29th May 2012 Release

As the key knowledge partner for India Commercial Vehicle Summit 2012, held in Westin, Pune on May 17th & 18th, BMGI mapped the current trends and envisioned the future for the Indian Commercial Vehicle ecosystem. The event was organized by Shanghai based Lnoppen who facilitates business through events and market research across Asia & Europe. The event comprised thought leaders from across the world from the commercial vehicle industry with senior management representations from OEMs, Tier 1 & Tier 2 suppliers that included Ashok Leyland, JAC Motors, Mahindra Navistar, Daimler India Commercial Vehicles, John Deere, Delphi Diesel Vehicles, Volvo-Eicher Commercial Vehicles to name a few.

In a succinct presentation, the Chairman for the event Mr Naresh Raisinghani, CEO and Executive Director, BMGI India, outlined three key shifts in the times to come for the Commercial Vehicle Industry.

The first shift, Naresh noted was how India and China as a global sourcing and consumption hub stand to reclaim glory of their past as significant contributors to the world GDP. Where the two countries accounted for over 50% of the GDP ratio 500 years ago, they are expected to reach over 40% in another three decades, he elucidated. Pointing to the strong correlation between GDP & the Logistics industry, Mr Raisinghani shared that commercial vehicles are expected to grow rapidly at a CAGR of 11-15% in the next 5 years with LCVs having a faster growth rate. The total auto ancillary base in India is expected to reach 110-120 billion USD by 2020, the chairman for the event added.

Explaining the second shift, Mr Raisinghani cautioned to guard against potential disruptions in CV industry towards high performance, highly flexible, ideally near-nil emissions and lowest total cost of ownership for the future vehicles. Naresh built scenarios based on viable cost, higher digital content and infrastructure availability in a few decades, a hydrogen or a solar powered truck would displace its diesel or near futuristic hybrid/electrical powered counterparts; the trucks would increase their digital intelligence; GPS / RFID diagnostic friendly trucks would be replaced by technology assisted safe driving trucks which is the need of the hour in low infrastructure countries. He advised that the industry should watch out for game changing disruptions which could impact the CV landscape, particularly improvement in rail infrastructure or low cost air transport which could impact long haul material movement segment; or likewise high speed and life-like videoconferencing could impact the passenger bus segment. The third shift, Mr Raisinghani envisaged is lower and lower inventories throughout the supply chains and less than 100ppm defectives in the supplies which would be possible through implementing in the true spirit of world class practices such as Lean and Six Sigma across the auto value chain instead of current practices of near warehousing closer to OEMs or up-tier facilities and achieving similar ppm levels by inspection.

Corroborating the shifts, Mr Nitin Seth, Executive Director LCV, Ashok Leyland projected the change in the commercial vehicle market scenario in India. Nitin, in his comprehensive talk started with identifying the change in customer focus in India today and how India is attracting global players. Mr Seth not only reminded the delegates that the CV market was expected to grow, but also shared that the growth drivers pointed to a change in the segment mix between the LCV & the HCV. Thanks to the ban on the entry of heavy vehicles in many cities, the need for last mile connectivity to feed the spokes (of the hub & spoke model) will continue to feed the growth of the LCVs in India, Nitin added. Before mapping the future for the industry, Mr Seth charted the challenges the industry currently faces apart from going green viz., new expectations by the customer like: ready to use solutions, car like interiors, increased service levels and the need to use technology. Mr Seth signed off saying balanced local & global Leadership, India-located product development and leveraging of Indian supplier capabilities in the supply chain leading to frugal engineering will lead to success in the emerging CV market.

The intensifying competition came to the fore with JAC Motors, the second largest Chinese light truck brand and the country's highest exporter, revealing its plan to enter the Indian Commercial Vehicle market. Mr Robert Zhang, Leader - Medium Commercial Vehicle Department, JAC Motors, shared the product portfolio for the India market with the five-level R&D system and the goals for the India market that includes being one of the top five LCV brands in India. Mr Zhang spoke about JAC's search for an Indian partner to start a JV business and a CKD (Completely Knocked Down) operation with some localized parts to start with.

If in 1873, trams could be conceptualized and operated with an external power source, can the same concept be adopted to commercial vehicles as well "What are the challenges to bring to reality the disruptions of hydrogen or solar powered truck as envisioned earlier by Mr Raisinghani" Mr Akshay Sangwan, Head Corporate Strategy & Marketing, International Cars & Motors Ltd., pondered in his assessment of the potential of hybridized commercial vehicles in India. With videos of pilot implementations and examples from developed countries, Mr Sangwan suggested since the Toyota Prius has already brought the concept of external charging to reality, it could be achieved with the Commercial Vehicles with a few changes. Keeping in mind the diesel fuel hike which has risen by 100% in 10 years, Akshay said the challenge was to identify how the hybrid / electrical CVs can be charged. He presented practices followed in the world for charging the vehicles which included a point to charge the bus at the bus stops. Mr Sangwan insisted that hybridization is the way to go if the commercial vehicles have to expand profitably, given the rise in fuel prices and the price paid for the emission.

Given that the hybridized vehicles were the future whereas the emission control regulations were for today, Mr Kenneth Smith, Medium Duty Systems Manager, Delphi Diesel Systems, UK spoke about the challenges brought by the new emission regulations. While Mr Smith listed down emission reduction strategies by exhaust gas after-treatment, Mr Alok Trigunayat, Head of Business, Ecocat shared the emission reduction strategies for diesel vehicles through effective flow-through filters. He asserted that if the OEMs need to make vehicles BS IV & BS V compliant, the emission reduction technology should be able to deliver near zero emissions of nitrogen oxides - a smog causing pollutant & a greenhouse gas. To meet the challenges faced today, a technology based on an optimised combination of appropriate substrate and efficient chemistry was required, Alok added. The key issues, Kenneth pointed, are increase in engine cost, the right fuel quality & cleanliness throughout the machine life.

While the current global trends focus on performance, cost, reliability and durability, what the world demands is a safe, green and connected system for a CV, which translates into zero accidents, zero emissions and seamless connectivity noted Mr Gregory D Kochendorfer, Vice President, Global Commercial Vehicles Sales, Delphi India. Mr Kochendorfer showcased various products of Delphi that meets the above demands before concluding that safe, green and connected products will drive features and functions of new Indian truck platforms.

The inside story behind developing the vehicle that won "HCV of the year" in the Apollo CV Awards this year was shared by Mr Nandkumar Khandare, VP - Engineering, Product Development from Mahindra Navistar Automotive Ltd., giving others a perspective of how the VOC (Voice of Customer) is integrated with design and delivered at an operational level consistently. Lamenting on the current designs of commercial vehicles that keep the driver, who is the end-user, out of the design process, Mr Khandare noted the complicated nature of needs, including a living space where the driver spends most of the time during his travel. The customer requirement, however complicated, needs to be managed and the key is to deliver the product which has the right balance of various needs, Nandkumar stressed. With the designers from Mahindra Navistar staying in the truck cabins to understand what the drivers go through Mr Khandare explained the methods of capturing various customer requirements. He proceeded to outline various initiatives of Mahindra Navistar like the "Gurukul" training and the service support that offers the vehicle to be back on the road in less than 48 hours. Nandkumar charted a future where the demand for quality, reliability will be higher and the importance will be given to value instead of affordability as the next generation truck owners will not only be aspiring but also tech savvy leading to co-creation of products with the right mix of technology.

For a CV player to stand apart and be a market leader with the highest market share, it should adopt a lean paradigm, insisted Mr Nirmalya Banerjee, Business Head & Senior Principal Consultant, BMGI. Although there is often a gap between execution & strategy, he said that linking execution with results is a critical need today. Mr Banerjee observes that in the growing Indian CV Industry, there is a need for higher power vehicles driving competition to raise the bar that requires organizations to invest towards capitalizing the growth potential. Nirmalya noted that while the key paradigms of growth are new product development, new market entry, setting up new facility, joint ventures or enhancing capacity, the method of executing these will be critical. Mr Banerjee elaborated that the key differentiator is a fundamental thinking process which is lean that entails capturing the need of the product (and not VOC), identifying best solutions to design breakthrough products that lead the market, developing solutions & corresponding provisions seamlessly through lean way and taking the customer to moment of truth in zero time. He shared statistics on reduced new product development times and order fulfilment times, enhanced capacities, reduced inventories and reduced unit cost of production by adopting the above said methodologies.

Substantiating the need for imbibing true world class practices, pictured as the third key shift the CV Industry was headed to, Mr Christian Kellner, Head - Truck Operating System, India, Daimler India Commercial Vehicles showcased Daimler's Truck Operating System (TOS) and the importance of standardizing operations in the shop-floor through Daimler's journey in adopting best practices across geographies. Mr Kellner elaborated the procedure through which Daimler benchmarked some of the practices involving the people on the shop-floor - which also meant, demonstrating through mocks, the processes and practices that have not yet been transitioned into India.

Would it be possible to add capacity with zero cost? Mr Pradip Parode, Head Business Excellence, John Deere demonstrated exactly the same when he shared John Deere's journey that resulted in augmenting capacity by 15% with savings of INR 5 Crores within 6 months at zero cost. John Deere was confronted with an increase in demand by over 50%, coupled with increased customer expectations and product complexity for varying applications, Mr Parode shared. Supporting the third shift the CV Industry envisaged earlier, the head business excellence, John Deere said that the organization decided to adopt Lean methodology that incorporated other alternatives such as expansion of its facility, outsourcing, adding more resources and balancing its production line.

Pradip informed that a visionary roadmap for implementing Lean was designed with cross functional teams formed to execute the blueprint. A senior level leadership steering committee was setup to review and ensure achievement of the established roadmap. BMGI's SCORETM methodology was adopted to work on the opportunities identified for improvement. The areas that needed improvement to increase its capacity as identified by John Deere included reduction of cycle time in the Paint Shop, reduction of cycle time in Engine Machine shop, reducing stuffing time per container in logistics, improve line balancing in the transmission assembly area and reduce lead time for vehicle audit.

Utilizing the Indian intellect in bringing Engineering to India and modifying the features to suit the Indian context while preserving the quality of the product is a key step to grow in the Indian Commercial Vehicle market today, stated Mr Rajesh Mittal, Senior Vice President & Head - Operations, Volvo Eicher Commercial Vehicles. Mr Mittal recounted the Eicher days before the JV with Volvo and reiterated how joining with Volvo has provided opportunities for learning besides improved branding of the product. Rajesh spoke about implementing principles of Lean and insisted on continuous value engineering to bring out high quality products at low cost to the market through what he termed "Frugal Manufacturing".

To support the looming explosive growth of the commercial vehicle market, suppliers are gearing up their operations and developing processes to cash-in on the opportunity. Steering in this direction is Mr Mohit Oswal of Roop Automotive, one of the largest OEM suppliers of steering systems, striving to be the single source supplier to OEMs and also looking to develop their export capabilities. Mr Shrinivas Guddad, Head Marketing & Business Development, Tulsi Castings & Machining Ltd (TCML), charted plans to enter into critical Aluminium pressure die castings and grow to $ 220 Mn from the current $ 50 Mn.

While, Mr Hurssh Kalra, Managing Director, Kalra Overseas & Precision Engineering Ltd formed a joint venture with Weber Hydraulik GmbH to offer sophisticated, patented and customer-specific solutions in the field of mobile hydraulics vouches for joint ventures to bring world class products to India, Mr Sriram Sivaram, President, Madras Engineering Industries Private Limited (MEIL) believes otherwise. With 2 worldwide patents, Mr Sivaram insisted on Indian companies developing products indigenously investing in Research and Development. Working closely with IIT Madras and its researchers, Mr Sivaram spoke about MEIL Slack adjusters which have been developed indigenously, that has found wide acceptance all over the globe including Tata Motors.

Echoing the thought of indigenous development capabilities to enhance the effectiveness of the Commercial Vehicles, Mr Sadashiv Pandit, Executive Chairman, Fleetguard Filters Pvt Ltd mapped the aggressive growth plans banking on their design capabilities. By evolving the technology in selecting PTOs (Power Take-Off systems) for the CVs, Mr Suresh Williams, Director Marketing & Development, Alpha Drives shared insights on preparing for the explosive growth in truck based applications. Mr Chandan Bhattacharjee gave an overview of the plans Osram India Private Limited outlined to capitalize the growth of the Indian Commercial Vehicle industry.

In a feature rich presentation, Mr Sandeep Shetty, Technology specialist, Ansys Software detailed simulation driven product development and its significance in crashing the development time while improving the quality in designing the commercial vehicles.

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