It’s the centenary year for ArvinMeritor, and the company has undergone a complete transition in the last couple of years, setting fresh targets and focussing on segments and markets to help achieve the growth it has set for itself.
Mr. Tim Bowes, ArvinMeritor’s Vice President and Managing Director for Asia Pacific, said: “The transition is finally over. ArvinMeritor will focus on five major segments – Commercial Vehicles, Off-Highway, Military, Aftermarket and remanufacturing. We have set ourselves a growth target of 30% CAGR for the next 5 years from 2009 to 2014, and the focus markets would be India, China and the ASEAN region. We are investing heavily in the Asian markets, particularly in India and China”.
Mr. Tim Bowes and the senior management team of ArvinMeritor - Asia Pacific were in India recently to inaugurate the company’s Technical Center at Bangalore. The inaugural event was attended by ArvinMeritor’s JV partner in India, Mr. Baba Kalyani, Chairman of the Kalyani Group, and Mr. Kevin Thieneman, India Country Manager, Caterpillar Asia.
ArvinMeritor is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the transportation and industrial sectors. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers.
“Growth in Asia Pacific, particularly India and China, is a key component of our business strategy,” said Mr. Tim. “To support the growth we have planned in this region, we identified the need to increase the size of our engineering footprint in India – which was established more than 10 years ago. This new engineering center accelerates our ability to provide advanced product solutions for on- and off-highway, bus and coach, military and other industrial applications.”
“We have global products and global customers, but we want to make sure that our products meet the customer needs locally. We are leveraging on our global product platforms and tailor it for the customer and market needs”, he added.
Mr. Nagaraja Gargeshwari, Engineering Director, Bangalore Technical Center, ArvinMeritor, said: “The new technical center will lead the company’s advanced product development initiatives for its broad portfolio of axles and brakes for commercial and other vehicle applications in Asia Pacific, and will support the company’s engineering needs in North America, South America and Europe”.
The tech center highlighted the center’s engineering capabilities, specifically in product design and development, including design optimization and value engineering, computer-aided engineering (CAE), including finite element modeling and analysis benchmarking, and testing area that will house dynamometer rigs for axles and brakes, road load data acquisition and hydraulic rigs for vertical fatigue and side skid.
The Bangalore technical center covers approximately 16,000 sq.ft. of office space, with an additional 4,000 sq.ft. dedicated to a test lab. Approximately 100 employees will be employed at the facility, which will be a critical element in the company’s global engineering network that also includes R&D labs in Troy in the US, Cameri in Italy and Cwmbran in the UK.
The technical center is leading the company’s axle and brake development for commercial and other vehicle applications in Asia Pacific. It also supports the company’s engineering needs in North America, South America and Europe.
ArvinMeritor has 4 technical centers and 3 application engineering centers globally with the largest facility at its headquarters in Troy. The center in Troy is responsible for product development not only for North America but also for the global platforms. The application engineering centers are mainly responsible for local customer interface.
While the Cameri center does axle development for Europe and South America, the Cwmbran centre does design and development of disc brakes and trailer products.
Mr. Nagaraja said: “Over 80% of the team works for product design and development. We also have global sourcing supplier development team sitting at the center in Bangalore. As far as the engineering team is concerned, we support North America and Europe on product design and development. At the same time, we co-lead Asia Pacific programmes”.
Currently technical capabilities at the Bangalore center cover all stages of product design starting from concept stage to detail design, validation and releasing production drawings. This is also a global benchmarking center. Any product benchmarking within ArvinMeritor will be carried out here.
The Bangalore center has a mix of young and experienced engineers. The center is also working continuously with local universities identifying talent at early stage and developing them into great engineers. The Indian team is also involved in many of the new product development programmes and has come out with many innovative ideas. A couple of these ideas have already been converted into patents.
“Our current focus is to ensure that we understand regional requirements and develop global products to suit local requirements. Our long-term goal is to develop the Bangalore center into a Asia Pacific design hub supported by full-fledged test capability with dyno testing for axles and brakes”, said Mr. Nagaraja.
Growth strategy for Asia
Talking about the future growth strategy for Asia, Tim observed: “ArvinMeritor is targeting a 30% growth CAGR in the next 5 years, and much of the growth is expected to come from markets like India, China and the ASEAN region. Currently the Asia Pacific region contributes to 10% of ArvinMeritor’s global revenues, but this is bound to increase in the coming years with the strong growth of its business both in China and in India. Other than China and India, the ASEAN region will be a market which the company would start looking at more seriously”.
In 2008, of the total business in Asia, China and India contributed 40 per cent each, and the balance came from its operations in Japan and Singapore. In 2009, the equation has changed a bit, with China leading the front with over 50 per cent contribution to the overall business in Asia, thanks to the $586 billion stimulus package unveiled by the Government with most of the spending going into infrastructure development. India’s contribution has dropped due to the recession, which particularly hit the commercial vehicle segment very badly. But in the years to come, this contribution will even out, Tim said.
India footprint
Looking at the India footprint of ArvinMeritor, the company has been around for more than three decades, starting from the days of Rockwell International. ArvinMeritor has two joint ventures with the Kalyani Group and its own technical center. The first JV is Automotive Axles Ltd., located in Mysore. The JV manufactures axles, gears, housings and brake components for commercial vehicles. Automotive Axles is the largest independent manufacturer of rear axle drives in India.
The second JV with the Kalyani Group is Meritor Heavy Vehicle Systems (India) Ltd. (MHVSIL) which is again located in Mysore. MHVSIL takes care of the marketing and sales of axles and brakes for commercial, off-highway and industrial applications. It also does application engineering for axles and brakes.
According to Tim, the key strength of ArvinMeritor’s growth in India is its strong partner, the Kalyani Group. ArvinMeritor is today the preferred OEM to all major commercial vehicle manufacturers in India, including Tata Motors, Ashok Leyland, Eicher and Swaraj Mazda.
The company has also started supplying axles to MAN Force for its Tractor Trailer model. With many of the global OEMs like Mercedes and Navistar making entry into the Indian market, the company sees a huge opportunity unfolding in the Indian market, said Mr. Larry Dowers, Managing Director, ArvinMeritor India.
Also Indian OEMS like Tata Motors and Ashok Leyland are nurturing their global aspiration by expanding their horizon. Tata Motors has its presence in Korea and Ashok Leyland in the Czech Republic through Avia.
“We are working with the Indian OEMS not just in the domestic market but also in other global markets in which they are present. As the Indian market moves towards higher horse power engines, we see a much bigger opportunity in the Indian commercial vehicle market. The Premium bus and coach market is another important segment for us. We will continue to expand our brake business in India and are definitely going to push hard in the off-highway market as well. We also see great opportunity in military”, added Mr. Dowers.
Defence application
ArvinMeritor is an acknowledged leader in military drive train supplies. Over half a century ago, the company began its career as a leading drivetrain components supplier for military fleets. The engineering expertise has enabled ArvinMeritor to win many prestigious military contracts, including its long-standing position as axle supplier of choice to the US Army fleet of 2.5t and 5t vehicles.
Aftermarket & remanufacturing
Another focus area will be the aftermarket business, which is an important part of ArvinMeritor’s business globally. The company is looking to expand this into markets like India, China and the ASEAN region.
Further possible opportunity is in the area of remanufacturing. The company acquired TruckTechnic in Europe, which is a leading remanufacturer of components, and this has helped strengthen the remanufacturing business. The company is seriously looking at the opportunity for remanufacturing in markets like India and China.
China success story
Talking about China, Tim said, “ArvinMeritor is the largest supplier of independent axles for the off highway segment in China. We are going to launch the first global off-highway platform out of China”.
ArvinMeritor has been in China for over 16 years now. The company’s biggest success story has been in the off-highway segment. It is expanding its off-highway axle and brake business that has grown considerably in the last few years and continues to be very strong in the current year as well. This is mainly because the construction markets in China, whether it is mobile cranes or loaders and excavators, have been incredibly strong. In fact, the Bangalore technical centre supports the global off-highway platform product development program and the joint venture in China.
In the bus segment the company has signed a strategic partnership with Yutong Group Co. Ltd. to supply drivetrain components for buses and coaches in China, specifically focussed on high end bus and coach. In addition to supplying premium non-drive and drive axles to Yutong, ArvinMeritor will now manufacture differential carriers and brake callipers at its facility in Wuxi, China, for application on Yutong’s axles. The final product will be assembled at the Yutong plant in Zhenzhou, China. Production is expected to begin by the year end.
Globally, ArvinMeritor is increasing its focus on the off-highway segment. Infact, the company has been chosen for supplying axles by NC2, the Navistar-Caterpillar global alliance, which will launch medium and heavy duty trucks for construction applications. “We have a longterm relationship with ArvinMeritor and with the NC2 we are about to take the relationship to the next level”, says Mr. Kevin Thieneman, India Country Manager, Caterpillar Asia.
ArvinMeritor has made all the right moves to take advantage of the future growth opportunity in Asia. The company has been in India for over 3 decades and in China for over 16 years, establishing very strong local partnerships. ArvinMeritor brings global expertise in products and technology to markets like India and China and this adds lot of value to domestic OEMs. Also with the entry of global OEMs like Mercedes, Volvo, MAN and Navistar, the presence of companies like ArvinMeritor is a huge source of strength. It clearly paves way for an exciting opportunity ahead for ArvinMeritorin Asia.
