Lumax to expand capacity, set up three new manufacturing units in this fiscal

Lumax Industries, flagship company of the Delhi-based Lumax Group, will soon start work on setting up a Greenfield plant near Bangalore, for manufacturing automotive lights, which it will supply to Toyota for its small car in India. Toyota is expected to launch its small car for India by 2010.

On an expansion spree, Lumax Industries will also set up new manufacturing plants at Singur, Pantnagar and Haridwar, from where it will supply components to Tata Motors, Bajaj Auto, M&M and Hero Honda. And all this despite actually scaling back investments from Rs 250 crore to Rs 200 crore, due to a slowdown in the automotive market in India.

Apart from expansion in the automotive space, the Lumax Group is also looking at entering the aviation industry, in the aircraft repairs and maintenance space. Also, the Jain family, promoters of Lumax Industries, are likely to buy back some of the stake which they earlier sold to their Japanese partner, Stanley Electric.

Delphi to invest Rs 300 crore on Greenfield facility near Chennai

Automotive components, systems and electronics major, Delphi is looking at significant expansion of its presence in India.

The American company will soon be setting up a new manufacturing facility near Chennai, where it will make automotive electronic systems and sub-systems. Delphi India already has manufacturing units in Bangalore, Noida, Gurgaon and Manesar, and one technical centre in Bangalore.

Delphi’s Greenfield project will be set up at an investment of about Rs 300 crore and will be situated on ten acres of land at Oragadam, near Chennai. The land has already been allotted to Delphi.

Once it’s operational, the new Delphi factory will produce automotive instrument clusters, air-bags, seat belts, anti-theft vehicle immobilizers and other advanced, microprocessor-controlled automotive components. Delphi’s expansion in India is aimed at tapping the fast-growing automotive electronics market, which is expected to be valued at US$7 billion by the year 2016.

Delphi, which has its headquarters in Michigan in the US, has been present in India since 1995 and considers India as one its key markets in the Asia Pacific region. Delphi’s customers in India include companies like Tata Motors, Maruti, GM India, Toyota Kirloskar Motor, Mahindra-Renault, HMSI, Kinetic Motors, Hindustan Motors, TVS Motors and Bajaj Auto.

Kinetic Engineering to start supplying components for Tata Nano by August

Kinetic Engineering has announced that it will start supplying components for the Tata Nano, within the next two months. ‘Successful and speedy completion of the facilities expansion for manufacture of transmission gears for the Nano is our key focus at this time. We will begin supplying component to Tata Motors' small car project within two months from now,’ said Arun Firodia, chairman, Kinetic Engineering.

Kinetic Engineering is setting up an assembly plant within Tata Motors' Singur factory, where the Nano will be made, at an investment of Rs 55 crore. Kinetic is also setting up a separate division at its existing Ahmednagar factory for making powertrain and other components, at an investment of Rs 50 crore.

Kinetic Engineering has been undergoing extensive restructuring for the last one year – the two-wheeler division has been hived off, and the focus is now on manufacturing auto components and powertrain assemblies. The company recorded a net profit of Rs 11.8 crore for the quarter ended March 2008, as against a net loss of Rs 6.32 crore for the same period last year. Net loss for the financial year ended March 31, 2008 came down to Rs 25.84 crore, as against Rs 42.29 crore in the previous fiscal.

NK Minda Group announces new JV with Tokai Rika

The NK Minda Group has announced the formation of a new joint venture with Japanese company, Tokai Rika, for the manufacture of automotive seat belts, locks and anti-theft immobilizers. The new company will be called Tokai Rika Minda India Private Limited, and will have an equity participation of 70% from Tokai Rika while the balance 30% will be held by the NK Minda Group.

The new company will invest Rs 100 crore in setting up a new Greenfield facility at Bangalore. The commercial production will coincide with the roll out Toyota’s new small car from its second plant, which is slated to begin in 2010. The company has already got a letter of intent from Toyota for the supply of seat belts, locks and switches.

Speaking on the signing ceremony in Japan, Nirmal K Minda, chairman and MD, NK Minda Group said, ‘This new JV with Tokai Rika cements an already existing relationship and marks another important milestone in our journey to become a recognised global player with emphasis on technology and development.’

K Kinoshita, President, Tokai Rika said, ‘We have strong ties with NK Minda Group from the past decade. The new JV will build upon our existing relationships with OEM’s and the trust that Minda Brand enjoys in India.’

NK Minda Group and Tokai Rika already have a JV, Minda Rika Pvt. Ltd. (MRPL) for the manufacture of mirrors and automotive switches for four-wheelers. MRPL has a 50% market share in four-wheeler switches and has a turnover of more than Rs 130 crore. The NK Minda Group holds 60% in MRPL, Tokai Rika has 35% and the balance 5% is held by Sumitomo of Japan.

Ashok Minda Group acquires Germany-based Schenk Plastic Solutions

In a move aimed at strengthening its presence in the European market, auto component maker Ashok Minda Group has acquired a 100% stake in Germany-based Schenk Plastic Solutions, which makes components for car interiors. The buyout price has not been revealed yet.

‘We are already supplying components to many European car makers and this acquisition will give us access to new markets. Through Schenk, we will be now supplying interior parts to leading car makers, like Mercedes-Benz and BMW,’ said Deepak Singhal, President, Ashok Minda Group.

With plants in Esslingen and Bretten in Germany, and Liberec in Czech Republic, Schenk supplies plastic parts and components for car interiors in Europe. The company employs about 500 people and its annual sales are to the tune of 75 million euros.

The Ashok Minda Group supplies security systems, driver information systems and plastic injection-moulded components to domestic and global automotive OEMs. The company currently has a total of 21 plants in countries including India, Germany, Indonesia and Vietnam. The Schenk acquisition is Ashok Minda Group's second European acquisition. Last year, the company had acquired another plastic interior components plant at Pirna in Germany.

Ok Play to enter auto component biz, will invest Rs 70 crore

Plastic toys manufacturer, Ok Play will now be diversifying into plastic automotive components, investing Rs 70 crore towards setting up new manufacturing facilities in Haryana and Tamil Nadu. The company has already entered into a technology transfer agreement with US-based Solar Plastics, which will help it develop plastic auto components for the Indian and American markets.

‘We want to have a share in the Rs 60,000 crore automotive industry in India, and reach sales of Rs 100 crore by 2009-10. We will be making plastic fuel tanks, dashboards, seats and roofs for tractors, LCVs and HCVs,’ said Rajan Handa, MD, Ok Play. The company’s auto components manufacturing facilities in Bawal, Haryana, and Ranipet, Tamil Nadu, would be ready next year.

Ok Play expect the auto sector in India to witness a major boost by 2012, when Euro IV norms will make it mandatory for all vehicles to be fitted with plastic fuel tanks.

Magneti Marelli, Endurance Tech sign JV for making shock absorbers

A Fiat Group company, Magneti Marelli, and Aurangabad-based Endurance Technologies have signed a joint venture agreement to produce shock absorbers for cars and commercial vehicles, in India and Thailand.

Endurance Technologies will have 50 percent plus one share, while Magneti Marelli will hold 50 percent minus one share in the JV, which will be operational in the first quarter of 2009. Under the JV, one manufacturing unit will be set up in Chakan, near Pune, while the second will be set up in Thailand.

The new JV company will design, produce and market the shock absorbers, which would be aimed at local as well as international markets.

Rane Brake Lining Ltd invests in new facility at Trichy, for brake discs and pads

RBL's new manufacturing facility at Trichy will produce brake discs and brake pads

RBL, the flagship company of the Rane Group, has inaugurated its new factory at Trichy, where the company will be making brake discs and brake pads.

P S Rao, president, RBL, said the new facility was a step towards investing in the latest manufacturing technology, in co-operation with RBL’s collaborator, Nisshinbo Industries Inc., Japan. This would allow RBL to provide higher quality products that meet emerging customer requirements. ‘This facility will remain testimony to our relentless drive to improve all aspects of our operations and to maintain our status as one of the best suppliers in the industry,’ said Rao.

‘We have improved the overall layout of the various functional areas of the factory, to ensure a more efficient flow of materials – from receiving and storage to assembly, packaging and finally shipment. The facility emphasizes on ‘poka yoke’ (mistake proofing) in all manufacturing processes to ensure defect-free products reach our customers,’ said Bheemsingh Melchisedec, plant head (Trichy), RBL.

‘Manufacturing excellence and benchmarking of quality will continue to contribute strongly to our business growth as a group,’ concluded L Ganesh, chairman, Rane Group. ‘By expanding our capacities and capabilities, our constant endeavour is to continually improve the supply chain and better serve customers locally as well as globally. The new RBL plant in Trichy is a state-of-the-art facility. This will be the most modern asbestos-free disc pad plant in India,’ he said.

Rane Engine Valve Ltd wins Volkswagen Group Award 2008

From left: Francisco J. Garcia Sanz, Member of the Board of Management (Procurement), Volkswagen AG, L Ganesh, Chairman, Rane Group, Prof. Martin Winterkorn, Chairman of the Board of Management, Volkswagen AG

Rane Engine Valve Ltd (REVL), the flagship company of the Rane Group, that produces engine valves and tappets, has won the prestigious ‘Volkswagen Group Award 2008’ for Rane Engine Valves’ achievement as one of their most important business partners. Volkswagen awarded 15 global suppliers with the award and REVL was the only Indian company to receive this honor.

Prof Dr Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft and Francisco. J Garcia Sanz, Board Member responsible for procurement of Volkswagen Aktiengesellschaft presented the award to L Ganesh, Chairman, Rane Group, at a function held recently in Ibiza, Spain.

Accepting the award, L Ganesh said, ‘REVL has been one of the leading exporters of auto components from India. We are very proud to be recognized as one of the 15 top vendors of Volkswagen worldwide. I believe this the first and only recognition of any Indian supplier. Earlier in 2003 it was the only non-German supplier to win an award from Deutz, Germany. The company is poised to grow significantly as a global supplier with such customer awards.’

The Volkswagen Group Award recognizes its suppliers who allow Volkswagen to deliver excellent value and quality to its customers. Moreover, this award recognizes REVL’s special entrepreneurial performance, reflected through its constant reliability and sustainable partnership with the Volkswagen Group.

REVL has been supplying Volkswagen Group factories since the mid-1990s. Moreover, REVL has been an integral part of the switchover from unit injector to common rail diesel technology, and has proven to be a competent and future-focused partner for Volkswagen in terms of competitiveness, technology and quality.

Hero Motors to make CNG kits for automobiles

With the rise in petrol and diesel prices, CNG is one cheaper alternative for car owners right now, and demand is skyrocketing. Seeing a quick business opportunity, Hero Motors is planning to start making CNG kits for cars. These kits will be made at Hero’s existing plants in Ghaziabad and Manesar.

It’s not just the aftermarket – even manufacturers are looking at launching cars that are compatible with LPG or CNG, hence Hero Motors seems to be entering the alternative fuel kit segment at a very good time.

BMW to source parts, engineering services from India

An interesting video that shows BMW cars being assembled at the company's high-tech manufacturing facility in Leipzig

The BMW Group has set up an international purchase office (IPO) in Delhi and is looking at sourcing automotive components and engineering services from India, for its global operations.

Herbert Diess, BMW board member (international parts sourcing), recently said that India is an important market for BMW and that the German company recognises the engineering talent available in India. ‘We already source some components for bikes and auto parts for some of our cars and bikes from India. Considering the increasing capabilities of Indian vendors to provide quality spares, we plan to source more parts and services from the country,’ said Diess.

The BMW Group is said to be negotiating with various India-based automotive component manufacturers for sourcing car parts. The company also plans to increase the number of Indian suppliers for its motorcycles business. However, the company has not set any specific targets for sourcing from India. ‘We need to study the Indian market as it should conform to our quality standards,’ said Diess.

BMW wants to source engine and chassis components from India, for its high-end motorcycles. The company is also exploring the possibility of tying up with Indian IT companies and software development firms, for developing in-car applications for BMW vehicles.

Minda to invest in expansion, will supply parts to Volkswagen

The VW Polo is coming to India in 2009 and in addition to headlamps and taillamps, Minda could also be supplying various other parts for the car

Delhi-based Minda Industries Ltd (MIL) has signed an agreement with Volkswagen to supply headlamps and rear combination lamps for VW’s upcoming cars in India, which are scheduled for launch in late 2009. The German carmaker is currently working on identifying component suppliers for its India-made cars, which will roll out next year from VW’s upcoming plant in Pune.

‘We plan to source largely from local vendors to keep our car prices low and competitive. We will launch the Polo in two variants – a small car and a sedan – sometime next year. We are working on our suppliers chain,’ said Joerg Mueller, Volkswagen India president and managing director.

‘We have signed a letter of intent with Volkswagen to supply automotive lighting, which will be made at our manufacturing plant in Pune. We will be working closely with Volkswagen’s head office at Wolfsburg in Germay to develop the style and prototype of these products to meet quality and cost parameters. It’s an all new technology that we are developing for them which will be used for the first time in India,’ said NK Minda, MD, MIL.

MIL, part of the Rs 1,000 crore NK Minda Group, will also supply the rear combination lamps for a VW car which will be manufactured in Russia.

Volkswagen has opened an international purchase office (IPO) in Mumbai and the company has plans of sourcing auto components from India for VW cars worldwide. Among other things, VW will look at sourcing tyres, body panels, automotive electronics, seats, and windscreens from the country, and Minda may also supply some of these components.

‘We have also submitted request for quotations to supply automotive switches, horns, locks, electronic starter motors and alternators for Volkswagen’s domestic and global operations. We will invest Rs 100 crore in the next 15 months to expand our facilities at Pune and Pantnagar to meet demands of Volkswagen and other car makers,’ said NK Minda.

Bosch Mahle Turbo Systems: New JV for exhaust gas turbochargers approved

German companies Robert Bosch GmbH and MAHLE GmbH have founded a 50/50 joint venture for the development, production, and sale of exhaust gas turbochargers. The European anti-trust authorities have approved the founding of the joint venture. ‘Bosch Mahle Turbo Systems GmbH & Co. KG’ will commence business on the 2nd of June 2008.

The company's head office in Stuttgart will house the development, administration, and sales activities. Initially, around 100 employees will work here, with half drawn from each of the parent companies. Series production of exhaust gas turbochargers will begin in 2011 at existing locations in St. Michael ob Bleiburg, Austria, and Blaichach/Immenstadt, Germany.

Up to 500 employees will manufacture major parts and components of a high quality and assemble exhaust gas turbochargers. These will be used in passenger cars and light commercial vehicles, in both petrol and diesel engines.

Dr. Martin Knopf and Dr. Andreas Prang have been appointed managing directors of the new company. ‘We are convinced that Bosch Mahle Turbo Systems will position itself as a preferred partner of international automobile manufacturers for the development and production of exhaust gas turbochargers. Concrete interest has already been shown during numerous discussions with customers,’ says Prang, responsible for production, purchasing, and quality management.

‘Now that exhaust gas turbochargers have been successfully used primarily in diesel engines, they will be used increasingly in petrol engines in the future, in combination with direct gasoline injection for downsizing concepts. This will allow smaller engines to achieve better efficiency with comparable power output,’ explains Knopf, who is responsible for development, sales, and finances.

Bosch Mahle Turbo Systems regards the exhaust gas turbocharger as one of the key technologies for the sustainable reduction of fuel consumption and CO2 emissions.

Bosch and MAHLE are firmly established in the field of automotive powertrains. The two companies complement each other ideally as regards their systems and component know-how as partners in the development and production of new exhaust gas turbochargers.

Autoliv IFB India may develop low-cost airbag for Tata Nano

The higher-end Tata Nano variant will have airbags, which may be developed by Autoliv

While they are an important piece of safety kit in modern cars, airbags don’t come cheap. Airbags fitted in most small cars don’t cost less than Rs 6,000 but with the Nano, that won’t work. So, Tata Motors is trying to get components manufacturer Autoliv IFB India to develop a special, low-cost airbag for the Nano.

Autoliv’s airbag for the Nano may be in the Rs 400 price range, and if the component manufacturer can really pull it off, it may be a big step forward for small car safety, as the low-cost airbag may also find its way into the Maruti 800, Alto and other small cars.

While the basic, no-frills, Rs one lakh Nano may still have to do without airbags, the higher end variant will get driver/passenger airbags at the front, an AC, and perhaps extras like power steering, radio/CD-player and alloy wheels.

The Bangalore-based Autoliv IFB India is one of the largest manufacturers of automotive airbags, with 28% market share worldwide. But, of course, Autoliv isn’t the only company working on special, low-cost components for the Nano. Other manufacturers like Bosch, Honeywell Turbo India, Koito and many others have worked on various low-cost bits for the car, including fuel-injection systems, engine components, seats, electrical systems and so on.

Koito to design simpler, low cost headlamps for ultra low cost cars

Koito is working on designing new low-cost headlamps for ultra low cost cars

Japanese company, Koito will now design lights specifically for ultra-low cost cars like the Tata Nano and perhaps the Nissan-Bajaj ULC. Koito, which makes headlamps for some of the best luxury car brands worldwide, is now looking at making lights for the ultra low cost car segment. (We don’t know if that’s because ultra low cost cars really are the future, or because these seem to be the flavour of the month…)

For low cost cars, Koito is in the final stages of creating a simpler light that uses half as many parts as its more expensive models, says Masahiro Ohtake, president of the company. Koito, 20% owned by Toyota, and one of the world’s biggest manufacturers of automotive headlamps, is now gearing up to make parts for cars that will cost only half as much as the Maruti 800 – the cheapest car in India (and perhaps worldwide) for well over two decades.

Koito opened a second plant in India in September last year, in Haryana, so that it could work more closely with various north-based carmakers. The company also supplies lighting assemblies for Tata trucks.

Car manufacturers, auto component makers struggling with rising steel prices

Vehicle manufacturers in India are currently under pressure from vendors, who want to raise component prices to offset the relentless increase in steel prices. If component vendors do increase prices, vehicle manufacturers may also be forced to increase prices, with the consumer having to end up bearing the brunt of it all.

Steel producers did announce a price cut last week, but it wasn’t for the alloys of steel used by automotive components manufacturers. ‘The alloy steel has not been impacted by the price cuts at all, leaving the industry sandwiched between fixed-price supply contracts on one hand and the rising prices of steel on the other, which has severely impacted on the profitability of the industry,’ says Sanjay Labroo, president, ACMA.

Chrysler to source Jeep Wrangler seats from Delhi-based Krishna Maruti

The all-American Jeep Wranger will have Indian-made seats by mid-2009!

In a bid to source more parts from lower-cost countries like India and China, US-based carmaker Chrysler will soon start sourcing seats for its famous Jeep Wrangler, from Delhi-based Krishna Maruti Ltd (KML). Chrysler will order seats worth about Rs 400 crore, and the seats would be fitted on 120,000 vehicles per annum.

KML, a JV between Maruti Udyog and Ashok Kapur & Associates, is one of South Asia’s largest seating systems manufacturer. The company will ship seating sub-assemblies to Ohio, in the US, where the Jeep Wrangler is manufactured. The Indian-made seats should find their way into American Jeep Wranglers by June 2009.

While Chrysler’s order may lead to even bigger and better things for KML, in the US market, Chrysler is also talking to various auto manufacturers in India. The American company wants to explore the possibility of setting up JVs with Indian companies, for making low-cost cars for emerging markets. The company wants to expand its traditional user base in America and also establishing a presence in new and growing markets like India, China, South America and Eastern Europe.

Former parent Daimler sold its 80% stake in Chrysler last year to Cerberus Capital Management, a private equity investment firm that paid US$7.4 billion to buy Chrysler ownership. The DaimlerChrysler merger lasted for nine years, but was never very successful.

Sona Koyo: Growth slowdown in FY09

Sona Koyo Steering Systems expects slower sales growth in FY09, as a result of a tight monetary policy hurting car demand. However, the company is hopeful of better margins on increasing local sourcing.

‘We expect a 10-12 percent growth in sales in 2008-09,’ said Surinder Kapur, chairman and MD, Sona Koyo. For FY 2007-08, Sona Koyo's net sales rose 17.7 percent on year to Rs 684 crore. The company expects better margins in the current fiscal, due to increased local sourcing for its column type electric power steering system, which makes up about 30 percent of its annual sales.

Rane NSK Steering Systems Ltd inaugurates steering column plant at Bawal, Haryana

Rane NSK Steering Systems Ltd (RNSSL), one of India's leading Steering System makers, today inaugurated a new, state-of-the-art production plant at Bawal, Haryana, 80km southwest of Delhi. The ceremony was led by L Ganesh, chairman, Rane Group, and M Degawa, director and executive vice president, NSK Limited, Japan.

RNSSL has invested Rs 377 million in the new facility, with initial annual capacity to produce 200,000 electric power steering systems for vehicle assembly plants in the region. ‘We have decided to invest in this plant keeping in line with our overall strategic growth plans. RNSSL will grow in its chosen segments through expansion, upgraded technology and synergetic diversification. We are also expecting sales revenue of over Rs two billion targeted by the year 2010-11,’ said L Ganesh.

‘The key is close service to our customers in each of India's manufacturing regions. To overcome logistics challenges and offer minute-by-minute technical support, our plants must be close to the final assembly line. So this new Bawal plant will offer the kind of support our Chennai plants provide in South India,’ said M Degawa.

Completed in just eight months, the 3600sq.m plant offers a vast production area unobstructed by support pillars. Electricity needs have been reduced by maximizing the use of natural light and utilizing high efficiency air-conditioning throughout the building. The plant's state-of-the-art equipment has been built in Japan by NSK Limited.

The five-acre site in the Bawal Industrial Area also offers ample space for the company’s ambitious expansion plans. With contracts for new business already in hand, RNSSL plans several phases of additional investment.

Rane NSK Steering System to invest Rs 20 crore in Singur

Automotive components manufacturer, Rane NSK Steering System will soon be investing Rs 20 crore for setting up a new plant in Singur. This would enable the company to supply parts to Tata Motors for its Rs one lakh car, the Nano. Apart from Tata Motors, Rane NSK already supplies parts to Maruti Suzuki, and the Indian operations of Honda, Ford and Toyota.

The company plans to supply manual steering gear, engine valves and seat belts for the Nano, from the proposed plant. It has already acquired five acres of land for setting up the unit, said R Narayanan, president, Rane NSK Steering System.

Apparently on a growth spree, Rane NSK is alsp starting a new manufacturing facility in Bawal, Haryana, from where the company will make electric power steering systems for North-based auto manufacturers. The plant will have an initial capacity of 200,000 steering systems per annum.

In three to five years, Rane NSK expects 25% of its revenues to come from exports. Set up 10 years ago, the company is a 50:50 JV between the Rane Group and NSK of Japan.