Chinese Executive to Lead Nanjing Fiat  
BEIJING -- Fiat SpA's joint venture in China on Friday named a Chinese chief executive, in an apparent shift in the Italian auto maker's strategy to boost sales in China.

The shuffle signals that Nanjing Automobile Corp., Fiat's local partner, whose parent is in alliance talks with Shanghai Automotive Industry Corp. (Group), or SAIC, is gaining more power in deciding Nanjing Fiat Inc.'s future, analysts say.

Nanjing Fiat is a 50-50 joint venture between Nanjing Auto and Fiat.


Source : http://online.wsj.com (8/19/2007)

Compare 2007 Sedans That Get 30+ MPG Combined City/Highway  
The sedan is the most popular car body style, and offers interior space and access through two doors on each side (or more rarely one) and luggage security because of a locking, covered luggage compartment separate from the passenger compartment.

Sedans come in all sizes. Small examples include the Honda Civic and Toyota Corolla. Midsize sedans are the best-selling, with the Toyota Camry and Honda Accord leading. And large sedans, once the staple of the American industry in the 1950s and 1960s, refuse to die, keeping limo drivers happy in their Lincoln Town Cars, and police officers in their Ford Crown Victorias.

With over 100 sedan models to choose from it is important for potential buyers to “know before they try and buy”

If you want to know more (and we suggest that you do), The New Car Buyers Guide’s exclusive Rank By Specs tool allows consumers to become experts and rank and then compare every sedan sold in North America by every spec, dimension, capacity and performance criteria.


Source : http://www.theautochannel.com (8/19/2007)

Maruti Udyog is now Maruti Suzuki India  
The Board of Directors at Maruti Udyog have approved a proposal to change the company’s name to Maruti Suzuki India.

The need for the change in the company’s name came in the light of the Indian government selling off its residual stake in the company last May.

The name change, meanwhile, is subject to approval by shareholders. The new name will come into effect once it is approved by shareholders at the Annual General Meeting, and thereafter by the Registrar of Companies, a company release said.

Maruti is one of the strongest corporate brand names in the country in terms of awareness, recall, trust and customer care, and the Board of Directors decided to retain that value in the name, said the company press release.

Suzuki is the parent company and it imparts an international dimension to the company’s new name, the release said. India, on the other hand, indicates the location of the company and its facilities and recognises the growing importance of the country across the world.

This international dimension is expected to help Maruti reach out to global markets. It may be noted that the company had earlier announced it would launch a new product for export to Europe in the next couple of years, while building on its recent success in Afro-Asian markets. Maruti is also developing capabilities to become Suzuki’s research & development hub for Asia, outside Japan.

The government’s exit from Maruti Udyog was valued at Rs 2,360 crore, which was picked up by a clutch of financial institutions. All the shares held by the government were sold at an average price of Rs 797 per share. The government had earlier fixed a floor price of Rs 760 for the sale.

The bulk of the government’s remaining 10.27 percent stake in Maruti Udyog, which accounted for 2.96 crore shares, was picked up by Life Insurance Corporation. LIC got all the 1.3 crore shares it had bid for at a price of Rs 800 per share, thus becoming the second-largest shareholder in the company with 12.5 percent stake, up from the earlier 8.1 percent. State Bank of India was the second most successful bidder and got 83 lakh shares at Rs 775 per share. In all, 32 financial institutions and mutual funds were allotted shares.

Other name changes

In recent years, companies in the auto sector that have changed their names include Tata Engineering and Locomotive Company which became Tata Motors, Bajaj Tempo which became Force Motors, Goetze India which is now Federal Mogul Goetze India and Tata Holset is now Cummins Turbo Technologies following the acquisition by Cummins Inc. of Tata Motors’ stake in the joint venture. Kalyani Brakes was renamed Bosch Chassis Systems India after the Kalyani Group sold its equity to the Bosch group.


Source : automonitor.co.in (8/19/2007)

Allied Nippon eyes JV in the Middle East  
Buoyed by its successful foray into the European market, Allied Nippon, one of the leading manufacturers of brake pad assemblies and brake linings, plans to expand its global portfolio of customers and products.

The Sahibabad-based company is keen to sign a joint venture in the Middle East and its talks with three large business houses have led to the company zeroing on a potential partner with which it hopes to conclude the venture in the coming months.

The new operations are likely to be based out of Dubai, which would oversee Allied Nippon’s business in Iran, Iraq and other western Asian markets.

Allied also plans to foray into North Africa, while a third base would be set up in Saudi Arabia.While all three centres will have stocking points for components, the Dubai operations would monitor the entire operations. President, Allied Nippon, Vasu Saksena said the global strategy in the coming year will focus on these three geographies.

In the Middle East, Allied Nippon currently doing business through three distributors in Dubai. Saksena said the company would also need to focus a great deal on South America.

The company’s European foray has started paying dividends and as an extension of its business operations in Europe, it recently opened a new office and distribution centre in Croatia, that takes care of the eastern European bloc as well as a few of the smaller erstwhile USSR nations. The Croatia office handles business in 3-4 four countries in Eastern Europe. The plan is to increase the reach to 18-19 countries this year, implementation for which is expected to happen as early in this month and the next.

Europen operations

The Croatia office is Allied Nippon’s third in Europe after its Bristol and London offices. The Bristol office is a support office for its London operations that take care of Western Europe. In fact, the London office has now been shifted to Luton, which has a warehousing capability of 3800 plus pallets and is spread over an area of over 30000 sq ft.

‘The operations in London have grown much larger. The warehousing costs in London were not making any business sense and hence we decided to move to Luton, which is 60 km north of London as costs in the city were prohibitive, said Saksena.

In the meantime, the company has added a new distributor in Germany in the truck segment which is the company’s largest distributors. Allied has already begunsupplying truck brake pads and linings to them in their brand name. The other European market with great growth potential is Russia. In yet another recent development, the company has established its own foothold in Australia, where it is in discussions with some of the largest auto component distributors. Product samples have already been sent and they are under field test in Australian conditions.

Allied has also got on board a major trailer manufacturer based in Detroit, US. Saksena said the selection of his company took place after a thorough commercial and technical selection procedure, for its OEM and aftermarket requirements. ‘There are many international majors, who have approached us for future products and we are in the process of developing those products,’ Saksena said.

In Asia, the company has catered to some distribution requirements from countries like Sri Lanka. Here, said Saksena, price remains an issue which the company has had to contend with.

At present, the Asian market is not part of the company’s strategy to expand in the global aftermarket. ‘We are in talks with a few OEMs to go along with them as far as their exploration in the Asian market is concerned. This is for a manufacturing network there and not for distribution,’ Saksena said.

Domestic growth

Meanwhile, the company is also gearing up for demands in the domestic market and is in the process of commissioning a second plant at Parwanoo, Himachal Pradesh. Earlier, the company had set up a new facility in Gurgaon that caters to OEMs in that area. It is also in talks to examine the need to build a base in the western part of the country, but no final decision has been taken on that yet.

To fund all future expansions and projects, the company recently concluded a rights issue. ‘This is going to propel our future growth both in the domestic and overseas markets,’ he said. The company may also consider an IPO down the line and there are several private equity (PE) fund managers showing interest in the company.

The last financial year saw the company grow an overall 43 percent, while exports grew 52 percent. Business with the OEMs increased 51 percent and the share in business from the railways grew 76 percent. The 43 percent growth has taken the company to a turnover of Rs 156 crore, which is accounted for by businesses with OEMs, aftermarket and private brand levels.

‘This year, we have added a new business of a new model of an Indian automobile major. Global majors have approached for new products that are going to be launched in the next 2-3 years. Overall, the future looks good for us,’ Saksena said.

Growth strategy

Saksena feels growth in the coming years would largely be contributed by a few key factors. Firstly, the domestic industry is expected to show strong growth in the coming years, resulting in good businesses for all parts manufacturers. Also, manufacturers inEurope and the US are finding it to tough to continue manufacturing in their own domain. A natural fallback option for these companies is Asia, especially India and China. Other Asian markets in focus are Indonesia, Thailand and Malaysia.


Source : automonitor.co.in (8/19/2007)

Vege Motors to launch three wheelers next month  
Vege Motors, a division of Continental Engines, plans to launch its three wheeler offerings, under the same brand name, from its facility in Roorkee, Uttarakhand next month. Prototypes of the vehicle are ready and currently undergoing homologation at the Pune-based Automotive Research Association of India.

President, Vege Motors, KK Vij told Auto Monitor that once the vehicles are certified, commercial production will commence and the vehicle will hit the roads by September. Continental has acquired engine technology for the vehicle from VM Motori of Italy.

‘We would rather call it a vehicle project and not merely a three wheeler project as we will look at several options ranging from a sub one-tonne four wheeler vehicle, small and medium scale transport solutions for rural and semi-urban markets to a light commercial vehicle, said Vij.

Diversified intersts

The Roorkee facility in which an initial investment of Rs 35 crore to Rs 40 crore has been made, will crank out 100,000 engines and 60,000 three-wheelers. It will first roll out the 1.5 and one-tonner vehicle in the cargo segment, followed by a passenger carrier, CEO, Continental Baxy Alok Dutta in a previous interaction in December. Baxy Continental is part of the larger Bakshi Group. The European arm of Vege Motors, which is world’s largest player for remanufactured engines was acquired by Gurgaon-based Bakshi Group, which has diversified interests in automotive components, engine business, back office operations, civil engineering and real estate.

In August 2005 Continental Engines, which is 100 percent, owned by Amar Bakshi, entered into a license agreement with VM Motori, a DaimlerChrysler Group company to manufacture one and two-cylinder engines for automotive and non automotive agricultural applications.

According to Vij, the Roorkee facility will manufacture , engines of different sizes ranging from 10hp to 22hp that could be put to variety of applications in the automotive as well as non-automotive segment. The company is also bullish on the export potential of the engines for applications in fishing boats, golf carts, lawn mowers, alternators, etc. for the European and US markets.

Meanwhile, in order to cut costs on the remanufacturing business, Vege Motors is scouting for a location in Eastern Europe. Though exact location has yet to be ascertained, the company has zeroed in on Poland and the Czech republic. An initial investment of Euro 8 million to Euro 9 million has been outlined for a greenfield facility in the region. Finance for the project would be raised through loans from international banks like ABN Amro. Additionally, in order to enhance its footprint in Europe, it plans to open a few representative offices.

East European costs

‘In the present scenario, I think the cost advantages that Eastern Europe offers outweigh that of India, and is one of the reasons why most global automakers want to set up base there,’said Vij. Meanwhile, the group has made an investment of half a million Euros in its refurbishing business in Holland which is a profitable operation.

In the past six months, it has diversified its product portfolio and is now also refurbishing gearboxes for cars, turbochargers and common rail pumps.

In November last year, it bagged a long term contract from General Motors, the value of which is pegged to be Euro 4.5 million to Euro 5 million. Meanwhile, Vege is also planning to harness untapped potential in markets like, Russia, Ireland and Norway.

As per company estimates, while the value of remanufactured engine market in Europe is 25 million Euro per month, the value of the US market, which is said to be much bigger than Europe’s is pegged to be in the range of $30 billion to $ 40 billion.

Vij is of the opinion that India too is a big market for refurbishing engines and aggregates but it’s all in the unorganised segment and will, in all likelihood, remain that way. He cites huge margins in spares enjoyed by the dealers and manufacturers to be one of the reasons for it. Another very strong deterrent is the long arduous process of re-registration of engines.

‘Once you get the engine refurbished and you have a new serial number you need to make registration amendments, which is time consuming. Having said that I do know that there are some suppliers who are setting up units for refurbishment,’ he added.

Meanwhile, providing an update on casting and component business, one of the core businesses of Continental Engines, Vij said capacity at its facility in Bhiwadi, Rajasthan is being doubled from 300 tonnes to 350 tonnes. The expansion would be completed by September. An investment of Rs 60 crore has been earmarked for this, of which Rs 25 crore has already been invested and remaining will be done before the end of the fiscal. The company has recently bagged a contract worth 2 million Euro from VM Motori recently. With its global clientele comprising ITEC, VM Motori, GM, etc, exports account for 80 to 85 percent of company’s turnover. Domestic OEM clients include Mahindra & Mahindra, Eicher Motors, Lombardini and Greaves.

The Bakshi Group plans to reach a Rs 500 crore plus turnover by 2009-10. This would be accounted for by the business from the upcoming project (vehicle and engine) in Uttarakhand, the remanufacturing business in Holland and its components and casting business.


Source : automonitor.co.in (8/19/2007)

Ensa Vikas to make EGR coolers  
Ensa Vikas, the joint venture between the Vikas Group and Europe’s Dayco Group will commence commercial production of EGR (Exhaust Gas Re-circulation) coolers by December.

With Euro 4 norms due for implementation in 11 Indian cities by 2010, it would be mandatory for diesel run vehicles to have the EGR technology. Speaking to this publication, COO, Ensa Vikas EGR Systems, K Srinivas said, ‘With most of the passenger carmakers betting big on the diesel agenda, we anticipate that demand for EGRs is going to be huge.’ The company already has orders from Maruti Udyog, now Maruti Suzuki India, Fiat India, Tata Motors etc,. To cope with the demand from the passenger carmakers and CV manufacturers, Ensa envisages having capacity to produce one million EGRs by 2010 at its Faridabad facility, which will go on stream by the end of 2007, said Srinivas. An initial investment of Rs 20 crore has been made.

Small engines

‘Heavy-duty commercial vehicle manufacturers like Tata Motors, Ashok Leyland, and Mahindra ITEC have already initiated developmental work to meet the new emission norms and we are partnering most of these programmes,’ added Srinivas. While initially supplies will be confined to smaller diesel engines, by 2009-10, the company expects to develop capabilities to supply EGRs to the entire diesel engine range. Srinivas did not rule out the possibility of a buyback arrangement with Dayco once domestic requirements are met.

EGR has been chosen as a technology option to meet tighter emission norms by most global automotive majors. In Europe for instance, Behr has refined its cooled exhaust gas recirculation (EGR) technology for heavy trucks in anticipation of the new Euro 5 emission standards in Europe and corresponding regulations in the US.

In the EGR cooling process, the exhaust gas is passed through a cooling system and then mixed with the fresh intake air to reduce the level of pollutants. This lowers the oxygen concentration in the cylinder charge and the combustion temperature drops, hence reducingNox in the exhaust gas.

Last September, the Vikas Group which manufactures host of automotive components ranging from catalytic converters, fuel line, casting and machining components, exhaust systems, heat exchangers, fuel and fluid products, etc through its various group companies forged a joint venture with Europe’s Dayco Group. Dayco is a leading manufacturer and supplier of fuel lines, fluid components carbon canisters, EGR systems, and transmission components, to name a few.

The group envisages clocking Rs 600 crore from its automotive business by 2007-08 against Rs 500 crore in 2006-07.


Source : automonitor.co.in (8/19/2007)

Yokohama India  
Yokohama Rubber Co, has kicked off its India operations with the inauguration of its subsidiary, Yokohama India. The Japanese company is the world’s seventh largest tyre manufacturer.

The Indian subsidiary will function as a sales company that will import high performance passenger and SUV tyres to India from Japan. Imports began started last month, said Managing Director, Yokohama India, Fumihiro Nishi who added that as volumes increase, the company might consider importing tyres from the Philippines and Thailand.

For now, there is no immediate plan to start manufacturing tyres in India. From the studies the company initiated in India, it has found that there is a shortage of land in the industrial belts of Delhi-NCR, Mumbai-Pune and Bangalore-Chennai. The decision to put up a manufacturing plant will largely depend on sales and land availability, Nishi said.

In its first year, Yokohama India will focus on the retail business in Delhi, NCR and Punjab. In the west and south, the company would rely on area distributors who have already been appointed.

The plan is to import high performance passenger car tyres, but going forward, Nishi hopes to find market for truck and bus tyres as well. Nishi, who is in charge of the BRIC nations, said the company may look at other business opportunities in India for their product portfolio which includes hydraulic hoses, conveyor belts, sealants and golf products. In fact, Yokohama’s Thailand operations export window sealants to market leaders Maruti in India.

In India, Yokohama’s product range would include tyres of 13-inch and 18-inch dimensions. The company has brought in eight different types of tyres, including Yokohama’s flagship tyre ADVAN. Nishi realises the fact that almost 70-80 percent of the demand in India is for tyres in the 12-14 inch range. The Aspec family of tyres, which is being introduced in India, will meet the requirement in that segment.

2007 is the 90th year of Yokohama Rubber and it adopted a new management plan called ‘Grand Design 100’ for remaining 12 financial years, leading to its centenaryin 2017. Under the plan, the target in India is to reach a turnover of Rs 357 billion by 2017, from a base of Rs 178 billion now. The tyre business is expected to contribute 75 percent oftotal business in India, while the rest will come from the other businesses.The targets in phase one, the first of four, three-year segments in Grand Design 100, spans from the present fiscal year to starting April 1 to the year ending March 31, 2009 are to increase net sales by 24 percent over current figures, and to increase operating income by 60 percent, Nishi said.

Globally, the company plans to increase its production capacity over the next three years. From the current production volume of 45,600,000 tyres a year, the target is to reach 56,500,000 tyres by financial year 2009.


Source : automonitor.co.in (8/19/2007)

NHRA Troxel Feeling Positive  
The NHRA POWERade Countdown to the Championship is literally winding down to only seconds and the time has finally arrived in the Toyo Tires Nationals at Maple Grove Raceway for the final positions to be decided of those who will make the move up and becoming a member of the elite eight. Melanie Troxel, driver of the Vietnam Veterans POW/MIA Top Fuel dragster, is exactly in that position. After qualifying, the Avon, Ind. resident, now has accumulated a total of 736 points and snagged the No. 5 position with her pass from Saturday morning of 4.549 seconds, at a speed of 326.08 mph. Her main contender for the last spot in the Countdown, David Grubnic, qualified in the No. 4 position (4.545 seconds) and can now claim 739 points to his total bringing the distance between the two down to only three points with eliminations beginning at 11 a.m. on Sunday. Her first round opponent will be her Lucas Oil teammate, Morgan Lucas, the No. 12 qualifier. It will mark her 11th time to qualify in the No. 5 position and against Lucas holds the edge 8 – 3 in head-to-head match-ups. That 4.54 was a really nice run this morning, said Troxel. We knew we were going to have to take a chance and roll the dice to try to get ahead of Grubnic, but it didn’t work out. We do know where to put it back to go out and run some good numbers tomorrow. Unfortunately, we have to race our teammate (Morgan Lucas) on Sunday, which is disappointing because I think we’ve made some definite strides and this means one of us is not getting past the first round. On the other hand, when you look at the ladder we have our destiny in our own hands. We have the possibility of racing Grubnic in the second round. If we both make it past the first round, then we have to earn out way into the top eight by getting around him. It should prove to be an exciting day tomorrow.” ESPN2-HD will air the final round of eliminations starting at 10 p.m. EDT on Sunday, August 19.


Source : http://www.theautochannel.com (8/19/2007)

NHRA (Reading) Scelzi Ready To Go......  
Gary Scelzi steered the Mopar/Oakley Dodge Charger R/T Funny Car into the No. 6 spot in qualifying for the Toyo Tires NHRA Nationals, and he's pleased with the team's efforts.

Scelzi's quick pass came in the cooler Friday-night session, a 4.850-second run at 315.93 mph, good for No. 4 at the time. Today's final two rounds produced a 4.950/312.71 and another straight 4.894/316.45, each a strong pass, but it didn't improve his standing, and he fell to sixth. His only tire-smoking pass was his first on Friday, a 6.708/127.04.

"Thrilled to death," he said. "One run with tire smoke, and the other three go right down the race track. We've got something to race with. I'm excited.

"It's fun working with Todd," he said of his new crew chief Okuhara, who shares tuning duties with Phil Shuler. "He's so mellow, and so relaxed. So was Zippy (former crew chief Mike Neff).

"Tomorrow's going to be fun. We have (second in points) Robert Hight first round. Big race. We've got a chance to make a move here and this is it," he said of escalating up from seventh in the standings for when the next phase of the Countdown to the Championship begins at the U.S. Nationals in Indianapolis on Labor Day weekend. "We want to get as high as we can in those POWERade points, so we don't give anything away coming into Indy. Because now it's crunch time. We've got to get serious.

"The Mopar/Oakley Dodge is coming around at the right time. Todd and I are starting to really get together here, and the guys are having a good time. Let's get it, baby."


Source : http://www.theautochannel.com (8/19/2007)

NHRA - Shumacher Clarifies Pruett Test Goal....  
Team owner Don Schumacher today clarified some of the recent media buzz that 19-year-old Alcohol Altered and Nostalgia drag racer Leah Pruett, of Redlands, Calif., will test and/or drive a Don Schumacher Racing Funny Car in the future, including at next week's two-day NHRA POWERade Drag Racing Series test session at O'Reilly Raceway Park outside of Indianapolis, Ind. "Leah's got the desire, the drive and the determination to do it," said Schumacher, "and I'm looking to have her just make a couple of short little squirts, as we call them - 200- to 300-ft. passes at Indy during the test session - if we have time.


Source : http://www.theautochannel.com (8/19/2007)

Subros outlines Rs 200 crore expansion plan  
With a view to catering to upcoming demand in the domestic market and other new opportunities, Subros has said it plans to invest Rs 200 crore by 2012, to double its production capacity.

The company has four plants in the country, two in Noida and one each in Manesar and Pune. The expansion will take Subros’s production capacity to 15 lakh units a year, from the current 7.5 lakh. Chief Executive Officer, Subros, DM Reddy said with the enhanced capacity, the company should be able to reach sales of one million units a year. ‘We will invest Rs 40-50 crore per annum till 2012 to double capacity and expect to reach a sales mark of one million units by then,’ he said.

Reddy, and other senior Subros officials, including Chairman Ramesh Suri were addressing the media on the occasion of the company supplying 2.5 million air-conditioning systems to Maruti Udyog. Subros has been supplying to several Maruti offerings since 1985. Chairman Suri said, ‘It has been a long and fruitful association with Maruti since we first started as a joint venture between Denso and Suzuki.’

Maruti is key buyer

Currently, Subros supplies 75 percent of Maruti’s air-conditioning requirements. Maruti Udyog sold 6,35,629 vehicles in the domestic market in 2006-07. The 21 percent growth over the previous fiscal’s figures was the highest ever annual sales for the company.

In the current fiscal, the carmaker expects to sell over 7.5 lakh vehicles and Subros is keen to tap the growth there. ‘We should be well equipped to service them,’ Reddy said.

With 40 percent share in the domestic air-conditioning market, Subros said it is the market leader. The planned expansion and new business opportunities in the market, primarily with global automobile majors scheduled to start operations in India soon,

Subros expects this growth trend to continue.

In the past year, the company started supplying air-conditioning systems to Force Motors’ mini buses. Plans are being put together to start developing such systems for large buses, Reddy said. In January 2008, supplies will begin for the Mahindra & Mahindra’s Ingenio, a new MPV (multi purpose vehicle) that is expected to go on sale in 2008. The Ingenio is expected to be pitted against the Toyota Innova and the Chevrolet Tavera in both the individual buyer and tourist taxi segments.

Subros also supplies

air-conditioning systems to Tata Motors and Reva Electric. Subros’s Pune plant caters to Tata Motors’ requirements. Subros supplies about 70 percent of Tata Motors’ total air-conditioning needs.

In yet another significant development, the company has started making air-conditioning systems for M&M tractors. Although insignificant in terms of volumes, the company has taken up this project to understand the requirements for catering to this segment.


Source : automonitor.co.in (8/19/2007)

Dr Surinder Kapur, Sona Koyo Group  
India’s largest manufacturer and supplier of steering systems, Sona Koyo Steering Systems grew 31 percent in the first quarter of the current fiscal as compared to the corresponding period last year. Moreover, the whole year saw the company grow 65 percent.

In an interview to Auto Monitor, Chairman and Managing Director, Sona Group, Dr Surinder Kapur said these are difficult rates to sustain, but he is hopeful the buoyancy in the domestic as well as overseas markets will help keep the company in the growth path.

How do you view the growth you have experienced in the first quarter?

In the first quarter of the year, our revenues have gone up by 31 percent to Rs 185.27 crore, and our bottom line has increased by 116 percent to about Rs 8 crore. The industry is growing at about 12 percent and we expected to grow at 18 percent. The production of electric power steering had just started in the first quarter last year and we did not have much volume. We thought we will have larger volume this quarter.

However, to our surprise, some of the models that we supply to grew much more than what they had done last year. Therefore, cumulatively our total sales grew by that margin. It is a little unusual that this specific model of ours got the kind of response than what we had anticipated.

Do you see this trend continuing?

I am still not clear how the rest of the year will pan out. Keeping the first quarter aside, I think this year will grow at 10-12 percent and I do believe that we will do something similar, unless some of our specific models do much better. Some new models could see unusual growth, but fortunately the industry would continue to grow at 10-12 percent.

Last year, the industry grew at 22 percent, while commercial vehicle segment recorded a growth of 30 percent. However, this year, CVs have taken a beating and even two-wheelers have slowed down. I do not see any reason why this slowdown will not take place in the domestic passenger car market as well.

The hardening of interest rates is also taking a toll on sales…

The hardening of interest rates is impacting the whole economy. The intention of the government to rein in inflation is working. So, you cannot fault them for that. It is also not that the economy is not growing at 8-plus percent. I think there are different challenges of high growth, especially since we still do not have the infrastructure in place, be it roads, ports or power. We still do not have the social infrastructure in place, including education, skilled development to the extent we should, and any economic growth rate therefore puts a challenge and the stress of attrition in a company.

There are a host of issues. The automobile is one of those things that everybody desires and aspires to. The penetration of cars in India, even in comparison with neighbouring Pakistan and Sri Lanka is very low. They have a penetration of 12-14 cars per 1000 people, and ours is only seven. So, it has got to increase rapidly. When economic development takes place the way it is, there is certainly going to be a growth in the industry. The Finance Bill even talks about a 10-plus growth this year. We are very bullish as far as the industry is concerned.

The other major issue that we need to look in a slightly different light is the export sector. Many companies are still very bullish on exports, but with the hardening of the rupee, the margins come down. The trend that I see is that those who came to buy from India are now starting to establish businesses here. Once the Special Economic Zones get going, you will see a large number of manufacturers coming to India. They may still buy the components from here but there will be large exports from India.

I see India attaining the Automotive Mission Plan that we put together by 2016. We will become a designing and manufacturing hub for small cars and the component manufacturers will supply to these SEZs, where manufacturers will set up their base. These are, truly, very exciting times for the industry.

Do you believe that the slowdown is temporary?

Absolutely. As a matter of fact, I think this has come as a blessing in disguise for the industry. For a company like ours, for example, we had 65 percent growth last year, and have grown 31 percent in the first quarter of the current fiscal. These are difficult rates to sustain, not only from my company’s point of view, but also from the supplier community’s point of view.

There is a lot of divergence of activities. Infrastructure is very weak, and so is electricity sector. We still have to buy water in our company. While one welcomes growth, it should not be at the cost of stress that we go through. As it is, the administrative reforms have not been fully implemented and infrastructure development is yet to pick up.

Do you expect the industry to stabilise at around 10-12 percent by the year-end?

I believe this compounded growth rate of 10-12 percent would continue for the next five to six years. We visualise the auto component industry to become a $45 billion industry, out of which $25 billion should be Indian sales, while the remaining should be exports. Today, we are a $10 billion industry. This figure has to become $25 billion and the $2 billion has to become $20 billion. The business opportunities are there, but I’m not sure if the infrastructure would be in place.

Do you see this changing considering the time we have already lost?

As of now, the ports have become more efficient. While there still are issues with infrastructure, the efficiency has come. Now we require new investments. Everyone knows we need $500 billion worth of investments, but I haven’t seen any action so far.

For the Sona Group, what is your vision of growth?

So far, we have a Rs 400 crore expansion project going on at Sona Koyo Steering Systems, Rs 200 crore expansion at Sona Okegawa, another Rs 200 crore expansion at Mahindra Sona, Rs 100 crore expansion at Sona Somic. In total, we are investing around Rs 900 crore in the group over the next 24-30 months. As a group, our turnover now is Rs 1,100 crore.

Our plans till now are organic, but having said that, we have recently decided to finalise and appoint somebody to look at inorganic growth for all our companies. Earlier, we were only reacting to certain opportunities that came our way. The joint venture that we did in France with Fuji Autotech has been a wonderful learning experience. Through that company in France, we own a company in Brazil and another in the Czech Republic. We did that as a minority JV partner because we wanted to learn what it means to get involved in a company that does business overseas. We wanted to understand what the quality and marketing issues are, and more so the cultural issues.

As a group, I think we are now ready to look into inorganic opportunities overseas. We will appoint somebody who can take us through the process in a professional manner. There are lot of companies available overseas. In fact, there good companies in the west, who are competitive despite the cost factor just like the Japanese are, primarily because they are well-managed companies.

What do we bring to the table if we acquire a company abroad? I think we have excellent manufacturing management processes which we can put there. We have done the same in France, Brazil and The Czech Republic. If we manage to do that, we will be successful. But we have not, so far quantified anything.

There were talks of your company building a manufacturing plant in North America. What’s the progress on that?

I had said we need to be in North America, and that still holds true. We need to be there for our Sona Okegawa business. We had discussed an opportunity there but it did not come through because of UAW problems, not because of anything else. They had asked us for some time, which is by February 2008. We had said if we do not find an opportunity, we would put up a greenfield unit. We are examining both options and would probably wait till December 2007 or January next year before taking a final call.

Currently, we are examining all possible options including the location, etc. If it comes through before that, we will acquire that company.

How have your exports to Brazil and Czech Republic panned out?

We started exporting components to Brazil, which we manufacture for them here. We even made them a cost-effective assembly line out of India. We are supplying some components to The Czech Republic. Our whole idea of this JV from a business perspective and being in a minority position, is to be able to supply them components out of India so that their costs gets lower.

We have been able to do that. Last year, we did Rs 3 crore, and this year we will do Rs 20 crore. We expect to do Rs 40 crore in the coming year and expand that gradually. As part of that, we are also looking at component manufacturing. We have just set up a joint venture with one of our suppliers for stampings, called Arjun Stampings. We picked up a majority (70 percent) stake in the company. We provide the funding and treat it like a subsidiary.

We are looking at machined aluminium castings and machined forgings as the way forward to support our export drive and may follow the same format as with Arjun Stampings. Our idea is not to use these companies for capital consumption, but more so for the overseas markets. We want to be strategic partners in these suppliers.

In the area of exports, we already have JTEKT Corporation and Fuji as global players. We need not replicate what they are already doing because these companies have scale and we do not. Therefore, we will support them in their global efforts for components, not assemblies.

Russia is part of the BRIC group. Any plans of going to Russia?

Russia is one country we are going for the first time in September this year. We believe Russia is a big market and we would go to study the market. We need to be in that market, if not by manufacturing than at least by supplying. Russia is a difficult market. They are more aligned towards Europe and hence are comfortable there. But I don’t think they are uncomfortable with Indians. We will make an effort.

In the domestic market, would your joint venture with Arjun Stampings and the ones you plan for aluminium castings and forgings mean setting up of new plants?

Yes, indeed. In fact, for stampings, they are already putting up a new plant that is expected to start production by November-December 2007. The plant is coming up in Farooq Nagar in Haryana. As far as the Chennai EoU is concerned, we will expand our steering assembly as well as the steering column assembly units.

What are your projections for Sona Koyo Steering Systems?

At Sona Koyo, last year we were Rs 700 crore last year and plan to be Rs 770 crore this year. Our target for next year is Rs 900 crore, and the following year it will be Rs 1200 crore. There is business and I believe we will achieve the targets. On the exports front, we suffered a bit as the launch of a particular vehicle was delayed. It is going to be launched in October-November this year. We are looking at increasing our Euro-denominated exports.

A few years ago, the Sona Group had set up Sona Autocomp USA, and now we are setting up Sona Autocomp Europe to help us with the logistics and services to the customers in Europe. We have set the ball in motion.


Source : automonitor.co.in (8/19/2007)

Deepak Jain, Executive Director, Lumax Industries  
The two-wheeler industry in the last two quarters has witnessed a sluggish demand with sales of all the manufacturers including the top three dipping.

Executive Director, Lumax Industries, Deepak Jain goes into the reasons and attempts to assess the impact it would have on company’s overall business and the industry at large. Besides catering to passenger carmakers and CV makers, the company is a key supplier to all the two-wheeler manufacturers.

Jain also dwells on the significance of Stanley, its technical collaborator for over two decades, upping its stake from 19 percent to 35 percent, and opportunities it would throw open for one of the oldest component manufacturers in the northern belt.

How will the current slowdown in two-wheelers impact your business?

In comparison to the 30 percent growth we registered last year, we are projecting a 10 percent growth this year. As a key growth driver is volumes, this has declined. However, I do not thinks the slowdown is going to impact us very much as we are diversifying in terms of our customer base and the segments or products that we operate in.

To put things in perspective, revenues generated from our two-wheeler business account for just 28 percent of total revenue. Moreover, thanks to the new launches lined up for the forthcoming year, we expect the passenger car market to grow. For instance, this year we started supplying products for the Logan. This is an add-on business and hence the downturn in two-wheelers has been offset by new businesses from other segments.

Did you anticipate this downturn? Can it be attributed solely to rising interest rates?

Yes, we did. I personally feel there are three reasons for it. No 1. Interest rates have definitely had a huge impact. Secondly, this also has a psychological impact because the components industry for the last three years has been growing at an average of 30 percent in comparison to the larger automobile industry that has been growing at 15 percent. This was something unheard of and everyone was expecting a cyclical correction.

Thirdly, if one looks at the investment outlay, most of the investments have been done two years ago and in that context, last year’s growth is attributable to that. Both last year and in the year before that, industry was capitalising on the investments made and struggling to sustain a 30 percent growth. It is a challenge to maintain that kind of growth momentum. Now, this year and next year investments are being made. Hence, we could see some consolidation or de-growth taking place this year this year and in the next year. In my view, this is good for industry as so much of growth is bound to bring inefficiencies into the system. This is usually spawned by a complacent attitude.

Some OEMs have cut the production by atleast 20 to 30 percent, how do you think it would impact the component industry?

If a supplier is dependent on just one customer, say if around 70 percent of company’s revenues are generated from one customer, the cost pressures are going to increase, even if the volumes slow down. Input costs are going to increase hence margins would always be under pressure. A company has to ensure that its growth is not profitless. For instance if I am growing at 30 percent, just maintaining profitability level puts pressure on margins hence its unlikely that one would achieve the same result even in the next year. But if you do not grow at the same level, you start depleting your profits. That becomes a dangerous situation to be in.

This year for instance, we see 10 percent growth in revenues, but we don’t see decline in profits. Rather, we see profits going up. This is attributable to upgrading efficiencies. Also, we are looking at using low-cost automation to enhance the productivity levels. Hence the quality remains consistent.

Recently, your partner Stanley of Japan acquired equity in Lumax Industries. What does this mean?

We forged ties with Stanley way back in 1984, so it is a relationship that goes back 23 years. It all started with a technical collaboration but today it’s an equity relationship. They have also been a minority shareholder (19 percent) in the company. Going forward, Stanley sees Lumax as its manufacturing base in India.

Secondly, with Japanese companies like Honda and Suzuki expanding capacities, Stanley and Lumax management decided that they should become equitable partners. Both Jain family and Stanley would hold 35 percent each. The first round of the equity enhancement was through preferential allotment of shares; now that stake is 28 percent. The open offer is now in progress. But we have no plans of delisting the company, as that would take away value from the minority shareholders.

What does it mean for you as a company?

This is very significant development for us from the strategic point of view. This year, as already announced, Lumax will align itself globally. It would be getting the advantage of the Stanley network. As of today, we do not figure anywhere in the global participation but the equity participation is set to change that, and with this move, Lumax would become one of the Stanley affiliates overseas.

Stanley would also need a manufacturing base. This would have a significant impact from the global perspective. Moreover, 10 years down the line, we see a major shift in technology of the lighting products and Stanley will be one of the drivers for these changes.

Thirdly, this is the time when Lumax is undertaking major expansion plans. While earlier plans have been West and North dominated, we now want to do a pan-India expansion. We need funds and do not want to expand at the cost of high debt. The

equity participation would give us lot of financial muscle to carry out the expansion plans. We did not want to repeat the 1998-99 scenario. While 1996 was a golden year, in 1997 everyone created huge capacities on high debt and then in 1998-99 everything went down. As a company, we were just working towards servicing debts.

How would it help you in realising your global aspirations?

Several opportunities exist in the global arena. But the first priority is to service the Indian OEMs and maintain a leadershi position and service the customer needs. Once that happens, there are plenty of export opportunities in markets like US, Europe where Stanley may not be present.

We are looking at the agriculture and the commercial vehicle segment; that’s where Stanley enjoys a formidable presence. Apart from that, we would also weigh opportunities to export to OEMs. We recently bagged an order for small lamps from Nissan in UK. This is an order for the European continent, where Stanley is not present. Hence the idea is not to compete with Stanley but to complement Stanley.

Do we see Stanley’s association with Nissan getting you orders?

With this kind of association now, Stanley would be bidding and competing for the global orders. For instance, if Nissan launches a global car, Stanley would be competing with all the global suppliers who are in the fray. When Carlos Ghosn was here he had said that India would be emerging markets for outsourcing. This will give usleverage Additionally, the equity participation would also help Lumax leverage upon Stanley’s talent and vice versa as HR isvery critical now. We have three expats on our board on a mid term to long-term basis. Gong forward, we see that expanding and Stanley taking more responsibility in sales and distribution network.

You are looking at setting up a base in Thailand. Can we have an update?

We have been invited by Tata Motors for their Thai operations. We are conducting a feasibility study which should be completed by end-August. Tatas have got the license for 35,000 vehicles but we don’t see ourselves supplying components for 35,000 units initially, so we’d have to ramp up gradually. It is not just for lights that we have been invited to supply but for other products in the Lumax umbrella. Hence we would set up one entity that caters to all their requirements. Phase one would begin with the assembly operations, and an initial investment of Rs 20 crore will be made . Stanley has a huge presence in Thailand with anaround 80 percent marketshare in lighting. The idea again is to complement and leverage their presence to support our operations. Our first priority is however, Tata Motors.

What about facilities in other parts of India?

Lumax as of now has been confined to the Haryana and Maharashtra. Our strategy now would be to first upgrade and modernise these existing units in terms of technology. Second of course, would be to go pan India. All the new units would be greenfield.

We are setting up base for Tata Motors in Pantnagar. Yet another unit would be commissioned for Hero Honda’s Haridwar unit. We have recently been awarded the lighting business from Tata Motors for the Rs one lakh car. Land for the same has already been in Singur and construction will commence shortly. This would mark our foray into the Eastern region. In 15 months we are looking at an investment of Rs 90 crore


Source : automonitor.co.in (8/19/2007)

D Subramanyam, Vice President-HRM, Minda Group  
The Minda Group is among India’s most dynamic auto component companies. Comprising 10 companies, its product portfolio includes electronic and mechanical security systems, keys, instrument panels and clusters, connective systems and die-casting parts.

The group has already forged two joint ventures with Valeo of France, while another one is expected to be signed soon. It has established joint ventures in the US and Europe as well.

D Subramanyam, Vice President - HRM, Minda Group speaks out his group’s priorities in this delicate and important are and the initiatives the company

What are the key priorities of the Minda group as far as HR is concerned in this fiscal?

Our key priorities as a group include retention, providing growth and challenging environment to employees, building world class HR practices to meet our Vision of becoming Euro 1 billion company by 2015 and finally, benchmarking and developing an effective organisation structure.

As a group expands outside India, what are the challenges that the HR department faces?

As our global business footprint expands, we as a group will face several challenges. Firstly, to make the Project Team comfortable in new environment i.e. the new country. Secondly, to source local talent and above all, to understand the kind of human Resources practices in and around the region.

Let us take the example of putting up a plant in Uzbekistan. The first task is to constitute the Project Team. We then had to learn more about the prevalent conditions in Uzbekistan, right down to food habits, accommodation availability security and household item availability, cost etc. Accordingly we have to fix up remuneration for employees. As an organization we provide accommodation for families and schools for children and security. Unless these are ensured , no Project Team is able to function or willing to move to alien environment.

Moreover, we have to familiarise ourselves with local rules and regulations about employing local people. Accordingly, we have to make our recruitment plan.Since the host country people are new and they have to work as per Project Team, Project Team has to train the people and understand the locals in order to maintain cordial relationships.

We do make survey of the HR practices of the region and adapt our own policies to suit the local people and to ensure that these are in accordance with industry norms of the host country.

What has the Minda group done to retain talent in a time when most companies including the auto sector face a talent of crisis?

The Minda Group is working on three-pronged approach: salary increase, growth and the challenge / Content of both the job and the work environment.

We benchmark our salary levels so as to be among the top five companies in the auto components industry. For growth of the individual and also to develop leadership pipeline, we have initiated ‘Key Personnel Development’ Programme wherein we select persons’ Career Planning will be done and accordingly, these people will be trainedor rotated among several jobs so as to enhance their exposure.

We have been making efforts to create a challenging working environment, where the individual is able to be passionate about his job. As the company is growing, many opportunities for working on different projects are available. At Minda, conscious efforts are being taken to ensure that the job content is challenging and make the individuals to stretch.

How important is training at Minda and what kind of budgets does the group have for this?

Training is considered a very important activity at Minda. We do allocate adequate budget to impart training to all those employees once their training requirements are identified. Apart from that, we do have separate budgets to develop key personnel. Further, to develop bonding among groups we do undertake Outbound Training. We are making an effort to make ‘MINDA’ – the learning organization. We are aiming at providing eight mandays training for our staff upto the middle management cadre.

What do you believe are the main challenges going forward The challenges, we are envisaging at Minda are: talent crunch, retention and having the right skills fit. As we all know, it is a fact that talent is scarce now days. With the rapid growth in industry, it is difficult to get people with the right talent. Most of the technical / engineers (which we require) have tended to opt for either the information Technology or ITES industry. For the manufacturing sector as a whole, it does appear to be below the priority list of these talented people, as admittedly, remuneration levels are not on line with IT/ITES.

The auto component industry is growing very fast and OEs in this sector and all other engineering industry also compete for the same resources, hence the talent crunch.

Retention is another problem. Owing to the demand supply gap, every engineering graduate now has many options as far as job offers are concerned. Money, facilities, sign-in bonuses are being offered to woo the prospective candidates. In such scenario, retaining the people becomes a mammoth task.

The quality of the people available is not really up to the mark.The really good talent goes to best Paying Jobs. Sometimes, manufacturing industry has to content with 80 percent fit people, as it has no option.

Can you describe any one Minda initiative that is unique to the company / group and the impact it has had on employee morale / dedication?

We do have what I believe is a unique initiative. We call this the Family concept: It starts from Top Person. As per the concept, the Top person has to take care of the people who report to him. Like that every one has to take care of their subordinates and all the employees are covered in this fashion. The Boss has to spend at least 2 hours in a month enquiring and solving not only his professional but also his personal problems. This will enable the individual to develop bonding which goes beyond office hours. As the subordinates feel the boss is a mentor and a kind of godfather, the relationship moves to another level and it will have very positive impact on retention of the people as the saying goes that “People join the Organizations but they leave their bosses”

What is the Minda group’s view on affirmative action and reservation of jobs for the socially disadvantaged?

Minda does not discriminate individuals based on caste / creed / gender. Merit will be given preference in selection. We do not believe in reservations but we believe in making the individual capable to compete with the best. We employ large of number women employees. We recruit these girls after 10th or 12th class and train them for few months and deploy them in the organizations.


Source : automonitor.co.in (8/19/2007)

Renault Design  
An increasing number of younger people in Western Europe, and in the more mature automotive markets now look forward to careers in cinema and the liberal arts while those in emerging car markets like eastern Europe, Russia and India are keen on careers in automotive design, said Vice President, Advanced Design, Renault Design, Patrick Lecharpy.

He was speaking on the sidelines of a recent meeting where Renualt Design India announced plans to extend the operations of its two-year old observational unit to a full-fledged design centre. The press meet was first addressed by Renault’s VP for design, Patrick Le Quement. He spoke about the process of managing the creative process, the requirements for people keen to pursue a course in design, the importance that Renault attaches to design etc.

Asked about the $3000 car that Renault’s president and CEO Carlos Ghosn has spoken, le Quement said that as far as design is concerned, the company would have to start with a white sheet, need a lot of ingenuity and quite practically forget about how cars were made before. He said he was looking forward to the challenge.

Young designers

In his address, le Quement said Renault’s design team worldwide has people from 24 nationalities. The average age is 32 and most have degrees in Applied Art or work experience of 4 to 6 years after secondary school. Renault’s designers work on a variety of products from coffee-making machines to drills and of course, cars. Le Quement said, most drew cars in their early childhood years’.

Le Quement used his address to describe the company’s organisational structure as it pertained to design likening its functioning to that of an SME. The management has the job of integrating this 450-member team with the larger organisation.

In 2007, Renault has set design centres at Bucharest in Romania and at Sao Paulo. In this context, the satellite centre in India will now play a greater role, LeCharpy said. He said the need to set up base in India was motivated by the fact that the Indian market is very different from others, and it is important for the company to make special efforts to understand this scenario.

Early beginnings

Two years ago, when things began moving at Renault Design India, the mother company sent designers to India to learn about customer preferences here. The aim, Lecharpy said is to use the Indian base to rejuvenate other centres. The centre, when it was established in 2005 was to support the Logan project, assess the creative process here and develop the design function here.Renault Design India says it is the first local design operation of a western auto manufacturer. In the two years in which it has been operational, the centre has been part of several programmes including the Logan Steppe Concept, first displayed at the Geneva Motor Show in 2006, the man machine interface concept car that was presented at the Geneva show in 2007. The centre has also focussed in textile related trends to tap India’s unique textile heritage.

While the mandate of the design centre has now been broadened, one key area for Renault Design India remains talent. According to Lecharpy, ‘We have to track the best talent’, he said. Lecharpy said that Renault Design has looked at the premier institutes such as the National Institute of Design and the IITs but is now keen to its dragnet further.


Source : automonitor.co.in (8/19/2007)

NHRA (CLERMONT) - NHRA Xplod Sport Compact Series Sets Records At Orp  
The inaugural Indy NHRA Sport Compact Nationals presented by BP, thrilled the fans in attendance at O’Reilly Raceway Park at Indianapolis with jaw dropping qualifying in all Pro Classes.

The top qualifiers for the event are, Marty Ladwig (Pro FWD), Kenny Tran (Hot Rod), Lesile Armendariz (Honda Tuning Magazine All Motor) Brent Rau (Modified) and Brad Personett (Pro RWD).

Ladwig and his team set a new national elapsed time record on the way to his top qualifying spot in the final session when he laid down a pass of 7.261 seconds at 199.82. He backed it up the run previous with a pass of 7.382 seconds. This is the second No.1 qualifying position in 2007 for Ladwig helps tighten an all ready heated points battle.

“In our class the competition has really stepped up and everybody is running really close. It used to be a couple of seconds from number one to bottom qualifier, now it is pretty tight,” stated Ladwig following his final pass. “For us the point’s race is really tight and I’m only five points behind in second place and every point in qualifying really counts”

Tran held onto the top qualifying position from first round on when he dipped into the seven second range for the first time in his five year career. He ran a 7.951 second pass at 182.58 seconds for his second No.1 qualifying position of the season.

“We’ve had this car for over a year now and to get it down into the seven’s here at Indy is pretty good for us,” said Tran. “I was expecting to run low 8’s but I didn’t think we were going to break into the seven’s and it’s been a long time for us to get the car dialed down into the seven’s.”

Armendariz nabbed her second top qualifier position of the season following her last top starting position at the Moroso Motorsports Park at the start of the season. She ran a 9.448 second pass at 142.64 mph in her 2006 Scion tC.

“The Royal Purple, AEM car did really good. We’ve been having some problems off and on all year but hopefully we have got it figured out,” said Armendariz following qualifying. “Hopefully we get some points, and catch up. I’d like to still go for the championship. I’m stoked out because Vance and Hines is out here, ERL is out here and it is an honor to be out here at Indy.”

In the Modified class Rau only got his 99 Eclipse down the track once during the three rounds of qualifying but that was still good enough to place him top of the pack. He posted a pass of 7.186 seconds at 192.08 mph.

“We had some mechanical issued and we tried to run the third run but the fuel pumps wouldn’t turn on,” stated Rau. “I’ve been to five NHRA races this year and have qualified No. 1 all five times. There have been six races but I had to miss one for personal matters and I’m pretty proud of my qualifying. I would have liked to gotten another lap today but that is how it is.”

Personett took his Titan Motorsports 2007 Scion tC to the top spot during the first round of qualifying with a blistering pass of 6.726 seconds at 206.39 mph. This is the fifth time for him to go into Sunday atop the leader board.

“Not bad since we’ve had a tough couple of weeks and been kicked in the face with small problems and crashing a car at one event,” he said. “We had a different set up and had it on easy and cruised but we are confident going into tomorrow. We will just try to go from A to B and go from there.”


Source : http://www.theautochannel.com (8/19/2007)

NHRA (Reading) - Ashley Falls Short...  
Disappointment and aggravation are just two of the words Funny Car driver Mike Ashley used to describe his feelings about not qualifying for the Toyo Tires NHRA Nationals this weekend - ³the other words are best left unprinted,² Ashley said. Today's qualifying runs were tire-smoking lessons futility for the driver of the Torco Race Fuels Dodge Charger R/T, both ending just after the 100-foot mark, and ending Ashley's chances at keeping his No. 3 spot in the POWERade standings. At the best, he'll be fifth after this race, worst case, seventh.

"It's a bitter pill to swallow, to be sure," the 42-year-old mortgage banker said. "You can have all the confidence in the world, the very best team, the best parts money can buy, and, sometimes, it just doesn't work out.

"In times like this, I have to take a step back and look at the big picture, and, from that perspective, things do really look good. We've had an incredible season and we're going to head into the Countdown playoffs ready," Ashley said.

Looking at the numbers for the first-year Funny Car team owner, the statistics back up his position. In competition with multi-car teams that have been at the Funny Car game for years, this fledgling group has amassed a spectacular record in the first seventeen races. Two wins, three final round appearances, five No. 1 qualifiers, five times low ET, six track speed records, and eight times top speed. In addition, he's twice earned the Motel 6 Who got the Light award, twice recorded the quickest ET for the class, and three times his Gotham City Racing crew has received the Full Throttle Pit Crew Challenge award.

"The way I look at it, we made the playoffs in our first year out, and we're ready for the next part to begin. We're going to go to Indy to test, and I guarantee we'll be ready for the US Nationals. We won't have any of these issues dogging us - we'll stay and test 'till it's all clockwork.

"My team, my guys, my friends - they are all just as disappointed as I am, and I know that after they get a chance to breathe a little, they will be on top of things to get us through the next steps of the playoffs. I have every intention of going into Indy and winning the SKOAL Showdown, and doubling up by winning the race. We can do it. I know it," Ashley said.

"For now, I'm going to enjoy the first Sunday I've had off in nine weeks on the beach at Fire Island (New York). With things as hectic as they have been in the mortgage industry and with such a tough racing schedule, I'm completely exhausted and need to just catch up on some alone-time with my family. That's my ultimate priority," he said.

"I believe that when one door closes another one opens. As the door closes on the regular season for our brand new team, it opens on the Countdown. Behind that door will be success, because this is a team committed to that result.

"I have the best sponsor in all of motor sports, Torco Race Fuels, and its leader, Evan Knoll, is a life champion. We are committed to bringing him a championship, because he deserves it," Ashley said.


Source : http://www.theautochannel.com (8/19/2007)

NHRA (Maple Grove) - Coughlin Jr. Takes Full Advantage....  
An overnight cool front made Maple Grove Raceway a much more agreeable place Saturday and three-time POWERade champion Jeg Coughlin Jr. took full advantage of the improved conditions. The 50-time national event winner knocked more than a tenth of a second off his previous best time, climbing up to fourth place with a strong 6.610-second run at 208.62 mph in his JEGS.com Chevrolet Cobalt. "That was a huge run," Coughlin said. "It was one of those typical early-morning sessions that we all knew before the first car went down the track that it was going to be much quicker. "It gets a little nerve-wracking as you're waiting your turn because you hear what the guys in front of you are running and you know you have to step it up if you want to stay in the show, but both sides of this Victor Cagnazzi race team answered the call and were able to get both me and my teammate Dave Connolly up near the top of the ladder." A full night's sleep also helped Coughlin improve his overall health as the 37-year-old from Delaware, Ohio, continues to recover from sinusitis. "Another day of antibiotics and plenty of rest sure helped," Coughlin said. "I went into the hospital in the middle of the night Thursday and they gave me a shot to facilitate the healing process. I think that helped as well. I feel a bunch better." Coughlin will open eliminations against Kurt Johnson, who qualified 13th with a 6.609 at 209.79 mph. The two men have faced each other four times this year with Jeg holding a 3-1 record. Eliminations begin around noon EDT and will be carried in same-day tape delay on ESPN2.


Source : http://www.theautochannel.com (8/19/2007)

GRAND AM - Wittmer Brothers Power Past Competition  
Nick Wittmer showed his strength on the circuit at Trois-Rivieres in qualifying in the morning and was joined in the afternoon by his brother Kuno Wittmer to complete a dominating day at the Grand Prix of Trois-Rivieres with a near flag-to-flag win in Saturday’s Grand-Am KONI Challenge race in the No. 31 i-MOTO Racing Acura TSX.

“The hometown crowd here is awesome as usual,” said Nick Wittmer who joins his brother in being natives of nearby Hudson, Quebec. “I have raced here three times and have managed to pull a hat trick. I have loved it here from the moment I stepped on the track in 2004. It was awesome to have the opportunity to bring home a win while driving with my brother.”

Taking the lead from the start after qualifying on the pole nearly a second faster than the competition, Nick Wittmer set the tone for the team’s performance at the drop of the green flag. He quickly opened up to a five second lead in the race’s first lap and both brothers later led by nearly 30 seconds at times throughout the race. They lost the lead only briefly during scheduled pit stops and led all but four of the race’s 93 laps. The winners crossed the finish line 28.446 seconds ahead of the No. 76 Kensai Racing Acura TSX of Billy Johnson and Karl Thomson. Third place went to the No. 95 Turner Motorsport BMW 330i of Adam Burrows and Trevor Hopwood.

“Where else is better to be than here at Trois-Rivieres, the crowd is great and so is the track,” Kuno Wittmer said. “Hats off to my brother, he led almost an hour and a half, and really showed his performance and gave me a great car to bring home for a win. With nine or 10 laps to go we had a 30 second lead so I slowed down three seconds a lap. The car was really handling well and the braking with the Cobalt Friction Brakes worked well all the way to the end.”

Johnson was one of only three cars to lead today’s race and was up front for three laps before giving the lead back to Nick Wittmer during a pit stop in Lap 70. Towards the end of the race, however, the No. 76 entry began to slow with brake wear and Johnson nursed the car home which extended the winner’s margin of victory.

“We decided to try a slightly different pit strategy to get Billy out in some clean air, which we knew was very important,” said Thomson, who handed the Acura over to Johnson on lap three. “The Kensai car was put together really well and it was just a matter of managing the brakes until the end, and Billy did a great job with that especially in the last three laps.”

After qualifying in 13th position, Thomson gained three spots before pitting and the strategy proved to be successful. Johnson picked off each competitor on his way to the lead, and was running in third behind the sister No. 75 Kensai Racing Acura TSX of Benoit Theetge and Beau Buisson late in the race. On the 78th lap, Buisson lost a wheel at Turn 8, ending the day for the No. 75 entry and handing second position over to Johnson.

“We were trying to keep the car in one piece and at the same time keep the No. 95 BMW behind us for championship points,” Johnson said. “We really wanted a yellow to bunch everyone back up and be able to push for a win, but we didn’t get one. The team did a great job and we will look forward to the next race at Miller Motorsports Park.”

The No. 75 Acura’s wheel failure also allowed Hopwood to podium in the Turner BMW. Hopwood and Burrows are currently leading the driver championship in the ST class and are no strangers to the podium, but the duo are still searching for their first win this season.

“We were obviously hoping to grow our lead here this weekend, but after how this race started for us we’re happy to at least hold onto the top spot,” said Hopwood. “I think we might have been too conservative at the end, we probably would have had something for them at the end but that’s racing. I have to thank Turner for giving us a great car. We knew this was going to be a bit of a survival race and it was great how the Stoptech brakes held up for us all the way to the end.”


Source : http://www.theautochannel.com (8/19/2007)

REVA’s hi-tech offering  
As part of its endeavours to provide eco-friendly and intelligent solutions for city mobility, the REVA Electric Car Company (RECC), has launched the advanced REVA car, the REVAi. This offering launched last week comes with several technological advancements and features that are aimed atbenefittingboth the consumer and the environment.

Key to this technology is the AC drivetrain.This advancement in technology will give customers a greater driving experience, increased speed, range and acceleration.The REVAi also comes with improved aesthetics and interiors aimed at enhancing the customer’s experience.

Deputy Chairman & CTO, RECC, Chetan Mainisaid “The REVAi has state of the art technology, making it the most advanced electric car in the global market today. The enhanced technology incorporated in the new REVAi and the new features will significantly benefit both the consumers and the environment. We have ensured that the REVAi delivers a greater driving experience as well as meets the needs of city driving for our consumers in India and internationally.” The REVAi starts at Rs. 3.49 lakhs.

European presence

On other fronts, the RECC also announced the marketing and sales operations in key European markets- Norway and Spain after its presence at this year’s Barcelona Auto Show. REVA electric cars are now available in India, UK, Spain, Norway, Cyprus, Malta and Greece.

Maini said “The REVA today is truly a global vehicle. It is building its presence across Europe and is gaining popularity among consumers. With the addition of two new markets Norway and Spain, we aim to further our reach in Europe and the rest of the world. We will continue to deliver intelligent solutions for city mobility to consumers around the globe.”

The improved motor in the REVAi comes with a 40 percent increase in mid-range torque, this results in better acceleration and climbing and also has a ”Boost” mode for short-term acceleration/power. The maintenance-free brushless motor provides a smoother, quieter operation and would deliver greater efficiency and thus benefit the environment significantly. In addition, the unique “hill restraint” will help drivers.

Other features include, improved braking by using advanced regenerative braking and disc brakes, an anti-roll bar for better handling and an advanced IPC (Instrument Panel Cluster) with an electronic speedometer, a trip odometer and an automatic computer-controlled indicator for power consumption and regeneration.

The new REVAi’s technology is now compatible with battery technologies of the future, thereby making it upgradeable. The REVAi also comes with options such as a CD/ MP3 player, Climate Controlled Seats, Leather Seats, and environment friendly, colour impregnated panels that are scratch and dent proof.

The REVAi is a two-door hatch back that can seat two adults and two children. Based in Bangalore, India, was started in 1994 as a joint venture between the Maini Group, and AEV LLC, California, US. Seven years of R&D earned RECC recognition in the form of 10 patents and a globally accepted product.

The existing model of the EEC-certified REVA is currently available in India and marketed in UK Norway, Spain, Malta, Sri Lanka, Cyprus and Greece. With over 2000 vehicles on the road, REVA is also being test marketed in Japan and other European countries.


Source : automonitor.co.in (8/19/2007)

Federal Mogul Corporation likely to relocate facilities in India, introduce new products  
US-based Federal Mogul, which acquired a majority stake in Goetze India last year and renamed it Federal Mogul Goetze India (FMGI), is in the process of major reorganisation of the Indian outfit.

This exercise is aimed at capitalizing on the huge potential of the domestic automotive market as well as shift production of certain product lines to India.

Top company official said the company is working out on expansion of existing facilities and are planning to undertake greenfield expansion in order to cater to not only the growing domestic demand but also cater to the requirements of the US-based parent as its low-cost production hub.

The priority, in terms of investment and resource allocation, for Federal Mogul Goetze India would be to address local demand, which is expected to be huge given the technology changes expected for meeting the upcoming emission regulations in India. The Euro 4 emission norms are expected to kick in from 2010 and for the company, this a major growth driver.

The key issues facing the Indian operations is how to best allocate available resources for addressing the growing domestic market while also acquiring quality validations and skill sets to aspire as a sourcing base for Federal Mogul globally.

Though US major intends to relocate some of its facilities from high-cost locations in Europe and the US to lower cost manufacturing bases like India, it is likely to be done in a gradual manner focusing on local market realties as well. Thus decision of relocating major facilities to India for Federal Mogul Corporation has been much slower than anticipated by industry watchers.

Top officials have point out, on the condition of anonymity, that in order to meet the euro four emission norms, passenger cars and commercial vehicle manufacturers will have to undertake a major technology upgradation for pistons and piston rings currently used in the diesel engines. Pistons that are likely to be used for a euro four compliant engine are required to withstand dramatically high peak pressures as compared to what they are currently subjected in euro 2 or 3 compliant engines.

Gallery-cooled technology

Pistons currently available in the Indian market are not suitable under such condition and automobile manufacturers will have to look at ‘Gallery Cooled’ piston technology meant for diesel engines to overcome this hurdle. OEMs would also have to adopt diamond or ceramic chrome based coating on the piston rings.

FMGI is already in talks with Indian manufacturers to make this technology available in India and said it has already bagged significant ‘proportion’ of the new orders for pistons in the domestic market. It is also empanelled to be a single source supplier for the pistons and rings to the Rs one lakh’ car project of Tata Motors. Petrol engines also require changes on the design rather than technology for meeting the higher emission standards.

Though initial cost of adopting this technology may be high for the end-consumer, they will eventually benefit as the engine will be more fuel efficient with higher reliability and power on the same or even lower sized engine. This would imply that the cost of owning a diesel car could much lower than a petrol-powered vehicle given the better fuel efficiency coupled with low price per unit of diesel in the country.

The key pistons manufacturers in India include Federal-Mogul Goetze (India), Shriram Pistons and Rings, Samkrg Piston and Rings and India Pistons. These companies together with IP Rings and Perfect Circle constitute a significant portion of the organised market for piston and piston parts in India.

On other fronts, FMGI, which is the market leader in pistons and parts in terms of installed capacity, is also working on three major projects that have to do with three different auto components for the domestic market. These products also have potential for exports. These projects are likely to be implemented through joint ventures with local or global partners or through separate entities distinct from FMGI. Federal Mogul Corporation intends to introduce its range of engine bearings, gaskets and oil seals and non-asbestos friction pads in the Indian market. It is also evaluating market potential for introducing other auto components including head lamps, wiper systems, heat shields and special wiring protection components in addition to other body parts from its global product portfolio in the Indian market.

The company officials point out that the competition in engine bearings, gaskets and friction pads would be limiteddue to technology upgradation driven by euro four emission norms but international players equipped with emission-compliant technologies are already firming up their plans for the Indian market in these three product categories and could eventually compete in the same space as FMGI.

Pistons and piston parts are important components of an engine and original equipment manufacturers demand qualifying criteria before selecting a supplier to meet their requirements. This coupled with the fact that the manufacturing of these components is very capital intensive and requires high technical know-how has left the business of supply to original equipment manufacturers concentrated with a few players. Most of the Indian companies are getting into joint ventures for technology transfer with global component suppliers, to be able to meet the needs of OEMs. The top four companies together have an installed capacity to manufacture 272 lakh units of pistons and top six companies have an installed capacity to manufacture 1,533 lakh units of piston rings.

‘Champion’ brand

Federal Mogul, meanwhile is promoting its ‘Champion’ branded spark plugs which is manufactured and marketed through a separate subsidiary of Federal Mogul Corporation. established in mid-1990s christened Federal Mogul India. It is planning to introduce glow plugs, to start the diesel engines in cold conditions, in India. These are likely to be manufactured at its existing spark plugs facility at Bhiwadi, Rajasthan.

FMGI has an additional plant in Bhiwadi for manufacturing sintered parts like valve seats and guides. It also has two additional facilities for manufacturing pistons and rings at Patiala and Bangalore. The company is looking to double its capacity of pistons and rings from around 12 million units manufactured currently over the next couple of years.

FMBI evolution

FMGI was originally incorporated as Goetze (India) in 1954 by HP Nanda. It entered into a technical and financial collaboration with Goetzewerke Friedrich AG (Goetze Werke) and in due course, Goetze-Werke and Escorts became the majority shareholders. Goetze Werke was succeeded by Goetze AG, which was transformed from a stock corporation into Goetze GmbH, a limited liability company in1993, following its acquisition by Ferodo Beral GmbH, a subsidiary of T&N Plc.

In 1994, Goetze GmbH changed its name to Goetze Vermogensverwaltungs GmbH. Subsequent to Federal-Mogul acquiring T&N Plc in 1998, Goetze Vermogensverwal tungs GmbH changed its name to Federal-Mogul Vermogensverwaltungs GmbH.

Meanwhile on the local front, JIPL acquired the shareholding of Escorts in the company in 2003 and subsequently FMG, Nanda family and JIPL became the key promoters. In 2006, Federal Mogul Holdings acquired most of the shareholding of JIPL in the company. Currently the company is controlled by the Federal -Mogul Corporation through two of its entities Federal Mogul Vermogensverwaltungs GmbH and Federal Mogul Holdings.


Source : automonitor.co.in (8/19/2007)

Technology  
The performance of a petrol engine, the high torque and fuel economy of a state-of-the-art diesel together with extremely clean emissions: Mercedes-Benz has combined all the advantages of both engine types in its DiesOtto powertrain.

The new technology package, which stands for the future of the petrol engine, includes features such as direct gasoline injection, turbocharging and a variable compression. At the core of this innovation lies the controlled auto ignition, a highly efficient combustion process similar to that of a diesel. By way of another advantage, and in contrast to comparable developments, the Mercedes system requires no synthetic fuels but can be operated using conventional petrol.

Optimising the internal combustion engine is one of the milestones on the Mercedes-Benz roadmap for sustainable mobility. BLUETEC has already made it possible for Mercedes engineers to make the powerful and economical diesel as clean as the gasoline engine. In the US this technology has already been available in the E-Class since 2006, and it will also become available in Europe from the end of this year. The E 300 BLUETEC will be by far the cleanest diesel in its class, and will meet the requirements of the EU5 exhaust emission standards in full.

“Our next goal will now be to make the gasoline engine as economical as a diesel. All the preconditions for this are provided by our DiesOtto concept, which incorporates the foremost strengths of both the gasoline engine and diesel engine,” said Prof. Dr. Herbert Kohler, Head of Group Research & Advanced Engineering Vehicle and Powertrain; Chief Environmental Officer of DaimlerChrysler.

Compact power unit

The result of this “ marriage “ is a four-cylinder unit with a displacement of just 1.8 litres, which combines the strengths of the low-emission petrol engine with the fuel economy of a diesel. Despite its considerably reduced displacement – downsizing is one of the major factors for achieving a lower fuel consumption – this compact power unit delivers superior performance together with refinement at the level of the luxury class. An output of 175 kW/238 hp and a maximum torque of 400 Nm are achieved together with the hybridisation a fuel consumption of less than six litres of petrol per 100 kilometres. This figure by no means relates to a small or compact car, but to a vehicle the size of the current S-Class, with the level of comfort and safety that is typical of a Mercedes.

“ In line with the worldwide success of today’s diesel engine, vehicles equipped with gasoline engines will continue to have a long-term attraction for many customers and in many markets. Accordingly we are giving our attention to both engine types – including a full hybrid option for diesel and gasoline vehicles, “ said Prof. Kohler. Mercedes-Benz is working on its DiesOtto concept with corresponding emphasis. Its key technological features are as follows:

·Downsizing with fewer cylinders and a smaller displacement

·Turbocharging for superior performance

·Direct gasoline injection as a further fuel economy measure

·Controlled auto ignition, a combustion process similar to that of a diesel

·Variable valve control

·A variable compression ratio leading to even better fuel economy and, depending on customer needs and the type of operation,

·A hybrid module with an integrated starter/generator, which makes the drive unit even more economical.

· When starting and under full load, the fuel/air mixture is ignited by a spark plug, as in a conventional spark-ignition engine (homogeneous combustion). The controlled auto ignition to which the DiesOtto automatically reverts within its working cycle occurs under partial load conditions, i.e. at low and medium engine speeds.

The result is the very low nitrogen oxide emissions of homogeneous combustion at reduced reaction temperatures. All further emissions control in the DiesOtto engine is by means of a standard three-way catalytic converter. A highly efficient engine management and control system has also been realised to combine the individual sub-systems into a drive concept.

The current prospects for the future of the internal combustion engine reveal its great potential, and show that the new drive concept is a feasible proposition in the mid-term. Some of the intermediate solutions incorporated, e.g. direct petrol injection, are already in series production at Mercedes-Benz. Others will be gradually integrated into series-production engines until the overall solution has been realised.


Source : automonitor.co.in (8/19/2007)

Speaking with Mrityunjaya Singh  
Volvo Construction Equipment (CE) began its India innings in 1998. In nearly a decade of its existence, it has been able to make inroads in sectors like mining, irrigation and other infrastructure projects. Recently, thanks to the worldwide acquisition by its parent company of Ingersoll-Rand’s road construction machinery assets, this business is now a part of Volvo CE India’s portfolio.

Mrityunjaya Singh, Head-India Hub, Volvo CE speaks about the evolution of the business in India, the challenges ahead and what the acquisition of Ingersoll-Rand’s road construction machinery assets mean to his company.

What does the recent acquisition of Ingersoll-Rand’s road construction assets mean to Volvo CE?

Let me start by giving you some background. Road machinery equipment comes much before the road is actually built. What we had earlier was generic Volvo construction equipments, which include excavators, articulated haulers and motograders that would be used for the sub-base of the road. With this, we worked on quarries, material handling sites, sand mines, etc, which provide the ingredients that go into the making of the road.

Then there was a gap, and above that came our trucks and buses. What we were missing between the vehicles and the sub-grade was all these layers, which is precision laying of soil, using rollers, and paving the asphalt mix, etc. We now have the total road solution as the missing link has been found — from the digging process to build a new road right up to the means of transportation that plies on the road.

From a Volvo CE perspective, this is the next big thing. Look at the BRIC nations, where big infrastructure projects are underway. You will find that infrastructure is the key challenge and how you go about building projects. Roads are important for all these developments.Globally, Volvo has been keen to be in this sector and to acquire it, as there was no need to re-invent the wheel. So, Ingersoll-Rand’s road business was acquired at a value that is good not only of the asset, but also the brand.

In India, we typically approach road construction contractors with what we have; now we can go to the road contractor and ask him to tell us what he wants. We can now package our product solutions and this can include 80 percent of his requirement. We are now able to give the customer the full solution, a single-window opportunity. We can give him a full service solution in the field and he can negotiate with us.

As far as other aspects go, our dealerships are another area that we can leverage. We had nine private dealerships with 53 service outlets and 28 sales outlets countrywide. We operate in the hard hinterland, out in the jungle, where one works in tough circumstances.

As far as the road construction machinery market is concerned, Ingersoll-Rand had a 35-40 percent share and were selling products at 10-15 percent premium over the next best producer, which was probably an Indian one. Most had JVs or were into company-wide selling. For us, this acquisition gives us a product that is conceived at the top of the quality line, and now we can package our products better. We operate in the premium range, have great support and quality, but low in market share as we came in 1998 or so. We came in when things were already set. Our success in buses, for example, has helped us in terms of visibility and has helped us open doors.

We are now aligning a premium product with another premium product. We hope to end up with a market share of 13 percent or so in this year. Road construction, I estimate in terms of units would be in the 2000 units range or so for products as far as Ingersoll-Rand is concerned in road compactors, paves.

Globally, we have pushed up to three from No 5 in terms of size. In India we are at No 5 or No 6. The synergy is now that we have access to the 40 percent market share that they have. From importers and resellers, we have the manufacturing facility near Bangalore. What is great is that it is a multi-product plant that has multi-skilling ability that makes road machinery, air compressors, mining drills, light towers, etc. We have the opportunity to see what we can localise for this country.

How did it all begin for Volvo CE?

When you enter into a country, and we began here in 1998, one tries to pick and choose what sectors and applications we wish to operate in. So we started right at the top with customers like the Dempos and Sesas in Goa, who are in the A or A plus category, and who will not look at the price but at the value that it brings.

Over the years, we have found a niche for ourselves in the construction equipment industry. When one thinks about Volvo, the things that come to mind are quality and support. When we started here, we had good products. So we did demos, and kept building our customers. It took some time before we had about six dealers. But we went about it piece-by-piece. We realised that we can take over a large dealership but what would be difficult is to make them unlearn their older way of doing business.

As you probably know, we came through into Goa and now you find us at several locations in Tuticorin in Tamil Nadu, Subansiri in Arunachal Pradesh and the Terai region. Some machines are now in Jammu & Kashmir, the Makrana marble areas, on the Gujarat-Pakistan border, where we are into lignite mining, etc.

What issues did you face when you went about setting up dealers?

As far as dealers go, there were the family-run organisations, where the decisions are on price, not quality. All this has now changed and we found it better to get professionals into the dealership. So we started with mining, a sector on which we rely on even today.

By 2004, we stepped on the gas; our volumes went up. When you consolidate yourself, customers come to you. The dealers have the right levels of competence to be able to provide the support, even in the deep jungles. We started with the first two machines sold in Goa, and this year we should have a 1000. Currently, 75 percent of our business comes from excavators, then another 20 percent or so is divided between wheel loaders and motograders. The rest is accounted for by off-highway trucks and other compact equipments.

How has the process of road building changed in India?

It has surely changed in the last decade or so. Back then, there were no quality specs and even if there were, it was difficult to implement them.Between 1992 and 1997, there was only planning of sorts going on. But implementation is important. Policy makers decided to go outside the country to see what was happening.

Projects then were machine-specified, so to say. Then there was a movement to method-specification in which you put out what kind of road you wanted. After this, they would consider what should be done.

So generic machines that are cheap would be sourced locally but the expensive ones that had to be imported were given duty sops. Then one brought in someone to monitor the project - international consultants like Louis Berger - hired at high costs. So the road quality began changing as they ensured that roads were built as per specs in the tender and built in time. So if a road was laid wrong, they would tell them to lay it again. When money was a problem, the World Bank, the Asian Development Bank etc, pitched in. Then you had the rural roads programme and the cess that was levied on fuels. Then came tolls, reverse bidding and annuities etc.

So what are your priorities now?

For one, integrating Ingersoll-Rand’s road machinery business with Volvo CE, which has happened. Worldwide, Volvo CE has always grown inorganically. Names like Michigan, Champion and many small players are all a part of Volvo CE. So, integration is a process that I believe we are well versed in. The synergies are going to be strong.

Another area is the integration of dealers, cost competence development, as we want everyone out in the field to portray a Volvo product. We have taken over Ingersoll-Rand’s dealerships — 15 — and spread all over the country. We have nine, and they have 15, so the opportunities are immense. We will, so to say, rationalise the dealer network and aim to have greater representation in the field. We are open to the idea of investing in the dealers if this is the need.

What are growth areas in this business?

Road construction and mining are jostling for the top spot. This is a growth driver from a project point of view. Mining is going very strong because of the privatisation efforts that stated a long time before. This is privately operated but publicly owned business. The Andhra Pradesh river inter-linking project, the multi-purpose projects that includes power and an area that is coming up is urban development, are important. Then there is also the Special Economic Zones (SEZs), sewage, bridge building and what have you. So where you have to move equipment or dig, that’s where construction equipment comes into play in many forms.

How important is the branding exercise?

We have certainly been helped by the fact that people see Volvo buses and trucks ply on our roads. The media has conveyed that the brand is important. In this line of business, a lot has to be done through word-of-mouth, through customer interactions. The brand education we do through our dealers is an important activity for us. With our dealers, we have said they should convey the look and feel of Volvo. People training is important; how they behave with buyers, etc.

The community we address is small – 25,000 units — in terms of machine numbers and so it is easy, in a sense to focus and address. So road shows, customer meets work well for us. Both sides are media shy — customers and manufacturers. Of late, a spurt in the exhibitions has helped us. We have shows every month, held on a regional basis. Kolkata and Bangalore are key hubs but now Pune, Coimbatore, Guwahati, Kochi are where the action has begun.

What about financing activities of the construction equipment business?

There are two types of financing – for dealers and customers. Earlier, the customer bought products for a project and if he were late, there would be a penalty to pay and if he is on time, there is a bonus to be earned. The customer wants to know what the cost per tonne km is of doing an operation. We offer a solution — product and product support.

We have a robust finance model as compared to China. Redundancies are low in India and with recoveries being strong, we have both local and MNC banks operating in this space. We partner with finance companies, do road shows or loan melas. To get into the first time buyer segment, which is price conscious, we tell them operational costs will be low; so we try and offer special rates during the monsoons, for example. We also partner with banks to help our dealers finance their stocks.

How do you see the sector panning out?

When we started in 1998, the business was for the large machines that were being used by A-class customers for large infrastructure projects. We did not touch the urban customers. We have gone down the value chain and are now looking at smaller players, many first time buyers who want to own a piece of CE and give it on rent. So machine sizes have fallen in terms of tonnage from 50 tonnes or so to 15 tonnes, and with the acquisition that we have made, we go right down the value chain. So you can have the head of the gram panchayat buying an Ingersoll-Rand equipment that will be now branded Volvo. Some equipment like a wheel loader, for example, can cost about Rs 30 lakh for the smallest size, or a compactor can cost 12 lakh for use in the rural roads programme. In the non-orthodox business, the rental one, for example, this is very fragmented and these really operate from small offices, little professionalism, NPAs, etc, but this market is growing. We believe there will be consolidation. We have a branded rental outfit that works on a consultative basisglobally and we can tap that knowledge whenever we want. That is an interesting area for us going forward. Overall, bankable projects are important for us. In this business we face the risks of political uncertainty. Changes in government impact us as it did in 2004, when our road business dipped. What has helped is the broad-banding. We are in mining, road, irrigation, etc and if one sector goes down, there’s another that helps. We grew in 2004 by 30 percent because mining went up. In 2005, irrigation grew as the AP Government spent Rs 43,000 crore on the project, which is a huge amount of money. This helps us maintain balance and rhythm.


Source : automonitor.co.in (8/19/2007)

Leyland inks JV  
Ashok Leyland, India’s second largest truck manufacturer, has formed an equal joint venture (JV) partnership with Finland-based Alteams Group to manufacture auto components for the automotive and telecommunications sectors.

The joint venture will cater to growing domestic demand and also leverage India’s emergence as a hub for the manufacture of auto-components. The project, to be implemented over two phases, will involve a total investment of Rs. 335 crore and generate estimated revenues of Rs 650 crore in five-six years. The name of the new venture is yet to be decided.

New opportunities

“The JV reflects the expansion of Ashok Leyland’s presence in auto components to take advantage of rapidly growing opportunities in India and abroad,” said Managing Director, Ashok Leyland, R Seshasayee.

In the first phase, the joint venture, which will make high-pressure die-casting aluminum products, will partly meet Leyland’s requirements for components for engines and gearboxes in the world’s fifth biggest bus and truck market, and its portfolio will extend to parts for passenger cars and other non-automotive applications. The JV has also secured orders from Nokia’s manufacturing unit near Chennai.

Meanwhile, Ennore Foundries, part of the Hinduja group that owns Ashok Leyland, is in a similar line of business and Seshasayee did not directly respond to queries on whether the JV and Ennore Foundries would compete with each other.

In its second phase, the JV will expand its product portfolio and start exporting to other parts of Asia. Alteams Group already has five manufacturing facilities in the world, including one in China. The company will build a bus assembly unit in the UAE and is all setting up a unit at Uttarakhand.


Source : automonitor.co.in (8/19/2007)

Vivek Chand Sehgal, Chairman, Motherson Sumi Group  
What started as a single product company with wiring harness in 1983, today has transformed itself into a business conglomerate with a turnover in excess of Rs 1700 crore.

On back of healthy growth in most of the segments coupled with business generated from acquisitions, Motherson Sumi Systems (MSSL) today strives to be a billion dollar company by 2010. Wiring harness still contributes to over 64 percent of company’s turnover.

With more than 20 joint ventures in its fold for different product categories Noida-based manufacturer, which is often quoted as a JV specialist offers components from bumper to bumper to several car manufacturers in India and globally.

Auto Monitor spoke with Chairman, Motherson Sumi Group, Vivek Chaand Sehgal to get an insight into how a joint venture works, challenges and opportunities associated with the same and host of other issues