Chinese tyre imports


The onslaught of Chinese CV tyres is hurting the domestic tyre industry.

Story by: Anirudh Raheja

Inderjeet Singh Bawa from Ludhiana is contemplating replacing the worn out tyres of his 4×2 Ashok Leyland Comet Gold 1613 truck. The existing set of tyres has clocked almost 70,000kms (69,974kms to be precise). Bawa is scouting various options; he is worried about the expenses involved in the purchase of a new set of tyres, what with one tyre costing between Rs.18000 and Rs.20000. TCO is dear to Bawa like the numerous other truck operators, big and small. More so in an environment where freight rates are not showing signs of a good climb, and business is not particularly looking very promising. Compelled to keep the costs down, Bawa learns of Chinese tyres on offer from one of the many people in his field that he often talks to. Bawa is lured to check out these tyres because of the considerable price advantage they may offer over Indian-made tyres. It is cost that is the prime criteria that is providing Chinese tyres a foothold in the one-million Indian tyre market.


Until almost half a decade ago, the demand and supply for natural rubber was on par. India was perhaps the only market in the world where the production of natural rubber, and production and consumption of tyres was balanced. The dependence on imports was negligible. However, Chinese tyres, over the past few years have altered the situation. Expresses Rajiv Budhraja, Director General, Automotive Tyres Manufacturers Association, “Only 40,000 tyres were imported every month until a few years ago. The monthly Chinese truck and bus tyre import figures have touched one and a half lakh units.” The import of one and a half lakh truck and bus tyres was clocked in June 2016, and is said to be growing at a brisk pace. For a price sensitive buyer like Bawa, Chinese tyres make an attractive option.

Known as the manufacturing hub of the world, China builds almost everything. It is also known to offer the best quality and the worst quality products.Says Budhraja, “Tier-one and tier-two tyre manufacturers are supplying high-end products (from China). Of much concern are the tier-three tyre suppliers that emerge like wild mushrooms. They may have reduced in numbers, down to 250 from 1000, they are however continuing to damage the Indian tyre industry. They are finding a way into the market with the help of small-time importers and exporters.” He adds,”What is worrying is that these are unknown brands; they are not competitively priced, nor do they have selling strategies on par with market standards. They evade taxes and duties, and cause a snowball effect on the domestic industry. The manufacturers are largely driven by the prospect of exports, and can make tyres of a particular brand name. This causes the volumes to spike up or fall in a short duration of time.”

Falling natural rubber production a concern

It is no secret that the tyre industry is raw material intensive. Close to 70 per cent of the raw material input costs in a tyre are that of rubber. Of this, close to 45 per cent is contributed by natural rubber. With the content of natural rubber high in CV tyres by up to 90 per cent when compared to passenger car tyres, the falling production of natural rubber is a matter of concern. In contrast, vehicle production in India has soared. It clocked 20 million units in 2015. With the procurement of natural rubber an area of concern, industry experts claim that it is necessary to take drastic steps so that rubber production goes hand-in-hand with the consumption requirement of the tyre industry. They draw attention to the time when rubber production was 1800 kg per hectare. In 2015, natural rubber production hovered around 5.6 lakh MT, down from 8.2 lakh MT in 2009. Natural rubber production declined by over 60 per cent within a span of three years post 2009. States Budhraja, that almost 90 per cent of the rubber produced in India is in Kerala. As pressure on land increased, land used to produce rubber was converted to purposes like tourism, which would ensure a higher yield. Adds Budhraja, that wages in Kerala are high and rubber, a long gestation period crop, in the face of other resources like rentals and gulf remittances, is facing the brunt. The gap between domestic production and consumption of rubber is widening.


Unable to address demand

In 2011-12, the tyre industry posted a growth of eight per cent. It was expected of the tyre industry to keep growing; to perform well. In anticipation of this, investments of up to Rs.40,000 crores have been made till date, focussing largely on truck and bus radial segment. CV sales have unfortunately tapered. This has led to the building up of surplus capacity. While the tyre industry in India invested in capacity, a similar exercise in China was also carried out. China currently has a capacity, which is almost two and a half times more than what it needs. Facing anti-dumping duties in markets like US, Chinese tyre manufacturers started dumping tyres in India, and at a cost that does not even cover the raw material costs in India. “You can assess whether a tyre is coming at a fair price or not by ascertaining it on cost and construction based on the international cost of raw material,” says Budhraja.


System complexities

A statement issued by Automotive Tyre Manufacturers’ Association (ATMA) mentions that the dumping of Chinese tyres in India is fuelled by high rubber prices in India. Rubber prices are claimed to be 20 per cent more than that in the international markets. An inverted duty structure in the rubber industry adds to the challenge, dampening industry growth prospects. Claims an industry source, that the custom duty on rubber is 25 per cent or Rs.30 per kg, whichever is lower. The basic duty on tyres, he adds, is however 10 per cent, which is even lower under various trade agreements. “You can import tyres from the ASEAN region, South Africa, South Korea, and even China at a rate that is lower than the basic rate of 10 per cent. This can further hover between zero and five per cent up to 8.6 per cent depending upon the trade agreement,” opines Budhraja. Thus a peculiar situation arises where the principal raw material, largely dependent on imports, is had at 25 per cent. Finished product can be imported into the country at a very low rate of duty. Adds Budhraja, “There are many uncertainties when it comes to import and export policies, which are subject to change at a short notice. The commitment for both, the export of finished products and import of raw material, are developed over a long-term. Restriction on import of rubber against advanced licence for a few months until March 31, 2016, play an important role in determining industry growth. Also, does the pre-import condition where the rubber has to be imported ahead of exports to qualify for the advance licence.”

Rising radialisation

Demand for radial tyres in CVs is on the rise. With radialisation level of 40 per cent, there is good potential for the CV radial tyre market to grow. Estimated to be growing at four to five per cent, the trend, says Budhraja, is expected to continue until 70 per cent radialisation is achieved. This, he adds, is expected to take place in the next three to four years. Barring some specific applications in mining and farm equipment, Budhraja is of the opinion that the shift to radials must happen. OEMs, he avers, are already playing an important role with the radialisation at 70 per cent levels currently. The need, emphasises Budhraja, is to reach 90 to 95 per cent at the OE end over the next three to four years. Bias tyres, he is certain, will not see the end of the road soon. Their sale may decline, and they may continue to face negative growth, their application in specific areas will continue. Points out Budhraja, that radial tyres are being pushed by OEMs on high-end models, which also make high growth segments. The need is to widen the scope of radial tyres to basic models, and to improve market penetration of radial tyres.

Market dilemma

The typical OE aftermarket ratio as far as CV tyres are concerned is 35:65. Despite the OE market being considerably smaller than the replacement market, tyre manufacturers seem to be keen to carve out a larger pie of that market. This is despite the fact, that returns are not as per the expectations. This however is not the reason why Chinese tyres are finding easier access to the Indian aftermarket, claims an industry source. They find takers, he adds, because of the cost at which they are offered. Says Budhraja, “Aftermarket potential is huge, however OE market makes big sense for tyre manufacturers. Even if 50 per cent of the OE fitment brings in replacement market demand, there is a lot for a tyre manufacturer to gain.” Hoping for emergence of strong demand from the rural sector, Budhraja avers, “We also have a lot of cross-state movement of food grains, which means great demand for CV segment. With an improvement in infrastructure, disposable income, and mobility, the tyre industry can look at good growth.”

Beyond carving out a place in the aftermarket, Chinese CV tyres are starting to affect the retreading business. A buyer can avail of a new tyre at a cost that is not significantly high, claims an industry source. He adds, with the current economy levels, it is quite likely that a CV tyre buyer will look for cost over many other parameters since for him a tyre is a tyre. Mentions Budhraja, “If the economy gains traction, we could see mid-single digit growth in the CV segment. India is a strong economy, and companies would not set up shop on the basis of exports alone. Even if exports amount to 20 per cent, a company would chalk out its plans according to the domestic market prospects.”


Government role

The Goods and Services Tax (GST) Bill has been passed, and is expected to play a vital role in reducing the check posts and barriers. Local taxes are expected to go away, and with it, unwanted activities like baseless checks and harassment of CV drivers. The tyre industry, says Budhraja, is seeking correction in the inverted duty structure. “It is long overdue, and can be done in two ways. Either by reducing the duty on rubber to five to seven per cent, or by increasing the duty on a tyre to a rate closer than that of the rubber,” he adds. Tyre manufacturers have set up capacities at a certain cost. They are aware of the widening gap between rubber production and consumption. There is a growing demand from the industry for allowing the import gap on a Tariff Rate Quota (TRQ) where a fixed quantity of import can be allowed on a differential tariff similar to other commodities like palm oil and corn. “As the gap assessment is done by the government and not the industry, the assessment can be made by the rubber board (a commerce ministry arm) to ascertain the gap and allow differential rate to control costs,” says Budhraja. Government restrictions mean rubber can be imported only through the ports of Chennai and Nhava Sheva in Navi Mumbai. Tyre industry sources claim that tyre companies that have infrastructure away from these ports have to incur extra costs. It was easier earlier when they could get the rubber cleared from Inland container ports. It is expected of the government, concludes Budhraja, to speedily address the issues that are eroding the competitiveness of the tyre industry.

Commuter shuttle buses look up


Bus shuttles are looking like yet another disruptive business model in the ever changing world of transportation.

Story by: Anirudh Raheja

App.-based transportation solutions are transforming the way people are travelling in India. Dictated by the use of technology, it is both easy, and challenging, to use app.-based platforms over various devices, including smartphones. The good part is, they save the task of having to step out on the kerb and flag down a taxi. If understanding the fare structure is a challenge, paying it is made easy by digital payment medias like Paytm. Even cab aggregators like Ola have come out with their own purse called ‘Ola Money’. It may not be viable for many yet to hail a cab however. It is not easy for Monica and Sambhavi either. The two stay at Noida and Faridabad respectively, and commute to Gurgaon for work. A cab makes a costly proposition for them. The lack of good last mile connectivity is making it tough for them to commute. It is therefore that the two are finding the concept of bus shuttle attractive. It was kick-started by Shuttle, and has seen the inclusion of Ola, Cityflo and Zipgo. The other app.-based cab aggregator, Uber is also claimed to be looking at entering this segment. According to Jaspal Singh, an analyst with Valoriser Consultants, there is a need for such a service. “There is a need to nurture it, and to let it bloom,” he adds. Singh points at the cab aggregator model, and how it has grown thus far.


The need for shuttle bus

The number of daily commuters in India is estimated to be over three million. Most of them ride a bus very often. It is not surprising therefore that over 30 million bus rides are taking place in India everyday – through public transport buses and private transport buses. Promising last mile connectivity, the public transport buses offer a cheaper ride, courtesy the government subsidy. More disposable income is fuelling new modes of travel with emphasis on safety and comfort. The metros, monorails and BRTS services may offer safe and comfortable travel, they are however not able to address the last mile connectivity expectations of commuters to the hilt. States Singh, “Commuters are increasingly looking at a comfortable mode of transport. The need is to understand the demand and supply pattern, and also the travel pattern.” According to the research done by UITP, even though taxi fares in India are the cheapest when compared to 21 cities across the world, they are neither volume based, nor value-based. The scale of players that operate in this space is also low. This is resulting in lower per trip realisation. Cab aggregators are having to look for options to sustain. For instance, in Delhi, not more than 60,000 trips are carried out by cab aggregators. Privacy, air-conditioning are fine, but the cost is considerably higher than that of a bus ride. Identifying the opportunity – between aggregator cabs and various other modes of transport including buses, it was Shuttl who kick-started an aggregator-based shuttle bus segment. It built the app-based platform in 2015. Ola entered not much after. Available in Pune, Bangalore, Kolkata and Delhi NCR, according to industry sources, Ola Shuttle, aggregates tourist and chartered buses, and promises to take the hassle out of getting to work everyday with express routes and attractive features.

Informal to formal

At a nascent stage, the aggregator model-based shuttle bus service could well lead to the market assuming a formal dye. Mentions Singh, “Even if 10 per cent of the commuter volume shifts towards bus aggregating platform, it is a big number for the industry. There is an informal market, and the need is for a formal structure.” Drawing attention to issues like heavy traffic and pollution, Singh avers, that the industry is finding it suitable to skip 12 m buses for smaller more agile bus forms like the Force Traveller. “If the preference for smaller buses is in response to the demand, the fact is, the industry is at a nascent stage,” he adds. Bigger buses are not passe; a shift to bigger buses is expected as the bus aggregator model picks up pace. As of current, the advantage of small and midi-buses like the Traveller, is turning out to be the most suitable since they serve the tourism industry during weekends and holidays, making it a sustainable business case. Such buses are finding favour with corporates too, and are known to ferry their staff on fixed routes. With bigger buses, such flexibility may not be always possible. As the aggregator-based bus shuttle model picks up pace, and turns a good deal formal, bigger buses will find a place for themselves.

Simplifying procedures

Shuttle services by Ola, Shuttle and Zipgo ran into rough weather last year at Gurgaon and Bangalore respectively. The reason for Ola and Shuttle service being suspended at Gurgaon was the seisure of over 20 shuttle buses by the Gurgaon RTO. The reason given was, the shuttle services cannot operate in the city as they don’t fall in the ambit of the Haryana Contract Carriage Permit Act 1988, 1993, 2001, 2004, and 2013. Zipgo’s all-women shuttle bus services also had to be stopped at Gurgaon. It is situations like these, claims an industry expert, that highlight the fact that the government and industry are not on the same page. There is a need to offer solutions, engineer checks and balances quickly, and simplify procedures, he adds. Facing regulatory challenges, shuttle bus aggregators are not ready to give up. They are continuing to invest in technology. The Near Audio Communication Protocol (NAP) for example, is Shuttl’s sound based boarding technology that uses sound to transfer the boarding details locally between two systems. Paving the way for ticket conductor less travel, the technology, according to Amit Singh, Co-founder, Shuttl, “uses sound to transfer the boarding details locally between two systems – the driver and the rider apps.” “The rider’s boarding details are sent to the bus driver’s smartphone through sound signals which is enabled by pressing the button on the app., and it does not require internet” informs Amit.He adds that NAP saves time, resources and adds to commuter comfort. Improving customer experience, technologies like NAP are also helping to quickly retrieve data as compared to the traditional methods of scanning the QR code or physically entering the boarding pass number. Since its launch last year, Shuttl has added over 400 buses. It has plans to expand its fleet, and become a pan-India player. Not much could be known about the other players. Despite repeated attempts Ola did not respond to the queries. Neither did Zipgo.



Like the cab aggregator model, the shuttle bus model too has its own set of complexities. One of the most prime is commuters preferring to travel only one way. This can lead to the bus waiting for them, hampering the experience of other commuters. Says Amit, “We operate on over 100 routes with daily ridership of 20,000 in the Delhi NCR region. After booking the ride, the commuter can track the bus real-time through our app. He or she knows exactly where the bus is, and how much time it will take to reach their pick-up point.” However, it does not always simply work out as expected. Delay does set in, and this has the risk of reflecting negatively on the service. Uber, after exiting China, is increasing its concentration in India. With quality of service at the core of the aggregator commuter bus model, it is logical of players like Uber to aim at offering more value. Avers Amit, “It is natural for us to think beyond bus rides.” “We have therefore invested in driver training,” he adds. Shuttl bus drivers are trained in behaviour skills and etiquettes according to Amit. They are trained to follow the traffic rules and avoid over speeding. Any deviation from the set guidelines, and they are subject to commensurate corrective action including fines. If this presents some idea of the complexities involved in the aggregator shuttle bus model, the stoppage of services by the Gurgaon authorities is perhaps the most evident. It adds a new dimension to the aggregator based bus commuter model. and what it is trying to achieve.

Lucrative business

A lucrative business opportunity, the aggregator shuttle bus model is. This, despite the various complexities associated. Like the cab aggregator model, technology and infrastructure are playing an important role. Witnessing the participation of private players, the model is calling upon the operators to balance out the cost of operation and revenue. Commuters are willing to pay more for comfort and convenience, turning the need to create a pull almost unnecessary. Avers Singh, “There’s no need to create a pull strategy. The need is to get operators on board.” He draws attention to technology-based platforms offering a minimum guarantee of Rupees one-lakh per bus per month as revenue. “The basic thought is to encourage operators to pool in their assets and wait till the volumes rise. Once volumes rise, bigger investments can be made,” he adds. This may sound similar to the path taken by cab aggregators, the fact is, upon realisation of payback potential, the operator will be more than willing to invest. Opines Singh, that he will also allocate more assets to the business. In order to induce a self-drive, aggregators are mulling over per trip incentive. According to Singh, this would be the next best thing. He expresses, “It is possible only when the tech-based platforms will offer bookings and charge money against every trip.” “Model adaptability will happen, the game will however continue to revolve around volumes,” he adds. Drawing attention to bus registrations decreasing year after year, Singh states that OEMs will come forward only when it makes business sense for them. “With bus code implementation, reforms will happen sooner than later. They will also drive standardisation,” he mentions. Shuttl is said to be in talks with Mahindra and Force Motors among others to procure customised buses, developed specifically for intra-city transportation. According to Deepanshu Malviya, Co-founder, Shuttl, “Focus is on buses that are suitable for commuting, and the need therefore is to have buses that are more conducive to intra-city travel.”

Permits, funds and awareness

Money is what drives the aggregator shuttle bus model. Shuttl, in a quest to make more money, is said to be drawing up plans to expand to newer markets like Mumbai and Bangalore. It is said to have raised USD 23 million in series A from Sequoia India, Lightspeed Ventures, and Times Internet Limited. Zipgo is claimed to have raised an undisclosed amount from Orios Venture Partners. Mumbai-based Cityflo has raised USD 750,000 from IDF ventures. Venture capitalists, on their part, look cautious. They look cautious about channelising money in such ventures. This, says Singh, has been the limiting factor. He draws attention to the fact that the cost of acquiring a bus is considerably higher than a cab. “Once a bus is bought, the capital gets locked, and there is a supply constraint. This results in the funds flow being less optimal,” he adds. Claims an industry expert, that there is a need for government policies to change. This is necessary to support the growth on new, non-traditional transportation business models, he adds. An impression is somehow had that government policies do not make it easy to do business.

For a bus rendering intra- and inter-city services, the need is for stage carriage permit and contract carriage permit. This is seeming to create ambiguity as the operator struggles to decide upon the right permit he needs to operate with. The Delhi aggregator scheme enables contract carriage to operate. As per the rules however, buses cannot pick-up commuters on the way unless they have pre-booked. According to Singh, operators are asserting that they operate between residential and commercial points and pick-up passengers in a two-to-three kilometer periphery. This, he adds, is beneficial since the operator can schedule his movement in the city, and co-exist with other transport modes. Inefficiencies can thus be eliminated, and also any chance of cannibalisation.


Government role

There is no doubt that the demand for mobility is growing. The need is to develop supporting infrastructure, and maintain quality. Companies like Shuttl are working towards expanding their services to newer geographies in India. The prospect of invading new markets should be exciting for other players too. Success could be defined when the aggegator shuttle bus model grows in co-existence with other aggregator models and transportation solutions. Not only would this create a cohesive transport environment across the country, it will also make the life of India’s growing young population more productive and meaningful. Government support for such models is absolutely necessary. The need is for a transparent framework. The need is also for transport departments to have strategic cells that think about reforming the transport sector. They seem to be overloaded with permit issuing, licensing and vehicle registration responsibilities. After the aggregator policy took off in Delhi, many cities have followed in its footsteps. Contract carriage permit however seems to be an issue. With most commuters following a fixed route (to and fro), the need is to create a multi-modal channel that is efficient for masses, and is environment-friendly. This could be achieved through seamless integration. Different transport systems including cab aggregators, metros, monorails, buses, and suburban trains, are currently lacking integration. They are seemingly operating in isolation. The foremost need is to integrate. Mentions Jaspal Singh, “It is important to integrate; to ensure the requisite development and availability of physical and technological infrastructure. This will make commuting easy and enjoyable. Seamless integration of various modes will enable various transport models to sustain and grow. Issues like pollution and congestion will be tackled, and private and public transport efficiency will increase.” For Monica and Sambhavi, the commute to Gurgaon continues to be challenging. They are happy about the new aggegator shuttle bus model, and what it would offer them. It holds the promise of getting closer to offering them, and many other commuters like them, an effective last mile connectivity medium like no other.

Stressing on knowledge and skills

SML Isuzu held the second National Skill Competition for its technicians.

Story by:

Anirudh Raheja


Vehicle complexities are on the rise. With the upcoming BSIV emission norms, complexities are expected to rise even further. Usage of electronics is at the core of complexities rising. The other is composites. Combined with rapidly changing buyer requirements and market cyclicity, OEMs, it is evident, are training their workforce to tackle what could be termed as weird and unanticipated challenges. Such training, and transfer of knowledge to be able to tackle challenges is being extended to dealers as well. It is in this direction that Chandigarh-based SML Isuzu has set up two new regional training centers in India, at Bangalore and Kolkata respectively. According to Eiichi Seto, MD and CEO, SML Isuzu, “The two centers are strategically placed to enable us to impart better training and education. These centers will also ensure that one does not have to travel to Chandigarh for the purpose. This would help us to keep our costs down.” The Bangalore center is expected to go on stream in December 2016, and the Kolkata center is expected to go on stream by early 2017. Over the last one year, the company has applied thrust on improving its sales and service network. It has invested in the training of its dealers, and has taken steps to further study and enhance its operations. SML Isuzu is gearing up to evaluate trainees once they come down to attend the training sessions regardless of the duration. Said Nawal Kumar Sharma, General Manager, Product Sales and Customer satisfaction, SML Isuzu, “The pre- and post-training evaluation will allow us to understand the improvement in the trainee. It would also help us to understand if we need to change the training module for better imparting of knowledge and skills.” For its technicians, SML Isuzu organised its second National Competition at its Ropar, Chandigarh plant recently.


Second National skill Competition for technicians

Following in the footsteps of the first National Skill Competition, the second edition saw SML Isuzu further fine-tune the competition model to make it more effective. Aimed at strengthening the company’s dealer and technician network, the competition saw over 110 dealerships across India participate. Out of the 110 dealerships, 50 dealerships were shortlisted. They made it to the competition on the basis on their demonstration of skill sets and technical abilities. The last edition had 25 dealerships. Averred Seto, “The basic motive of such competitions is not to imbibe a spirit of competition among various dealerships, but to help them to build an ability to meet service challenges.” Out of the 50 dealerships shortlisted, six were selected after further evaluation. These six dealer teams were invited to the Ropar plant to exhibit their knowledge and abilities, and show their aptitude towards problem solving. “If they are able to deal the situation well, the customer will return to them for his or her service needs,” expressed Sharma.


The six teams were challenged with SML Isuzu vehicles in the eight to nine tonne GVW. These were Samrat XM, Supreme XM T3500 and Prestige T3500 to be precise. All three were fitted with BSIV emission compliant engines. Based on six basic parameters including safety, protection, inspection, failure analysis, measurement, and tool selection and usage, the competition reflected upon skills and knowledge. Held in two parts with three teams taking part in two groups, the first 10 minutes of the competition had them field a five set questionnaire; the works managers and service engineers. This was about judging their abilities in situations like a vehicle not starting, and how they would diagnose an error. It was also about identifying issues in a vehicle during general inspection. The next task involved the inspection of a connecting rod bush and piston by using appropriate tools. An issue regarding the clutch was also to be identified and dealt with. For 45 minutes, service engineers used various tools and gauges including micrometer, digitech multimeter, vernier caliper, dial gauge, etc., to identify and repair the vehicle. There job was complete when they brought the vehicle to life.


Solan-based BEE GEE Automobiles, won the competition, and was awarded Rs.30,000 in cash. They were also given shopping vouchers worth Rs.10,000. The first runner up in the competition was Rathinam Motors, Coimbatore. It was awarded Rs.20,000 in cash and vouchers worth Rs.6000. The HKS Automobiles team from Delhi was awarded a cash prize of Rs.16000 and shopping vouchers of Rs.6000. SML Isuzu gave a consolation prize of Rs.5000 to the rest of the three teams. Opined Sharma, that it is necessary for dealers to have a modern setup, and be well equipped to tackle a service challenge. They also have to ensure that a vehicle is back on the road quickly. “From April 2017, BSIV emission norms will be implemented. This will complicate repairs. Repair skills will become more crucial, and a systematic approach will be vital,” concluded Seto.


Tata Motors banks on LNG tech

Tata Motors is bullish about LNG powered commercial vehicles.

Story by:

Bhushan Mhapralkar



Tata Motors showcased a LNG (Liquefied Natural Gas) powered bus at Thiruvananthapuram, Kerala, recently. It did so in association with Petronet LNG Limited (PLL) and the Indian Oil Corporation Ltd. The bus is based on the Tata LPO1613 platform, which is currently available with a CNG engine. With plans being drawn to launch the LNG bus by April next year, it is clear that Tata Motors sees a good future for such buses. Expressed Dr. A K Jindal, Head – Engineering Research Centre, Commercial Vehicles, Tata Motors, that Kerala is keen to place an order for 10,000 buses, with 10 per cent of them, LNG powered. The supply constraints posed by CNG infrastructure makes LNG a logical extension for CV manufacturers like Tata Motors, and the operators, it s clear. There are other issues too. “To increase the range of a CNG powered bus (from 300 km), more storage cylinders will be needed. This will adversely affect the power to weight ratio, payload capacity and seating capacity,” he says. In the case of trucks, the additional weight of the CNG tanks lowers the payload capacity. With gas prices on the rise, a CNG truck or bus operator will have to visit the CNG bunk more often. This will limit the travel range. Avers Dr. Jindal, “Limited availability of CNG will lead to time wastage.”


LNG for longer range

The possibility of powering a city bus, or an inter-city bus that travels longer distances on a single fill is perhaps the biggest advantage LNG may offer. LNG terminals, as of current, are under utilised. According to Dr. Jindal, “Operators find it risky to operate CNG vehicles, what with the lack of CNG infrastructure. “We therefore expect a migration to LNG.” India has a long contract with Qatar for gas. It is transported to the western coast of the country in the form of Liquified Natural Gas (LNG). The government has invested in infrastructure at the ports of Dahej, Kochi, Dabhol, and Hazira along the western coast of India. These terminals are under utilised,” he adds. If the under utilised terminals provide an opportunity to set up LNG dispensing pumps, the need is to understand customer needs from a transportation point of view. One big advantage is the cost of LNG. It is expected to be 30 to 40 per cent cheaper than that of a diesel. States Dr. Jindal, “LNG powered vehicles (trucks and buses) make good candidates. They were not fitted with CNG because they would find it difficult to fill; LNG has a two-and-a-half times more per litre capacity than diesel. The range therefore will be between 600 to 700 km.”

Advantage Kochi

The LNG terminal at Kochi has got the Kerala Government interested, claim industry sources. They add that it is therefore that Tata Motors chose to showcase their LNG bus at Thiruvananthapuram. With an LNG dispensing unit being setup at Kochi, it can be expected that over time, the whole of Kerala will be covered as it amounts to a radii of 300 to 400 km from Kochi. Mentions Dr. Jindal, “The indications we are getting are that LNG can be easily transported from the port to a distance of 500 km. Any further, and the chances of 30 to 40 per cent cost advantage being neutralised are more.” With the erection of five to six LNG dispensing stations being planned along the Mumbai-Delhi corridor, a distance of 1200 km, LNG as an automotive fuel is expected to get a shot in the arm. For proliferation of LNG, a terminal is said to be under construction at Haldia. It would support LNG-powered barges running upstream of the river Ganga. “Big plans for LNG are being chalked out,” states Dr. Jindal. He mentions, “Commercial vehicles will benefit from such an exercise.”

For its part, Tata Motors has been working on LNG for sometime now. With gas companies forthcoming, according to Dr. Jindal, the push for LNG is rising. “We displayed a LNG powered Prima four years ago. We also took efforts to get the government to declare LNG fuel as an automotive fuel,” he adds. Rules were framed in the last three-four years to ensure the use of LNG as an automotive fuel. With regulatory framework in place, the potential for LNG commercial vehicles is looking up.

Cleaner and better

Coming out of natural gas fields, it is about compressing the gas to make it easy to transport it in cylinders. The density of CNG is 16 kg per litre of volume; LNG density is 41 to 42 kg per 100 litre, which makes it 2.5 times denser than CNG. A gas derived product, LNG is clean. It is claimed to reduce greenhouse gas emissions by 30 per cent with respect to conventional liquid fuels. According to Dr. Jindal, the possibility of impurities finding their way into CNG fuel is more. “Since LNG is liquefied, impurities are unable to find a way into it. LNG is thus pure methane,” he quips. Cleaner than CNG, LNG also rises up in the instance of leakage. It is safe because it operates at lower pressure and evaporates quickly. It is lighter than air and evaporates extremely quickly under atmospheric pressure and temperature. Opines Dr. Jindal, that LNG is safe, and without any known incidents in vehicles.

In trucks, he claims, LNG has a clear potential to enhance the TCO. Compared to CNG buses and trucks, the performance of LNG trucks and buses may not be very different, he adds. “The advantage however will be less weight due to weight saving in areas like cylinders,” he says. If the need for more performance is felt, a solution, explains Dr. Jindal, would be to offer higher horsepower engines. “With a turbocharged engine, we have been able to get the same amount of power from a CNG engine as a diesel engine,” he adds. The DMRC buses Tata Motors has supplied to Delhi make a good example in terms of drive-ability. A turbocharged four-cylinder engine can develop the same power as that of a diesel engine. Pure methane in the form of LNG is expected to ensure superior performance over CNG. With pure methane content, engine knocking is taken care of, and efficiency increases. Thermal efficiency, according to Dr. Jindal, will be better in the case of LNG. Like all CNG engines, that are BSIV emission norms compliant, LNG engines will also be BSIV emission compliant. From 2020, they will be BSVI compliant. The liquified form that LNG is in, makes it 95 per cent Methane in content. This makes LNG one of the most purest gases available.

LNG conversion

To attract truck operators to LNG is going to be a big challenge, and Dr. Jindal is aware of it. He opines, “LNG will make a superior proposition for trucks operating in regions like Delhi NCR. A trucker going from Trivandrum to Guwahati will however not be enticed by the propsect of LNG; not unless and until he gets supporting LNG infrastructure to bank upon.” The introduction of LNG trucks is most likely to be limited to dedicated corridors therefore. Buses will be the first to get LNG. The 30 to 40 per cent cost saving will be a big enabler. Making practical sense for heavy vehicles because the return on investment in the case of heavy duty LNG vehicles will be faster, one may also consider the fact that cryogenic cylinders, as of now, are of the size suitable for bigger CVs. Fitted to small CVs, they would make a costlier proposition as far as the total cost is concerned. Efforts to package LNG on smaller CVs, except the very small ones like the Ace, are on.


Pricing is one area that Tata Motors is working on as far as LNG commercial vehicles are concerned. Cryogenic tanks, according to Dr. Jindal, are imported. Their prices are high. Work is on to ensure that the prices are brought down to a reasonable and competitive level. Local development of tanks is underway. While that happens, the biggest pull for LNG will come from a (total cost of operation) saving of between 30 to 40 per cent. Dr. Jindal is of the opinion that LNG buses will pick up faster. Trucks will take longer because of their pattern of usage. It would entail an amount of confidence building as far as truckers are concerned. “By mid-next year we will be ready with buses. We will be ready for trucks by the end of next year. It will take time even though we do not see packaging as a challenge in this case,” signs off Dr. Jindal.

Tata LPO1613

In the CNG form, the Tata LPO1613 platform measures 11120 mm in length. Available as a cowl chassis with a 900 mm floor height, the platform, designed to spring a bus, is powered by a naturally aspirated 5.7-litre BSIV water cooled engine that does 96 Kw at 2500 rpm, and 405 Nm of peak torue between 1250 and 1500 rpm. The transmission is GBS-40 synchromesh unit with six gears. The bus chassis is fitted with five CNG cylinders of 650-litre. The cryogenic cylinders on the LNG LPO1613 bus showcased in Kerala are imported, and known to provide a range of between 600 and 700 km. The LPO1613 chassis is built at the company’s Lucknow plant. The body is built by Marcopolo at their Dharwad plant.


Demonetisation hardships for transporters

Demonetisation affected numerous truck and bus operations in India.

Story by:

Bhushan Mhapralkar


While many may hail prime minister Narendra Modi’s decision to strike out Rs.500 and Rs.1000 notes, and introduce new Rs.2000 notes in an effort to curb black money, and the menace of fake currency, the effect of what is being termed as demonetisation is affecting every Indian, or it seems. Since November 8, 2016, after the prime minister announced the demonetisation measure, the transport sector is looking bruised. Accounting for roughly 4.5 per cent of India’s GDP, the transportation sector, which includes numerous truck and bus operators, is having to deal with the prospect of over 80 per cent of the currency taken out of circulation overnight. The economy of India, Asia’s third-largest, is said to be heading towards a liquidity crisis. Truck and bus operators (transporters) are finding it challenging. Especially with the flow of new notes controlled by the government. Supply chains at small, medium and even large companies are claimed to be breaking down. With corporate operating profits feared to fall by as much as 40 per cent in the current quarter, it is not just the taxi drivers, street hawkers and big consumer goods firms that are seeing their earnings plummet, truck and bus operators are seeing their flow charts being curtailed.

Transporter hardships

Transporter hardships are best described by the fall in fleet utilisation levels. According to Hemant Laddha, Director, Shivani Carriers Pvt. Ltd., fleet utilisation has fallen by 25 per cent. Mukund Desai, Managing Director, Mukund Roadlines Pvt. Ltd., is of the opinion that his fleet utilisation is down by 40 per cent. Avers Sanjay Sharma of Assam Transport Service, that fleet utilisation is down by 40 per cent. “Because of cash crunch, our trucks are stranded at various places,” he states. Sharma explains that they cater to corporate clients who pay them through bank transfer. For return transportation, Sharma’s company relies on food grain traders. It is here that the issue is more acute; food grain commerce is cash intensive, and the sector, according to Sharma, is down by 50 to 60 per cent.

Catering to the FMCG sector, Laddha operates a fleet of 110 trucks. The issue, he feels, is towards the remittance of Rs.30,000 to Rs.40,000 towards operating a truck. The sum, he explains, involves cash expenses towards loading and unloading of goods, driver allowance and toll. “We have RFID tags for tolls, but not all tolls are RFID ‘ready’, adds Laddha. Sharma states, that even if he were to pay the driver by making a NEFT transfer as every driver today has a debit card, the difficulty lies in him withdrawing the money. “With most ATMs out of order, and withdrawals restricted to Rs.2000, it is simply impossible to operate a truck.” he adds. Claims Laddha that he is managing to keep the business going by paying the driver a mix of old and new currency notes. “For example, out of an allowance of Rs.5000, we are giving the driver Rs.2000 old notes and Rs.3000 new notes,” he says. With buyers beginning to postpone their purchases, Laddha feels that the FMCG business has began to pause. This, he states, is a sign of the economy slowing down. “More time is spent in a queue, and adjustments have become a primary activity over all other activities,” mentions Laddha.

Echoing the sentiments of Laddha and Sharma, Desai, who operates a fleet of 50 trucks, opines that they are facing hardships when it comes to driver allowance. “An expense of between Rs.50,000 and Rs.100,000 is incurred,” he adds. In what could well define the extent of difficulties faced by the transporters, Manjinder Singh Dhaliwal, Secretary, Maharashtra Tanker and Lorry Owner’s Association, says that they are the worst affected due to demonetisation of Rs.500 and Rs.1,000 currency notes. As one of the largest unorganised and cash-based sectors of the country we are facing immense problems, he adds. Informs Sharma, “At various border passings, there are these fine slips which the RTO is demanding, and have to be paid in new currency notes. Even the government offices are refusing to accept old currency notes.” Claims an industry source on the condition of anonymity, that even those who are seeking bribes are insisting on new currency notes.

Bus operator woes

Buses in India touch the lives of every citizen. They come in various sizes, forms and are used for the most diverse functions ever imagined. The industry is made up of private and public bus operators. Public bus operators are termed as semi-government bodies and run a business model that is subsidised through government funding. This underlines the socialist agenda that concerns buses in India as they move people within cities, and between cities as well as villages. Competing with, and yet carving out a business model of their own are the private bus operators. They could be an owner of a single bus, or of a fleet that is no less than a whopping 8000-10000 buses. Demonetisation is claimed to have affected the business of both, public and private bus operators. There are less people moving around as businesses begin to slow down. Says K T Rajashekhara, CEO, S.R.S. Travels, “Our flow chart is getting curtailed as people are curtailing travel due to the money crunch.” Of the opinion that road connectivity is lacking in India, and the law is against road transporters, Rajashekhara avers that bus travellers have shrunk by 50 per cent since the demonetisation measure came into force. Stressing upon the need to customise the laws framed for road transporters as they are restricting the sector growth, and thus the overall economy, Rajashekhara sounds concerned about the factors that have played out over the last few months. He says, “Now it is the issue of demonetisation; yesterday it was the issue of Cauvery. The day before, there was something else. For us, transporters, there are too many hurdles to be tackled. And, they have been affecting our flow chart. Business has gone down, but taxes remain as they are. This means, our fixed costs continue to be high – towards the payment of insurance, various government taxes, and salaries. Operations are being hampered as staff punctuality has gone down. Our employees stand in long queues to withdraw small sums of money to run their household.” Of the firm opinion that laws for transporters have to be customised, and take a long time to change, Rajashekhara explains, “Toll closure does not affect us as much as the fixed costs do. Taxes especially. While business for the last one month was affected, there was no concession in taxes, offered. Compared to a truck, which accounts for Rs. 35000 in taxes for one year, taxes for a bus amounts to Rs. 800,000 per year.” Operating a 8000 bus fleet, including long distance luxury coaches like the Bangalore-Jodhpur (2000 km) service, S.R.S. Travels is one of the leading private bus operators in the country.


Shedding the baggage

Under the condition of anonymity, quips a transporter that many customers, in a bid to let go off their old currency, have paid them in old higher denomination notes. If a transporter refuses to accept old notes, he is threatened that no revenue will come his way, he adds. SP Singh, Convenor, IFTRT, is of the opinion that cash flow in the transport industry is not an issue. The issue, he adds, is the steep fall in cargo despatch post demonetisation, as businesses and traders do not procure goods due to unsold inventories.” The drop in fleet utilisation has been sharp,” he adds. Claims Singh that businesses and traders are used to having almost 50 per cent of the transactions out of the books, and common carriers and transport agents have been facilitating this to escape excise duty, VAT, Service Tax, etc. He adds that an estimated Rs.45,000 crore worth of unaccounted money has been pumped into the transport industry since November 9, 2016. This is being done by making payment in old notes towards the purchase of diesel, and by paying the employees. Pressure, says Singh, is being put on the government to extend the toll exemption deadline. While utilisation of country’s nearly 85 lakh trucks is said to be down by almost 40 per cent since demonetisation was announced, and is attributed to the fall in cargo movement, the fact is, opines Singh, that the common carriers and transport intermediaries are busy seeking an extension for cash acceptance of Rs.1,000 and Rs.500 old notes, toll exemption, and higher cash withdrawal limit on exaggerated claims. Many other difficulties are being cited too. “Many transporters and businesses are busy neutralising their books of accounts by exchanging transaction with 20-30 per cent cut offered to people needing to dispose off real unaccounted currency at mass levels so that unethical and under-reporting of transactions could resume after 50 days with business being as usual,” adds Singh.


Optimism prevails

Despite the hurdles, transporters are optimistic. Much like the Indian population, they are of the impression that this is a passing phase. Some are of the opinion that a long-term framework towards improving the business environment may be necessary, Others think that things will soon limp back to normalcy. Says Laddha, that he hopes normalcy to return soon. It is this optimisim that is keeping the truck and bus operators going.

Taxi woes

Taxi operators have seen their business mellow down in the wake of the currency crisis since November 09, 2016. The worst hit are the conventional taxis as against the likes of Meru, Ola and Uber. The Ola money digital purse has proved to be useful to both, the taxi operators and the travellers since it does not entail any cash transaction. With conventional taxis, the situation is not as good. The pre-paid taxi counters at Mumbai’s Sahar International airport are said to have shut down for a few days since the taxis could not be paid due to the shortage of new curency. Though the conventional, black and yellow cabs, that run as pre-paid taxis make the most cost effective way to travel among other taxi means, the shortage of currency is ensuring that such operators are asking for random sums, which may be on par with what a traveller would have paid at the pre-paid counter. A sense of mistrust is however taking hold of the situation. In an instance of travel within the city, cab drivers are in no mood to turn down a ride, but do not have change to offer at the end of it. Business, opined a Mumbai cab driver, is down 50 per cent, since November 09, 2016.

Focusing on challenges

At the recent SIAM annual convention, focus was on long-term policies to counter future challenges

Story : Bhargav TS


It was in 2000 that the Indian automobile industry rolled automobiles complying with BSI emission norms. Much has changed since. The industry has moved past BSII emission norms in 2002, and past BSIII emission norms in 2005. The BSIV emission norms were introduced in 2010. Their pan-India implementation is however slated for mid-2017. Unavailability of fuel proved to be a detterent for pan-India implementation. It took Europe 13 years to move from Euro1 to Euro4. In India, this journey was completed in 11 years. Work is on to meet the BSVI emission norms deadline by mid-2020. This was reflected at the 56th SIAM Annual Convention held at Delhi recently. Said a SIAM source that the industry is ready. He drew attention to the additional expenditure of Rs. one-lakh crore that may be necessary to get to a new level. The theme of the convention was, ‘Building the nation, responsibly’.

The future

In his inaugural speech, Anant Geete, the minister for heavy industries and public enterprises, expressed that the government’s move to subsidise electric vehicles, implement GST and encourage a transition to greener vehicles will ensure good growth. Hinting at the future, Geete mentioned that environment is one of the biggest concerns for the sector. “We have therefore allocated Rs.14,000 crore for the FAME scheme to promote hybrid and electric mobility. This will save Rs.60,000 crore worth of fuel, thereby benefitting the environment,” he added. Announcing that hybrid and electric vehicles are expected to dominate mobility by 2025, Geete stressed upon the key role the Indian auto industry has played in the ‘Make in India’ programme. Reiterating government support, he averred that jobs need to be created for the youth of this country. SIAM president Vinod K. Dasari, called upon the central government to support the auto industry concerning laws governing diesel vehicles, and regulate GST to ensure the auto industry is able to focus on innovation. Dasari said that the auto industry lost Rs.4000 crore in the last nine months post the ban on sale of diesel vehicles in the National Capital Region. “Such losses could be avoided if the industry gets a clear long term policy perspective,” he added.

The ban on sale of diesel vehicles above 2000cc engne was recently lifted after levying an additional one-per cent green cess, and is reflective of the challenges the Indian automotive industry is facing towards providing sustainable mobility for the masses. The industry is keen on a long-term roadmap on safety, emissions and fuel efficiency from the government. In order to make practical and rational regulations, the auto industry has been calling for the establishment of a single ministry, and a single window system. “We would like to thank the Government for accepting SIAM’s suggestion of fleet modernisation. The industry will be happy to offer incentives to customers to supplement the incentive the government will offer for the purchase of new vehicle against a scrapped vehicle,” expressed Dasari.

Global benchmarks

The session titled ‘Sustainable Mobility for Creation of Wealth of Nations’, as part of the annual convention, saw prominent industry figures participate. Discussion focused on India setting the trends – global benchmarks, rather than follow them by pursuing innovation and best practices. Gunter Butschek, MD and CEO of Tata Motors averred that the Indian economy is witnessing an unprecedented advantage compared to other countries since it is home to the world’s largest young population. “The Indian automobile industry contributes 40 per cent to the nation’s manufacturing GDP, and is surrounded by a cloud of opportunities,” he expressed. Drawing attention to challenges like safety, pollution, unemployment and lack of adequate resources, Butschek explained that it is imperative for leading automobile manufacturers to focus on developing ‘sustainable mobility solutions’ and nurture skilled engineers and people managers rather than technocrats and theory masters. “New developments like safety norms, GST and scrappage policy will be an opportunity to counter such challenges,” he added. Wilfried Aulbur, Managing Partner India, Chairman Middle East & Africa, and Head Automotive Asia, Roland Berger India, stated that the automotive industry is a significant driver for FDI in India. It also drives process improvements and quality. Aulbur stressed upon the need to stimulate volumes to boost GDP and create more job opportunities, A holistic, long-term policy is required, he opined.


In the interest of safety

Participating in a discussion under the theme, ‘Technology Trends’, Nitin Gadkari, Minister of Road Transport, Highways and Shipping, praised the auto industry’s performance and assured of his government’s support to avail new technologies. Speaking via video recorded message, he appreciated industry’s support to solve pollution problems and agree to move to BSVI from BSIV emission norms. “The automotive sector is on the road to growth and success with a turnover of Rs.450,000 crore. It is generating employment, and the government is seeking ways to ensure that a large part of the global supply can be exported from India,” averred Gadkari. He drew attention to safety, and stated that five lakh accidents take place annually, causing 2.5 lakh deaths. Calling upon the auto industry to help address the issue of accident spots across the country, Gadkari mentioned, “In 10 years, we believe India’s automotive sector will be number one in the world. To realise this goal, the industry will have to play a key role.”


Smart mobility solutions

In his address, Areil Sella, Managing Director, Capsula, called upon the Indian auto industry to come together and develop smart mobility solutions. He expressed that it is the latest and perhaps the most disruptive technology that is changing the world. Dr. Robert Stephen Moran, Deputy Head, Office for Low Emission Vehicles, Departments for Transport, Business, Energy & Industrial Strategy, Government of United Kingdom, spoke about his country’s plans to go all electric by 2040, and how they’re creating awareness among people and supporting electric vehicle production. Moran stated, that the move towards efficient models, diesel engines will play a big role in the UK. There are four policy drivers – air quality, energy security, carbon and inward investments, he informed. Drawing attention to his government’s plan of spend Euro 600 million between 2015 and 2021 to support uptake and manufacture of ultra low emission vehicles and achieve the goal of zero emission vehicles by 2040, Moran explained that the challenge is to create a self-sustaining market that is not reliant on government support.

4th Industrial Revolution

As part of the discussion under the theme, ‘Overcoming Mindsets’, John Moavenzadeh, Head of Mobility Industries, World Economic Forum on Global Trends in Mobility, USA, averred that the 4th industrial revolution is on. It is a shifting automotive game, he said. Stating that the 4th industrial revolution is not categorised by one single technology but by diverse technologies, Moavenzadeh mentioned that the global auto industry is in the midst of a more profound transformation not seen in the past 100 years. “Automotive demand is undergoing a seismic shift between developed and emerging economies. The automotive game is changing from volume to value; from the customer’s focus on the product to the mobility experience; from customer-driven vehicles to software-driven ones. By 2026, the Indian automotive industry will be among the top three in the world in the area of engineering, manufacture and export of vehicles, and components,” he added.


Vindo Dasari MD, Ashok Leyland has been re-elected as the president of SIAM. Ravinder Pisharody, Executive Director (Commercial Vehicles), Tata Motors, will continue to serve as the vice president of SIAM. Kenichi Ayukawa, MD and CEO, Maruti Suzuki India, continues to be the treasurer of SIAM.

Global trends to survive, thrive

Stress was laid on progression to partnering with OEM for product development from being a mere supplier at the 56th Annual Session & National conference hosted by ACMA.

Story & Photos: Bhargav TS

The Indian auto component industry recorded a turnover of Rs.255,600 crore in 2015-16. Exports contributed almost 30 per cent of the Indian auto ancillary industry’s revenue at Rs.70,900 crore. From a long-term perspective, the Automotive Mission Plan (AMP) 2026 has already set ambitious growth aspirations for the ancillary sector with growth in the region of Rs.12,11,500 crore. The AMP has set exports growth ambition to the tune of Rs.462,500 crore, which would roughly amount to 35 to 40 per cent of the overall industry output by 2026. To achieve these goals, the Indian auto ancillary industry, it is clear, will have to align with global trends like electrification and lightweighting. It is clear that the industry players will have to invest in innovation and modern manufacturing practices.

This is what the captains of the Indian ancillary industry underlined at the 56th Annual Session & National Conferencee hosted by Automotive Component Manufacturers Association of India (ACMA) in Delhi recently. The conference reflected upon the changes, challenges and opportunities the industry is foreseeing. With the government’s ‘Make in India’ campaign encourging Indian companies to indulge in local manufacture of high value goods, the auto industry, the captains expressed, have an important role to play. They also drew attention to prospects like ease of doing business, and what key reforms like GST will have to offer. According to ACMA sources, the Indian auto components industry has been focussing on improving quality. There is a need however to be proactive while focusing on holistic qualitative growth. The industry, they said, is investing, working to imbibe culture and develop leadership, which will reflect on commitment and an ability to grow. Sources drew attention to the transformation the global automotive industry is going through with the advent of new technologies and changing regulatory environment. Trends like electrification, connectivity, autonomous driving, advanced material and manufacturing were delved upon at the conference. Focus was also laid on how the automotive industry will transform over the next few years.


The way forward

In order to understand the challenges that lie in front of the Indian auto ancillary industry, and the way forward, ACMA engaged McKinsey & Co. to conduct a study.. The study, ‘Winning with Quality and Innovation’, tabled at the conference, mentioned that the auto component industry, in order to stay competitive, will need to develop in-house design capabilities, harness frugal engineering and create product differentiation through innovation. A move towards product and process innovation, and quality, the study mentioned, will deeply influence growth. It also stressed upon culture being the most critical dimension of quality. Contrary to popular belief, the culture of quality can be created in all organisations regardless of age and size, the study underlined. It highlighted upon four steps to create a quality culture in the organisation. Touching upon the key observations of the study, ACMA sources averred that innovations in the auto components industry have grown quickly and profitably. Innovation historically, they mentioned, have been driven by European suppliers. In the changing global order, the Indian suppliers have found a significant opportunity to innovate, they mentioned. Innovation, said an industry captain on the sidelines of the conference, need not be limited to products and processes, even portfolios and business model make important candidates for innovation. It is they that help to create value, he added.

Quality and technology

Reflecting upon quality and technology, president of ACMA and the joint managing director of Lucas-TVS, Arvind Balaji, expressed that the Indian auto component industry is at a crucial stage where quality and technology will be the key differentiators. To achieve zero defects, the auto components industry will require upgradation of existing facilities and capabilities, he added. He drew attention to the government policy that makes manufacturing more attractive and industry more profitable. India has all the ingredients to be among the leaders of the global automotive industry, mentioned Balaji. “The overall quality levels in the component industry have improved significantly, but there is some more distance to be travelled to meet the global industry levels,” he added. Stressing upon the rapid change the automotive landscape is undergoing globally with integration of digital technologies, and with rising concern for environment and safety, Balaji averred that there is a need for the Indian component industry to move to the next level. With the advent of newer technologies like 3D printing, the digital edge is upon the auto industry, and will lead to unprecedented level of automation. Changes like these will have to be addressed, and will call for significant investment in R&D to create value, expressed an industry figure.

Government support

Emphasising upon government support, union minister for heavy industries and public enterprises, Anant Geete, in his speech mentioned that his government would leave no stone unturned to ensure the auto industry in India grows. He stressed upon the need for the industry to absorb new technology and find frugal ways of working without compromising quality. “New technology is essential to compete at the international level. There is so much more that has to be worked upon. The level of acceptance of new technologies is high in India, it is the utility value that we must focus upon since it is vital to provide global standards of quality to increase exports and make the Indian auto component industry numero uno in the world,” he stated. Geete expressed that the auto-component industry has displayed excellent performance in the last decade. The growth the industry has achieved, has generated tremendous employment opportunities. Stressing upon the Indian auto industry as the primary contributor to manufacturing sector growth, and for ‘Make in India’ programme, Geete averred that his government will help resolve issues troubling the auto industry. and pledge full support. With implementation of GST, industry prospects will improve, he opined.

Union minister for road transport, highways and shipping, Nitin Gadkari, in his speech, assured the ancillary industry of government support. He spoke about the plans to develop internal waterways for transportation to bring down logistic costs. He also spoke about plans for scrapping old vehicles to help make way for new, greener vehicles. “It is essential to bring down logistics costs. To do so, we are trying to connect rivers across India. We are also developing 27 industrial clusters, and are looking at the auto industry to play an important role in it.” In his speech, Rattan Kapur, Vice President of ACMA and CMD of Mark Exhaust Systems, expressed that the industry has to graduate from one that merely ‘builds from print’ to the one that ‘innovates and experiments’. To achieve this, we need to strengthen our relation with the customer, he added. Stressing upon the need to turn co-development partner to OEMs, Kapur stated that there is a need to ‘share risk’ in areas like technology and product development.


Need to scale up

In his keynote address, RC Bhargava, Chairman, Maruti Suzuki India Ltd., emphasised, “The auto component manufacturers need to have a singular focus to scale up their businesses with quality and technology as the bedrock. The industry needs to invest in design and capability, in world class testing and manufacturing facilities, improve profitability of operations in order to become integral with the global supply chain .” Speaking on the theme of ‘Quality and Innovation’, Guenter Butschek, MD & CEO, Tata Motors, said, “The Indian auto industry is going through a very dynamic phase. It is witnessing a dramatic shift in landscape for the auto components industry. Quality and innovation are the cornerstones for success in today’s business environment and at the core of Tata Motors’ new mission and vision, along with a continued focus on R&D investment in design and engineering. We at Tata Motors are looking to streamline our supply chain operations and focus on suppliers with comprehensive capabilities and high performance levels in areas of technical know how, quality, cost, delivery and financial health. We will be rolling out a new supplier capability assessment process with the intention to bring synergies and efficiencies in the whole ecosystem and to create win-win situations for both, Tata Motors and the supplier fraternity.”

Team Spirit

A panel discussion on ‘Winning with Quality and Innovation’ saw eminent speakers from the ancillary industry as well as the government share their views. These included Girish Shankar, Secretary Department of Heavy Industry, Government of India, Rajan Wadhera, President and Chief Executive, Truck & Powertrain Head – Mahindra Research Valley, Mahindra & Mahindra, C V Raman, Executive Director (Engineering), Maruti Suzuki India, Dr. Christian Brenneke, Vice- President – Product Engineering, WABCO Inc., Malo Le Masson, Head – Global Product Planning, Hero MotoCorp, David Keeling, Senior Partner, McKinsey & Company India, and Shivanshu Gupta, Partner, McKinsey & Company. The discussion was moderated by Ashok Taneja, MD and CEO, Shriram Pistons & Rings. Stress was laid on achieving global quality, and an ability to learn best practices to be able to team up with vehicle manufacturers as development partners. Averred CV Raman, that supply chain is critical for smooth functioning. It is they, our partners, that need to be guided in terms of employing best quality practices. To be a global player, they will need to strictly adhere to global quality standards, he added. Wadhera emphasised upon design and engineering as the core parameters to drive the quality culture. Stressing upon the need to engage suppliers from the beginning, he said, at Mahindra we organise supplier capability building programme, which has seen the participation of over 50 suppliers in the last two years. We also conduct Mahindra Supplier Evaluation System, Supply Risk Management and other sessions to help the suppliers to follow best practices, he mentioneds. Malo Le Masson of Hero MotoCorp expressed that in order to meet BS VI emission norms target, vehicle manufacturers need to collaborate with suppliers and focus on R&D. “We have done this earlier, and a good example is the development of Splendor’s start-stop iSmart technology. We are looking at developing technology of global standards at Indian cost. We think it amounts to a good opportunity,” Le Masson stated.

Inputs from Prashant Talreja