Manufacturing India: MNCs

Posted on May 17, 2013 by indra

MNCs entered colonial India some even in late nineteenth century as traders. After independence, many got out, but some continued and set up its manufacturing plants in India. Scores of new ones have come in.

For example,in 1888 Lever Brothers introduced Sunlight soap in India. It happened just four years after Sunlight was launched in England. Today Hindustan Unilever Ltd. is a Rs. 26,000-crore company. It today produces for domestic consumption as well as for export. Its innovation of Pureit, the low cost and effective portable water filtration system can be revolutionary for preventing waterborne deceases.

In 1867, Siemens set up the first direct telegraph line connecting Calcutta and London and thereby it laid foundation of Siemens AG’s association with India.

Siemens is now one of the biggest engineering companies in India with annual revenue close to Rs 13,000 crore. Siemens started its first manufacturing in 1955, medical equipment in 1959,electric motors in 1966 and electronic equipment in 1987. Today, Siemens employ 20,000 persons in 23 factories in India competing with other European engineering company such as ABB and Schneider that entered the Indian market and also with Indian engineering companies such as Crompton Greaves and Thermax. Siemens has set up a corporate technology centre in India and earns about 15 percent of its revenues from overseas business.

Genera Electric still remains one of the world’s top engineering company with huge manufacturing in US. It has a long history of association with India. In 1902, GE built the power station at the Shivanasamudra Falls for supplying electricity to Kolar Gold Mines. GE supplies nuclear power plants, jet engines and locomotives to Indian Railways and employs around around 14,500 people with its India revenue of about 2.8 billion US Dollars, but it doesn’t manufacture any of its high tech products for which it is known in India. GE got known for its low cost health care equipment innovated and manufactured in India, and its GE Technology Centre. GE also pioneered the BPO sector in India.

Can one day GE India set up its own manufacturing facilities for locomotive engines or gas turbines in India and export to other Asian countries. Interestingly, GE has set up a wind turbine factory in Pune.

Philips Electronics was known for its radio sets and transistors in 50s and 60s. In 1995, Philips was number 3 TV maker in India. Today, it figures nowhere in competition to Samsung and LG in present digital era. However, Philips remains market leader in lighting and compete well with local brands such as Surya, Bajaj and Sylvania Laxman. Philips started making healthcare related imaging products that helped Philips to sustain its profitability.

SKF, the Swedish bearing set up its first bearings manufacturing plant to meet the needs of automotive sector in Pune in 1965.In 1989, SKF started its second plant in Bangalore in 1989.In 2008, SKF set up a Rs 250- crore customised-bearings plant in Ahmedabad. In 2009, SKF set up a global technical centre in Bangalore too.Eighty percent of its resources are now devoted to providing solutions to the global parent and the rest for domestic solutions. SKF employs today around 3,000 people and commands an almost 50 percent share in the automobile aftermarket. The presence of the manufacturing plants for companies such as SKF and TIMKEN in India is good enough indicator of the manufacturing strength of India.

Alfa Laval, the Swedish firm, entered India in 1937 and last year it completed 75 years. Alfa Laval India is one of the largest supplier of technical processing products in the biotech, brewery, distillery, food, pharma, comfort climate, energy and refrigeration, refinery, petrochemicals and wastewater applications. The company’s offer includes everything from equipment to complete solutions, which are often tailor-made to meet the specific process requirements of the Indian customer. The company has its manufacturing facilities at Pune, Satara and Sarole in India.

Finnish Nokia is well-known for its cell phones. Even though India was one of the largest market for cell phones, cell phone manufacturers were hesitant to set up a manufacturing plant in India. However, Nokia that has a number of manufacturing plants around the globe set up one of its largest factories in Chennai in India to manufacture cell phones. Nokia has recently launched the latest offering in its Asha series, in the presence of company’s global chief executive officer (CEO) Stephen Elop in New Delhi in an attempt to stay in the fierce smartphone race.

The government must discuss with all the foreign companies having manufacturing establishments in India to explore the potentials for exporting as much as possible to take care of the country’s fiscal deficit.

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Manufacturing India: PSUs

Posted on May 13, 2013 by indra

Just after independence when the big industrial houses were not ready to put its money in capital intensive manufacturing sectors, be it steel, machine tools, shipbuilding or even drugs or telephone sets, the government decided to set up PSUs in almost all the sectors. Pandit Nehru called them ‘the new temples of modern India’.

According to a study by globalisation advisory firm Zinnov, the public sector in India gives employment to 1.4 million people and 40% of PSUs operate in the manufacturing sector. “India is a hub of 225 PSUs operating across verticals, with 16 of these companies featuring in the global list of top 2,000 companies. With their growing size and dominance, PSUs have started looking at IT to address the global competition. Examples like SBI, which has done one of the largest Core Banking Solution implementation globally or BPCL which has made early investments in Big data make the segment very lucrative for the technology companies.” “India is a hub of 225 PSUs operating across verticals, with 16 of these companies featuring in the global list of top 2000 companies.

1. Bharat Dynamics Ltd:BDL was established in July 1970 under the control of Ministry of Defence with the prime objective of establishing a production base for guided missiles in India. It is now one amongst a few strategic industries of the world having the capability to produce the most advanced guided missile systems for Armed Forces.

2. Bharat Earth Movers Ltd: Bharat Earth Movers Limited is a premier ISO 9001-2000 Company in India and the second largest manufacturer of earthmoving equipment in Asia. A four- decade-old multi-locational and multi-product company, BEML has vital applications in diverse sectors of economy such as coal, mining, steel, cement, power, irrigation, construction, road building and railway. It has expanded its product range to cover high-quality hydraulics, heavy-duty diesel engines, Welding robots and undertaking of heavy fabrication jobs.

3. Bharat Heavy Electricals Limited (BHEL):BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry, Transportation, Telecommunication, Renewable Energy, etc. The wide network of BHEL’s 14 manufacturing divisions, four Power Sector regional centers, over 100 project sites, eight service centers and 18 regional offices, enables the Company to promptly serve its customers and provide them with suitable products, systems and services – efficiently and at competitive prices.

4. Heavy Engineering Corp. Ltd: HEC was established in the year 1958 as one of the largest Integrated Engineering Complex in India. It manufactures and supplies capital equipments & machineries and renders project execution required for core sector industries. It has complete manufacturing set up starting from casting & forging, fabrication, machining, assembly and testing – all at one location backed by a strong design – engineering and technology team.

5. Hindustan Aircraft Limited: HAL’s supplies / services are mainly to Indian Defence Services, Coast Guard and Border Security Force. Transport aircraft and Helicopters have also been supplied to Airlines as well as State Governments of India. The Company has also achieved a foothold in export in more than 30 countries, having demonstrated its quality and price competitiveness.

HAL had tried to be many things at the same time. In aerospace, an
integrator company assembles all components made by tier-1 companies
to make an aircraft.Tier-1 companies are those that make engines,
fuselages, wings etc. Tier-2 ones are those that make components for
engines, fuselage, etc. Tier-3 firms are those that make nuts and
bolts, the most basic of components. HAL wanted to be all of them at
the same time. In the process it ended up exposing itself and its
inefficiencies. HAL would have evolved as integrator company while
encouraging many vendors for the components.Even with a huge manufacturing facilities, HAL failed to be a major source for different types of aircrafts or for even helicopters.

India has a number of companies for meeting manufacturing requirements
of the huge railways network and defence services. But hardly few of
them have developed products and that at a scale of global
competitors. It is only because of the lack of accountability or
managerial autonomy of the units. A re-engineering of the
manufacturing facilities of railways and defence on the line of
globally competitive enterprises can boost the manufacturing sector to
a great extent.

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Manufacturing India: Machine Tools

Posted on May 7, 2013 by indra

Machine Tools are the mother machines to manufacture almost every part that goes into engineering products. It was in 1957 that I first came across these machines in the workshop of IIT, Kharagpur. The machine tools in the workshop were left out from the WWII. In 1961, I joined Hindustan Motors that one of the biggest facility manufacturing almost all the parts small and big going in cars, trucks, as well as heavy earth moving machines. And up to 1997 I remained in touch of machine tools industry and its growth in the country, as we did a number of projects at HM procuring the latest machine tools for expansion as well for the new products. That was the period when the machine tools sectors of India got matured.

India stands 12th in production and 7th in the consumption of machine tools in the world as per one of the latest survey that I know. The Indian Machine tool Industry has around 1000 units in the production of machine tools, accessories/attachments, subsystems and parts. Of these, around 20 are in the large scale sector and account for 70 percent of the turnover and the rest are in the SME sector of the industry. Approximately, 75 per cent of the Indian machine tool producers are ISO certified.

India consumes in value terms ($1.74 billion) as against China at $27 billon, Germany $5 billion and Japan $4.5 billion. India ranks 13th in terms of production in value terms at $500 million and 27th in exports. I have seen USA, Germany and then Japan at the top of the industry and its consumption and their sliding down too over the years. The production, consumption, and the exports of the machine tools are clear indicators of the engineering strength and the global position of a country and its economy to a great extent.

Five Indian Machine Tool Companies are among the top 115 Machine Tools companies of the world.

Metal Working Insiders Report published the list of top 115 Machine Tool companies across the world based on their financial results. Five Indian Machine Tool companies found place in the list.
1.According to the report, Ace Micromatic Group on basis of its revenue is the largest machine tool builder in India. The group has Ace Designers, Ace Manufacturing Systems, Micromatic Grinding, Pragati and Micromatic in their group. It produces different types of turning as well as grinding machine tools.

2.BFW placed at the 92nd position with a turnover of 60.9 million US Dollars can produce the total solution through a manufacturing system of bigger prismatic components such as cylinder block, cylinder heads, transmission case for different production capacity and varying amount of flexibility for multi-models manufacturing with CNC machining centres and special purpose machining units integrated with an automatic component transfer system.

3.HMT the public sector Machine Tool Company of India with revenue of 53.9 million US Dollars at the 99th position in the Metal Working Insiders Report. HMT produces almost all types of machine tools. It went for collaborations with a large number of machine tools companies from the West. It provides the total solutions including automatic handling of the parts from end to end as transfer machine. HMT has been the pioneer in producing a very wide range of machine tools in its huge facilities at four plants in Bangalore, Hyderabad, Kalamassery and Ajmer. In Hyderabad it produces sheet metal stamping presses. Praga, Hyderabad is also part of HMT.

4.LMW, Coimbatore with revenue of 46.8 Million US Dollars at the 103rd position in the list has CNC machining centres and turning centres in its product range.

5.Jyoti CNC Automation, Rajkot with 28.8 million US Dollars is at 110th positions. Jyoti CNC Automation Pvt. Ltd has acquired Huron Graffenstaden, a France-based high-precision CNC machine manufacturer, valued at Rs 240 crore, in an all-cash deal. Huron with revenue of 55.1 million US Dollars is shown at the 98th position in the report.

Some OEMs such as Tata Motors started building specialised machine tools for using in its manufacturing systems. As a policy, Tata Motors while procuring machine tools from western manufacturers signed an agreement to procure the design and got the right of manufacturing them. It helped them in executing the project fast and at less cost. TAL Manufacturing Solutions Ltd manufactures a wide range of machine tools for its new projects

The latest trends are for high speed machining, near-dry machining, MQL, or machining with minimum quantity lubrication. It aims at heavily reducing coolant costs while being friendlier to the environment and the workers. The absence of high pressure coolant pump saves about 50% energy. Moreover, the tool life is claimed to increase dramatically. Basic processes such as castings, forgings are more precise, almost net-shape in dimensions cutting down the roughing cuts.

As estimated the share of the domestic manufacturers in the Indian machine tool market will increase to 50% by 2016-2017, as against 35% in 2010-2011. The Indian machine tool industry currently has a direct employment of 30,000, which is estimated to double by 2016- 2017.

The major improvements to be achieved over the next few years include in the machine tools sector relate to some technologies: development of high precision machine tools; multi-axes, multi-function machines; heavy duty machine tools; metal-forming machines of various types; critical mechanical elements; machine tool electronics and other sub- systems; as well as software for design / analysis / simulation, machining and manufacture.

Machine tools sector in India could have become the leading in the world but for the presence of HMT machine tools that lived on government protection. It would have set up huge design offices and used outsourcing for the major accessories as was the practice in the Japanese machine tools industry.

The government established Central Machine Tool Institute at Bangalore in the 60’s by the Government of India that was a major event in the history of the Indian Machine Tool Industry. The institute changed its name to Central Manufacturing Technology Institute (CMTI) in 1992 in tune with its current role in the manufacturing scenario in which the machine tool has become just a part of the entire gamut of concerns in the productive endeavors of the manufacturing industries.

One can see the range of the machine tools and accessories produced in India at the IMTEX that is held every second year.India has everything to become a major player in machine tools industry.

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3 Nights in Patna

Posted on May 4, 2013 by indra

I couldn’t make it to Vaishali to have the feel of the place that nurtured one of the oldest democratic system of governance, where both Mahavir And then Buddha came and created two of the earliest faiths- Jainism and Budhhism, and where Ambpali or Amrapali lived and ruled over the hearts of the mightiest and richest youths of the time and finally took shelter in the Budhhist religious garb.I know that there is nothing left now from that era, but still I was mentally perturbed when I couldn’t make it because of my foolish way of depending on incapable ones for arranging a car even against a good money that I wanted to pay. The excuse was that of heavy bookings due to large number of marriages that day. I took a judicious decision in favour postponing Vaishalli’s visit for next time. Moreover, it was really a bad hot summer day so I never repented for my decision. Further, the exemplary hospitality of my friend, Janardan and his wife more than compensated my agony of not going to Vaishalli’s.

In Patna, we stayed at ‘Ghar Angan’, an ethnic resort on the line of Chokhi Dhani in Jaipur to participate in the marriage of Jyoti, my niece with Abhijeet on May 1, 2013.

Ashok has mastered social networking in his job in railways. The way he arranged convenient conveyance from and to airport and assistance for us in Patna is remarkable.While returning, I found a counter of Bihar Tourism Department in the departure area. The person in charge was really courteous. After many years, I could see good colourful brochures for different places and circuits of tourism interest such as Buddhist, Ramayana, Sikh and Sufi in Bihar. Even the fortnight long festival of souls… Pitrapaksha Gaya is the caption of one brochure. It appears the government is trying hard to attract more and more tourists to Bihar. However, Bihar will require a lot of investment in the basic infrastructures of tourism sector- hotels, transportation and management of the places of interest.

As I was told, law and order situation is really excellent. Interestingly, both parties of bride as well as that of bridegroom travelled by road in night only to avoid the summer heat. Almost all the roads that I took were distinctly clean, smooth and well maintained. My wife kept on comparing them those in Noida. But Bihar will have to go miles for improving the education at all levels. Corruption is the main culprit. As I understood from my conversation with some persons working in the sector, even the posts of principals and vice-chancellors are sold. However, the incidence of sexual assault on women is rare. According to the gentleman who dropped me at airport, that because of the continuing rural link of Patnaites.

I don’t know when I shall go again to Patna and visit Vaishalli.

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Cheating Chits: From Sanchayita to Saradha

Posted on April 27, 2013 by indra

Chit fund had been cheating the greedy or needy poor as well as rich equally since time immemorial. Everyone wishes to earn some extra money or make fast buck. I have still few certificates of Sanchayita that my clerk while in HM in 80s, sold me. He had brought to my company flat in Hind Motors one of the senior managers of Sanchayita, who was an alumnus of Presidency College. I had to extend the due courtesy, though I hardly enjoyed it. My clerk knew my weakness of everyone connected to my alma mater. He wanted his officer to convince me to invest more. As I didn’t open my purse, they were disenchanted that evening and finally left. Perhaps just after a month, Sanchayita scandal was in media and many lost their hard earned money. 

For last few days now, the public outrage in street protests has again been growing over a fraudulent investment scheme run in the name of  ‘Saradha’ in West Bengal. Thousands of ordinary men and women have lost their money again in a chit fund. According to media, Mamta Banerji and many leaders of the Trinamool Congress leaders, such as Rajya Sabha MP Kunal Ghosh, Lok Sabha MP Shatabdi Roy and Mamta’s transport minister Madan Mitra had proximity with the dubious firm. Sudipto Sen is the villion CEO of Saradha. And after the arrest, Sen has ignited the bomb that may inflict serious damage to the image of Trinamool of Mamta. This is something that didn’t happen when Sanchayita was busted by the then finance minister of left front, Shri Ashok Mitra. Perhaps, that was due to Jyoti Basu.

Mamata Banerjee’s government would set up a Rs 500-crore relief fund to pay back to some poorer investors in the Saradha depositors. She planned to rake in Rs 150 crore from hiking taxes on cigarettes by 10%, at the same time suggesting that people should “smoke more frequently” — never mind what doctors may have to say on the subject. 

As reported in media,  the victims of Saradha Group hailed primarily from the districts and from villages, who have lost their life savings.Many of the agents are TMC leaders at the grassroots level and even panchayat members. Most cannot return to their homes since they are being hounded by investors. Sanchayita didn’t cause this much of upheaval.

But unfortunately, the government during the last thirty years couldn’t enact laws to protect ignorant Aam Aadami from fraudsters.

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Manufacturing India-Tractors

Posted on April 22, 2013 by indra

India is the largest market of tractors in the world by volume. M&M is the world’s No. 1 tractor company, by volume with annual sales of above 2, 00,000 tractors and presence in 40 countries. M&M is trying to enter the Chinese’s market with an association with a local manufacturer. Mahindra has sold well over 1.75 million tractors worldwide. As a new strategy, M&M having its focus on export that is currently less than 5% of total sales of 220,000 units in fiscal year 2013.

Interestingly, at one time, almost all states of India planned to have manufacturing facilities for tractors, scooters and TVs. But as usual, all these endeavours failed. However, India has many tractors manufacturers with Mahindras and TAFE as leaders, but Escorts, HMT, Sonalika and another dozen of them are in the business of manufacturing tractors. At least two of the globally reputed tractor manufacturers have set up the shops in India with modern manufacturing facilities.

New Holland Agriculture with a state of the art technology of manufacturing in Greater Noida is a 100% subsidiary of CNH Global N.V. (NYSE:CNH), a majority-owned subsidiary of Fiat Industrial S.p.A (FI.MI) – the World’s largest Agricultural Equipments Company, the leading manufacturer of Agricultural and construction equipment in the world.

John Deere established a green field project in 1999 in India and has set up a state of the art tractor manufacturing plant for John Deere tractors at Sanaswadi, near Pune, in the state of Maharashtra.

Interestingly, both John Deere and New Holland sells in India as well as export their tractors to a large number of foreign countries.

Indian farming is unique with about 102.8 million farmers. However, 61.3 million of them are having landholdings of less than 1 hectare, about 1.2 million farmers have land holdings of more than 10ha, 6.3 million between 4-10 ha, 13.1 million between 2-4 ha and 20.9 million between 1-2 ha. With such a distribution of landholding, the scope of traditional mechanization is limited. It reflects into low HP/ha and low yield in T/ha. And so around 52 % of the population is engaged in agriculture and mechanization is at 30% of the potential.

Basically, the tractors manufacturers must design features in tractors for local conditions besides its cost and robustness for easy maintainability. The Indian manufacturers must go for innovative attachments to the tractors for easily performing various operations of the farming of various food grains as well as that of various commercially beneficial horticulture items, vegetables and fruits. The industry is going for consolidation and for becoming globally competitive. India may not integrate the sophistication and luxury in designing and manufacturing tractors, but for the export market it must provide everything that can make Indian tractors acceptable.

As reported recently in ‘Hindu Businessline’, SAME Deutz-Fahr (SDF) Group, which bought the Lamborghini tractor brand from the uber luxury car-maker, is targeting rich farmers, high-profile individuals with farming interests, as also golf -courses, cricket stadiums and luxury resorts. Though the pricing is yet to be firmed up, Lamborghini tractors sell in Western markets upwards of $20,000 (Rs 10 lakh plus).

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एक पुरानी कविता

Posted on April 22, 2013 by indra

२०.५ २००१.
एक पुरानी कविता

हर युग में भीष्म शर कुंठित हुए
शिखंडी के सामने
आचार्य द्रोन देते रहे आटा घोल
पुत्र को
लेते रहे एकलव्य के अंगूठे
दक्षिणा में शाशकवर्ग हित
मारे गए शोकावस्था में
धनुष छोड़ झूठे शिष्य से
पुत्र बध की भनक सुन |
हर युग का कर्ण
माँ को रुलाता रहा
मिथ्या अहंकार में
और फिर
गलत सारथी चुन
मरता रहा चालक शत्रु से |
हर काल में
भाई भाभी का चिर हरण कर
खुश हुआ
देवर के खून से रंगती रही
केशराशि खुले रख बर्षों तक |
फिर वही द्रौपदी
सुहाग मनाती रही
पांच पांच पुत्र दे
बलि |
अमित बलि होकर भी
दुर्योधन मारा गया
छल से |
शम्बूक को ब्राहमन
मिलने न दिया राज वर्ग
छल से सम्पूर्ण अमृत पान किया देवों ने
मिहनत मरती रही
बुद्धि घात करती रही |
जो दूसरों के लिए गलत था
अपने लिए सही बना
अहिंसा कभी नहीं जीती
न अशोक काल में
न अब \
कलिंग युद्ध की याद ,
या डर
अशोक के धर्म चक्र का
बापू की अहिंसा नहीं
भारत का जन बल जो
जाग्रत हुआ
था लाया १५ अगस्त |
गरीबी हटेगी नहीं कानून से से
हटेगी तो डर से
गरीबों की संख्या
निगल जाएगी
अमीरों के ऊँचे महल |

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Manufacturing India-2/3 Wheelers

Posted on April 19, 2013 by indra

India has raced ahead from the days of Vespa, Rajdoot and Bullet that were hot in demand by prospective bridegroom in India as dowry.

Images

India is the second largest producer of two-wheelers in the world. In the last few years, the Indian two-wheeler industry has seen spectacular growth. The country stands next to China and Japan in terms of production and sales respectively.

Images

Interestingly, however, based on CY2012 volumes, India is now the largest 2W market in the world with sales volumes of 13.8 million units (domestic), having overtaken China at 12.6 million units. In fact, while 2W sales volumes in India grew by 5.8% in CY2012 over the previous year, the domestic demand in both China and Indonesia (the second and third largest 2W markets, respectively) shrunk by 10.0% and 9.2%, respectively.

Interestingly, the three major manufacturers- HeroMotoCorp, Bajaj Auto and TVS Motors- are located near the three metros in North, West and South.

Hero Honda has taken new birth as two siblings; HeroMotoCorp and Hero. While the first one is the name of the company owned by the old Indian masters, Hero is fully owned Japanese company. The country’s largest two-wheeler maker HeroMotoCorp is set to kickstart its international business by foraying into new geographies by the end of this financial year, will design and develop all future products taking into account requirements in global markets all on its own.

Honda has challenged to become number one soon. It hopes to clock four million units annually from its three plants in Haryana, Rajasthan and Karnataka and to touch 10 million units by 2020, though this could be achieved even earlier.

Bajaj Auto Ltd. was known for scooter ‘Hamara Bajaj’, but has now gone whole hog for manufacturing motorcycles and is the second largest manufacturer of 2-wheelers.Bajaj Auto has also developed a quadricycle but it is waiting for the government permission for launching on road. TVS Motor has also dropped its Suzuki tag and is on its own as third largest manufacturer.

Yamaha, the Japanese two-wheeler major is planning to make India a hub for development as well as manufacturing of low-cost products and plans to launch a sub-$500 (under Rs 27,000) scooter and motorcycle, which would be its cheapest two-wheeler globally and sold across volume-laden markets such as China, Africa and Latin America. Japanese two-wheeler major Yamaha Motor Company (YMC) recently announced the establishment of Yamaha Motor Research & Development India (YMRI) at its Greater Noida facility is looking at leveraging India as a procurement hub to source the product and parts for its global market.

BMW Motorrad has gone for a tie-up with TVS Motor Company to leverage a cost competitive manufacturing base. “If you don’t have the best quality of a premium product, then you have problems later on. India is the right place for high-quality mass production.” According to Stephan Schaller, President, BMW Motorrad, Schaller who recently was in India, “India is the right place for high quality mass production — to source, produce, to ship to places in the world where we can sell them… and one of these places will also be India”.

All the three top Indian two wheelers manufacturers had successful tie ups with the Japanese manufacturers such as Honda, Kawasaki, and Suzuki. Today they are on own for their mass produced vehicles, but for the upper end product each have some strong tie-ups such as Bajaj with KTM of Austria and Kawasaki, TVS Motors with BMW. Bajaj Auto, distributor of Kawasaki Bikes in India, has recently launched Kawasaki Ninja 300 in the domestic market. It is mutually respectable working. As reported, Bajaj Auto International Holdings (BAIHBV), a Netherlands-based wholly-owned subsidiary of Bajaj Auto, has raised its stake in KTM Power Sports in an attempt to tighten its grip on Europe’s second-largest power sports bike manufacturer.TVS Motor and BMW Motorrad recently announced to jointly make sub-500cc bikes in India to be sold worldwide. As a result, TVS can now access the best in technology and R&D for its two-wheeler operations. In other words, the marketing end will have to gear up and capitalize on the BMW brand equity association to plan its strategy.

Indian 2- wheelers are contemporary in style and sleek in design and are gradually being accepted in the global markets too. The markets in more than fifty countries of Asia, Africa, Middle East, South America and even parts of Europe are gradually emerging as new destinations for the Indian two wheelers.

According to analysts, India is getting close to peak penetration levels. “Every fifth person in the addressable market owns a two-wheeler,” says a report by Macquarie Research, whose research accounted for the age group between 15 and 59 years of age and income greater than Rs.60,000 per month.

Honda Motorcycle and Scooter India (HMSI) recently launched its cheapest motorcycle in the mass commuter segment, the 110cc Dream Neo, to take on former partner HeroMotoCorp’s flagship model, Splendor.

Royal Enfield, the oldest player under new management is trying to make its presence felt. Even in present slowdown, Royal Enfield continues to buck the trend and has strong demand for its products with waiting period ranging from three to six months depending on the region. An all new 1, 50,000 units plant coming up very soon to reduce the waiting time.M&M is also trying after its acquisition of Kinetic Motors to be a major player in 2-wheeler. Many global players such as Harley Davidson, Hyosung, and Ducati of high-end motor cycles have entered India to grab that market that is going to grow. A new wave of electrical 2-wheelers is also trying to take advantage of the government subsidy that for better environmental advantages.

As under such a competitive market, the government of India has cleared the financial package for ailing Scooters India. One can very well imagine its political motive.

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Manufacturing India-Commercial Vehicles

Posted on April 16, 2013 by indra

The production and sales of commercial vehicles tell a lot about the country’s economy. It indicates the country’s growth. Over the years, India was having two major manufacturers in cars and trucks. Though older car manufacturers-Hindustan Motors and Premier Automobiles are on way out, truck manufacturers-Tata Motors and Ashok Leyland are still going strong, though some MNCs such as Volvo and Mercedes have also entered the commercial vehicles’ market.

Tata Motors are the fourth largest commercial vehicles manufacturer in the world and the topmost in India. Ashok Leyland is the other major commercial vehicle manufacturer in India. With Hinduja, Ashok Leyland is attempting to enter newer market. Its collaboration with Nissan and Renault has launched a small truck to compete with Tata Motors’ innovative and very popular ACE.M&M,and AMW are other new major players in commercial vehicles manufacturing.

The attempt of many of the Japanese truck manufacturers (Mazda-Swaraj, DCM-Toyota, and Eicher-Mitsubishi) to enter India for producing medium duty commercial vehicles in 90s failed. It was the time when Hindustan Motors was tying up with Isuzu Motors to manufacture some of their commercial vehicles including the buses in Halol, Gujarat. That would have been a great project for the local company as well as for the country, as both the dominating players in commercial vehicles were using almost obsolete old technologies that over the years have been upgraded with help from associates. Tata Motors could do that because of the acquisitions of Daewoo Motors of South Korea. Ashok Leyland took the assistance of Hino Motors. Hindustan Motors failed to continue with the collaboration with Isuzu Motors and the project ended because of the financial reasons and perhaps the poor strategy of the management.

Isuzu Motors are trying to enter India again and all on its own. Isuzu Motors India Pvt. Ltd, a wholly owned subsidiary of Japanese auto maker Isuzu Motors Ltd, plans to set up a light commercial vehicle (LCV) manufacturing plant in Chittoor district of Andhra Pradesh at an estimated cost of Rs.1,500 crore.The plant, which will produce 120,000 units annually at peak capacity, will commence operations in 2015-16.

Volvo and Mercedes have entered India and performing fairly well. <a href=”http://www.vecv.in/aboutus-overview.aspx”>Volvo has also tied up with Eicher for commercial vehicles for larger tonnage.

As reported, even amid the slump in the automobile sector, when major automobile companies are reviewing expansion plans, the Renault-Nissan alliance in India is going the whole hog on its expansion plans. The Ashok Leyland-Nissan Dost LCV has turned into a runaway success for the commercial vehicle manufacturing joint venture between Indian Utility Vehicle major Ashok Leyland and Japanese automaker Nissan.

With improving infrastructure of roads and growing industrial activities, the manufacturing of commercial vehicles will require the latest technologies with thrust on fuel efficiency and emission control. The domestic as well as MNC manufacturers will also export in good numbers to balance the cyclic demands. Another good news for expanding business will come from Indian Defense Services with increasing demand to use locally manufactured products.

The commercial vehicles segment in India even in the slow economy present interesting trends. The M&HCV segment is witnessing steady increase in share of heavy duty, long haulage trucks owing to improvement in road and highway infrastructure. But in the LCV goods segment, the share of sub 1T segment is increasing with the emergence of the hub-n-spoke model and increasing demand for last mile connectivity. Higher tonnage trucks (16T+) offer higher profitability as operating costs (besides fuel) are similar to lower tonnage vehicles. The introduction of newer, efficient and advanced platforms/vehicles by both incumbents as well as foreign OEMs has further escalated the advantage.

The commercial vehicles segment in India even in the slow economy present interesting trends. The M&HCV segment is witnessing steady increase in share of heavy duty, long haulage trucks owing to improvement in road and highway infrastructure. But in the LCV goods segment, the share of sub 1T segment is increasing with the emergence of the hub-n-spoke model and increasing demand for last mile connectivity. Higher tonnage trucks (16T+) offer higher profitability as operating costs (besides fuel) are similar to lower tonnage vehicles. In India, the LCV segment is currently dominated by sub 1-T and pick-up segment vehicles.Tata Motors through its innovative ACE and M&M have performed excellently. While multi-laned highways are cutting down the turnover time between metros and cities, roads laid out under Pradhan Mantri Yojana in rural India are making sub 1-ton vehicles popular.

Posted in manufacturing, rural india | Leave a comment

India:Digital Waves

Posted on April 13, 2013 by indra

India has seen at least three digital revolutions in past two decades. The first started with setting up of IPOs providing the facility for having local, STD and ISD telephony along with fax for transferring the documents. One could see these booths in every corner of the country. Both in Noida and Salt Lake, I used it for its convenience whenever the BSNL connectivity failed me.

The second revolution was for the Internet connectivity. It manifested itself in setting up of cyber cafes even in small towns and cities. I used the facility in CK market near our residence whenever I was there for sometime.It used to remain crowded in those days.

But with laptops, tablets and smart phones reaching every home either through personal procurements or through election manifesto of various states, the Internet has become easily available to a large number of individuals at homes, and now cyber cafes look deserted. However it remains popular with school going children for preparing project reports demanded by their schools.

Cell phones with almost in hands of 900 millions of the population had already killed the IPOs and with almost all cell phone service providers offering Internet on mobile phones for many a things such as social networking, cyber cafes have lost its utility.

Cyber cafes are still popular with students for project and photocopying of notes or text books and owners have added some related items along with it. I find it selling stationaries including those for computers that the students need. The self-employed owner of the cafes even help the amateurs to keep their laptops running, providing batteries or anti-virus and other softwares.

The owners try to diversify with some side business activities. I find one doing railways and flight booking, the other one does digital transfer of money for migrants.

Laptops and tablets will have good business in India with states as big as Uttar Pradesh committing to hand over to class X and XII students the gadgets free. UP alone is to buy 26.62 tablets this year itself. The state government has already selected HP for the supply of 15 lakh laptops at a cost of Rs 2,858 crores. A new wave of online education spreading fast will mean the requirements of the gadgets in increasingly larger number. I wish the local manufacturers such as HCL would have taken advantage of the opportunity.

As reported, the web-based courses of National Programme on Technology Enhanced Learning (NPTEL), led by IIT and IISc, that has Google, Nasscom, TCS, Cognizant and IIITs as partners, went online in October 2012. From July, NPTEL will offer course certification with live exams at the end. While the course is free, a fee will be charged for certification. Some IT cos have agreed to give inputs for the online courses related to computer science and networking. NPTEL is looking for a software platform to host its content along the lines of international providers Coursera and edX that have millions of users with Indians account ing for about 15%, second only to the US. The NPTEL channel, currently on YouTube, has 1.5 lakh subscribers and 8.7 crore views.

I foresee the digital onslaught to all Indian households- rich and poor benefiting them equally well.

Posted in education | Leave a comment