End of an era in Automotive Journalism

By K. Gopalakrishnan

R. Kalidasan, Publisher of MOTORINDIA, passed away on 2nd June, 2010.

Born on 25th May 1945, Kalidasan joined Motorindia in 1968 after passing out of Madras law College.

The initial days were always a struggle, particularly in the 60s and 70s, when the industry was going through very tough times. He travelled extensively to the remote locations of India and established very strong relationships with the automotive industry and trade. The relationships which he established decades back still holds Motorindia in good stead.

He had very close interaction with auto component manufacturers and had the rare opportunity of working with the Founding Members of various automotive groups including Amalgamations, TVS, Rane, Talbros, GNA, Minda, Shriram, Roots and several others.

He was aggressive, hard working, enterprising and believed “Nothing is impossible”. His commitment to work and to the Indian automotive industry was unparalleled. In the career spanning 42 years, he has not missed bringing out even one single edition of Motorindia, irrespective of the business conditions. For him, Motorindia was an opportunity to serve the Indian automotive industry and he delivered it with a lot of passion and dedication.

In 1994, after the demise of his Father M. Rajagopalan, Founder Editor and Publisher of Motorindia, Kalidasan took over as the Editor and Publisher of the magazine. He assumed the responsibility at an important stage and under his leadership took the magazine to greater heights. He participated in many international shows, back in the 80s and 90s, with the intention of providing global exposure to the Indian automotive industry. There was a sense of joy and satisfaction in him when he saw Indian companies make it big in the global arena.

The launch of the Hindi edition of Motorindia in 1999, the only automobile magazine in the National language till date, was a sincere attempt to provide quality information, to thousands of people in the North, North-West and North-East part of India, in a language which they understand better.

He always kept pace with technology and in 2006, paved way for the digital revolution by starting the online edition of Motorindia. Today, the online edition of Motorindia is read in over 181 countries worldwide.

To honor the Doyens of the Indian automotive industry, Kalidasan instituted the Motorindia Automan Award. He had the opportunity to honor Mr. T. S. Santhanam of the TVS Group, Mr. A. Sivasailam of the Amalgamtions Group and Mr. Keshub Mahindra of Mahindra & Mahindra.

Recognising his contribution to the automotive industry, he was conferred the Best Editor Award by United Writers’ Association and Lifetime Achievement Award by CGTA.

He has ensured smooth transition of his responsibilities. In 2009, he appointed his Brother R. Natarajan as the Editor of the magazine.

In the last 42 years, Kalidasan has given his best. He has been a source of inspiration for many. He worked till the very last day of his life. Kalidasan will always be remembered for his commitment, dedication and priceless contribution to the growth of automotive industry in India.

Tata Motors emerging stronger

To offer complete transportation solutions from 0.5 to 49 tonnes and above

The pace of change at Tata Motors is breath taking, particularly in the commercial vehicles segment. The last few years saw the company developing a whole range of vehicles for both cargo and passenger applications right from 0.5 tonne to 49 tonne and above. On the one side, the company is test marketing Iris, a 0.5 tonner four-wheeled passenger vehicle, ideal for rural transportation and on the other hand, it is concept-selling the Prima range of heavy duty trucks. The versatility of Tata Motors is reflected in it is ability to identify the market opportunity in every segment and fill the gaps in its product portfolio to take advantage of the emerging opportunity.

In an in-depth interaction with Mr. R Ramakrishnan, Vice President, Sales and Marketing (CVBU), Tata Motors, he shared lot of insights about the company’s plans right from launching new products to the changing trends in the Indian transportation industry and how Tata Motors is gearing up to take advantage of the emerging opportunities and much more to Motor India.

Ramakrishnan says: “The biggest advantage with Tata Motors is the in-depth understanding of the market and the range of products offered. Over a period of time, we believe that we will very quickly move from being a cowl chassis maker to a total transport solutions provider”.

According to Ramakrishnan, Tata Motors has lined up an array of products to be launched in the next 12 to 18 months. In the heavy truck segment, the company is planning to introduce the Prima range, with the launch of a 49 tonne tractor trailer model fitted with 280 hp engine, followed by a 31 tonne 8x4 tipper with 380 hp for mining applications, which will also be launched with a 280 hp engine. Further, the company also will launch a 49 tonner tractor trailer with 380 hp engine for ODC applications and subsequently a 25 tonne tipper with a 380 hp engine, again for mining applications.

Also on the cards are plans to introduce a 31 tonner 280 hp 8x2 haulage truck. “In the Prima range, we are initially focusing on the heavy duty segment only, which is currently under powered. On the other end of the spectrum, in the sub one-tonner segment, we have lined up a few interesting products as well. Iris is the first product to be launched, which we showcased at the Delhi Auto Expo in January this year. Iris is nothing but a small four wheeled commercial vehicle with a seating capacity of 3+1 and ideal for passenger transportation in semi-urban and rural areas”.

Tata Motors has soft-launched Iris in Rajasthan and is planning to launch it in other markets shortly. Part of the Penquin project, Iris is a 0.5 tonner version of Tata Ace. “We had launched the passenger version initially and would soon introduce the goods carrier version as well. We always believed that the potential for a small passenger vehicle is immense in the country and we want to get into that segment in the first place”, Ramakrishnan pointed out.

While elaborating on another unique change that is going to take place in the Indian transportation industry, Ramakrishnan says: “There are many changes which one can expect, going forward. What with the kind of infrastructure development taking place, the new express ways and other major road projects, there is bound to be an excellent connectivity across the country. India will soon have six and eight lane highways and to take advantage of these infrastructure developments, the industry needs high horse power trucks which are ideal for long haul, especially carrying heavy loads.

This means, the composition of the truck market today, which is heavily skewed towards the rigid trucks or the three-axle trucks, will eventually move towards tractor trailer, which will suit long distance applications.

On the other side, the rigid trucks will come down to shorter distance like tippers or construction equipment and special cargo, which is of light density and subsequently less tonnage. What is more, these segments will move towards two-axle or three-axle truck with a longer wheel base. A few of these vehicles can be used as vehicle carriers such as car carriers, two wheeler and three wheeler carriers. Rigid trucks, on the other hand will be confined to these applications. Construction and mining applications will typically use the two, three and four axle tippers. Our aim is to shift towards higher horse power trucks”, Ramakrishnan adds.

There is a growing expectation for the power to weight ratios to go up, even within the city or inter-city. The trucks will have to keep pace with other vehicles on road failing which these vehicles will be a big cause for traffic congestion and instrumental in growing number of accidents.

Operational efficiency

Tata Motors is also laying lot of emphasis on improving the operational efficiency of its trucks. Typically, a truck in India does around 350 kilometres to 400 kilometres a day. The Prima range is touching 700 kilometres a day. “From the consignor’s point of view, his warehousing requirement on both ends and the inventory on wheels are cut down by half. Currently, the inventory cost is quite significant and we are looking at more powerful and efficient powertrains, which means the life of the vehicle, is not only longer, so does the improvement in reliability. A typical Indian truck works for about 230 days to 250 days in a year and the new range of Prima trucks can do up to 330 days in a year. That is the kind of change we are talking in terms of availability”, Ramakrishnan adds.

As manufacturers move towards offering ready-to-use, fully built vehicles which are application specific, there is a lack of efficient and good quality application providers in the country, Ramakrishan says and adds: “There is still a dearth for good quality application providers in India, not to mention the good quality manufacturers of tippers, trailers, bulkers and other applications. Initially, the OEMs will have to show the way and develop efficient and affordable bodies for their trucks. We firmly believe that in the next few years, fully built vehicles will gain prominence much more like in the developed world”.

Tata, as a group has built lot of expertise on the application side. TRF, one of the group companies has made a slew of acquisitions in the area of manufacturing axles, tippers and trailers. The company acquired York, a leading global axle manufacturer a few years ago. Moreover, TRF has recently acquired Dutch Lanka, a major trailer manufacturer and also bought out the stake in Aditya Automotive for building tippers. All this will eventually help build competence within the group, Ramakrishnan feels.

Lacuna in loading process

According to Ramakrishnan, yet another key change that is expected to happen is on the loading and unloading of goods. there is no use having high powered trucks, which can carry goods from one point to the other in half the time, but still end up spending hours waiting for loading and unloading the cargo.

Currently, there is lot of inefficiencies in the system. So, we need a more mechanised loading process in place. At the point of loading, what we require is a tailor-made loading ramp. Furthermore, we also need to move from a single tractor and trailer combination to a tractor with multiple trailer combination. For, this will considerably improve the productivity and further reduce the idle time, says Ramakrishnan.

“We are working beyond just loading and unloading, for instance, consider steel coil transportation. It takes six to eight hours to load steel coils before it can leave the warehouse. The equipment is not customised to loading on a truck. Hence we are looking at customised cranes which can stack the coil on to a truck and also design the trailer bed making it suitable for a coil so that it needs no latches. This will certainly cut down loading time significantly.

Similarly, we are working on the unloading side as well. The unloading is usually done at a location where there is no proper infrastructure. This is where we need equipment like truck mounted cranes or evolve other concepts which are low cost, low investment, yet doing the job effectively”, he adds.

Ramakrishnan feels that Tata Motors need to get into these areas effectively. “When we say that we want to be a complete solution provider, all these elements need to be taken into account. We are actively working on various aspects such as training the drivers and mechanics, educating goods manufacturers on loading and unloading points and we are also actively engaged in all these developments right now”, Ramakrishnan avers.

Rural economy

“As far as the rural and semi-urban transportations are concerned, we believe some very big change is going to take place and that is where products like Iris are going to play a significant role”, Ramakrishnan points out.

The road development in rural areas is already happening and under the Grameen Sadak Yojana, a little over 30 percent of the roads planned are already in place. What is more, in each of these villages that are already in the loop, the consumption have gone up phenomenally. Therefore, vehicles like Tata Ace are ideal and are operating in these areas. The moment roads are there in place, people start traveling from their villages to nearby towns and cities and this is where vehicles like Iris would come into picture. So, we are going to see a phenomenal growth in those parts of the country, where connectivity is happening. The passenger or the bus segment is going to be much bigger”, he says.

In the bus segment too, Tata Motors is looking forward to a big transformation. The change is visible in the company with the JNNURM order. Ramakrishnan lays emphasis on the increased private participation either directly or in the form of privatised routes. “We have products to cover the entire spectrum of the bus industry. We are changing the powertrain on some of our buses by introducing a whole new range of engines which are electronic, common rail with a dual overhead camshaft. These will be in three-litre and five-litre engines. These engines would be used on the light and medium duty buses between 3.5 to nine tonne. The city buses will continue to be on Cummins engines. The inter-city is one segment where we need to focus on. We entered this segment with the Hispano 230 hp and we are now planning to launch a new model with 280 hp, BS-III electronic, common rail engine. We will soon launch a global LCV platform for buses”, Ramakrishnan says.

Service

While touching upon the servicing aspects of the new generation of trucks, Ramakrishnan has this to say: “We have not only designed our trucks to ensure minimal service and repair by improving the reliability of our trucks and aggregates, but also changed the service intervals. A typical truck today requires oil change every two months. The new trucks will require oil change every six months. For gearbox and axles, the service interval is 80,000 kilometres. All this will help reduce the need for frequent visits to workshops”.

According to the official, Tata Motors have the largest service network in the country. In terms of workshop, the company has well over 2,000 touch points, which are Tata Motors dealers and authorised service stations, not including the garages which has its trained mechanics. There are about 8,000 outlets for supply of spares.

“We are also now equipping all the workshops to service the new generation of trucks. The new trucks have lot of electronics and whole lot of cabin. Hence training and upgrading their knowledge and skill sets in handling these trucks are very important”, Ramakrishnan adds.

Ashok Leyland Transformation in progress

From a domestic commercial vehicle manufacturer, Ashok Leyland has metamorphosed into an automotive powerhouse and going ahead with global goals. From time immemorial, Ashok Leyland is a synonym for commercial vehicles in India. Right from the days of Ashok Motor, traversing through the rough roads of commercial vehicles market in India and the transformation after the Hinduja Group took over the company into a automobile powerhouse is amazing.What is more, the transformation from a mere truck and bus manufacturer to a full range automobile player is evident from the fact that in the last five years, the flagship company of Hinduja Group has initiated some bold moves including firming up new alliances, both for the vehicle production as well as the manufacture of auto components, overseas acquisitions, establishing green field facilities both in the domestic and overseas markets and ramping up existing facilities. All these endeavors have had a lasting impact on the image of the company.

Besides its core business of manufacturing and selling medium and heavy duty trucks and buses, Ashok Leyland has signed a joint venture with John Deere for the manufacture of back-hoe loaders and construction equipment. Furthermore, the company also formed another alliance with Nissan Motor of Japan for making LCVs. Plans are afoot to have another JV with the Japanese giant for the manufacture of a compact car. Ashok Leyland has also set up a bus manufacturing unit in the state of Ras-al-Khaimah in the United Arab Emirates, in order to cater to the requirements of the Middle East and African markets. More recently, the company has acquired 26% stake in UK based bus manufacturer Optare.

Besides these initiatives, the firm has also set up a slew of joint ventures in areas such as design and manufacturing auto components with global giants including Continental, Albonair and Alteams. In a strategic move, Ashok Leyland has also acquired the US-based Defiance, to share the synergies and expertise of the latter, which can provide end to end solutions right from design to the manufacture of components and systems. Overall, the company is planning to invest around Rs 2000 crore in capex during 2010-11, out of which Rs 1200 crore would be funded for various joint venture projects.While tracing the genesis from its core business of making trucks and buses and the journey through various segments of automobile business, let us take a closer look at its transformation.

Existing business

As trucks and buses are its bread winners, the commercial vehicle business will continue to be Ashok Leyland’s mainstay. The company has set a roadmap to increase its market share in the commercial vehicle segment. As part of its endeavour to stay competitive, yet adding value to the customers, Ashok Leyland introduced the U-Truck, its latest range of world class products during the Delhi Auto Expo held early this year.

The U-Truck is designed and developed in line with its strategic objective of becoming a low cost producer of commercial vehicles, at the same time, adding more customer value. What is more, the U-Truck range offers a flexible platform in meeting a gamut of exacting customer requirements, right from the demand of satisfying various applications, following the mandatory and stringent emission norms and varying load requirements, through a large number of variants and combinations between 16 tonne GVW to 49 tonne GCW, that could be derived from a small number of modules in an even shorter time frame.

Following the customer demands will lead to lower cost of production and in turn, the customers will be benefited as the U-Truck will provide world-class features at Indian prices. Another advantage for the customers who have a fleet of U-Trucks is that the inventory cost of parts will reduce to a great measure, thanks to the modularity of parts. The company has scheduled to launch the U-Truck tractor and tipper range in the second quarter of the current financial year.With greater emphasis being given for better road infrastructure, India is also following global trends of increasing power-to-weight ratio. Therefore, to compliment the U-Trucks with higher power, Ashok Leyland has also developed a new genre of engines and badged as ‘Neptune’ series, which will be capable of producing engine power, ranging from 160 hp to 368 hp. The company plans to bring out the Neptune series engines in four and six cylinders configurations that have BS-III and BS-IV compliance of emission norms. Furthermore, the engine is also designed to meet the next level of BS-V and BS-VI emission norms.
Next Generation Cabs

Ashok Leyland felt the need to educate the drivers about the safety aspects and skill set improvement to the drivers. To make commercial vehicle driving an attractive vocation, it is imperative to improve driving skills as well as driving conditions. Therefore, the company, in an endeavour to resolve the challenge has piloted a programme: ‘Next Generation Cab (NGC), which will provide cabs with world-class standards related to noise/heat insulations, ventilation, ergonomics, comfort and driver safety, all at an affordable cost. NGC will be implemented along with the launch of U-Truck range and this unique initiative by the company will redefine the way vehicles are developed in the country.

Besides implementing the NGC programme on the U-Truck range, the firm is also planning to develop on a modular platform where cab variants could be produced from a combination of height, length and width. This initiative is also part of its objective of providing higher value to its customers at lower cost.

Exports

Ashok Leyland has also made significant progress on the exports arena by expanding its footprint into regions such as Latin America, Peru and made further inroads into locations as far as Ukraine to Saudi Arabia and all these markets hold lot of promise for the company in the coming years.

Expansion plans

Ashok Leyland, which was hitherto known in the Indian automotive horizon to be a South-based manufacturer of trucks and buses, had dispelled the cloud of darkness with a pan Indian presence by setting up a manufacturing facility for trucks at Pantnagar in Uttarakand and another unit for buses at Alwar in Rajasthan. The commissioning of Pantnagar plant is a significant step forward for the firm and it has invested Rs 1,100 crore. Notably, the sense of urgency shown by the company is laudable in that it had set up this unit in a record time.

Ashok Leyland plans to manufacture the U-Truck at this state-of-the-art and fully integrated facility that matches international standards. With the commissioning of the Pantnagar unit in March this year, Ashok Leyland has added an annual capacity of 75,000 vehicles. Currently, the company has an overall production capacity of 1,50,500 vehicles a year on a two shift basis.

Initially, the plant at Alwar was meant only for the manufacture of chassis and now it is transformed into a full-fledged bus manufacturing facility. The company’s long term objective is to convert this unit into a contemporary integrated bus manufacturing plant.

With the commissioning of new facilities up north, the firm found lot of spare capacity available at its existing units at Hosur in Tamil Nadu. The company is now planning to utilise a part of the capacity in Hosur for the manufacture of light commercial range, jointly developed with Nissan.

Ashok Leyland has formed a tripartite joint venture with Irizar and TVS for bus body building and had set up a new facility in Viralimalai, Tiruchy in Tamil Nadu with a capacity to make 2000 buses a year. Ashok Leyland’s bus manufacturing unit at Ras-al-khaimah, near Dubai, with a capacity to produce 2000 buses went on stream, catering to the demand for buses in the Middle East and African markets.

Japanese JV

The joint venture Ashok Leyland has with Nissan is to develop light commercial vehicles and this segment has a significant growth potential in the country. During the financial year 2009-10, the contribution of LCVs in India was on the upward tick with a phenomenal 54 percent of the total commercial vehicle volumes.

Due to the global market slowdown and the subsequent market sluggishness in the commercial vehicles segment, the joint venture modified its manufacturing strategy to optimise investments. Clearly, this new strategy helped the JV to leverage the surplus capacities available at the two parent companies, with the ability to increase production capacities at the appropriate time. The joint venture is likely to roll out its first LCV vehicle some time in April next year. As mentioned earlier, part of the production of these LCV would happen in Ashok Leyland’s facility at Hosur, partly at Nissan’s facility at Oragadam, near Chennai. Vehicles produced in these respective facilities would be marketed with both Ashok Leyland and Nissan badges.

As news is making rounds that Ashok Leyland is also working with Nissan on a compact car project, though an official announcement is yet to come from both the sources.

John Deere alliance

Ashok Leyland’s 50:50 partnership with John Deere Construction & Forestry Company has resulted in the formation of a new entity, Ashok Leyland John Deere Construction Equipment Company Private Limited in July last year. John Deere is the US-based firm which is one of the leading construction equipment manufacturers in the world. The joint venture with that firm means, Ashok Leyland would gain access to the full range of construction equipment of John Deere and the synergy can be replicated in its Indian operation.

When the two partners firmed up a joint venture deal, the initial initiative the new entity did was to acquire 48-acres of industrial land at Gummidipoondi, near Chennai. The firm has laid the roadmap and the work is progressing as per schedule. Currently, the company has started the construction of the first shop. The first batch of products is likely to be rolled out by early February next year. According to the company, the project is running on schedule and orders for the manufacturing equipment have been placed. What is more, the firm has already kick-started discussions with the key suppliers, just to make sure the cost and time readiness is there at their disposal. Also, the marketing plan is in place and the product specs appropriate to the Indian markets have also been worked out and the engineering work is going on in full swing to make sure that the commercial production starts without any snags.

All the mandatory approvals from the Government have been obtained and the company has also started the recruitment of key personnel. Gradually, the firm will also start recruiting associates as well. Although the joint venture has concretised on the initial batch of products to be manufactured and launched in the market and once it starts production of these products, introduction of additional product lines would be evaluated periodically.
Continental connection

Ashok Leyland’s joint venture with Continental AG is solely focused on consolidating the execution plan for the existing projects, which were aligned with a roadmap for stabilisation and growth. During the last one year, the key thrust areas included building technical competence, develop innovative low cost products for both Ashok Leyland as well as its partner and further engaged in engineering services to align with Continental’s product development process.

Albonair

Ashok Leyland had set up Albonair GmbH in Germany back in December 2007 primarily to provide cost-effective after treatment systems for commercial vehicles in emerging markets in order to leverage the opportunities created due to the implementation of stringent exhaust regulations similar to Euro-IV regulations and above from this year. The company would offer exhaust after treatment solutions based on selective catalytic reduction technology and other technologies including the diesel particulate filter or oxidation catalysts to the company and to other commercial vehicle manufacturers as well.

During 2009-10, the firm had successfully developed the complete after treatment system based on SCR for emerging markets. The company had even commenced a small scale sales office at Shanghai to be present in the Chinese commercial vehicles space.

Ashley-Alteams alliance

Ashley is Ashok Leyland’s division and it has partnered with Alteams to form a joint venture: Ashley Alteams India Limited. Furthermore, the new entity has set up a sophisticated facility at Cheyyar, Kancheepuram near Chennai. The company has already started supplying products to both the automotive as well as telecommunication sectors.

Defiance Technologies

Ashley Design and Engineering Services is a division of Ashok Leyland and subsequently renamed as Defiance Technologies Division. Defiance is engaged in engineering services and has the requisite expertise and experience to provide manufacturing services to global customers.

Considering the synergy between the activities of Defiance Technologies Division, which is engaged in engineering services, and the activities of Defiance Technologies Limited, the former firm’s fortunes were drying up and eventually integrated with the latter during the year.

Hinduja Leyland Finance

In an apparent move to boost the sales, Ashok Leyland has established a non-banking finance firm, Hinduja Leyland Finance, a captive financing arm with an initial investment of Rs 100 crore. The new endeavour kicked off its operations across 130 centres in 16 cities. What is more, the company also has plans up its sleeves to broaden the network to 300 centres. The main aim of the firm is to fulfill the needs of the commercial vehicle buyers as banks and other financial institutions still show some reluctance in funding commercial vehicle purchases and are very selective in providing financial assistance.

With all these initiatives, it is clear that Ashok Leyland is evolving itself to play in the global turf and the transformation of being a major global automotive major from a mere truck and bus manufacturer is more pronounced now what with all these joint ventures and diversifications happening at regular intervals are anything to go by. The next decade will see Ashok Leyland dominating both the domestic as well as global arenas.

JnNURM brings much needed relief to Kolkata’s public transport

- By K. Gopalakrishnan

A year back when I visited Kolkata, I had a harrowing experience travelling by the local city buses. I found the public transport, particularly buses, in complete disarray.

A year later, Kolkata’s bus transport is much better, thanks to the JnNURM program. As part of the program, West Bengal received grant for 1,300 buses out of which 1,200 was for Kolkata city and 100 buses for Asansol. Out of the 1,200 buses for Kolkata city, 300 buses would be air-conditioned low floor buses including 50 Volvo buses.

After years of jostling amidst the heat and dust in old buses, the low floor air-conditioned Volvo buses are a welcome relief to the commuters in Kolkata. Volvo city buses are plying from Airport to the city centre.

The WBSTC has also appreciated the fuel efficiency per passenger-km and the reliability levels of these buses are far better than expected. The Volvo city bus offers automatic transmission; optimum power-to-weight ratio and excellent city manoeuvrability.

Throughout the trials, the performance of these buses were closely surveyed. Passengers surveyed were not only ready to pay more but 98 per cent of the passengers interviewed were also ready to make public transport their first preference. 81 per cent of the passengers rated the ride comfort as being far superior in a Volvo – a key factor while comparing public travel versus personal vehicles. The stepless entry received high appreciation from the elderly and young alike.

“City corporations are increasingly including buses into their long-term investment plan. This is because there is little purpose in making huge investments on roads if we cannot have the right vehicles and transport systems operating on them. Modern city buses have a key job to do – attract owners of private vehicles to switch over to convenient public transport and save, thus aiding in decongestion of city roads. They will also result in profound savings in terms of fuel conservation and reducing emissions”, mentioned Mr. Akash Passey, Managing Director, Volvo Buses India Private Ltd.

Sometime back Kolkata High Court passed an order of phasing-out all pre-1993 commercial vehicles from city roads to check pollution. About half of the 9,000-strong-fleet of private buses in Kolkata had to be removed from road. This resulted in severe shortage of buses. JnNURM has attempted to solve this problem and improve the quality of public transportation.

Urbanisation continues in India and rescuing the country’s cities from traffic jams will require major investments in the modernization of the traffic system and convincing people to take public transportation instead of cars and two-wheelers.

Ural – FAW bus project on stream

Ural India is entering booming bus business in India. It has signed a technical collaboration agreement with FAW of China for manufacturing low, semi floor and inter-city buses in India. Ural India is presently manufacturing trucks, dumpers and special anti-mine vehicles for army and police. With the new arrangement they will now be able to cater to the needs of general markets also. Besides they will also offer bus chassis to customers for building their own bodies.

FAW Group is a leading global manufacturer of trucks, buses and passenger cars in China. According to Mr. Anirudh Kanoi, Director, Ural India Ltd., these buses are built at their Haldia factory in West Bengal and production has already started. Currently, the buses are imported as CKDs from FAW and assembled at their Indian plant. They have achieved indigenisation to the extent of 25 per cent and Mr. J.K. Saraf, Chairman of Ural India expects that in the next couple of years this will go upto 50 per cent. These buses are estimated to cost between Rs. 30 lakhs to Rs. 50 lakhs.

The new city buses will be rear engine type, fitted with 150 hp conforming to Euro III standards and will have a seating capacity of 40 with both AC and non-AC options. These will be marketed with Ural and FAW badging.

MAN bets big on BRIC countries for future growth

India made MAN CLA series will be an important part of its global portfolio

In a strategic move to boost its growth, MAN Nutzfahrzeuge, leading global truck and bus manufacturer is now gunning for growth in the BRIC nations with its ‘Made in India ‘MAN CLA Series’ of trucks.

In a recent media conference, MAN has displayed an interesting line-up of the range of trucks which will be part of its global portfolio. The products showcased were manufactured in Europe, Brazil and India and the company had also announced that very soon it will add another truck which will be developed in China with its partner Sinotruk. MAN’s strategy for the BRIC nations seems to have finally paid off.

While talking to the media about the global economic downturn and the impact it had on the company, Dr Georg Pachta-Reyhofen, Chairman of the Executive Board of MAN Nutzfahrzeuge Gruppe said: “After the severe downswing, the global commercial vehicles industry now finds itself in the recovery phase. Order intake in the triad markets is gradually increasing, the boom in the BRIC countries, though paused briefly for breath but is accelerating once more. MAN Nutzfahrzeuge will further expand its share of the European core market and participate in growth in the emerging economies”.

MAN’s initial move into emerging market started with its foray into India in a joint venture with Force Motors. MAN Force Motors developed the CLA series of trucks, which apart from being sold in the domestic market are also being sold in Asian and African markets. The CLA series will form an important part of global product portfolio, says Dr Pachta.

MAN is quite upbeat about its business in Latin America. In 2008, MAN acquired Volkswagen’s truck business in Brazil. VW has established very strong presence in Brazil leading the truck market for eight consecutive years. The acquisition of VW’s truck business has given MAN a firm footing in Brazil, which is one of the strongest growing truck markets in the world. Now known as MAN Latin America, the company sells nearly 50,000 to 60,000 trucks every year.

Russia is again an important part of MAN’s global strategy. MAN has been successful in establishing itself as the market leader in the imported truck market in Russia. The focus is on construction and long-haul transport vehicles. Whereas in China, MAN has acquired a 25 percent stake plus one share in Sinotruk, a leading manufacturer of trucks in the country. MAN and Sinotruk are jointly developing a truck for Asean markets.

Focus on emerging markets

Despite tough market conditions in Europe and in many other global markets, MAN has pursued its strategy to focus and invest in emerging markets. The reason for this is that in the medium term, the demand for transport in the BRIC countries is expected to rise considerably driven by the expansion in infrastructure. This will result in increased demand for buses and trucks in these countries. In total, these countries represent 40 percent of the world’s population, while their share of global economic performance is currently around 10 percent. Annual growth rates of between five and 15 percent prior to the economic crisis clearly show the direction in which these striving economies are moving.

Product suit

MAN now has a complete range of products to offer from its global product portfolio to suit varying market conditions. For developed markets, it has a complete range of trucks – the TGX, TGS, TGM and TGL. Starting from seven tonnes to 49 tonnes, these trucks will form the top-of-the-line offerings from MAN which will be suited for developed markets. In the next level, it has the VW series of trucks which are more suited for emerging markets like Latin America and to some extent in Africa. MAN has recently started building the TGS and TGX series of heavy duty trucks in Latin America. The company feels that the Latin American market is ready to accept these high-end trucks. The CLA series manufactured in India are best suited for emerging markets. These trucks come with MAN’s engineering, design and quality standards at a price point which is more suited to markets like India, Africa and some Asian countries. This completes the product range of MAN globally. MAN has a product to offer at every price point and for practically most of the global markets. Added to this, MAN is developing a new truck jointly with Sinotruk in China, which the company says will be in the heavy duty higher horsepower segment. Let us look at each of these markets and the products they offer, which will give a better understanding.

India

The truck joint venture MAN FORCE TRUCK Private Ltd produces heavy trucks in India for the domestic market, Asian and African markets. The vehicles in the MAN CLA range are designed for tough, challenging operating conditions. The products in the MAN CLA range include two-axle and three-axle chassis, semi-trailer tractors and trucks ready for bodies to turn them into tippers and concrete mixers with gross vehicle weights of 15 tonnes to 26 tonnes and engine outputs of 220 hp to 280 hp. With a rugged frame, economical engines and 20 inch or 22.5-inch tyres designed for poor roads, MAN is aiming at various markets in Asia and Africa. The trucks are already in operation in Indonesia, Vietnam, Uzbekistan, South Africa and Morocco.

Latin America

With the integration of VW’s truck business, MAN became one of the world’s biggest manufacturers in this sector. By the end of 2010 the heavy vehicle segment will be supplemented by more powerful trucks from the MAN brand, like the TGX range of trucks. The first orders for these vehicles have already been received. With a bigger range of products and the two strong brands, VW and MAN, the commercial vehicle manufacturer is aiming at growth in all Latin American markets. In Brazil, MAN (with VW) has a share of over 30 percent, making it the market leader in heavy-duty trucks. Since 2009, the commercial vehicle production plant in Resende in the state of Rio de Janeiro has belonged to the MAN Gruppe. The plant is a major element of the company’s global production and growth strategy.

The products offered include light, medium and heavy trucks as well as bus chassis for city, charter and long-distance transport. The weight classes range from light delivery vehicles at five tonnes gross vehicle weight to bus chassis to the Constellation trucks. The Constellation trucks range from 13 tonnes to 57 tonnes GVW with 4X2, 6X2 and 6X4 rigid chassis and 4X2 and 6X2 tractors. MAN Latin America sells vehicles in 22 countries, primarily in South America and Africa, where they are operated by mining companies, inter-city bus operators or on big farms.

Russia and Central Asia

In the past few years, MAN Nutzfahrzeuge has been so successful in establishing itself on the Russian truck market that it is now the market leader amongst the importers. The focus is on construction and long-haul transport vehicles. During this period, an extended and highly qualified service network has been built up for MAN’s customers in Russia.

In Uzbekistan in 2009, MAN founded a joint venture for assembly, sales and service of trucks for markets in Central Asia. The joint venture imports components for heavy trucks from the MAN TGA and CLA ranges from Germany and India respectively into Uzbekistan, where they are assembled. The trucks are sold and serviced via a network of independent dealers. The trucks are, for instance,semi-trailer tractors and chassis for construction vehicles. The joint venture, JV MAN AUTO-Uzbekistan, is headquartered in Tashkent, Uzbekistan.

China

In China, MAN and its partner Sinotruk are developing a new truck brand for emerging countries and growth markets. Sinotruk is one of the market leaders in China with a more than 20 percent market share. In addition, the first components from MAN are being integrated as planned into existing ranges from Sinotruk. With this partnership, MAN is participating directly in the expansion of the market leader on the world’s biggest truck market. Sinotruk has also licensed technology from the MAN TGA range, including the engines. The new products will be sold by MAN and Sinotruk.

Europe

In the European markets as well as an ever larger number of neighbouring markets, the most important drivers are the pressure of competition, rising fuel prices, increasing density of traffic and the resultant demand for greater traffic safety. For the transport operator, competitiveness is defined more and more through adherence to deadlines, few down times, and the ability to calculate the costs of their vehicles down to the cent per kilometre.

This is why a closely-meshed service network, good and rapid maintenance, mobility guarantees and precisely calculable maintenance costs are playing an increasingly big role. When operators are deciding on a purchase, they therefore look at suppliers who are able to offer efficient service agreements, mobility guarantees and telematics systems. MAN has analysed the major factors driving the costs of operating commercial vehicles and is already offering its customers a comprehensive programme to reduce the total costs of ownership (TCO).

‘Consistently Efficient’ refers to the trucks and buses of the MAN brand as well as to the services that have been tailored to meet the demands of the various sectors. The combination of the two is aiming at achieving outstanding efficiency over the entire period of the vehicle’s operation. ‘Consistently Efficient’ also includes research and development measures, which enable products and road traffic systems to become even more efficient in future. MAN’s strategic approach thus goes far beyond merely saving fuel.

Global strategy

MAN has clearly established its presence in all major truck markets globally and more particularly in the BRIC nations, which will form an important part of its global strategy. The company has developed a complete range of products at every price point to suit the demands in various developed and developing markets. What will be interesting to see is the way the company will position its products in various markets. The trucks manufactured in Europe are top-of-the-line products which will be more suited for developed markets and will have a niche demand in emerging markets as well.

The trucks manufactured in MAN Latin America are of slightly higher specifications than those manufactured in India. These will be positioned in the middle and upper segment in emerging markets. The CLA series will be positioned as a mass market truck in emerging markets like India, South Africa and some Asian countries. There is new truck which is under development in China. All this will offer MAN the flexibility to offer products in various global markets based on the specific requirements.