MAN Nutzfahrzeuge AG has increased its share in the joint venture with Force Motors Ltd. from 30 to 50 per cent. “In increasing our share we are taking on more responsibility for the further successful expansion of our activities in India. MAN will be significantly spurring on sale of our Indian-built trucks in the growth markets in Asia and Africa,” said Anton Weinmann, Chairman of the Executive Board of the MAN Nutzfahrzeuge Group.
“Force Motors welcomes the closer involvement of MAN. This increase in its holding is proof of its confidence in our successful joint venture,” said Abhay Firodia, Chairman and Managing Director of Force Motors.
Begun in 2006 the joint venture produces heavy trucks with the MAN CLA brand for India and for export to Asian and African countries. Some 90 per cent of the parts used now come from local suppliers who are meeting MAN’s high quality standards. The product range extends from chassis via construction-site tippers to semi-trailer tractors for long-haul transport.
The MAN CLA occupies a leading position as a premium truck in the Asian market, thanks to its technical equipment standard, comfort, safety and high-quality production.
The joint venture, which is now in a position to invest in further expansion of production and the sales network, will be managed hereafter by MAN Nutzfahrzeuge and Force Motors in close co-ordination.
MAN acquires VW Truck & Bus business
MAN AG is to acquire VW Truck & Bus based in Resende in Brazil from Volkswagen AG. The company with an enterprise value of 1,175 million euros is set to be transferred on January 1. The executive bodies of MAN and VW have already granted their approval for the deal.
VW Truck & Bus which has been producing trucks and buses in Resende since 1996 is Brazil’s largest truck manufacturer and leads the market for trucks with a gross vehicle weight of more than five tons. The vehicles are primarily sold in Latin America and South Africa. Around 47,000 trucks and buses were supplied in 2007.
The company has a comprehensive sales and service network in Brazil and neighboring countries. Around 5,000 employees work at the Resende plant, one of the most modern truck production facilities for VW Truck & Bus and its partner suppliers. Acquiring the Brazilian company and its strong brand enables MAN to expand into the South American market, thus consistently strengthening its commercial vehicles business.
The CEO of MAN AG, HÃ¥kan Samuelsson, sees the acquisition as an important step for the MAN Group: “Having concentrated on our core business units, MAN is now focusing on expansion in all business areas. The acquisition of VW Truck & Bus in Brazil marks another milestone in our international growth in trucks and buses. The new business area with its strong market position will provide MAN with access to the Latin American market. At the same time, we can see considerable synergy potential for our production network. VW Truck & Bus has a strong regional sales network and a state-of-the-art truck and bus plant at its Resende site. We look forward to further strengthening the company’s position together with its President, Mr. Roberto Cortes, his management team and the employees.”
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MAN’s share in JV with Force Motors increased to 50%
DRI announces maiden orders from JCBL
DRI Corporation (DRI), a digital communications technology leader in the domestic and international surface transportation and transit security markets, has announced that the company’s Mobitec Group in Sweden, through its 51 per cent-owned joint venture in India, has received first-time orders for Mobitec(R) electronic information display systems from JCBL, the Indian bus manufacturer.
David L. Turney, the company Chairman, President and Chief Executive Officer, said: “The first-time orders from JCBL, placed on behalf of transit agencies in Mumbai and Hyderabad, include Mobitec(R) products with newly redesigned integrated control units. Deliveries are underway and should conclude in the first quarter of 2009. These orders demonstrate our continued reach into what we believe is a vast and growing Indian market.”
The Mobitec Group, a global supplier of electronic information display systems, is highly respected for its products, technology, service and product quality. Based in Herrljunga, Sweden, the group also operates business units in Australia and Germany, as well as joint ventures in Brazil and India.
The digital communications technology leader, DRI’s popular products include TwinVision(R) and Mobitec(R) electronic destination sign systems, Talking Bus(R) voice announcement systems, Digital Recorders(R) Internet-based passenger information and automatic vehicle location/monitoring systems, and VacTell(TM) video actionable intelligence systems. The products help increase the mobility, flow, safety and security of people who rely upon transportation infrastructure around the globe.
Using proprietary hardware and software applications, the company products provide easy-to-understand, real-time information that assists users and operators of transit bus and rail vehicles in locating, identifying, boarding, tracking, scheduling, and managing those vehicles. They also aid transit vehicle operators in their quest to increase ridership and reduce fuel consumption, as well as to identify and mitigate security risks on transit vehicles.
Positioned not only to serve and address mobility, energy conservation and environmental concerns, DRI’s products also serve the growing US Homeland Security market.
How Ritchie Bros. Auctioneers brings fortunes to its dealer
Navneet Mathur sells more than $20 million worth of new and used equipment every year through his Vermeer dealership in India. When he’s looking for used equipment, Navneet trusts one source above all: a Ritchie Bros. auction.
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In 1996, Navneet Mathur sought, and gained the exclusive rights to distribute Vermeer used and unused equipment in India for one reason alone. “I am fascinated by trenchless technology!” he laughs. “You might say I am obsessed! It has completely revolutionized the way utilities have been installed in India. Now they can be installed underground with no mess, no digging up of roads. More people have power and gas, and there is less disruption to the common man.”
Navneet was just 23 years old in 1996 and newly graduated with an MBA from New York’s Rochester Institute of Technology. He returned to his hometown of Ajmer and established India’s first Vermeer dealership. Today worldwide Machinery Solutions has additional locations in New Delhi, Kolkata and Bangalore, 75 employees and annual sales in excess of $20 million.
He says: “We feel we have achieved success because our customers have been successful: we have been able to help the small contractors buy the right equipment at the right price, and they have grown themselves to become much bigger. Take care of your customers: that’s our motto. I think Ritchie Bros. works on the same level.”
Navneet first heard about Ritchie Bros. auctions at a party in 2002 where he met “a friend of a friend”, Jeroen Rijk, who has worked for Ritchie Bros. in Europe since 1995. At the time, Ritchie Bros. did not have an office in India, and Navneet knew nothing about the company. Intrigued by what he heard from Jeroen, Navneet flew to Texas to attend an auction. He bought 14 machines, and “I never looked back,” he says.
He further observes: “There are two main things I like about Ritchie Bros. auctions. First and foremost, there are no bid-ins. That is the most comforting factor. I know that I am not bidding against the owner of the machine; it’s a level playing field. Second, Ritchie Bros. is very honest and upfront. I know that the information they give me about the equipment is true. The prices at Ritchie Bros. auctions are fair – you pay what the machine is worth, the market price.”
Navneet now sources all of the used equipment for Machinery Solutions from Ritchie Bros. auctions across North America. “At first I went to all the auctions in person, but slowly we’ve moved more on to online bidding. There is a lot of valuable information on the Ritchie Bros. website, which is like the eye to the equipment. I trust that Ritchie Bros. is honest.”
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Navneet is now looking to diversify Machinery Solutions. He is hoping to soon start selling used general construction equipment – all sourced through Ritchie Bros.
“India has always been a hub for used equipment, but as the economy progressed, there was an increase in demand for equipment. New machines are very expensive in India, so a specific niche opened up. Used equipment filled in that gap. My customers have responded positively when I tell them I will be selling used construction equipment – cranes, excavators, loaders”, he adds.
Since 2002, Navneet has purchased millions of dollars of equipment at Ritchie Bros. auctions around the world, earning the distinction of being Ritchie Bros.’ first Platinum Card holder in India. “It was a very pleasant surprise,” says Navneet, of hearing the news. “But until we got the card we did not know what the benefit of being platinum was – because I don’t think we have been treated any less than platinum by Ritchie Bros. so far!”
JCBL to focus on SPVs
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“We see a growing requirement for good quality ambulances in our country. We already have our range of ambulances under the Lifeplus+ brand and the tie-up with Cross Mobile will further boost our existing product range. Working with cross mobil has been a great experience”, says Mr. Rishi Aggarwal, Director, JCBL
JCBL is targeting niche segments or special-purpose vehicles (SPVs) where there is good growth opportunity. Another interesting segment which the company is targeting is Mobile homes or Recreational Vehicles (RVs). This is a very popular segment in developed markets like the US and Europe, and the concept is catching up very fast in India. JCBL is planning to tie-up with a company which specializes in building mobile homes. These products are slated to hit the market in 2009.
JCBL has traditionally been a very strong player in the school bus segment with its Happy Bus range of products. The company has raised the standards by launching a semi low-floor AC school bus fitted with CNG engine which has been delivered to G. D. Goenka School in Delhi. This is expected to generate a lot of interest from other schools as well.
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Ambulances, school bus, mobile homes, armoured vehicle and mobile ATM vans – all these are very niche product segments which has significant growth potential in the Indian market.
JCBL is a name synonymous with high quality, safe, superior technology and futuristic styling in Indian automobile industry. Today it has evolved into a highly successful bus coach manufacturing company. The company is also looking at establishing satellite plant in the South catering to regional customers.
JCBL’s product range includes complete range of buses, special application vehicles, election campaign vans, display vans, OB vans, mobile ATM vans, riot control vehicles, mobile homes and offices, life-saving ambulances, cargo boxes and power-packed trailers.
By diversifying into the manufacturing of several high quality luxury coaches, motor homes, ambulances, special utility vehicles and tippers, JCBL has become a name to reckon with in the automobile industry.
JCBL has a continuous growth record for the last 8 years, company is confident of at least 20 per cent in current year. The company has established capacity to manufacture 7,000 buses and for the current year the target is 4,500 units. To develop its competency in component manufacturing, the JCBL Group, through its group company MSL has forged many alliances. The group has a tie-up with APM for manufacturing seats and with the GHE Group (Group Happich Ellamp) for bus interior and components. JV Company MSL Ghe Auto Components has already developed a complete range of locks, hinges, roller blinds and also various options of coach interiors.
JCBL’s biggest strength lies in building and sustaining partnerships. Having established its leadership in the bus segment, the company is now looking very seriously at the cargo movement segment. The group already has a tie-up with Marrel for manufacturing tipper.
JCBL has forged a major partnership with another company for manufacture of the complete range cargo transportation products including trailers, tip trailers, cement bulkers, garbage compactors, petroleum tankers, sludge carriers and concrete mixers. The company hopes to replicate the success of its bus business in cargo as well.
BorgWarner acquisition of JV with Tube Investments complete
With its engine timing system sales in India expected to show strong growth in the future, BorgWarner Morse TEC has completed the acquisition of its joint venture with Murugappa Group’s Tube Investments of India (TII) located in Chennai.
In 2001, BorgWarner Morse TEC partnered with TII to manufacture silent chains for the Indian automotive and two-wheeler markets, producing over four million silent chains since then.
The purchase of the joint venture reflects BorgWarner’s commitment to the Indian market as well as its customers in the region, including Hyundai, Mahindra & Mahindra, Maruti Suzuki and Tata.
The growth in the Indian passenger car market offers BorgWarner exciting opportunities for its engine timing system products. BorgWarner will continue to invest in this business, positioning itself to satisfy further growth in the automotive and two-wheeler segments. “We would like to thank our former partner, TII, and the Murugappa Group for their guidance and cooperation in this venture and wish them well in their future endeavors,” said Alfred Weber, President and General Manager, BorgWarner Morse TEC.
BorgWarner Morse TEC manufactures engine timing systems that are durable, precise and cost effective. Engines equipped with BorgWarner variable cam timing (VCT) technology operate independently of oil pressure to deliver more horsepower, better performance and improved fuel economy over traditional cam phasing devices in the marketplace today. HY-VO(R) chain systems, which are available for both front wheel drive transmissions, 4WD transfer cases and hybrid power drives transmit power between shafts efficiently, quietly and economically with considerable weight saving over gear technology.
Auburn Hills, Michigan-based BorgWarner Inc. is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. The Fortune 500 company operates manufacturing and technical facilities in 64 locations in 17 countries. Its customers include VW/Audi, Ford, Toyota, Renault/Nissan, General Motors, Hyundai/Kia, Daimler, Chrysler, Fiat, BMW, Honda, John Deere, PSA and MAN.
Hirschvogel-Kalyani Thermal joint venture agreement signed
The Hirschvogel Automotive Group will embark on a joint venture with Kalyani Thermal Systems Ltd., a sister company of Bharat Forge, in India. At the new company known as Hirschvogel Kalyani India Pvt. Ltd., Hirschvogel will hold 51 per cent of the shares and Kalyani Thermal Systems 49 per cent.
The joint venture will set up at a greenfield site at Baramati, 100 km away from Pune. Construction of the site is planned for mid-2009. At the new plant, the company will produce cold-forged transmission shafts and pinions as well as constant-velocity joints, diesel injection components and wheel hubs. Besides forging operations, the site will also have machining and in-house die shop facilities. Common production will commence by mid-2010.
For Hirschvogel, headquartered in Denklingen, Upper Bavaria, the joint venture with Kalyani Thermal Systems represents an important step towards further internationalization of the company which already has sites in the US, Brazil and China. “With this commitment, we are expanding our global manufacturing footprint as an increasing number of our customers are making their presence in India,” says Dr. Manfred Hirschvogel, Chairman of the Board of Executive Directors at Hirschvogel Umformtechnik GmbH.
The Indian automotive market has demonstrated double digit growth rates for many years, and this development is expected to continue over the next few years, too.
Kalyani Thermal Systems is a subsidiary of the Kalyani Group, headquartered in Pune. Bharat Forge, the second largest forging company in the world, belongs to the Kalyani Group which recorded a turnover of $2.4 billion in 2007, of which Kalyani Thermal’s contribution was $40 million.
The Hirschvogel Automotive Group is among the most successful manufacturers of forged steel and aluminum parts. More than 3,000 employees in six plants worldwide produce forged parts and components for the automotive industry and its system suppliers. The consolidated yearly turnover in 2007 was EUR 525 million at a yield of 210,000 tons of forged parts.
Hirschvogel Umformtechnik GmbH in Denklingen, Bavaria, is the main plant of the group. With around 1,700 employees it produces about 160,000 tons of hot and cold-forged steel parts a year. The company has three subsidiaries in Germany. Hirschvogel Aluminium GmbH in Marksuhl near Eisenach, Thuringia, produces sophisticated chassis components made of high-quality aluminum materials. Also located in Marksuhl is the steel forge Hirschvogel Eisenach GmbH. At Hirschvogel Komponenten GmbH in Schongau, Upper Bavaria, almost 600 employees process steel and aluminum forged parts into ready-for-assembly components.
Besides, the group is also active in the US. In Columbus, Ohio, Hirschvogel Incorporated produces hot and cold forged parts as well as ready-for-assembly components for the US market. Three years ago, Hirschvogel Automotive Components was founded in Pinghu near Shanghai. Here forged parts and finished parts are produced for the Chinese automotive industry. Furthermore, Hirschvogel Umformtechnik GmbH holds a 49 per cent share in the Brazilian forging company Mahle Hirschvogel Forjas S.A., allowing Hirschvogel to apply its know-how on the South American market.
Mondial offers its global expertise to Indian vehicle manufacturers
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Are you owning any of the new generation cars? Just imagine a situation when your car breaks down in the middle of a road and you call the emergency assistance number provided by the manufacturer. There is a good probability that the call will be attended and the required assistance would be provided by Mondial Assistance India.
Mondial Assistance India is part of the Mondial Assistance Group, the international leader in assistance, travel insurance and customer services. It is the first global assistance company to enter the Indian market. Mondial India established its business in India in 2007 and the first major contract signed was with Ford India for providing emergency road side assistance for Ford customers all over India.
Mondial, in a way, is an extended arm of vehicle manufacturers and provides complete peace of mind to the manufacturers regarding varied customer-related issues. Any manufacturer who agrees to provide roadside assistance to its customers – services like attending to customers’ needs, responding to their problems and providing the necessary assistance – is taken care of by Mondial.
Mondial Assistance India is currently working with many OEMs, Ford, Honda, Mitsubishi, Volvo, Mercedes, etc., to name a few. It has also signed up with leasing companies like Lease Plan and ALD to provide emergency roadside assistance to their entire fleet.
Mr. Rajesh Sethi, CEO, Mondial Assistance India, says: “We believe there are various touch points in a customer lifecycle which really impacts the profitability of any automotive manufacturer. The first point is the prospect stage when the customer thinks of buying a vehicle and he contacts a contact centre enquiring about the various features in the vehicle. We feel this is a critical touch point, which if monitored properly, will have a huge impact on the buying decision. The second touch point is the whole customer experience after buying the product in terms of service and post warranty issues. The third touch point is when he decides to sell his existing vehicle and buys a new vehicle. If the customer has had a good experience with his existing car then he will upgrade to a car within the same brand rather than going for another brand.
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Also, by engaging Mondial Assistance, the manufacturers can ensure that, in case of emergency or breakdown of a vehicle or even accident, the vehicle is brought to one of the authorised service centres of the respective manufacturer. This ensures proper service and also higher revenue for the service centre.
Mondial India has made significant investments in terms of creating the infrastructure. “We have our own fleet of service delivery vehicles spread across 19 cities in India, which we have invested on and employ around 200 full time employees. Essentially we cater to 76% of the total car pool through these 19 cities. We have our own fleet of roadside repair and recovery vehicles and well trained staff”, adds Mr. Sethi.
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“At the end of the day, we can relieve the manufacturer of the infrastructure and costs related to breakdown and customer assistance services which is a major chunk of saving for the vehicle manufacturer and ensures absolute peace of mind to the manufacturer and all the customers”, adds Mr. Sethi.
Mondial Assistance Group is a 100 per cent subsidiary of the Allianz Group and is the result of the successful integration of the Swiss-based Elvia Travel Insurance and France’s SACNAS – Mondial Assistance, two companies with 75 years of cumulative expertise in travel insurance and service solutions. The group is present in 30 countries across the globe having a worldwide network of 4,00,000 service providers and making its service available to 250,000,000 end users.
Mondial Assistance India started its journey in November 2007, based out of Gurgaon. It is the first global assistance company to introduce its services in India. Backed by its strong global experience and its three pillars of strength – Human Resources, IT & Telephony and Network – Mondial Assistance India is on the fast track to success.
McCoy Total Seal lays strong foundation for future growth
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I always believe that the biggest strength of India vis-a-vis any other emerging economy, including China, is the pioneering spirit of its entrepreneurs. It’s interesting to see how small companies started in the 1980s and 1990s have emerged leaders not just in the domestic market but in the global markets as well. One such young entrepreneur is Mr. Amit Malhotra, Managing Director of McCoy Silicones Ltd., part of the Teknos Group. McCoy is the market leader in India for polyurethane(PU) based sealants. The company was established in 1999-2000 by him with the idea of importing and distributing new technology and futuristic products in India.
The company initially started as distributor for Wacker Chemie GmbH of Germany for Trade Label and Elastosil Brand of Silicone Sealants for India. From a turnover of Rs. 1 crore and 26 distribution centers in the first year, McCoy is today a Rs. 120-crore company with more than 600 distributors spread across India. It is clearly the largest adhesive and sealant company in India and has spread its wings across South east Asian markets as well.
Amit says that the big break for McCoy came in 2000 when the company became the distributor for Le Joint Francais(LJF), a French company, which is part of the Total Group worldwide. LJF is a global leader in sealants, and McCoy became the distributor in India for its Total Seal range of urethane, polysulphide, mastics & sealants for bus and coach applications and for the automotive after-market.
Globally PU is a common form of sealant used for automotive applications. In fact in mature markets like the Europe and the US, it’s almost 100 per cent on PU. But in 2000, it was a major challenge to introduce this technology in India and to create a market for it, says Mr. Amit. The reason was the Indian market was primarily using silicon based sealants which were 50 per cent of the cost of PU.
Mr. Amit recollects that the initial years was very tough. “Our first major breakthrough in the bus segment came from Sutlej for their Tarmac coach project which was built using the Mercedes McClaren engines. We worked with our partner LJF and made 42 buses using PU sealant technology. Also with entry of Volvo in 2001, usage of PU increased considerably. In fact Volvo was our first major customers in terms of buying large quantities of PU sealants”, admits Mr. Amit.
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Nothing in Indian automotive history is complete without Tata Motors. In 2003, the company launched the Starbus and Globus range of buses, and Tata Motors clearly mandated usage of PU sealants across all its buses. This further added to the increase in usage of PU. Today close to 80 per cent of the bus market is using PU-based sealants and within that McCoy dominates with a marketshare of well over 50 per cent.
After having established the product and technology in the Indian market, McCoy started identifying areas where the company can provide better value to its customers. It was identified that there was high incidence of wastage of sealants at the customer end as the products are usually being applied by unskilled labour.
Identifying the problem and with a genuine intention to provide value to its customers, McCoy initiated the first training program at JCBL in 2006. In the very first batch, more than 200 employees from various departments including procurement, purchase, design and development and most importantly the shop floor workers were trained on the proper usage of sealants and ways to reduce wastage. The same was organized by McCoy’s home team of professionally trained specialists and experienced personnel who have become the backbone of their training team.
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Apart from the bus manufacturing segment, McCoy is also supplying its products to the automotive after-market and construction equipment manufacturers like JCB, Terex Vectra, Telcon and Escorts. Currently, McCoy is distributing the products in India, and the target is to set up a manufacturing facility in the country by 2010. More so as McCoy now employs around 100 professionals across India with corporate HQs in New Delhi and offices and warehousing facilities in Bangalore, Mumbai, Kolkata, Chennai, Hyderabad and Guwahati. In addition they are developing the very first R&D Centre in Delhi for testing and training needs for the industry.
The Indian bus market will witness exponential growth in the few years due to rising demand for both city and inter-city buses. All the bus manufacturers are adding capacity, and all this will translate into additional demand for PU sealants. McCoy has done the ground work to take advantage of this future growth.
Sidwal bullish on future growth in bus air-conditioning
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Ever wondered who manufactures the air conditioning systems for the Shatabdis, Rajdhanis and even the Delhi Metro coaches. There is a good possibility that most of these units would’ve been supplied by Sidwal.
The Delhi-based Sidwal Refrigeration Industries Ltd. is a leading manufacturer of air-conditioning units for mobile and stationary units. The company was founded in 1974 by Mr. Sher. S. Sidhu, a first generation entrepreneur, who gave up his fledgling career in the US to set up a manufacturing facility in India. Mr. Sidhu says: “We initially started by manufacturing desert coolers and water coolers. In 1975 we signed an 8 year contract with Voltas for manufacturing and supplying air conditioning equipment for 5 star hotels and for Central air-conditioning of buildings”.
Sidwal has been part of many prestigious projects, including the recent order for the air-conditioning of 188 Delhi Metro coaches. The company has an endless list of prestigious projects to its credit which includes air conditioning of the Shatabdis, Rajdhanis, Palace on wheels given to the Rajasthan Government, the Deccan Odyssey operated by Maharashtra and the Golden Chariot of Andhra. And if you think Sidwal is strong only in Rail ACs, the company has executed some very prestigious orders in the bus segment as well including the air-conditioning of the Delhi Lahore bus flagged off by the then Prime Minister, Vajpayee and even the Kolkata-Dhaka bus.
All this the company has managed to develop indigenously without any technical tie-up. In that sense, Sidwal is a true Indian manufacturer. The success of Sidwal is Mr. Sidhu’s very strong technical competency. This has been the reason for developing Sidwal into a multi product company over the years.
Sidwal has also built very strong competency in the Bus air-conditioning business. The company has fitted over 2000 units on various types of buses including luxury coaches for long distance travel, for tourist purpose and even some of the Tarmac coaches for airport applications. In 2007-08 the company sold over 500 units and the target for the current year is 700 units. The company has also executed some major orders for staff transportation buses.
Another important vertical where the company has developed competency is Defence. Sidwal has developed cooling units for many important projects including the cooling units for missile launchers like the Brahmos, military shelters and radars.
Sidwal’s strength lies in its ability to absorb technology and its strong base in manufacturing. The company already has three manufacturing facilities in the North. Sidwal employs over a 1,000 people out of which 400 people are employed in service alone along all the rail network across the country to provide 24/7 service support for Railways. This is a big advantage for Sidwal as these service centers can also be used to service its other products.
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The company has a fully integrated manufacturing facility with ISO 9001-2000 accreditation, in-house testing facilities to meet international quality standards under demanding weather conditions of Indian sub-continent. It also has a well equipped R&D centre, tool room and manufacturing facilities for condenser, evaporator coils and fabrication of frames with metal / fiber with PUF insulation for heat resistance. The major components for bus air-conditioning units are sourced from the top manufacturers such as Bitzer, Prestolite, SPAL, Minoli, Parker, etc.
Sidwal clocked a turnover of Rs. 100 crores in 2007-08 and is looking to double this in the next couple of years. Sidwal is also providing ventilation systems for Mumbai suburban trains. This project has been awarded to Siemens and Sidwal is executing the project on behalf of Siemens. Already 300 rail cars have been done, and this could get extended to all the coaches. Siemens has approved Sidwal as a vendor for its global sourcing of HVACs.
JBM aims at providing complete solutions for goods & passenger transportation
JBM Auto Ltd., India’s fast growing automotive company, is looking to enlarge its presence in manufacturing products for commercial vehicle transportation solution. In 2005, the company established a separate division for manufacturing special purpose vehicles (SPVs) under which it manufacturers tippers, trailers and garbage compactors. Today, JBM is recognised as a major player in this segment providing high quality transportation solutions. The JBM Group was started by Mr. S. K. Arya who is now its Chairman.
Having gained foothold in the tipper and trailer segment, JBM is now looking at offering complete transportation solutions both in the cargo and passenger segments. In the cargo segment, JBM is in final stages of discussions with an overseas company to manufacture the complete range of products, including tankers, bulkers, refrigerated vans and containers and trailer axles. In the passenger segment, it is seriously evaluating JVs with a few global bus manufacturers for producing inter-city and city buses. All these projects are on the drawing board. The company is expected to make official announcements soon, and the projects will be operational by 2010, says Mr. Vinay Maheswari, Business Group Head (JBM Auto - SPV Division & JBM Industries), JBM Group.
The JBM Group has 28 plants spread across 11 locations. With a turnover of more than Rs. 2,500 crores in 2007-08 it has presence in steel processing, sheet metal pressing, welded assemblies, exhaust systems, fuel tanks, steel tubes, LPG cylinders for the auto sector, tool/die manufacturing, high-tensile fasteners, tailor-welded blanks, waste mgmt & SPV manufacturing.
The SPV Division which is part of JBM Auto Ltd. has two manufacturing facilities – one at Faridabad and the other at Kosi Kalan in U.P. Currently the division manufacturers tippers, trailer and garbage compactors and caters to major OEMs like Tata Motors, Ashok Leyland and MAN Force Motors. The SPV Division has capacity to manufacture 5,000 units per annum. The company sold over 2,500 units in 2007-08 and over 1,500 units the previous year. This is a mix of tippers, trailers and garbage compactors.
JBM’s big break in the SPV Division came when it entered into a joint venture agreement with Fanalca S.A of Columbia. JBM’s tie-up with Fanalca has opened new avenues for the group. The group has formed a JV company, Neel Metal Fanalca, for providing solid waste management solutions. There is a significant increase in solid waste generation in cities over the last decade. This has necessitated modernization and mechanization of the solid waste management system so as to provide a healthy and hygienic environment for living and working.
Looking into this potential, the company entered the solid waste management business to manufacture garbage compactors suitable for tough conditions.
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Today Fanalca is operating in many Latin American countries collecting more than 2700 MT of solid waste every day. Its efforts are predicated on collaboration with the French company, Vivendi, universally recognized as the leader in waste management, water resource solutions and public health.
Since 1986, Fanalca is also manufacturing garbage compactors and stationary boxes under licence from Peabody Galion of the US. The Neel Metal Fanalca JV has bagged two major contracts – the first from the Chennai Municipal Corporation and the second from the Ambattur Municipal Corporation – for solid waste management. The company is negotiating with many more city corporations across India for providing similar services, says Mr. Maheshwari.
Globally, Fanalca also has long experience in BRTS (bus rapid transport system) and has been operating the Transmilenio System in the city of Bogotá, Columbia. It was instrumental in establishing the system, and since then has been involved in running the same.
JBM and Fanalca believe that its unique expertise in this domain would add significant value to any BRTS initiative and would be in a position to design and deliver a complete BRTS project for Indian metros, starting from establishing the viability of the proposed project, designing and implementing the system, providing highly skilled and proficient manpower for ensuring operational efficiency, and imparting training and even operating the system. JBM is also talking to a few cities for implementing the BRTS project.
Other projects
Apart from the SPV Division, JBM Auto, which is engaged in the manufacture of sheet metals components, tools and dies primarily for automotive applications, has been selected by Tata Motors as one of the suppliers of components for its Nano project. The company is setting up a dedicated facility to supply components for the Nano project. JBM is setting up a new manufacturing facility in Lucknow to manufacture sheet metal components, assemblies, etc. for Tata’s HCV/LCV range of vehicles. It has also plans to set up manufacturing facilities at Chennai to cater to the Renault Nissan car project and in Bangalore for manufacturing sheet metal parts to cater to the Toyota car project.
JBM has also established a 50:50 JV with Magneto Spa of Italy for manufacturing skin panels, underbody components, BIW and other sheet metal components for the Tata Fiat JV. The total investment on the project is close to Rs. 250 crores. The JV has set up a state-of-art press shop with robotisation comprising four press lines ranging from 2000 ton, 1600 ton and 800 ton.
JBM Auto and Sandhar Technologies Ltd. have also established a 50:50 joint venture to maintain and operate the tool room and technical centre of Pithampur Auto Cluster Ltd. (PACL) situated at Indore. Recently JBM Auto and Ashok Leyland set up a JV to establish a manufacturing facility at Uttrakhand to manufacture and supply of sheet metal components and fully build cabins for their commercial vehicles. The project which will have large pressing and welding facilities is expected to start commercial production by 2010.
The JBM Group, in its Silver Jubilee year, has started spreading its wings. With its inherent strengths in design, engineering and manufacturing, the company is making it the preferred OEM for most of the domestic and global auto majors. The SPV Division looks promising considering the future growth potential both in the cargo and passenger segments.
The unexpected recession in the automotive industry, particularly in the commercial vehicle segment, has had its impact on the company’s plans for this division, adds Mr. Maheswari.
GroupSynergy’s expertise for bus and truck body building clusters
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GroupSynergy the consultants helping to rewrite the history of the Karur Bus Industry, are a team of hard core professionals. A consulting organization headquartered in Pune, GroupSynergy has multi-location operations pan-India.
While exploring the ‘Karur’ story, I discovered a thick pointer leading to Mr. M. Balaji Rao (Head Strategic Management) & Mr. Ganesh Vaidhyanathan (Vice President - Organization Development), the latter heading the initiative now known as “Clusters” internally at GroupSynergy.
This lean team of professionals (core team comprises of 17 consultants), collectively represents a formidable depth and breadth of knowledge/experience covering such diverse industries as plastics, light engineering, heavy engineering, communications, industrial consumables, agro, hospitality, banking, finance and a whole range of service industries. In fact a sizeable number owe their core experience and exposure to Tata Motors, MercedesBenz, Thermax, Hyundai, Mahindra & Mahindra, Ashok Leyland, BEML, etc., all of whom are industry leaders in their own businesses.
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As Balaji says: “It is not the size of the Client that matters. We almost always choose to work on the Size of the Dream that the Client has”.
Expanding this, Vaidhyanathan further adds: “The content, depth, duration, pleasures, pains and finally the color of the Dream, actually determines a wholesome menu for us to work-on, while dealing with the Clients”.
In several cases, GroupSynergy starts simply with a humble sales team empowerment through focused workshops and programs (say, for the client’s own officers and further to the channel partners) or a 5-S implementation Program, eventually working its way into multiple strategic areas of the clients, such as product strategies and launch, manufacturing process upgrades including new technologies and JV, and developing a talent bank that would steer the client company in the next decade or beyond.
The key strengths of GroupSynergy lie in their extraordinary focus on Client Hand Holding. It goes as far as it would take, in most cases a 2 to 3 years client-engagement that eventually results in a long-term hand shake. Thus Sunil Patel, Director, proudly says: “We start with a Client and finally end up creating advocates and mentors”.
It all started when about five years back with some of the core team members left their promising careers to support the smaller companies which could not afford the big consulting companies but had large dreams that needed professional support. Thus was born GroupSynergy. Focusing on strategy development and support on implementation - was the mantra. “A mediocre strategy with great implementation is far more effective than a great strategy with lackluster implementation”. It is critical that the client is supported on the implementation of the strategy.
Implementation of the strategy also means conducting workshops for enhancing the skills and knowledge levels of the employees. This created a separate vertical with in GroupSynergy named people development.
GroupSynergy takes up projects on a holistic pattern – “Training is not about imparting knowledge to the participants – neither the participants nor the company is benefitted by this – training should focus on how the knowledge can be converted to action by the participants – hence GroupSynergy does not do any stand-alone training programs. They discourage their clients to do training programs in an assorted manner. No stand-alone programs on say negotiation or communication, etc”.
GroupSynergy creates a course content for the company at various levels and then goes about implementing the course in a systematic manner. There are feed-backs that are taken from the immediate senior on how much of the inputs have been implemented by the participant – say, after 30-60 days. Only on satisfactory implementation is the participant allowed to take up the next program.
The workshops are not about a case study that happened in Brazil or Russia – it is all about their own company – it is very specific to the day-to-day issues. This makes it a very unique approach.
The same model is adopted in the case of training the channel partners. “You cannot change the way the last member of your chain will work by conducting a two-day program in a year. You need to train them every week”, says Sowjanya, Head Creative Insights, GroupSynergy.
But, this is a very costly approach. To solve this GroupSynergy started creating video films that show how the process can be handled – how one needs to interact – they use TV artist to get it dramatized. “We have full-fledged in-house facilities for script-writing, shooting the film, editing and embellishments. We deliver the programs in 8 Indian languages”, says Sowjanya. The channel partners can use the film to train their teams on a weekly basis.
GroupSynergy has created about 14 films for various companies as of date. We are now releasing a series of the video aided management series in the market – “you can expect them to hit the stands by January 2009 end”, adds Sowjanya.
Mind boggling as one would put it, GroupSynergy indeed has an impressive client line-up (or mentors, if one could choose to call it) to boast of, that reads like a who’s who of the Indian industry spectrum, including names such as, Tata Motors, Piaggio, Mahindra & Mahindra, Kotak Bank, Hyva, Vodafone, Bosch, BK Tyres, Minda, etc.
Of their future plans in the next five years, Balaji detailed in no uncertain terms that GroupSynergy is keen to register a high-growth presence in the core sector, manufacturing sector and service sectors and a focused and continuous partnership with the Cluster Development Programs of the Union and State Governments.
These two strategies addressed to their domestic business plan, GroupSynergy also has an aggressive action plan to launch itself on the international scene starting 2009.
Karur braces up for the future
Cluster formation, a shot in the arm for bus body builders
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To know more about this cluster, I recently met Mr. P. Thangaraju, President of the Karur Bus Body Builders Association, and Chairman and Managing Director of PeeTee Coaches, one of the leading bus body building units in Karur. “We have come together to take on the challenge ahead”, says a confident Mr. Thangaraju.
There are a couple of things that readily impress me. First, the very fact that the body builders at Karur have taken the bus code very seriously and have taken the first step in working towards this. Secondly, there is a genuine interest taken by the senior members of the Association to come together for the benefit of all the bus body builders in the town.
According to a report prepared by Group Synergy Project Consultants to the Karur Bus Body Builders’ Association, currently there are about five lakh buses on Indian roads with an average age of 4 to 5 years. The total number of buses sold in the last three years alone is 1,30,000 units, including over 50,000 buses sold in 2007-08 alone. The number of fully-built buses sold by the manufacturers directly and by the organized sector is less than 20,000 every year. The rest of the buses are built by the unorganized sector. The unorganized bus body builders are spread across the country with concentration in Tamil Nadu, Andhra Pradesh, Delhi, Chandigarh, Jalandhar, Rajasthan and West Bengal.
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Karur has been traditionally building stage carriers catering to the requirement of private operators and government transport undertakings in the southern States. Of late, some of the Karur units have executed some significant orders for MTC in Chennai for semi-low floor buses. Many units are also catering to the requirements of staff transportation services provided by operators like Parveen and SRS. Very few companies have focused on exports. PeeTee Coaches is one company which has managed to focus on exports by setting up a dedicated unit.
Although some of the bus body builders have the experience of building luxury buses and even a few AC buses, the expertise is more in standard semi-luxury buses or ‘mofussil’ buses, as it is locally known. They have confined themselves to a segment which has growing requirement and created enough capacity to cater to that requirement.
In fact, the State transport corporations in the four southern states have a fleet size of close to 80,000 buses. Even to cater to their annual replacement demand will require huge capacities to be created.
Cluster formation
Coming to the topic of cluster formation, Mr. Thangaraju says that it all started three years back when the Government identified Karur bus body building as an important industry to be developed under the SME sector. A detailed study was made and report submitted on the ways to take this industry forward. The Association of Coach Builders, State Government and Central Government made a detailed study, resulting in the emergence of Karur Bus Body Cluster Private Ltd.
Thanks to the proactive schemes of the Union Government, Ministry of Micro, the Small and Medium Enterprises called MSME the local arm the MSME development Institute at Guindy, Chennai, actively co-operated with the Karur cluster to put together a relevant grant package under the MSECDP scheme that has catalyzed a feverish activity at Karur to rediscover their strengths and reorganize to take the future head-on.
The Cluster envisages creating a Common Facility Center (CFC) with a capital outlay of Rs. 9.5 crores out of which 70 per cent will be funded by the Central Government, 15 per cent by the State Government and the balance 15 per cent will be contributed by the bus body builders who will become members of the cluster. The cluster will require a minimum of 20 members to start with and this has been signed up, says Mr. Thangaraju.
What does the cluster do? The introduction of the Bus code is to ensure that all buses comply with certain specification that cover, Passenger Safety, which is an important factor. In fact studies on road accidents indicate that, there is a high incidence of road accidents in India and many of them involving buses. It has also been identified in many cases that the poor design of buses may have been responsible for loss of life, which could have been avoided had they followed some safety norms.
Hence CIRT and ARAI have come out with standards for bus body building taking into account all the safety aspects. In fact, prior to the implementation of the bus code, it has been stipulated that all the bus body building units in the country will have to go through the process of accreditation by the CIRT to comply with minimum requirements in terms of infrastructure and machineries for bus manufacturing. In fact, the accreditation process has already started and many units in Karur have gone through the inspection and audits.
But the fact remains that, to comply with the mandatory requirements, it will require significant investments in new machineries, infrastructure and design capabilities by individual units. This makes it difficult for smaller bus body building units to make such huge investments in improving infrastructure. Also as per the rules, once the Bus Code is implemented, every new bus model being developed by bus body builders will have to be approved and certified by the ARAI before it hits the road.
Individual units will have to obtain approval for the body structure from ARAI and CIRT and also comply with crash tests and roll over tests. Body building units will have to set up phosphating plants for preventing rusting of the structures. The bus code also specifies safety features like door-width, seat-pitch, aisle-space and rear-view mirrors.
With the establishment of the Cluster, a Common Facility Centre (CFC), wherein the entire infrastructure necessary for manufacturing the various components required as per the regulations, will be created. It will have CNC bending, cutting, shearing machines, phosphating plant, paint booths and complete design capabilities. All member-units can get the components manufactured out of the CFC in a kit-form and then assembled these bus-kits on chassis at their own facility prior to final testing and delivery.
The plan is to establish the CFC equipped with advanced testing facilities, design centre & quality testing laboratories to help the coach builders in their quest for achieving international standards. The advantages are many. There is no requirement for individual bus units to invest as there is the CFC. The buses body builders will become more as assembling units, which ensures faster manufacturing and delivery to customers. It now takes 20 days to build a bus at Karur. With the CFC in place it will take just a week or 10 days to build the bus. Therefore the CFC simply means higher productivity, increased capacity, reduced cost of manufacture and long-term business visibility for the currently stuttering units.
Some estimate that the capacity can be doubled from the existing 4,000 to 8,000 units with the setting up of the CFC. Also faster deliveries means that the customer can put the vehicle on road and start earning revenues.
The CFC will also work on some standard bus design models which have been approved by ARAI, and these models can be built at the various units, it could be for city, mofussil or luxury buses for long distance.
Another important activity of the cluster is to create a common sourcing platform for all its members whereby, the raw material required for bus body like steel, aluminium, seats, rubber components, sealants, to name a few, will be bought in bulk. This will give them a definite price advantage as they will buy in bulk and transfer the benefit to its members. They can start directly negotiating with the manufacturers which will ensure better rates and consistent quality.
The bus body building industry is witnessing rapid growth in India both in terms of technology and business volumes. At the same time it is governed by an urgent need for increased passenger safety and value for money. Predictably, many global players, including Volvo, Mercedes, Marcopolo and Irizar, have launched their buses in India powered by their technology might, setting benchmarks of quality, safety and comfort. Tata Marcopolo, for example, is setting up a facility in Dharwad for 3,000 buses annually. This will have a definite impact on several of the indigenous and small units, including those at the Karur cluster who face an imminent threat of being elbowed out.
MSME’s crucial role in cluster development
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On the suggestion of the Ministry of Small Scale Industries, Government of India, the United Nations Industrial Development Organisation (UNIDO) initiated the process of setting up the Foundation for MSME Clusters to assist institutions in undertaking effective and inclusive cluster-based local area development in developing and transition economies. Typically the reasons for promoting a cluster are to give offer collective benefits, for example through the spontaneous inflow of raw materials, components and machinery or the availability of workers with sector specific skills, to favour providers of specialised technical, administrative and financial services, and to create a conducive environment for the development of inter-firm co-operation as well as of co-operation among public and private institutions to promote local production, innovation and collective learning.
Consider this example…. In 2004 a developmental initiative was started at the Wet grinder cluster in Coimbatore which has over 700 small manufacturers of this product. The cluster has taken up business development initiatives like conducting buyer/seller meet throughout the country and even overseas supported by a Government grant for the purpose. The cluster has also created a common facilitation centre for manufacturing critical components, which were earlier sourced from external sources at very high rates.
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The cluster development program for Karur Bus Body Builders is another forceful manifestation of MSME initiative. Mr. S. Sivagnanam, Director, MSME Development Institute (MSME-DI), Chennai, said that, two years back the MSME department undertook a major initiative in identifying Clusters within Tamil Nadu and Puducherry needing developmental support.
Based on their study 148 clusters were selected from which 15 were selected as dynamic clusters. A diagnostic study was done of all these 15 clusters, the Karur Bus Body Building cluster being one among them. A detailed report was submitted to the Central Government (Ministry of MSME) recommending several Development Supports & Initiatives. Subsequently the MSME-DI actively leveraged the strengths of the Karur cluster along with initiatives from the Union and State Government, adds Mr. A. Muthuvezhappan, Assistant Director, MSME-DI.
GroupSynergy, a consulting company, whose strengths in project consultancy specially in the auto/bus industry was then appointed as the Business development service provider for the Karur CFC project to take the MSME-DI initiatives forward.
Since then a lot of work has gone into this project and a Detailed Project Report (DPR) has been prepared and submitted to the State Government and the MSME headquarters in Delhi for final approval for grant. Once the project is approved and grant received, the project should be up and running in 9 to 12 months time, says Mr. Sivagnanam.
MSME-DI monitors all the projects thus funded, for a period of 3 years by which the projects are expected to be self-sustaining.
In my opinion, this is an excellent & dedicated effort by the MSME to identify and support micro, small & medium industries with good growth potential. MSME-DI, Chennai, has indeed set a glowing example for others as to how good intentions, concerted efforts, and low inertia can really energize the hitherto skeptical micro/small industries towards their future due to tightening business environment and impact of globalization.
Jamna Auto ties up with Ridewell for air suspension systems
Jamna Auto Industries (JAI), a leading manufacturer of commercial vehicle leaf springs and parabolic springs, has announced that it has inked a technical assistance pact with the US-based Ridewell Corporation for manufacturing and/or improving suspension systems and components on the basis of technology provided by Ridewell.
Ridewell is a major manufacturer and supplier of air suspension systems for buses, trucks and trailers. Ridewell’s truck and trailer suspensions are targeted at the heavy duty applications of Class 6, 7, and 8 vehicles. The company is also expanding into the light duty market with new products such as the “Featheride” trailer air suspension and light duty offerings for the bus industry.
Ridewell supplies truck suspension systems to Peterbilt, Mack, Navistar, Kenworth, Mercedes, Hyundai, MAN, etc., and R.V. air suspensions to OEMs like Blue Bird, El Dorado National, Optima, Thomas Built, Krystal Enterprises, Encava and Country Coach for vehicles ranging from low-floor shuttles and heavy duty transits to high-end motorcoaches.
Started as a partnership firm in 1955, JAI is one of the top seven suppliers of commercial vehicle leaf & parabolic springs in the world. With a share of 60 per cent in the domestic market, it is a leading supplier of springs to a lot of OEMs like Eicher Motors. With its current capacity of 114,000 mtp per annum, it is going ahead with its 60,000 mtp greenfield plant at Jamshedpur to cater to Tata Motors’ needs.
Jamna Auto’s customers include Ashok Leyland, Eicher Motors, Volvo, Swaraj Mazda, Ford India, General Motors, Suzuki and Toyota. Its products have been approved by reputed OEMs worldwide like Daimler, Volvo, General Motors and Ford.
There is growing demand for air suspension systems in India, with a market size of close to 4,000 units. Currently there are a few companies in this segment like Wheels India, Madras SAF Holland and Hendrickson. Wheels India continues to dominate the market with over 90 per cent market share.
Madras SAF Holland, a JV between Madras Suspension and SAF Holland, has set up a manufacturing facility in Madurai. Hendrickson has a JV with the TACO Group and has established a manufacturing facility in Pune. Both the companies are in the process of developing products for OEMs.
For Jamna Auto, its a natural step forward. The company is the market leader in leaf springs and parabolic springs, with very strong relationship with most of the domestic OEMs. The tie-up with Ridewell will help Jamna Auto enter this fast growing segment.
Ashok Leyland believes in consistent profit-making – R. Seshasayee
The 60-year-old Ashok Leyland Ltd. of the Hinduja Group has several notable achievements to its credit, including consistent profit-making right from inception and good dividend payment year after year.
Addressing the CEO Conclave – L’ATTITUDE organized by Great Lakes Institute of Management, Chennai, Mr. R. Seshasayee, Managing Director, Ashok Leyland, said his company has been quite successful in meeting the expectations of all those concerned with its working, especially its customers and shareholders.
In his long association of 30 years with the company, he has learnt a lot, the most significant being how a leader or CEO of a company has to be compulsorily ‘visible’ and could spread good ideas among the management staff, particularly during crises. During the period, he had to face recession on four different occasions. All that could be easily tackled by his meeting the key employees at the shop-floor level, explaining the difficulties faced and seeking their co-operation to find a way out of the crisis.
This, according to him, could be termed effective connectivity that plays a major role in tackling serious issues facing corporates. The recent terrorist violence in Mumbai and its aftermath is a classic example of how people in different walks of life come together during crises.
Mr. Seshasayee particularly referred to the recessionary phase of 1977-78 when, as part of AL’s austerity drive, he used to travel by night bus from Chennai to Hosur. While he was delighted to have such experience, he could also enjoy the comfort of the ride by the company buses. This also gave him the additional satisfaction of saving for the company. The main focus while facing low profitability should be on reduced activities to sustain profit.
He also observed that it is quite essential during such emergencies to find a ready strategy for enhancing the company competitiveness, particularly through improvement in product quality and innovative approach. His growing company has the additional advantage of keeping several young and talented people.
In conclusion, Mr. Seshasayee pointed out that he used to be particularly encouraged while attending sessions in which the youth is involved. The day’s session looked really surcharged with the presence of a lot of enterprising MBA students.
Earlier Mr. Seshasayee was introduced by the organiser as a most successful man capable of delivering solutions to difficult corporate problems. Under his expert stewardship, Ashok Leyland’s turnover has grown from Rs. 2,045 crores to Rs. 8,305 crores in the past decade.
Collaborative & innovative approach vital – Ravi Kant
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This was stated by Mr. Ravi Kant, Managing Director, Tata Motors Ltd., in his address at the CEO Conclave – L’ATTITUDE organised by Great Lakes Institute of Management, Chennai.
He said the current recession which had its origin in the US and later spread to the European countries and all other individual economies across the world, including India, within months, is quite unprecedented. While the US Government, in its recent bail-out move, tried to save the three auto majors – Ford, General Motors and Chrysler – from a major crisis with huge loans, the European auto manufacturers have also sought similar support from their respective Governments. Surprisingly, Toyota Motor Corporation, the Japanese auto giant, is reportedly facing problems and is likely to incur loss this year.
Referring to the history of the automobile industry, Mr. Ravi Kant said that the 100-year-old industry is mainly dominated by majors like Toyota, GM, Ford, etc. The normal behaviour of any recession happening every seven to 10 years, is always cyclical as far as the auto sector is concerned.
While the first few years of Independence have not witnessed a recessionary phase of serious propotions in India, a setback was noticed in the post-liberalisation period when even an auto major like his company suffered a Rs. 500-crore loss a few years back.
Normally a cyclical recession with its heavy fluctuations has its great impact of upto 50 per cent on the HCV segment and 25 per cent for LCVs. As far as the recession in the bus segment is concerned, it always maintains a normal cyclical nature. Since recession in the passenger car segment is less cyclical, Tata Motors has ventured into the field by rolling out the much successful Indica. While on the downslide of the cycle, there are attempts made to cut down cost of production during the upward movement, the tendency is to make huge profits.
The Ace success
According to Mr. Ravi Kant, the Ace is among the most successful of products from Tata Motors. In fact, the company took the risk of setting up the Ace plant four years back with a capacity of 2,50,000 units when the total market for such category vehicle itself was only 2.5 lakh units. In the last six years, the company exports have grown 15 times.
The industry recession has forced Tata Motors to rethink its production strategy. To move forward he suggested the following three beneficiary factors: A collaborative endeavour involving the industry, the Government and the financial institutions coming forward to solve the industry problems; a joint effort by the manufacturer and the dealer to minimise risks; and finally a collaborative approach within the product development department to minimise risks and losses. All this has to take the customer interest into account. In commercial vehicle business, many times the operators have to go without business. Hence the need to find alternative means of making profits.
Stressing the need for innovation, Mr. Ravi Kant said that an innovative policy always gives a competitive advantage for any company. As for the Nano small car project, the innovative product is specially designed for Indian customers at a fairly low price. At an affordable price, the Nano, with a carrying capacity of four passengers, offers a best solution to the existing two-wheeler users.
The Nano to be launched in January is all set to meet the higher expectations of the would-be customers and set a world record, he added.
Mahindra Tourister achieves market leadership in school bus segment
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Mahindra Navistar will launch its new range of trucks and buses towards the end of this year. The company has a clear strategy of creating a customer-centric brand for itself in the commercial vehicle segment. It is also focusing on building equity for the existing range of trucks and buses in the light commercial vehicle range. Among the existing range of vehicles, the Mahindra Tourister is the flagship product that has established market leadership in the school bus segment.
In an exclusive interview to Motorindia, Mr. Akhilesh Kumar, Vice President - Sales and Marketing, Mahindra Navistar Automotives Ltd., said that Mahindra Tourister has now become the No.1 in the school bus segment (15 to 25-seater). The company is launching a new Tourister model by name Tourister i with a new front facia and 32 additional features which will help strengthen the vehicle’s brand equity in the market.Excerpts from the interview with Mr. Akhilesh Kumar:
Question: Mahindra Navistar has established leadership position in the school bus segment? What contributed for this success?
Answer: Over the years the ‘Tourister’ brand has consistently delivered fantastic value to its customers in the school bus segment. Our school buses provide the most contemporary styling, highest mileage, lowest maintenance cost, best-in-class features and a good service back-up; all this at a competitive cost. Secondly, in keeping with the customer-centric philosophy of our company, we have time and again upgraded our buses with better features and new variant introductions to suit our customer needs. We are the first and the only manufacturer to provide CRDe technology in our buses which ensures the best-in-class comfort ride due to the low NVH (noise, vibration and harshness) factor.
This year too we have launched an improved range of buses, Tourister i.
Thirdly, our initiatives at the ground level also have played a major role. We keep talking to our customers throughout the year. We have one of the largest direct mailer programs where we contact over 65,000 schools across the country.
Q: You mentioned the launch of Tourister i range of school buses? How is this different from the current Tourister range?
A: Tourister i is an improved version of the Tourister range. In keeping with our philosophy to keep upgrading our offerings to provide better value, Tourister i was launched. Tourister i will sport a new front facia with stylish front and rear bumpers. We have also introduced 32 additional features which will help strengthen Tourister i brand equity in the market.
Q: What about the product range you offer in this segment - seating capacity?
A: The Tourister range of school buses includes offerings in the 15, 25, 32, 40-seater capacity. These are BS II compliant. We also have a CNG variant of our 25-seater. Also we are the only manufacturer to offer CRDe powered engine with the lowest NVH factor in our 25-seater Tourister bus.
Last year we introduced the lowest cost factory made school bus ‘Vikrant’ for the semi-urban and rural towns. Vikrant has a seating capacity of 14, including the driver.
Q: How many vehicles have been sold till date, and what is the target for the current year?
A: Last year for the school bus season we sold over 2,500 vehicles, which was a 50 per cent growth over the previous year. This year we strive to retain the No.1 position in the segment.
Q: What are the unique features that differentiate your products from those offered by the competitors?
A: As mentioned before we have been consistently delivering fantastic value to our customers. We have contemporary styling, highest mileage and lowest maintenance, good service back-up all at a competitive price.
Q: Which are the major markets in which you have had success traditionally and the new markets which you have captured in recent years?
A: The Tourister brand has been well accepted throughout the country. Last year we managed to further strengthen our presence across the southern States through concentrated marketing efforts. We continue to develop and nurture each of our markets to remain ahead of competition.
Q: You were the first to introduce CRDe technology in the commercial vehicle segment. Do you offer this in the school buses as well, and has this been the reason for the resounding success?
A: At this point of time, CRDe is only available in 25 seater buses. CRDe has been a great image booster for the Tourister brand. We are the first and the only player in the segment to offer this technology in commercial vehicles. Customers have really appreciated our CRDe offering in terms of the low NVH factor.
Q: Do you also offer a CNG version in the school and tourist bus segment?
A: Yes, we do, but at present only on the 25 seater platform.
Q: Do you have plans to introduce more variants in this segment? Any further feature that you plan to add to the product to make it more attractive to the customer?
A: We are constantly looking to improve our range; we plan to launch BS III variants of 15, 32 and 40 seaters, beside s providing CRDe and CNG across our range. There are also plans to launch the deluxe range of Tourister buses soon.
Q: Have you expanded your sales, service and spares network? How many sales and service outlets are there as on date?
A: We have a nationwide presence. Our network is spread across 150 dealerships for sales spares and service.
Q: How do you plan to sustain this market leadership in the future?
A: We will simply continue to do all the things that led us to become the No.1 and keep delivering value by upgrading our products and services based on customers’ needs.
MRF targets Rs. 6,000-cr. turnover
In an informal chat with MOTORINDIA on the sidelines of the recent meet organised by the Indo-Australian Chamber of Commerce in Chennai, Mr. K.M. Mammen, MRF Chairman & Managing Director, said the company is indeed very fortunate in maintaining its successful track record year after year. Despite the current recession, all the six manufacturing plants of the company are working in full swing. Even though MRF was aiming for a Rs. 6,000-crore turnover in 2008 itself, it could not achieve it for various reasons, mainly labour unrest. However, it still retains its tyre market leadership.
According to Mr. Mammen, among the various factors that drive the company growth is its brand pull. The MRF products always remain the first and preferred choice of every vehicle owner in the country mainly because of the company’s aggressive marketing approach making the brand world popular. Only when MRF products are not available, do customers go in for other brands.
Referring to the current scenario, he said the tyre industry is now ‘retired’ because of the various problems it is facing. The industry has already been hit hard by the frequent rise in raw material costs. Another major problem facing the industry now relates to logistics. The slowdown in the manufacturing sector as a whole as a result of the current global recession has its adverse impact on transport of men and material, which has come down significantly. Reduced movement of vehicles meant lower replacement of tyres.
However, Mr. Mammen added that since MRF is not dependent on any one segment as in the case of other tyre companies, it is not hit that badly. Basically, the balanced approach of MRF towards OEs, aftermarket and the export sector has definitely given an edge to the company over its rivals.
Ceat’s Halal tyre plant inaugurated
Ceat Ltd. recently inaugurated its radial tyre greenfield project at Halol in Gujarat at an investment of Rs. 700 crores, which will be made in three phases. The plant, located about 40 km from Baroda, will provide employment opportunities to 1,000 people in the first phase of its execution.
The radial tyre greenfield plant spread across 125 acres of land, which is expected to be completed by June 2010, will manufacture 100-150 tonnes of tyres in the first phase. The plant is strategically located in the vicinity of the Tata Nano project and General Motors plant in Gujarat. The production level is targeted to move up to 500-550 tonnes in subsequent phases.
Dedicated for manufacturing truck, bus, light truck and passenger car radials, a 25-40 per cent of the total production of the plant is expected to hit the export market.
Speaking on the occasion, Mr. Paras Chowdhary, Managing Director, Ceat Ltd., said: “Setting up the plant in Halol will enable us to avail the infrastructural support like gas from GSPL, water from the Narmada canal and power from GSEB’s local sub-station which is located just 500 metres away from the site. Moreover, the availability of trained labourers from the adjoining areas and the support from the administration will definitely achieve the cause. Proximity to the port will help in shipping out of tyres and importing the raw materials with ease.
Ceat is expecting a lower cost of production with the new plant and is focusing on a higher per man-hour output. The area being in a no-octroi zone will also help in savings per year for Ceat.
The flagship company of the RPG Enterprises, Ceat Tyres, established in 1958, is today one of India’s leading tyre manufacturers, with an annual turnover of Rs. 2,600 crores. Ceat’s solid brand equity has empowered it to establish a strong presence in both domestic and international markets.
Ceat tyres, tubes and flaps are known for their superior quality and durability, and is recognised as being ‘Born Tough’. Ceat offers the widest range of tyres to all user segments and manufactures world class radials for all Indian vehicles, including heavy-duty trucks and buses, light commercial vehicles, earthmovers, forklifts, tractors, trailers, cars, motorcycles, scooters and auto-rickshaws.
Currently the company manufactures over six million tyres every year. With a major market share in light and truck tyres, it operates from plants in Mumbai and Nasik and exports to over 100 countries across the US, Europe, Africa and other parts of Asia. It has an extensive network consisting of 33 regional offices, over 3,500 dealers and more than 100 C&F agents.
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