”.

Drawing on its brand strengths, the company is confident that Amaron Pro Bike Rider would capture a good market share in the first year itself. “In the five years we aim to have 20 per cent. In 2008-09, we have earmarked 25 per cent of our overall communications budget for brand building and marketing promotions and will continue the same proportion going ahead,” he added.

Mansons Group charts strategy for aggressive growth

The Mumbai-based Mansons Group is a leading manufacturer and exporter of suspension components for trucks and trailers to the US, European and African markets. Founded in 1962, the group has primarily been a trading organisation. It was in 2000 that Mansons got more seriously into manufacturing of suspension components. In the last eight years, it has expanded its manufacturing and engineering operations with nearly 50 per cent of the components exported being manufactured on its own. The target is to increase the export volume to 80 per cent by 2010.

Driving all these initiatives from the front is 36-year-old Gautam Khanduja, Managing Director of the Mansons Group, and the third generation scion of the founding family. A visit to one of the manufacturing facilities of the Mansons Group at Panvel on the outskirts of Mumbai would prove that strong winds of change are really sweeping across the company. As one of the shop floor engineers said, “everyday is an exciting day at Mansons.”

From the top management down to the shop floor worker, almost all of Mansons’ employees have some sense of the many changes happening around them. Each and every department in the company is trying to set benchmarks by improving work efficiency.

What is most striking is the importance attached to the minutest work detail. The company has established standards and systems comparable to some of the best manufacturing facilities in India. In fact, the group has invested quite heavily on its own engineering and product development capabilities and documented the complete design and development of over 10,000 part numbers. This is a rare achievement.

The group flagship company, Mansons International, is its trading arm. Mansons International exports 40 per cent of the its total business to the US, 55 per cent to Europe and the balance to African countries. The company sells close to 14,000 part numbers through key distributors in the respective countries and has achieved the distinction of exporting the largest product range in the aftermarket for suspension components for the European and American trucks and trailers.

Mr. Gautam says that it was in 2000 that the change came about. “From being a trader we started looking at manufacturing very seriously. The first strategic decision was to get into manufacture of rubber suspension components through our group company Mansons Automotive Rubber Pvt. Ltd. Today we have managed to establish the rubber component business, and in the second phase we are setting up a complete machine shop, one in Ludhiana and the other in Panvel which will be ready by 2009. We have also resorted to lean manufacturing and a management style that is mostly driven by the need to grow. We are working towards TS 16949 certification too”.

Mansons Rubber, which manufactures rubber suspension components, is a Rs. 10-crore business. Most of what it manufacturers is being exported through Mansons International. Identifying the growing business opportunity, the company has recently started focusing on the domestic market, particularly the OEM segment. It is now in the process of developing components for truck major AMW and is in talks with other major truck manufacturers for strategic tie-ups for their rubber to metal bush demand.

Mansons is also setting up an advanced machining facility for metal components. It is installing four CNC machines at the new facility of Mansons Intertrade, a company specializing in finely machined components and tools and dies. This will further widen the scope to manufacture both rubber and metal suspension components for trucks and trailers.

Mansons Automotive Rubber also has a captive state-of-the-art compounding unit for rubber. Currently it is mostly for captive consumption, but the company has additional capacity which could be used for other clients as well. Further, a new facility is coming up near Pune for stamping of heavy duty suspension related components.

With the ongoing the expansion in manufacturing and engineering, Mansons hopes that by 2010 almost 80 per cent of the products exported or sold by the company will be manufactured within the group.

Mansons Suspensions Private Ltd., another group company, supplies suspension kits for trailer manufacturers. It is a major supplier to PL Haulwell Trailers, the trailer division of Ashok Leyland. Mansons Suspension also supplies suspensions and their components to International Auto of the RSB Group, Stokato and several other trailer builders across India. The company has so far produced and sold over 2,100 suspensions to various manufacturers. It has recently signed a distribution agreement for the ASEAN region with Watson & Chalin of the US for air suspensions and related components. Presently these units from Watson and Chalin have been fitted on PL Haulwell trailers.

Mr. Gautam also disclosed that the group is in discussion with a trailer builder and an axle manufacturer for setting up a manufacturing facility in India. The discussion is almost in its final stage and a JV agreement may be finalised soon.

The Mansons Group employs over 400 people. The current group turnover is just over Rs. 60 crores. The target is to achieve a turnover of Rs. 100 crores by 2010. With that in view, the group has been investing on improving manufacturing and engineering capabilities. The outlay for expansion over the next two years is Rs. 18 crores.

From being a trader, Mansons has become a manufacturer, and the mission, Mr. Gautam says, is to become a complete solutions provider of air & mechanical suspensions, axles and components for truck and trailer manufacturers worldwide.

Camfil Farr joint venture with Anand Group

Camfil Farr has set up a new company in India – Camfil Farr Air Filtration India Ltd. – as a joint venture with Anand Automotive Systems. The new company has acquired the business of Anfilco Ltd., an Anand Group company.

The Camfil Farr Group has a majority stake in the new company, which now operates as Camfil Farr Air Filtration India Ltd. Anand will continue as a JV partner in this venture.

“Anfilco has been a Camfil Farr licensee for gas turbine air filters and filtration equipment for locomotive diesel engines for a number of years. As Camfil Farr Air Filtration India, the new subsidiary will serve as a bridgehead for the Camfil Farr Group to expand into the local Indian market,” commented Johan Ryrberg, Executive Vice President and CFO of the Camfil Farr Group. “Due to our past solid relations and co-operation with the Anand Automotive Systems, we considered it a natural strategic step to invest in a joint venture taking over Anfilco’s operations. We look forward to developing our business in India.”

Camfil Farr Air Filtration India’s production plant and offices are based in Gurgaon, close to Delhi. The acquisition represents the Camfil Farr Group’s entry into the south-central Asian market. Initially, it will be integrated with Camfil Farr Power Systems, which is representing 17 per cent of the group sales.

The Camfil Farr Group is a world leader in the production and development of air filters and clean air solutions with 24 production units and R&D centres in the Americas, Europe and the Asia-Pacific region. Headquartered in Stockholm, Sweden, the group has 3,200 employees and sales in the range of SEK 4.1 billion. International markets account for more than 90 per cent of its sales.

Camfil Farr’s business concept is to provide customers with best-in class air filtration products and services within four main segments: comfort air, clean processes, safety & protection and power systems.

Anand Automotive Systems serves the global automotive industry with innovative and technologically advanced range of automotive systems, from shock absorbers, struts, forks, engine bearings to automotive and industrial filters, piston rings and gaskets.

Established in collaboration with various leaders in the automotive segment, the company employs 7,500 people and has 44 manufacturing locations in India with an extensive customer base in OE and aftermarket.

MRF to double radial tyre capacity

Mr. K.M. Mammen, Chairman and Managing Director, MRF Ltd., and Mr. M.F. Farooqui, Secretary, Tamil Nadu Industries Department, signed on May 2 a memorandum of understanding (MoU) in the presence of the Chief Minister, Dr. M. Karunanidhi, for the new MRF plant to be located at Perambulur, Trichy, and also for expansion of its existing plants in Tamil Nadu.

This will be MRF's third plant to be set up in the State. The other factories are at Tiruvottiyur and Arakonam.

In terms of the MoU, the State Government has offered incentives to the company in line with the Government's new industrial policy of 2007.

MRF will initially invest Rs. 900 crores for ramping its radial tyre capacity by 3,50,000 radial tyres with a plan to double the capacity to 7,00,000 tyres in the second phase. It is acquiring nearly 290 acres of land for its new Perambulur facility.

Besides the two plants in Tamil Nadu, MRF has manufacturing facilities in Puducherry, Kottayam, Goa and Medak. It is the No.1 tyre manufacturing company in India producing a large range of tyres.

MRF had a humble beginning manufacturing toy balloons in 1949, with the establishment of a factory in Tiruvottiyur. MRF started manufacture of tyres/tubes from 1961. Today it exports tyres to nearly 75 countries worldwide.

The Perambulur plant will employ cutting-edge technology with the latest equipments available for production of radial tyres. This facility has been planned to provide a major thrust to MRF's production capacity, especially passenger and truck radials to keep pace with the rising demand in the automobile industry.

Eaton to buy Kirloskar’s engine valve business in India

Eaton has agreed to purchase the engine valve components division of Kirloskar Oil Engines Ltd. (KOEL) located in Ahmednagar and Nashik.

Kirloskar’s manufacturing facilities in India provide Eaton with first class valve facilities and expansion opportunities. Through this acquisition, Eaton will be able to use its global resources to meet the needs of the domestic Indian market.

“The acquisition of engine valves business of Kirloskar Oil Engines marks the entry of our automotive business into the Indian market. With this acquisition, we will have the manufacturing presence of all four of our business groups in India. We believe KOEL’s valve business is great strategic fit, and we are looking forward to welcoming the Kirloskar Valve team into the Eaton family,” said Shyam Kambeyanda, Managing Director, Eaton Corporation India.

Eaton Corporation is a diversified industrial manufacturer with 2007 sales of $13 billion. It is a global leader in electrical systems and components for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; hydraulics, fuel and pneumatic systems for commercial and military aircraft; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety.

Eaton has 79,000 employees and sells products to customers in more than 150 countries.

BASF to strengthen automotive business in India

BASF has announced its plan to rev up its offerings for the automotive industry in India with investments in plants and technology. The company will build a new engineering plastics compounding plant at its existing site in Thane, which is expected to go on stream by the second half of 2009. Engineering plastics are used, for example, in automotive as well as electrical & electronics and other industries.

The company has also set up a computer-aided engineering (CAE) lab in Thane where its engineers design and optimize new engineering plastic parts in close co-operation with customers.

“Advanced CAE technology is a key competence of BASF in the field of engineering plastics,” says Hermann Althoff, BASF’s Group Vice President, Asia Pacific Engineering Plastics. “Offering this service to customers, combined with local supply from the new plant, is a major milestone in growing our engineering plastics business in India.”

Further, BASF Coatings commissioned a new refinish color lab at Mangalore in February last, and is expanding its e-coat facility which is expected to be completed by the end of 2008. Also underway is the expansion of BASF’s catalyst plant in Chennai which will triple its capacity by 2009.

“Automotive is one of BASF’s most important target industry segments and our second largest revenue source,” explained Dr. Wolfgang Hapke, President, Market and Business Development, Asia Pacific, BASF East Asia Regional HeadQuarters Ltd. “In 2007, BASF derived over 13 per cent of its total worldwide revenue of 58 billion euros from the sale of products to the automotive industry.”

A special focus for BASF is energy efficiency and solutions to curb emissions. The increase in the number of cars is putting a strain on the environment: CO2 emissions could quadruple by the middle of the century. BASF pioneered the development of the first catalytic converter for automobiles. Today the company offers a catalyst that, for the first time, makes it possible to convert up to 96 per cent of a vehicle’s emissions.

Catalysts are not the only way to reduce emission: the vehicle’s weight is another crucial factor. Reducing a vehicle’s weight by 10 per cent translates into 5-7 per cent less fuel consumption, and BASF’s fuel additives can cut consumption by a further two per cent.

In fact, for every kilogram by which the weight of a car is reduced, the environment is spared 25.3 kg of CO2 emissions over the entire service life of the car. Using plastics in automobile construction therefore also makes sense from an environmental point of view because they are much lighter than steel components.

BASF provides many of the complex high-tech ensemble of plastic solutions that are commonly found in cars today – from dashboards and seats to airbags and temperature-resistant plastics that function right next to the engine block.
“Production figures show that Asia is the fastest growing region in the global automotive industry, with car production increasing by eight per cent last year. In India it is growing at an average of 15 per cent per annum over the last few years. Innovations in the automotive industry are increasingly being driven by Asian companies, and BASF supports this trend,” said Mr. Prasad Chandran, Chairman, BASF Group in India and Head, South Asia.

BASF is a globally popular chemical company. Its portfolio ranges from oil and gas to chemicals, plastics, performance products, agricultural products and fine chemicals. As a reliable partner, it helps its customers in virtually all industries to be more successful.

With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges such as climate protection, energy efficiency, nutrition and mobility. It has more than 95,000 employees and posted sales of almost 58 billion euros in 2007.

How ITS makes road traffic safe, easy and hassle-free

- By S.R. Venkatesan, Senior Advisor to Invest in Sweden Agency, Ministry of Foreign Affairs, Sweden

Mobility by means of transport of men and material is fundamental for economic growth, with its contribution for social development, improved lifestyle and wealth creation. Today we have the collective responsibility of “keeping the nation on the move”, in which technology and innovation play a critical role in providing efficient, safe, clean and seamless transport solution.

Sustained economic growth, higher infrastructure investments, faster industrialisation and large consumer spending in India have resulted in a spectacular growth in goods and passenger traffic. The growing vehicle population, coupled with rapid urbanisation, poses problems like traffic congestion, road accidents, increased travel time and the resultant loss of productivity, climate change impacting the environment, higher fuel consumption, etc.

Till early 1990s, vehicle availability in India was limited both in terms of volume and models because there were just a handful of manufacturers with limited product portfolios in a controlled economy. Subsequent to reforms, with the Government permitting 100 per cent FDI in the automotive sector, the doors were open for overseas auto majors to make their presence felt in the Indian market. With growing investments by both domestic players and MNCs, the auto sector started expanding with volume production in all segments. Further, accelerated infrastructural growth, particularly in respect of roads and highways, expansion in IT and telecommunication network, greater mobile connectivity and rapid globalisation could together provide excellent solution to the emerging mobility issues.

To address the increasing need for mobility on sustainable basis, planners and policy makers worldwide have been using a very powerful and effective tool, namely, Intelligent Transport Systems (ITS) that facilitates efficient and optimum utilisation of infrastructure resources and vehicular technologies.

ITS provides digital integration of various components of mobility, including roads, vehicles, goods, passengers, drivers and infrastructure, in a very intelligent way, thereby offering a completely new way of helping the society towards safe, efficient, secure and seamless transport system.

The key elements of the system are the road network and infrastructure, goods and passenger traffic, the human element and fuel and energy security. With an explosive growth in the number of vehicles and higher demand for mobility, there are many critical issues to be addressed, like optimum road utilisation, traffic management, improved traffic safety, vehicular pollution, global warming, dependence on fossil fuels by gradual migration to alternate fuels, etc.

In order to facilitate movement of goods and passengers, timely availability of information is absolutely essential for road users to plan their programme and maintain seamless connectivity. With the increasing usage of mobile phone, display systems and the Internet, there are now many options to stay connected.

Gathering details, exchanging information, carrying out analysis and offering quick information on real time basis by deployment of technology, it will give a major relief to everyone in terms of efficient planning, optimum use of resources and better social and business climate.

Thus, technology can play a vital role in transformation of mobility solutions and facilitate real time information flow for goods and passenger movements.

The real problem for road users is the ever-growing vehicular traffic with a restricted road network. All the more so with the constant migration of people from villages to towns and cities in pursuit of greener pastures. This adds to the demand for mobility. Despite best efforts, it is a challenging task managing the expanding road traffic.

Under these circumstances, ITS offers a powerful tool and an effective solution to address these issues. ITS comprises a number of technologies to facilitate information capturing, processing, communications, control, etc. These technologies are applied to the transportation system to save lives, minimise travel time, save money, improve fuel efficiency and reduce pollution.

The ITS technology, when implemented with the planned investment of infrastructure, will reduce traffic congestion and road accidents while making transport networks more secure. Users of public transport will have the latest information regarding bus arrivals/departures. Passenger car users can utilise the vehicle-based information system which communicates with the vehicles and infrastructure. Truck users will similarly have precise details about the location of freight and cargo, estimated arrival, etc. And goods transport operators will have real-time information about the logistics chain which facilitates secure and efficient movement of freight cargo. ITS services will also provide information about the safest and most efficient way of reaching specific destinations.

There are certain key areas where ITS services could be operational:

A: General :
Advanced Navigation System is aimed at route guidance and destination-related data to users and drivers. It also improves safety and increases driver comfort and provides assistance for safe driving related to road conditions, danger warning, automated highway systems, lane changing, parking, road intersection, rail-road crossing, unsafe spots warning, etc.

Multiple fee payment: A smart card issued to all users is a very convenient cashless transaction system by which one could make payments for e-tickets, parking fee, RTO fees, traffic fines, toll, etc. This card could also support multi-modal transport systems.

Safest road: Smartway 2007 initiative in Japan is working towards state-of-the-art ITS services to make roads the safest and accident-free. The integrated system will provide information about road congestion, traffic situation, road merging, speed restriction, etc.

Telematics: Telematics, an integral part of ITS, is a combination of telecommunication & informatics and in-vehicle electronics. Volvo cars offer wireless communication products in telematics. Basic navigation, tracking vehicle, data retrieval, etc., are some of the offerings. Addition of vision enhancement, pre-crash restraint deployment and collision avoidance is also underway.

As per Volvo Technology Corporation, Transport Telematics systems will provide advantages in terms of driver comfort, transport efficiency and improved safety, and will address environment benefits.

Volvo Trucks have developed Dyna Fleet which is an in-vehicle telematics device to provide information on driver information, driver activity management, vehicle information, GSM communication, etc.

B: Vehicle Based Systems:
On-Board System: A standardised single on board system which is compatible with the system will facilitate uniform communication among all the services. This will offer seamless interface with road side units, road-vehicle communication systems.

GPS and GIS-based information: Precise information on accident-prone areas and traffic restrictions will provide real time data to travellers. The special receiver fitted on the vehicle will provide real time road and weather details.

C: Goods Transportation:
The freight information provided here relates to location of cargo trucks, electronic identification of vehicles to avoid delays at check posts, electronic payment at check posts, etc. The electronic toll collection system fitted on board will facilitate payments at toll stations based on vehicle types, category, etc. This will also eliminate congestion at toll gates too.

Information is also provided under the system about fuel stations, rest and parking areas found essential for vehicle users, particularly truck drivers, to improve operational efficiency.

ITS could also be effectively applied for fleet monitoring, service-related issues, hazardous goods tracking, etc.

D: Passenger Transportation:
Availability of traffic data, pattern and flow details on real time basis will help all the road users to plan their travels and minimise congestion.

The information would include various possible modes of travel, estimated time for travel as well as for reaching the destination, guiding passenger car users to parking slots, etc.

High Capacity Bus Rapid Transit Services: The biggest challenge lies in using the existing road infrastructure resources innovatively and integrate it intelligently to achieve seamless urban traffic flow.

Bus Rapid Transit (BRT) consists of high capacity buses with additional doors, convenient boarding platform, safer entry-exit, higher average speed, e-ticketings and less stoppage timings. These buses operate in dedicated corridors with priority signalling at crossings to provide overall comfort for passengers.

Volvo took an initiative and popularised the BRT system through corridor management during the 1970s in the city of Curitiba, Brazil, which has now become a global reference. Beijing is now planning to introduce the system in a big way.

Subsequently, Sao Polo, Mexico, Bogota - Transmilano, Leon, Jakarta, Gothenburg and many others have also followed this example and successfully set up BRT systems which have now become fully operational.

The integrated system could also help in providing vital data on air quality.

E: Road and Traffic Management:
Optimised Traffic Management is designed for area-specific planning, traffic flows, emergency situation handling, disaster management, handling traffic congestion, special event management, lane and route controls, etc.

Road Management by road survey, maintenance, hazardous goods transportation, special lanes for high density traffic, monitoring overloaded vehicles, alternate route management, etc.

Public Transport Support by facilitating trucks, buses, taxis, etc., based on urgent requirements, Bus-On-demand, integrated Bus rapid Transit systems, smart cards, e-ticketing, real time bus timings, etc.

Deeper research about traffic pattern, road and vehicle conditions to study, analyse and evolve futuristic strategies.

Pedestrian and Safety and Services: Support for emergency vehicles operations with route guidance for rescue and relief vehicles traffic regulations.

Supporting pedestrians with routes, accident avoidance, refuge places, elderly persons and visually challenged persons.

F: Two-Wheeler Flow Management:
There is also provision for control of two-wheeler traffic on roads as in cities like Bangalore with high two-wheeler population. It would be so controlled as to ensure sales and smooth flow of traffic, reducing congestion to a great extent.

In fact, Taiwan with the highest two-wheeler population in the world has seen good success from ITS intervention with specific measures like lane control, turn zone, speed control, signal control, etc.

Intelligent Vehicles Safety Systems (IVSS), Sweden

Vision Zero for Sweden is aimed at achieving zero fatalities and zero serious injuries. Sweden has a long tradition of safety in respect of cars, trucks, buses and roads. This has resulted in a number of road safety technologies, and has earned the country a special status in this regard.

IVSS is a unique public-private joint venture that aims at saving lives through application of intelligent technologies. Most current technologies focus on saving lives through crash safety improvements.

The IVSS Programme aims at shifting the emphasis from passive solutions to active systems. In other words, preventing problems from arising in the first place. IVSS uses IT and SMART technologies to minimise fatalities and injuries.

ITS therefore can act as a powerful tool to achieve seamless sustainable mobility in India which is emerging as one of the largest economies in the world. It can also make substantial contribution to the dream and vision of making Indian roads one of the safest in the world.

A Mechanical Engineer with 27 years experience in commercial vehicles industry, Mr. S.R. Venkatesan is Senior Advisor to Invest in Sweden Agency, Ministry of Foreign Affairs, Sweden, co-ordinating various investment opportunities and business proposals related to the automotive sector / IVSS.

Having worked in various departments of Tata Motors, Ashok Leyland and Volvo, he has gained rich experience and deeper insight into vehicles industry working. He is also an active member of important committees related to mobility systems in CII.

MAN enlarges presence in India

The MAN Group is now having greater focus on India through its recently newly opened MAN House Mumbai. MAN experts representing the entire product portfolio of this renowned commercial vehicle and mechanical engineering group will be at the service of partners and customers.

"For over a century MAN has been in India, and with the new MAN House Mumbai we intend to significantly strengthen our presence there. Specialists from diesel engines, commercial vehicles, turbo machinery, and industrial services combine to form a strong team for addressing the customer needs and requirements," commented Dr. Georg Pachta-Reyhofen, Executive Board member at MAN AG, at a press conference in Mumbai.

Last year saw MAN raise its order intake in India by 38 per cent to around 111 million euros.

With a population of over one billion, India ranks among the 10 economically most successful nations. Its growing demand for energy and transport services corresponds to the transport-related engineering solutions provided by the MAN Group. Driven by the mounting demand from Indian associates for custom-tailored solutions in this sector, MAN has since 2006 been operating its own production plants in the country, among them the Pithampur-based MAN Force Trucks Pvt. Ltd., a joint venture for building heavy-duty trucks, and the Aurangabad plant for manufacturing marine and power plant diesel engines meant for the world market.

Further components of the group's physical presence in India are the MAN sales and service branches in Kolkatta, Pune and Delhi.

As one among the fastest growing nations, India enjoys international predominance in a number of sectors. With production of heavy-duty commercial vehicles and big diesels, the supply of turbo machinery and extensive expertise in transport solutions and large-scale plant, MAN contributes much for the growth of the country. Together with its customers and suppliers, the group benefits from an average annual economic growth rate of almost 9 per cent.

The MAN Group employs a workforce of 228 at its Indian locations. Besides apprentice training, skilled workers from India attend initial and advanced courses in Germany. Within India, MAN works together with local training establishments.

Besides the joint venture MAN Force Trucks Pvt. Ltd., MAN Nutzfahrzeuge has also now set up a subsidiary in India. MAN Truck and Bus India, housed in the Mumbai House, will assist the joint venture in technical matters and in the expansion of the sales & distribution network. The company is headquartered in the Mumbai MAN House. MAN is thus underscoring the significance of the future of Indian market. Marketing of its products in India will continue to be the exclusive domain of MAN Force Trucks Pvt. Ltd.

Since 2006, MAN Force Trucks, a joint venture of FORCE Motors with MAN Nutzfahrzeuge in which the latter holds a 30 per cent stake, has been manufacturing at its own plant in Pithampur. Force Motors is one of India's leading producers of three-wheelers and tractors as well as MUVs and LCVs; the company is headed by its Chairman and Managing Director Abhay Firodia.

The Pithampur plant makes heavy trucks of over 16 t capacity, the CLA series, marketed as semitrailer tractors, dumpers and chassis/platform units. About 90 per cent of the parts are sourced from local suppliers. Hence, MAN is the first truck builder to introduce European quality in India. The around 24,000 MAN Force Trucks units planned by 2010 will be marketed in India, besides being exported to other Asian and African countries.

MAN Force Trucks is in sole charge of handling sales of CLA trucks in India. Exports from India are handled through MAN's own distribution structure. MAN Force Trucks Pvt. Ltd. has a nationwide dealer network presently comprising 17 service and sales stations to be expanded to 50 bases in the medium term.

MAN Diesel opened its first sales branch in Delhi in 1950. Today, it has had its presence at several locations of the subcontinent. At Aurangabad since 2007, high-duty 32/40 engines for use in ships and power plants worldwide have been built.

From development to marketing, MAN Diesel relies on skilled Indian labor. Concurrently a local engineering center has been set up with almost 100 CAD-trained Indian engineers who provide intra-group assistance for European employees in the engineering and design departments working on innovative diesel engines.

Business ties with important Indian ship-builders and ship-owners as well as the Indian Navy are being strengthened. In 2007, MAN Diesel booked an order from India's ABG Shipyard Ltd. for the engines to power new anchor handling tug supply (AHTG) tankers with a total rating of almost 12,000 kW.

India is a highly promising market not only for the big marine diesels but also for diesels used in diesel and gas power plants. MAN Diesel's footing in the power plant sector takes the form of a joint venture with a local partner, MAN Diesel Power India Pvt. Ltd., managed by a board headed by Mr. Naresh Oberoi.

This company already has a substantial share of the market for small capacity power plants, and plans are underway to extend this strong market position to larger power plants to be marketed by MAN Diesel in turnkey condition and along with the related operating and maintenance contracts.

MAN Diesel PrimeServ operating from its Aurangabad, Mumbai, Vizag and Colombo locations assures the highest standards of after-sales service. By the end of the year, these will be joined by another two service bases on India's east and west coasts, in Chennai and Gujarat.

The first chapter in MAN Turbo's success story in India was written in the 1930s in the form of participating in the construction of steel mills which it also supplied shortly thereafter with machinery. Presently, some 60 chiefly Indian employees work at the Vadodara plant.

Since 1990, over 500 machines have been installed. MAN Turbo is, among other things, the supplier to the world's biggest refinery of Reliance at Jamnagar, with annually 60 million t of refined products such as diesel and aviation fuels.
Co-operation with the Nagarjuna Group, India's biggest fertilizer producer in Hyderabad, typifies the development and realization of customized industrial projects. Between 1989 and 1995, MAN Turbo supplied this innovation-driven company with altogether 14 high-performance ammonia production machines. Grown from this successful business relationship will in future be co-operation in the energy sector, a new group business unit.

MAN Ferrostaal has a Delhi-based office with a staff of 16. For its Indian customers, MAN Ferrostaal supplies individual turnkey plants – its capabilities ranging from development and financing via project management to commissioning. The upstream work is often sparked by an idea followed by market analyses and feasibility studies.

Together with its customer, British Plaster Board BPB in Mumbai, e.g., production plants are developed for plaster boards intended for interior use in both private and commercial buildings, a booming market in India. Other activities are directed at established industries such as petrochemical and power plant construction as well as, together with partners, the hydro-electric power sector.

Decades of experience as a general contractor of international format in the engineering and construction of industrial systems throughout the world – this is characteristic of MAN Ferrostaal also when it comes to biofuel production plants which are one of the most important future markets. Such equipment is tied to complex industrial processes which MAN facilitates for its customers. The necessary raw material resources which can be exploited indigenously thus play a valuable role in the economic development of regions which presently are 60 per cent agriculture dominated.

Shriram Transport: The messiah of small truck operators

“Arul Ratnam worked in a small garment factory in Tirupur and had to toil for his living. He did just about anything like packing and loading and even delivered goods as a truck assistant. Today he owns a fleet of trucks that meets the transport needs of not only the garment unit where he worked but many other companies. He is now thinking of setting up his own garment business. All through this journey, there is one company that has stood by him and financed all his needs right from the very first truck, and that is Shriram Transport Finance Company (STFC). Arul Ratnam is one among the thousands of customers to whom Shriram has made a world of difference. The company's marketing and sales efforts have penetrated the grassroot level in many regional markets, including solid customer alliances.”

Shriram's business mission is to finance the credit-starved segment of transporters and build long-standing relationship with them. The company has been successful in achieving this objective in several regional markets. There is still a huge market left untapped, and hence the company is expanding its distribution network.

Shriram has managed to build a workforce of over 10,000 people who are virtually the face and the backbone of the organisation. What it has managed to achieve has huge social impact and has helped in raising the living standards of its customers. The company has proved that a corporate can achieve excellent returns for investors from a business that is all about transforming lives and social uplifting.

Mr. Sridhar, Managing Director, Shriram Transport, says that initially his company entered this unique business segment which was perceived to be risky with a limited flow of resources from banks and institutions. “We were aggressive in raising retail resources during this period for carrying on our activities. We have proved to the finance industry that this business is a high growth and profitable one. Today with increased confidence in our unique business model, banks and financial institutions are willing to channel their funds to small truck owners and pre-owned trucks by routing it through us”.

Shriram is the market leader in financing used commercial vehicles with a market share of over 20 per cent, which it aims to double in the next few years. The main objective is to make cheaper credit available to the credit-starved segment of small truck owners.

Tracing the history, Mr. Sridhar said: "When we started lending to small truck owners to buy new vehicles, we found a mismatch between their aspirations and ability. The truck operator was not capable enough to support the credit levels required to buy a new truck. Hence we decided to think out of the box and fund pre-owned trucks. This was the biggest decision we took, and the results followed. From driver to owner, even if only of a pre-owned truck, and from pre-owned truck to a new truck, we have been with him in his journey of prosperity. What we have done is nothing but backing a small trucker whom we call the unsung hero of the Indian economy”.

STFC was established in 1979 with the objective of offering funds for small operators to buy trucks. As distribution of truck ownership was scattered among a large number of individuals, this very important group was missed by the institutional radar. It is estimated that 80 per cent of trucks in the country are in the hands of individuals.

Mr. Sridhar says: "We are financing unbankable people, namely, those who don’t have any banking habit and are in the grip of the unorganised sector. We are the only organised credit provider to these unbankable customers. In a way we bring these customers out of the unorganised segment and provide them cheaper credit. For Shriram, the credit-worthiness of the small truck owner has always been an article of faith. This faith has guided our journey from our pioneering days in financing small truck owners to the present-day leadership. Today Shriram is the leader in truck finances. We are also India's largest asset-based non-banking finance company”.

With a current network of 500 branches spread across the country, covering 91.3 per cent of truck owners, the company plans to extend operations to reach 100 per cent of truck owners. Shriram employs nearly 10,000 people and has assets under management (AUM) in excess of Rs. 18,000 crores ($4.2 billion), with live contracts of more than 6,00,000 customers. It is targeting expansion of its customer base to one million by 2010 and is now looking at developing an integrated business model by financing other segments like three-wheelers, tractors and passenger commercial vehicles such as buses and vans.

Mr. Sridhar observes: “We are not just financing the vehicle but we also understood the truck owner’s requirement for working capital and financed them by providing different loans like tyre loan and engine replacement loan. Another pioneering initiative is providing credit card. None of these small truckers have been provided credit card so far. We have tied up with Axis Bank and provided credit card for about 25,000 to 30,000 customers. We have also tied up with Ashok Leyland in the transport exchange initiative through which we will be able to offer bill discounting facility, which is otherwise done through money lenders in the unorganised segment”.

Today, small road transport operators own 70-75 per cent of the trucks on roads. Though they account for an indirect contribution to India's economic growth, the credit support to them is expensive, inequitable and exploitative. Banks are unable to evaluate their credit-worthiness due mainly to lack of proper documentations. Consequently this business segment is flocked by private financiers catering to over 70 per cent of the used truck market. As a result, truck owners are subjected to exorbitantly high interest rates.

Moreover the market penetration of organised players is restricted due to the necessity of a strong local presence, efficacious customer evaluation tools and a well-established network.

In the emerging situation, the truck financing industry is left with huge untapped potential. With the modernisation of aging trucks on the anvil, the average age of the national fleet is expected to be reduced to seven years, in the next five years. This would speed up replacement of older trucks. As per McKinsey report, truck financing is emerging as a profitable business opportunity unveiling a potential of Rs. 45,000 crores. Demand for pre-owned truck financing alone is estimated at Rs. 22,500 crores.
Shriram prides itself on a perfect understanding of the customer and his needs. Each product or service is tailor-made to perfectly suit his needs. It is this guiding philosophy of putting people first that has made it the preferred choice for all truck financing requirements amongst customers. Most of the retail lending by banks/financial institutions is information-based. Credit evaluation, vehicle delivery and dues collection posed huge challenge in truck financing. Unlike others, Shriram does not believe in outsourcing these functions.

The truck financing industry is of course a lucrative business. Shriram can take credit for having brought about a revolution in the institutional mindset. Today, Citigroup, UTI Bank, ICICI Bank and other leading banking institutions are proud associates of Shriram in financing pre-owned trucks.

Dealing with small customers has its share of risks. But Mr. Sridhar is always positive. “Historically credit losses for the company have been very low, at around two per cent. This particular industry is quite stable and reliable. We have a team of over 10,000 people, and we are the only organisation wherein there are no intermediaries between us and the truckers. We are in touch with our customers on a direct basis and finance them without the involvement of intermediaries. We interact with our customers on a day-to-day basis and we sanction nearly 1,000 to 1,500 loans every day. All these loans are sanctioned without taking any major security or post-dated cheques since most of these customers are not familiar with banking. The whole process is relationship based.”

According to him, the next few years will witness exponential growth in business. Shriram has covered only 20 per cent of the total business, and there is still a huge market which is left untapped. The challenge will be in preparing itself to manage this growth. Hence the company emphasis on building its HR capacity.

In order to widen its network, the company is developing partnerships with local private financiers, who manage around 75 per cent of the pre-owned truck financing market. By giving them access to competitive finance, Shriram plans to increase penetration into more widely dispersed regions of the country more effectively.

Mr. Sridhar was extremely confident that, “The initiatives we have taken today will be massive in size and volume in the next 10 years time and we look around and see not many companies who are interested in catering to this segment of customers. Its a nation building activity and fundamentally its a social service to a community which has been denied credit and in the process we also make profits”.

With the soaring interest rates, Shriram has deliberately moved away from the high-cost retail finance mobilisation to comparatively cheaper band and institutional finance. This has enabled it to absorb to some extent the effect of rising interest cost. The market opportunities for commercial vehicle finance business are tremendous, and even in the case of a slowdown in the vehicle industry, the company’s operations won’t be affected.

Shriram will continue to focus on relationship-based lending even as it reaffirms its commitment to extending vehicle finance to small truck operators.

ArvinMeritor announces plan to spin off LVS business

ArvinMeritor, Inc. has announced that its Board has approved a plan to spin off its Light Vehicle Systems (LVS) business to ArvinMeritor shareholders, with the Commercial Vehicle Systems (CVS) business remaining with the company.

“The plan to separate our two businesses is the result of a comprehensive strategic review to enhance the company’s long-term value for our shareholders,” said Chip McClure, Chairman, CEO and President. “We are confident that this transaction will not only unlock shareholder value, but will also significantly strengthen the competitive positions of both companies and better align them with their respective customer bases”.

According to him, each company will benefit from a greater strategic focus on its core business and growth opportunities as well as from increased recognition in each of its global market segments. In addition, the separate companies will offer more attractive and targeted investment opportunities, with incentives for management and employees that are more closely aligned with company performance and shareholder interests.

The planned spin-off of the LVS business – to be named Arvin Innovation, Inc. – would be implemented through a pro rata tax-free dividend to ArvinMeritor shareholders. Upon completion of the spin-off, the shareholders will own 100 per cent of the common stock of Arvin Innovation.

Approval of the spin-off by the shareholders is not required, and the company expects to complete the process within the next 12 months, contingent upon satisfactory financial and automotive market conditions as well as other customary approvals.

The President further said: “Our decision to spin off the LVS business is part of the company’s ongoing corporate transformation – our 3R strategy to rationalize, refocus and regenerate – that has been underway for the last three years. Separating these two businesses and successfully implementing our Performance Plus initiatives are major steps in the transformation to build two stronger, more competitive companies for the future”.

“Our LVS business group will have the right leadership team, a solid financial structure, market-leading positions in many of its product lines, a well-diversified customer mix and the global reach to grow this new company as a market leader going forward,” McClure concluded.

McClure will remain ArvinMeritor’s Chairman, CEO and President. James Marley, currently a Board member of ArvinMeritor, will lead Arvin Innovation’s Board of Directors as non-executive Chairman. Until the spin-off is completed, Marley, a retired Chairman of the Board of AMP Inc., will remain on the ArvinMeritor Board. Phil Martens, currently ArvinMeritor’s Senior Vice President, and President, Light Vehicle Systems, will become the President and CEO of Arvin Innovation.

Martens said: “As a separate independent unit, Arvin Innovation will be better positioned to drive specific growth initiatives, including improving our customer focus and expanding our global presence. With increased flexibility as a stand-alone business, Arvin Innovation will have an excellent opportunity to create next-generation systems technology solutions for our customers around the world. In addition, we look forward to the many new and enhanced opportunities the new organization will provide for our worldwide employees”.

Jim Donlon, Executive Vice President and CFO of ArvinMeritor, will immediately begin supporting ArvinMeritor’s LVS business group in the capacity of Chief Financial Officer as it prepares to become an independent company. Upon completion of the spin-off, he will become Executive Vice President and CFO of Arvin Innovation.

Jay Craig, Senior Vice President and Controller, will replace Donlon as ArvinMeritor’s Senior Vice President and CFO, effective immediately.

Rakesh Sachdev, Senior Vice President of ArvinMeritor, and President of Asia Pacific, will become Executive Vice President, Chief Administrative Officer and Managing Director of Emerging Markets of the new company upon completion of the spin-off. However, until a successor is named, he will continue to be responsible for ArvinMeritor’s Asia Pacific region.

When the spin-off is completed, Carsten Reinhardt, Senior Vice President of ArvinMeritor and President of the company’s Commercial Vehicle Systems business, will be named COO for ArvinMeritor.

ArvinMeritor will remain headquartered in Troy, Mich. whereas Arvin Innovation will be headquartered in Detroit, Mich., at the current location of the LVS Detroit Technology Center, with other corporate offices located in Europe, Asia Pacific and South America.

The spin-off is subject to customary conditions, including final approval by ArvinMeritor’s Board, completion of all required activities with employee representatives, receipt of applicable consents, effectiveness of a registration statement with the Securities and Exchange Commission, receipt of a tax ruling from the IRS; and the approval of applicable regulatory authorities.

ArvinMeritor’s LVS business is a leading global provider of dynamic motion and control automotive systems and components, with sales of $2.2 billion in 2007 – $2 billion of value-added sales and $200 million of pass-through sales. Of the value-added sales, more than 60 per cent were outside North America.

Through smart systems technologies, the intelligent application of controls and electronics, LVS’ traditional mechanical products are taking on new form and function at both the component and system levels. With advanced technology and systems design expertise – in body systems (roof, and door modules and systems, motors, latches, window regulators, and electronic controls); and chassis systems (chassis and suspension modules and systems, ride control products, electronic chassis control systems, global aftermarket chassis products and wheels) – LVS produces integrated, high-quality, cost-effective performance-based solutions for practically all car and light truck market segments. The business will have approximately 9,000 employees with 42 facilities in 16 countries. LVS has interests in eight joint ventures (three consolidated and five non-consolidated).

Upon completion of the spin-off, ArvinMeritor will continue as a market leader in the commercial vehicle systems business. ArvinMeritor’s commercial vehicle business is a leading supplier of drivetrain components and systems, including axles and drivelines, braking systems, suspension systems and ride control products for heavy- and medium-duty trucks, trailers, buses, off-highway and military vehicles as well as to the commercial vehicle aftermarket.

The CVS business will have 62 global locations, including manufacturing facilities, technical centers, warehouses and administrative offices. CVS has approximately 10,000 employees in 15 countries. In 2007, the CVS business recorded sales of more than $4.2 billion. CVS has interests in 11 joint ventures (five consolidated and six non-consolidated).

AMW foray into components manufacturing

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.