BorgWarner bets big on India

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Article by: Anirudh Raheja
Bullish about the Indian market, BorgWarner has been steadily expanding its reach in this market. The plan is to stay focused on drivetrain and engine products.BorgWarner’s manufacturing plant at Manesar near Delhi received the 2014 Supplier Quality Excellence Award from GM India in January 2015. The plant makes exhaust gas recirculation coolers for GM Thailand and Brazil. In India, the US-based BorgWarner operates through Joint Ventures (JVs) and wholly owned subsidiaries. Having brought out JVs like the one it has with the Murrugappa Group, BorgWarner has been steadily expanding its reach in the Indian market. This is in-line with the company’s goal to become a USD 15 billion company by 2020. This implies roughly doubling the company in a period of seven years from year 2013 to 2020, and with a growth rate of 10 per cent. According to James Verrier, Global CEO and President, the plan is to stay focused as a powertrain leader; to stay focused on drivetrain and engine products. “All of the products that we have (or will have) will enable the automakers to achieve fuel efficiency, emission standards and the driving performance they require,” said Verrier. In the last few years BorgWarner has spread its reach. Half of its business comes from Europe, while the other half is split equally between America and Asia. This equation is set to change in the next few years, with around 40 per cent coming from Europe and the rest coming equally from America and Asia.

Rising focus on Asia

Growth in Europe is slowing down, which has led to America and Asia emerging as two big growth markers. Asia, for BorgWarner, means China and India primarily. If this should explain why BorgWarner is keen to invest more in India, in new facilities, only time will tell. But the fact is, BorgWarner is looking at investing in capital equipments to support the products and programs it has been awarded. “You will see continued investments around technical infrastructure capabilities and production equipment to support growth and new launches, also in terms of new buildings. We will keep investing in India,” said Verrier. He added, “BorgWarner has always grown much faster than the market because of the adoption of products. We have done this for many years and Europe has been a large part of this growth. A lot of the adoption of our products is much more mainstream in Europe.” Similar to the diesel vehicles in the passenger car segment, a high percentage of gasoline vehicles in Europe have turbochargers. With tighter emission and fuel economy standards in Europe, BorgWarner products have been adopted and applied in European products. “Growth will continue to come from Europe, but at a slower pace. Technologies that have been successfully applied in Europe will find their way to Asia (India and China) and prove beneficial to the markets there,” said Verrier.

Technology & innovation

Producing technology for 6-speed, 9-speed and 10-speed transmissions, BorgWarner is keen to drive products to the next level. “A long time ago there were engines with only one turbo. Now there are engines with three or maybe four turbos. In the last year or two, we launched a product in the US market, to work with the transmission. It is used in stop-start technology for automatic transmission, and is termed as stop-start accumulator or a launch solenoid. It helps the transmission function smoothly and benefits the driver when in the stop-start mode,” said Verrier. Also, adding to the Borgwarner line will be products from acquisitions. The company recently acquired Gustav Wahler, which makes thermostats. These will be made in India according to Verrier. “Its going to be around the powertrain – things like thermo-management products, valve train products, air management products, etc. This is also the reason why we spend a lot on R&D,” he added.

Local engineering & sourcing

BorgWarner buys a lot of components from India and sends them to Europe and North America. From a component supply point of view, this will continue. Verrier said that BorgWarner may source housings for its turbochargers from India. He added, “One of the things that help us a lot is because we have a strong team on the ground in India. They develop local suppliers, to whom we will serve an opportunity to supply parts around the world.” Stressing on local production for local consumption, Verrier mentioned that, for India he would want to do engineering of products, make them locally to serve the Indian market. Derivatives of products in Europe, the products that BorgWarner will launch in India during the next couple of years will see application, engineering, designing, testing and validation at the local level. According to Verrier, conducting core R&D in India is the next step. “We want to walk before we run, but yes over the long haul I think the engineering is outstanding,” he remarked.

Mentioning that they work on everything – from 660 cc engine to 18-litre engines found in heavy commercial vehicles, Verrier stated that they see a strong trend to downsize engines by boosting them. “It is not just turbochargers, we do pretty small engine coolers. We also provide timing drive product for 660 cc engines in Japan,” he said. Interestingly, on a local or a global level, BorgWarner is very clear about offering ideas rather than defining what the engine configuration should be like. The engineers at the local level will be expected to offer optimisation technologies and products. Solutions like variable cam timing, EGR cooler, EGR valve, etc. Said Sudhir Chawla, COO, BorgWarner Emissions Systems India, “Gasoline engine emissions are still far off. The effect of which will be seen few years down the line. When the downsizing of gasoline engine is done. It is at this juncture that turbocharging and EGR cooler will be needed. Borgwarner is ready with products for 2021, and beyond. Especially knowing that BS 5 will come to India in 2021.”

Right technology at the right time

Attention will be on OEMs seeking a certain technology at a certain time. With emission norms becoming stricter and tighter, BorgWarner sees big opportunity. Irrespective of whether it emerges at the passenger car level or at the level of commercial vehicles. Weather it is the off-road segment or the gensets segment, Verrier says that BorgWarner sees a huge potential. Chawla opined that OEMs are setting up a base in India for exports; they will also buy locally developed parts. “It is not only the domestic demand, which is going to bring growth, but also come from OEMs supplying engines, powertrain and vehicles,” he added. A push is also expected at the fuel efficiency level. Demand from end customer for fuel economy will invite regulations according to Verrier. “The game will always be around improving fuel economy without increasing costs. You do get good fuel economy from hybrids, but it is expensive. A variable cam timing phaser or an EGR valve, or a turbocharger, gets one to two per cent better fuel economy, which is huge. The trade-off becomes very interesting and attractive.” Another trend in the merging markets is that once the customer really appreciates a technology to achieve fuel economy benefits, reliance on the supplier goes up. “We are not expected to design their engine completely, but OEMs certainly want us to understand their whole air management system and provide a solution accordingly,” said Verrier.

Growth

Growth at BorgWarner will be largely organic in nature. Products in its portfolio will drive the growth that the company expects said Verrier. He added, “There will be some acquisitions along the way, but they will be governed by technology.” Though BorgWarner has been adding plants in Mexico and Eastern Europe, the most growth is expected to come from India and China. Said Verrier, “China is important as it is one of the biggest markets in the world. It is important for us to support our global customers. They need us in China just as they need us in Europe. The growth rate in India is very strong and it will be among the top three markets in the world in next 10 years.” Expecting growth to emerge from passenger vehicles as well as commercial vehicles, Verrier said that manual transmission will account for half the transmission market, the other half will consist of the quick growing dual clutch transmission. Automatics, said Verrier, will move towards more ratios apart from breaking into Continuously Variable Transmission (CVT). “India has an opportunity to move to dual clutch technology. It was a good step for India to move to the first level of automated manuals. We will see a long term shift away from conventional manual to some form of automatics,” he concluded.

Used CVs find a suitable transaction media in TruckBusSale.com

Article by: Rajesh Rajgor
A part of Mauris Software Solutions, this portal bridges the organised and unorganised sector, with transparency over assets sold.The website, TruckBusSale.com, was born out of the need to ensure transparency and provide multiple options to the sellers and buyers of trucks and buses. The aim was also to provide hassle free deals to them. And, what began as a software development initiative for Mauris Software Solutions (MSS), offering software solutions to transport sector, turned into a specialised revenue model for transacting the sale of trucks and buses. Mentioned Ullhas Ambegaonkar, CEO, TruckBusSale.com, “Some of our clients, transporters, etc., requested us to dispose off their old assets in the sugar and agro industry. We managed to fix a few deals as a value added service since we had the necessary contacts. In the process, the seller and the buyer were happy with the asset quality and the cost. They managed to save close to Rs. 50,000 each as brokerage.” The deals inspired the formation of TruckBusSale.com. Further research study was undertaken. Customer patterns, demands, selling cycles and used vehicle availability was studied before starting work on the site. “Non availability of information on assets emerged as one of the strongest reasons for us to venture into it,” said Ambegaonkar.

Chances are that the industry would be glad that someone took the pain to come out with a platform like this. Since its inception in 2012, TruckBusSale.com has managed numerous deals, the largest being the sale of 20 assets (Ashok Leyland AC buses with different seating capacity) from Andhra Pradesh to Gujarat. The buyer was into ferrying school children, and is known to have overhauled the concept of ferrying pupils by providing air-conditioned buses according to Ambegaonkar. “School authorities and parents were happy to see the safety and comfort provided by the transporter,” he added. Back to the website, and it has proved to be a transaction platform for 10 numbers of 3118 tankers from Mumbai to a client at Kolkata. In yet another deal, the site proved to be of use in selling five trailers of 40-tonnes to a transporter in Gandhidham. The seller was from Nagpur. Such deals, claimed Ambegaonkar, helped towards cementing the site’s reputation as a trusted source of transaction as well as information.

We have dealt with clients with a small number of assets (5-10); with more assets (31-50), and with those that have assets that exceed 50,” said Ambegaonkar. It was during the course of work that the need to maintain secrecy was found out. The website thus concentrates on offering seamless deals for a good asset and at a good price. Apart from the company that may own it, it is the asset quality that counts. The website, claims Ambegaonkar, has been attracting a good deal of registrations from individuals and companies alike.

Striking the deal

Those wanting to sell or buy an asset need to register on the site. The next step is to key in the details. The user can also see profiles of other individuals and that of the different truck and bus models. “If you do not find a vehicle that interests you, or are looking for, you could fill in the details. We will enquire with the brokers and sellers. The moment the information about the suitable vehicle is had, apart from it being put on site, an SMS will be sent to the one interested,” avers Ambegaonkar. The process of registration is robust, and involves sharing of credentials like PAN number to avoid dubious transactions. The call center checks by calling the number and requests to send asset documents for verification in case of the vehicle registered. “Due diligence on documents has helped our portal establish itself as a reliable source of used assets. It has also come to be considered as the one, which converts inquiries into successful deals,” says Ambegaonkar. Even in a slow market, TruckBusSale.com receives 50 to 80 queries per day from different parts of the country, he added. 

Once the registration is done, the back-end team verifies leads and conducts inspection of the documents to get a clear understanding of the ownership of the asset and of other legal aspects involved. The back end team also guides the registered member (buyer) with tips and availability of assets. Given the nature of the industry, it is quite likely that different models are available in a specific vehicle segment in the new and used vehicle market at different times of the year. Often the task is to manage fluctuating demand. From Ambegaonkar’ point of view, a small business opportunity presents itself due to the demand for a particular asset type during that part of the year. “Demand for water tanker goes up in summer whereas the demand for earth moving equipment picks up in October,” he explains. Some long haul (industry specific vehicles) assets like trailers are in demand throughout the year, he added. Quality check on vehicles are carried out by trusted mechanics deployed for the job. They look into areas like engine, transmission, chassis, brakes, tyres, etc. Many of these tasks include routine maintenance. Since the assets are often found to have been well maintained, it may be easy to draw the attention of the buyer. However, a thorough inspection is carried out irrespective of the condition of the vehicle. Now, if a particular buyer shows interest, TruckBusSale.com arranges for an agreement between him and the seller. The website charges facilitation fees if the deal is successful. With an eye on expansion, the website is working towards opening a facility at Pune to offer maintenance. The facility will be well equipped, and include tasks like washing, oil change, greasing etc. Concludes Ambegaonkar, “We plan to open six more stores in Maharashtra and offer insurance and finance under the same roof.” 

4th edition of Mahindra Transport Excellence awards held at Delhi

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Article by: Bhushan Mhapralkar

The award’s recent edition took stock of the contribution made by transporters to the diverse Indian transport sector.

The 4th edition of the Mahindra Transport Excellence awards was held at Delhi on February 15, 2015. Drawing the who’s who of the Indian road transport sector, the awards honoured various outperforming personalities in the sector in an effort to recognise their contribution. Based on parameters like performance, excellence, innovation and leadership, the awards attracted 2,300 entries (with multiple case studies for different categories) – 20 per cent more than last year. The two new categories, spares retailers and the safety category (for hazardous and non-hazardous goods), were introduced at the behest of Ministry of Road Transport and Highways (MoRTH), which extended its support to the awards for the second consecutive year. The event, which saw the giving away of awards in 36 categories, began with a panel discussion chaired by Sanjay Bandopadhayaya, Joint Secretary, Government of India, MoRTH. Members included Jasjit Sethi, CEO, TCI Supply Chain Solutions, Prof. G Raghuram, Dean of Faculty, IIM (Ahmedabad), V L Patankar, Director, IAHE, Dr. Manoj Singh, Advisor, Niti Ayog, Gaurav Karnik, Partner – Tax and Regulatory Services, Ernst and Young LLP, and Sourabh Rohilla, Deputy Director, SIAM. The topic of discussion was, ‘Is India Ready for Global Road Transport Practices and Role of Road Transport in Multi-modal Transport Solutions.’

Addressing the gathering, Nalin Mehta, MD and CEO, Mahindra Truck and Bus Ltd. (MTBL), reiterated his company’s commitment to continue, strengthen and make more relevant, the awards initiative. Bharat Rajamani, Director and Solution Champion – Marketing and Advertising Risk Services, provided the Ernst and Young certification for fairness and transparency to the initiative. Expressed Anand Mahindra, CMD, as commendable the initiative to educate truck driver’s girl child under the Saarthi Abhiyaan. 

Drawing attention to 1,000 scholarships given in FY15, and another 1,000 scholaships which will be given out in FY16, Mahindra said, “In a small way, this will lead to the transformation of the mindset towards women folk; especially the girl child.” Chief guest, Road Transport and Highway Minister Nitin Gadkari averred that his ministry plans to construct 30 km of highways per day to boost Indian road transport network. Stressing upon the modernisation of RTO procedures towards toll permits and vehicle registrations, the minister announced that in the future no trucker will have to visit RTO or get stuck at toll, which will increase his or her productivity. Gadkari emphasised upon environment friendly fuel options and technologies.

While Rhenus Logistics, Dinesh Roadlines and Globe Ecologistics bagged the most coveted awards introduced for the first time, prominent CV Financiers like ICICI and AXIS Bank took away the top honours in their category. Lady ‘dhaba’ owner, Ravinder Kaur, got a standing ovation for her exemplary contribution towards truckers on NH-2 by extending state-of-the-art food and rest care facilities. As ‘Super Outperformer Driver of the Year’, Kumaraswamy and Thanarasu won a brand new Truxo 25. Eight winners among fleet owners received awards in the four categories based on load applications. In his speech, Dr. Pawan Goenka, ED and President, AFS, Mahindra, highlighted MTBL’s contribution towards knowledge, and about initiatives like MPower, War Room and Mentors Summit, which are the signature properties with IIM, Ahmedabad, as the knowledge partner. In the presence of lady trucker, Yogita Raghuvanshi, LPG transporter from North East, Hema Prava Devi, bagged the ‘Lady Transport Personality of the year’ award. Vikrant Kapoor of M/s. Kapoor Diesels bagged the ‘Youth Transport Personality of the year’. Given away for the first time in the history of this initiative, the lifetime achievement award went to D P Agarwal, Vice Chairman and Managing Director of TCI Ltd. His son and joint MD of the company, Chander Agarwal, received the award on behalf of D P Agarwal.