The Automotive And Construction Equipment Industry

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  • 1. THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY INDIA Fact Pack Swedish Trade Council in India June – July 2006
  • 2.
    • Overview Indian Manufacturing Industry
    • Indian Automotive Industry
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 3. THE MANUFACTURING SECTOR IN INDIA POSTS RAPID GROWTH - the Indian industry is traditionally growing strong at 8% annually
    • Manufacturing industry turnover:
      • India: USD 154 billion
      • Sweden: SEK 1 357 billion
    • Of total 143 manufacturing sectors:
      • 36 sectors recorded a growth of >20%
      • 36 sectors recorded a growth of 10-20%
      • 56 sectors registered growth of up to 10%
      • 15 sectors reported negative growth
    • Lead time for new product development has come down by as much as 50% in the past 3 yrs. E.g. development of brake system in India takes 6 months, in Korea it is 8 months, in Germany 12-14 months – IBEF*
    Top manufacturing industries in India Billion SEK The automotive industry amounts 24% of the total manufacturing industry Source: IBEF, CII, Rabo Bank *IBEF – Indian Brand Equity Foundation
  • 4.
    • Overview Indian industry
    • Indian Automotive Industry
      • Passenger Cars
      • Commercial Vehicles
      • Suppliers
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 5. OVER 9.9 MILLION VEHICLES ARE BEING PRODUCED BY INDIA - 1.3 million passenger cars and about 400 000 commercial vehicles VEHICLE MANUFACTURERS
    • 13 manufacturers
      • Suzuki
      • Tata
      • Hyundai
      • Mahindra
      • Toyota
      • Honda
      • GM
      • Ford
      • HM/ Mitsubishi
      • Skoda
      • Force
      • Fiat
      • Mercedes
    • 7 manufacturers
      • Tata
      • Ashok Leyland
      • Mahindra
      • Eicher
      • Force
      • Swaraj Mazda
      • HM
    Source: ACMA, CRIS, SIAM, industry interviews Passenger Vehicles (1 308 913 veh.) Commercial Vehicles (400 000 veh.) Tractors (296 000 veh.) 2 – wheelers (7 600 801 veh.) 3 – wheelers (434 424 veh.) LCV’s (171 781 veh.) M&HCV’s & Buses (219 297 veh.)
    • 8 manufacturers
      • Hero Honda
      • Bajaj
      • TVS
      • Yamaha
      • LML
      • Honda
      • Kinetic
      • Royal Enfield
    • 6 manufacturers
      • Bajaj
      • Piaggio
      • Mahindra
      • Force
      • Atul Auto
      • Scooters India
    • 8 manufacturers
      • Escorts
      • M&M
      • L&T
      • Punjab Tractors
      • New Holland
      • ITL – Renault
      • John-Deere
      • Steyr
    • 7 manufacturers
      • Tata
      • Ashok Leyland
      • Eicher
      • Swaraj Mazda
      • Volvo
      • Tatra
  • 6. INDIA PRODUCED 1.7 MILLION OF CARS AND COMMERCIAL VEHICLES DURING 2004-05 - Indian auto industry is growing at more than 15% annually Thousands of units Production cars and commercial vehicles industry in India Cars & commercial vehicle segment contributing about 20% of the total auto production volume Source: ACMA, SIAM, industry interviews Production of parts in the automotive industry in India
  • 7.
    • Overview Indian industry
    • Indian Automotive Industry
      • Passenger Cars
      • Commercial Vehicles
      • Suppliers
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 8. THE PASSENGER CAR PRODUCTION IN INDIA IS STABLE & GROWING - increase in domestic sales & exports for OEMs
    • One of the largest industry in India with turnover of USD 37 billion in 2005
    • Passenger car exports grew by 8%
    • The country offers 4 th largest car market in Asia
    • At present, 13 car manufacturers active in India
    • Emergence of strong domestic players
    • Large variety of choice on models for customers with over 50+ car models
    • Automatic approval on FDI
    • Indian automobile industry alongwith the component industry contributing considerably to the exports
    Passenger Car Production in India Development the last 5 years ’ 000 Vehicles Source: STC Analysis, ACMA, SIAM
  • 9. PURCHASE DECISIONS ARE GENERALLY MADE IN THEIR INDIAN HQ BY THEIR RESPECTIVE PROCUREMENT DEPT’S Passenger Cars Source: SIAM, ACMA, company interviews Mumbai, Purchase Deptt. MPV, UV 11 830 M&M (Mahindra) Pune, Purchase Deptt., Deputy GM Purchase PC 348 Daimler Chrysler (Mercedes) Mumbai, Purchase Deptt. PC 1 728 Fiat Pune, Purchase Deptt. UV 7 500 Force Motors Aurangabad, Purchase Deptt, Deputy GM PC 315 Skoda Chennai, Purchase Deptt. MUV, PC 6 354 HM/ Mitsubishi Chennai, Purchase Deptt. PC, UV 1 973 Ford PC, UV PC PC, UV PC, UV CV, PC PC Business Halol (Gujrat), Purchase Deptt. 1 315 GM Gautam Budh Nagar (U.P), Purchase Deptt. 1 900 Honda Bangalore, Purchase Deptt. , GM 2 220 Toyota Chennai, Procurement Deptt. , GM Materials 2 964 Hyundai - Pune, GM Materials, Materials Deptt. - Mumbai, Centralised Import Deptt. 22 000 Tata HQ New Delhi, Marketing Deptt. 3 453 Maruti/ Suzuki Purchase decisions Employees Manufacturer
  • 10. 15 CAR MANUFACTURING PLANTS IN INDIA - Maruti produces the maximum number of cars in India ** It is not Installed Capacity but their production in FY2005 * PC – Passenger Car UV – Utility Vehicle MPV – Multi Purpose Vehicle MUV – Multi Utility Vehicle Gurgaon: - Maruti
    • Pune:
    • Tata,
    • Force Motors
    • Mercedes
    Chennai: - Hyundai - Ford - HM Bangalore: - Toyota Noida: - Honda Halol: - GM Pithampur: - HM Kolkata: - HM Aurangabad: - Skoda Mumbai: - Fiat Source: ACMA, company interviews 82 636 68 MPV UV M&M (Mahindra) 1 812 PC Pune Mercedes 61 530 PC Mumbai Fiat 6 861 UV Pune Force Motors 7 429 PC Aurangabad Skoda MUV* PC PC PC UV PC UV PC PC UV PC UV* PC PC* UV* MPV* Models and focus 293 >15 000 Pithampur (MP) Kolkata Chennai HM/ Mitsubishi 25 596 2 230 Chennai Ford 16 135 13 608 Halol (Gujarat) GM 36 156 Greater Noida Honda 10 423 34 077 Bangalore Toyota 226 532 - Chennai Hyundai 154 313 Pune Tata 467 734 5 324 67 303 Gurgaon Maruti/ Suzuki Production volume** Plant Manufacturer
  • 11. Source: STC Analysis, ACMA, SIAM
    • Market is mainly dominated by Mini cars or Hatchbacks (>80%)
    • Car evolution from Mini cars to Hatchbacks to Compact Sedans now
    • Car sales rose by 23% in Apr-Jun 2006 as against previous quarter
    • Passenger Car & Utility Vehicle market to grow at 12% over the next 5 years
    • India will soon be the largest market for small & compact cars
    Positive Growth Indicators Customer Trend Market Trend
    • Easy financing with lower interest rates and lower EMIs (Equated Monthly Installments)
    • Increasing disposable income
    • Wide number of choices from 13 manufacturers with over 50+ models
    • Large proportion of chauffer driven cars. Rear passenger comfort is a critical influence in purchasing decisions.
    • Increasing emphasis on aesthetics & comfort
    THE PASSENGER CAR INDUSTRY POSTED A GROWTH OF 8% IN 2005-06 AS COMPARED TO 2004-05 Trends within the Indian passenger car industry
  • 12.
    • Overview Indian industry
    • Indian Automotive Industry
      • Passenger Cars
      • Commercial Vehicles
      • Suppliers
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 13. EXISTING CV PLAYERS BUSY IN EXPANSION OF PRODUCTION CAPACITIES - most of them preparing for the launch of new models in the market
    • Commercial vehicle exports grew by around 36%
    • 9 players active in India
    • Strong presence of local players
    • Almost all domestic manufacturers have undergone collaborative tie-ups with foreign entity
    • Local players expanding their production capacity
    • Companies widening their scope in LCV segment which seem to be the most demanding at present
    • Increasing power to weight ratio of vehicle
    • New global players planning to enter the market
    • Most players are offering the latest technologies
    Commercial Vehicle (CV) Production in India Development the last 5 years ’ 000 Vehicles Source: ACMA, Industry interviews
  • 14. PURCHASE DECISIONS ARE GENERALLY MADE IN INDIAN HQ BY THEIR RESPECTIVE PROCUREMENT DEPT’S Commercial vehicles Source: SIAM, ACMA, company interviews Hosur (Tamil Nadu), Purchase Deptt. MCV & HCV 160 Tatra Bangalore, Purchase Deptt. MCV & HCV 550 Volvo Chennai, Purchase Deptt. LCV 6 354 HM LCV, MCV & HCV LCV LCV, MCV & HCV LCV LCV, MCV & HCV LCV, MCV & HCV Business Ropar (Punjab), Purchase Deptt. , Chief Manager 799 Swaraj Mazda Pune, Purchase Deptt. 7 500 Force Motors New Delhi, Procurement Deptt. 1 173 Eicher Mumbai, Purchase Deptt. 11 830 M&M (Mahindra) Ennore (Chennai), Strategic Sourcing Deptt., ED 12 178 Ashok Leyland Pune, Materials Deptt., GM Materials, 22 000 Tata Purchase decisions Employees Manufacturer
  • 15. 14 COMMERCIAL VEHICLE MANUFACTURING PLANTS IN INDIA - Tata Motors & Ashok Leyland are the major producers Source: SIAM, ACMA, company interviews ** It is not Installed Capacity but their production in FY2005
    • Pithampur:
    • Force Motors
    • Eicher
    Lucknow: - Tata Jamshedpur: - Tata
    • Chennai:
    • Ashok Leyland
    • HM
    Bhandara: - Ashok Leyland Jaipur: - M&M Alwar: - Ashok Leyland
    • Hosur:
    • Ashok Leyland
    • Tatra
    Ropar: - Swaraj Mazda Bangalore: - Volvo * LCV – Light Commercial Vehicle MCV – Medium Commercial Vehicle HCV – Heavy Commercial Vehicle 165 M&HCV Hosur (TN) Tatra M&HCV LCV LCV M&HCV LCV LCV M&HCV LCV LCV, M/HCV Assembly unit LCV* MCV/ HCV* Models and focus 843 Bangalore (Karnataka) Volvo 456 Chennai HM 5615 6830 Ropar (Punjab) Swaraj Mazda 6591 Pithampur (MP) Force Motors 15700 7500 Pithampur (MP) Eicher 42 091 Rudrapur Jaipur M&M (Mahindra) 67 500 Chennai (TN) Bhandara (MH) Alwar (RJ) Hosur (TN) Ashok Leyland 75 137 134 772 Lucknow Jamshedpur Tata Production volume** Plant Manufacturer
  • 16. Source: STC-ND analysis
    • Presence of strong domestic players
    • Arrival of global players & some more are set to go on Indian roads
    • LCV – the new uptrend on the Indian CV market
    • Overall CV segment grew at 47% during Apr-Jun 2006 as against last year
    Other Key Trends Production Trend Domestic Market Trend
    • Players are busy in their production expansion
    • North India seems to be the hottest destination for new units
    • Increasing power to weight ratio
    • Divergence in Bus & Truck technology
    • Focus on fully built transport technology
    THE COMMERCIAL VEHICLE INDUSTRY POSTED A GROWTH OF 10% IN 2005-06 AS COMPARED TO 2004-05 Trends within the Indian commercial vehicle industry
  • 17.
    • Overview Indian industry
    • Indian Automotive Industry
      • Passenger Cars
      • Commercial Vehicles
      • Suppliers
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 18. THERE ARE OVER 6000 AUTOMOTIVE SUPPLIERS IN INDIA - Less than 10% of the total suppliers belong to the organised sector
    • Linked to the growth of Indian OEM industry @ 15%, component industry is growing at 17%
    • ~ 500 organised suppliers (T1+T2+T3) in Indian Auto Industry with nearly 6000 in the unorganised sector
    • India being looked upon as the next big automotive R&D base in coming years
    • There is a very high concentration of automotive suppliers in north, west and south part of India
    • Organised sector (T1 & T2) suppliers have on average 1000 employees, but the unorganised (T2 & T3) sector supplier are family run business with an average head count of 100
    • Traditional strong segments are suspension and forging & stamping
    Geographical concentration of automotive suppliers Indian automotive suppliers Source: ACMA, Industry interviews Low High
  • 19. 20-25 MAJOR T1 SUPPLIERS - T1 joint ventures with foreign companies generally are technology driven Source: ACMA, Industry interviews
    • Cables, bus systems, embedded systems
      • Sumi Motherson Group-Dräxlmaier
      • Lucas TVS (TVS Group)
      • SiemensVDO
      • Denso India
      • Yazaki (Tata Group)
      • Delphi
    • Power train, exhaust systems, engines
      • Bharat Forge
      • Sona Koyo
      • RICO
      • Greaves Cotton
      • Visteon
      • Toyota Kirloskar
      • Amtek
    • Cockpit, seats, dash-board, air conditioning
      • Johnson Controls(TACO)
      • Rane Group
      • Schefenacker (Motherson Group)
      • SiemensVDO
      • MICO Bosch
      • Pricol
      • TACO (Tata Group)
    T1 SUPPLIERS Electrical systems Interior equipment & others Propulsion / Suspension Transmission /Engine Body / Equipment Running gear
    • Body, roof, glass, doors, lighting etc.
      • ThyssenKrupp
      • Pricol
      • Webasto (Motherson Group)
      • Asahi
    • Suspension, brakes, axles, steering, tires
      • Bharat Forge
      • Sundaram Fasteners
      • Anand Group(Gabriel, Behr)
      • Goetze India
      • LuK India
      • MICO Bosch
  • 20. MAJORITY OF T1 SUPPLIERS ARE LOCATED IN METRO-CITIES NEAR THE VEHICLE OEMs - clustered in north, west & south India Source: ACMA
    • Noida:
    • Motherson Group
    • Denso
    • Gurgaon:
    • - Delphi
    • RICO
    • Asahi
    • Chennai:
    • Sona Koyo,
    • Visteon
    • Lucas
    • Sundraram Group
    • TAFE
    • Bangalore:
    • Siemens VDO
    • Bosch
    • Toyota,
    • Pune :
    • Bharat Forge
    • TACO
    Mumbai: - Greaves Cotton
  • 21. Source: ACMA , STC-ND analysis ALMOST ALL PURCHASE DECISIONS ARE MADE IN INDIAN HEADQUARTERS - purchase quality guidelines are set at international partner headquarters Major T1 Suppliers Individual Plants – Delhi Region Shock Absorbers, Piston, AC units, 6000 Anand Group-Gabriel, Behr Mumbai HQ Engine Systems 2 000 Greaves Cotton Pune HQ Seating Systems, Braking Systems, Harness, Suspension System 4 900 TACO – Johnson Controls, Yazaki Chennai Starters, Alternators 500 Visteon India Transmission Parts, Crank Shafts, Axle Beams Fuel injection systems, Shock Absorbers Electronic Ignition System, Alternators, Engine ECUs Engi ne Actuators, Fuel Systems Wiring Harness , Roof Tops, Interiors, Mirrors Electronic Distribution System Business Pune HQ 4 000 Bharat Forge- SIFCO-US, Tokyo D rop Gorge-Japan Bangalore HQ 10 000 MICO-Bosch Delhi Region – Individual Plants 3 500 Denso India Bangalore – HQ 500 Siemens VDO Respective Plant HQs (Noida – Delhi-Region) 13 000 Motherson Group Gurgaon (Delhi Region) 1 800 Delphi India Purchase decisions Employees Manufacturer
  • 22. THERE ARE MORE THAN 200 T2 SUPPLIERS LOCATED IN INDIA - some of the T2 suppliers are listed below Source: ACMA, STC-ND analysis
    • Cables, bus systems, embedded systems
      • Lumax
      • Tyco Electronics
      • MINDA Group
      • NTTF Industries
      • Napino
      • Karnataka Hybrids
    • Power train, exhaust systems, engines
      • Clutch Auto
      • Fag india
      • John Fowler
      • NRB Bearings
      • Sunbeam Auto
      • Shriram Pistons
      • JBM Group
    • Cockpit, seats, dash-board, air conditioning
      • IFB Automotive
      • Hanil Lear
      • Relan Group
      • Pinnacle Industries
      • Subros
      • Veethree
      • Injectoplast
    T2 SUPPLIERS Electrical systems Interior equipment Propulsion Body Running gear
    • Body, roof, glass, doors, lighting etc.
      • JPM Group
      • Bright Brothers
      • Hella (Padmini Engg)
      • FIEM
      • Roots Industries
    • Suspension, brakes, axles, steering, tires
      • Brakes India
      • Rane Group
      • Axles India
      • Benara Udyog
      • Hindalco
      • Hindustan Composites
  • 23. T2 SUPPLIERS ARE WELL SPREAD ACROSS NORTH, SOUTH AND WESTERN INDIA Source: ACMA, STC-ND analysis
    • North:
    • Lumax
    • Minda
    • Napino
    • FIEM
    • Relan Group
    • Hella
    • West:
    • FAG India
    • Hindalco
    • Hindustan Composites
    • Bright Brothers
    • NRB
    • South:
    • Tyco Electronics
    • Brakes India
    • Roots Group
    • Axles India
    • IFB Automotive
    • Hanil Lear
    • Karnataka Hybrids
  • 24. Source: ACMA, IBEF, STC-ND analysis ALMOST ALL PURCHASE DECISIONS ARE MADE LOCALLY BY T2 SUPPLIERS – quality guidelines are set by T1 & OEMs T2 Suppliers Plant level purchase (Chennai) Axles & Axle Assemblies 750 Axles India HO in Mumbai Bumpers & Fenders 500 Bright Brothers HO in Delhi Region Pistons & Castings 2 800 SunBeam Inds. Plant Level Purchase (Delhi Region) Lock Systems, Body parts & Electrical Switches 3 500 JPM Group Plant Level Purchase (Delhi Region) Lighting Systems 1 150 FIEM Steering, Gear & suspension Systems Sheet Metal Stampings, Exhaust Systems Brake systems Electrical Control Systems & Horns AC systems Lighting Solutions Business HO In Chennai 4 000 Rane Group Individual Plant Purchase Departments (Delhi Region) 3 500 JBM Group HO in Chennai 3 000 Brakes India Individual Plant Purchase Departments (Delhi Region) 3 000 Minda Group Purchase Dept. in Noida (Delhi Region) 850 Subros HO in New Delhi 1 500 Lumax Purchase decisions Employees Manufacturer
  • 25. Source: ACMA, SIAM, IBEF, CII, STC Analysis
    • India is emerging as low cost sourcing destination
    • Opening of Indian market for foreign investment
    • Companies advantage India for lower designing & redesigning costs like Ford (Camshafts) etc.
    Competitiveness Transition Of suppliers Sourcing destination
    • Competitiveness is driven by:
      • Manpower – large pool of qualified engineers & skilled technicians at lower cost
      • Lower investment cost – Through appropriate, low cost automation
    • Shifting focus from global after-market to global OEM supplies
    • Firms focus on operational excellence to improve quality & reliability of products (8 Deming Award winners)
    • Tier 2 or 3 players keen on going JVs to reach Tier 1 slot
    TRENDS WITHIN THE AUTOMOTIVE SUPPLIER INDUSTRY - becoming a global supplier Trends within the Indian Automotive supplier industry
  • 26.
    • Overview Indian industry
    • Indian Automotive Industry
    • Indian Construction Equipment Industry
      • Manufacturers
      • Suppliers
    • Recommendations
    • References
    CONTENT
  • 27. 6000 VEHICLES ARE SOLD ANNUALLY IN INDIA - 60 construction equipment manufacturers in organised sector; about 15 are the major ones, rest are parts & accessories manufacturers (mid-size companies) Source: CII, FICCI, KOMPASS, CJI CONSTRUCTION EQUIPMENT ROAD / RAIL
    • 5 major manufacturers
      • BEML
      • Terex
      • ACE
      • Capious
      • TELCO
    Motor Graders, asphalt pavers, asphalt mixers UNDERGROUND
    • 11 major manufacturers
      • BEML
      • HEC
      • HM
      • L&T
      • ACE
      • Escorts
      • Borewell Equipment Company
      • Beaver Eng.
      • Caterpillar
      • R.B.Industries
      • Terex Vectra
    Wheel loaders, dozers, drills, dumper, compactor, scapper
    • 7 major manufacturers
      • BEML
      • HEC
      • HM
      • L&T
      • TELCO
      • Caterpillar
      • R.B.Industries
    EARTH MOVING Crawler, tractor, shovels, excavators, dumpers, dragline LIFTING
    • 5 major manufacturers
      • ACE Ltd
      • TELCO
      • Escort Construction Equipment Ltd
      • R.B.Industries
      • Indital Construction Machinery
    Mobile cranes, forklift
  • 28. THE CONSTRUCTION EQUIPMENT INDUSTRY IS SPREAD ALL ACROSS INDIA - Indian government estimates approx. USD 200 billion on infrastructure development over next 7-10 yrs Volvo : India is the 3 rd largest construction market for Volvo but they don’t manufacture here as of now
    • Bangalore:
    • BEML
    • Indital Const.
    Haryana: - ACE
    • Faridabad:
    • Escorts
    • R.B.Industries
    • Hyderabad:
    • - Borewell Equipment
    • Beaver Engineering
    Ahmedabad: - Capious Mysore: - BEML Ranchi: - Heavy Engineering Corporation Kolkata: - Hindustan Motor Mumbai: - Larsen & Toubro Jamshedpur: - TELCO Noida: - Terex Vectra Thiruvallur: - Caterpillar Source: CII, FICCI, KOMPASS, CJI, company interviews USD 1 million Ahmedabad Capious USD 11 million Bangalore Indital Construction USD 5.8 million Noida Terex Vectra 4 800 Faridabad R.B.Industries 1000 Hyderabad Beaver Engineering By orders Hyderabad Borewell Equipment 2 400 Faridabad Escorts 200 Haryana ACE - Thiruvallur (TamilNadu) Caterpillar Models and focus - Dharwad (Karnataka) Jamshedpur (Jharkhand) TELCO - Powai (Mumbai) L&T USD 39 million Kolkata HM - Ranchi (Bihar) HEC 1 005 Mysore Kolar Gold Mine (KGM) Bangalore BEML Production volume (nos) Plant Manufacturer
  • 29. ALMOST ALL PURCHASE DECISIONS ARE MADE IN INDIA - some manufacturers follow joint decision from HQ & plant Construction Equipment Source: CII, FICCI, KOMPASS, CJI, company interviews Ahmedabad, Export Manager Road & Rail equipments 50 Capious DGM Purchase, Bangalore Lifter, cranes 50 Indital Construction Noida (U.P), Procurement Deptt. Loaders, compactors - Terex Vectra Faridabad (U.P.) Excavator, cranes - R.B.Industries - Drill 40 Beaver Engineering Chairman Hyderabad Drill 50 Borewell Equipment Faridabad (U.P.) Cranes, compactors, rollers 422 Escorts Director Manager, Materials, Faridabad Loaders, cranes, Road eq. 100 ACE Dumpers, dozers, crawlers Excavators, dumpers, loaders, motor graders, scrappers, cranes Excavators, dozers, dumpers, scrappers Excavators, dumpers, loaders Mining equipments Earthmoving equipments Business Bangalore - Caterpillar Bangalore, Procurement Deptt, General Manager (HQ + plant) 600 TELCO Mumbai 22 922 L&T Kolkata 14 000 HM Ranchi (Bihar), Purchase Deptt., General Manager 5 400 HEC Mysore, Purchase Deptt. 14 000 BEML Purchase decisions Employees Manufacturer
  • 30.
    • Overview Indian industry
    • Indian Automotive Industry
    • Indian Construction Equipment Industry
      • Manufacturers
      • Suppliers
    • Recommendations
    • References
    CONTENT
  • 31. MORE THAN 200 ORGANISED SUPPLIERS LOCATED IN INDIA - few in tie ups with International companies Source: ACMA, CJI & industry interview
    • Cables, bus systems, embedded systems
      • Delphi
      • Motherson Group
      • Siemens VDO
      • Yazaki
      • Denso
      • Minda Group
      • Dhoot Transmission
      • Auto Ignition
      • Lucas
      • Padmini Engg-HELLA
      • FIEM
    • Power train, exhaust systems, engines
      • Bharat Forge
      • Amtek
      • Greaves
      • Bosch
      • RICO
      • Toyota Kirloskar
      • Kirloskar Oil Engines
      • Wipro Infrastructure
      • Canara Hydraulics
      • John Fowler
      • Sunbeam Auto
      • Adroit
    • Cockpit, seats, dash-board, air conditioning
      • Johnson Controls
      • Bosch
      • Pricol
      • Siemens VDO
      • TACO
      • Sharda Industries
      • IFB Automotive
      • Indication Instruments
      • Harita Seat Systems
      • Injectoplast
      • Hanil Lear
    CONSTRUCTION EQUIPMENT COMPONENT SUPPLIERS Electrical systems Interior equipment Propulsion / Transmission & Engine Body / Hydraulic Systems Running gear
    • Body, roof, glass, doors, lighting etc.
      • Gates Corp.
      • Tractor Engineers
      • Ennore Foundaries
      • Asashi
      • LMW
      • Technofab
      • Benara Udyog
      • Bright Brothers
      • JPM Group
      • Torsion Products
      • Mayur Industries
      • Hema Engineering
    • Suspension, brakes, axles, steering, tires
      • Bharat Forge
      • Bharat Gears
      • Sundaram Fasteners
      • Goetze
      • LuK
      • Bosch
      • Brakes India
      • Clutch Auto
      • Rane Group
      • Eicher Demm
      • Automotive Axles
      • JMT Auto
      • FAG India
  • 32. CONSTRUCTION PARTS SUPPLIERS ARE FAIRLY SPREAD ACROSS INDIA - high concentration in North & South of India
    • Some facts:
    • Major demanding segment in construction industry are excavators, loaders, dozers, dumpers & cranes
    • Permit for free importation for end-users of used equipment lesser than 5 yrs old
    • Only few player active on ‘Under Crawlers’ segment for earth moving equipments which signifies a huge potential because of growing demand of this segment
    • Estimated excavator figure will cross 5000 by 2008-09 from 3200 now
    Source: ACMA, CJI, STC-ND
    • North:
    • MINDA Group
    • Gates Corp.
    • Motherson Group
    • Delphi
    • Denso
    • Padmini
    • Subros
    • Sharda
    • JBM Group
    • Clutch Auto
    • FIEM
    • Sunbeam
    • JPM Group
    • Auto Ignition
    • Indication Instruments
    • West::
    • FAG India
    • Hindalco
    • Hindustan Composites
    • NRB Bearings
    • Bright Brothers
    • Dhoot Transmission
    • RSB Transmission
    • Tractor Engineers
    • TACO
    • Bharat Gears
    • South:
    • NTTF
    • IFB Automotive
    • Hanil Lear
    • John Fowler
    • Torsion Products
    • Canara Hydraulics
    • Harita Seating
    • Automotive Axles
    • Axles India
    • Wipro Infrastructure
    • Visteon
    • Siemens VDO
    • Bosch
    • Luk
    • East::
    • Technofab
    • JMT Auto
    • Speedcrafts
  • 33. Source: ACMA,CJI, STC ALL PURCHASE DECISIONS ARE MADE LOCALLY AT HQ’S OR PLANTS - quality guidelines from international collaborators and OEMs Construction Equipment Components Suppliers GM Purchase-Chandigarh HQ Hydraulic Systems & Pneumatic Hoses 900 Gates Corp Mumbai Crawler Under Carriages, Apron feeders, Conveyors 250 Tractor Engineers Ltd. Bangalore HQ Fuel injection systems, Shock Absorbers 10 000 MICO Bosch Plant Head in Faridabad (Delhi) Fuel Tanks 110 Agro Engineering HO in Mumbai Brake systems 550 Hindustan Composites HO in Mumbai Bearings 1500 NRB Bearings Plant Head at Mysore( Bangalore) Axles 1500 Automotive Axles HO In Gurgaon (Delhi region) Castings 2735 Sunbeam Auto HO in Ghaziabad (Delhi region) Piston & Piston Rings 2800 Shriram Pistons Purchase Head (Delhi region) Cockpit Instruments 750 Indication Instruments Gears & Shafts Body parts-canopies Seat Systems Harness Automotive Lighting & Signaling Hydraulic Cylinders & Tipping Solutions Business HO in Jamshedpur (East India) 1000 JMT Auto Plant Head in Gurgaon (Delhi region) 200 Mayur Industries Pur. Dept. in Hosur (Bangalore region) 320 Harita Seatings Plant in Aurangabad (Mumbai region) 350 Dhoot Transmission Plant in Sonepat (Delhi Region) 1150 FIEM Industries Plant in Bangalore 1500 Wipro Infrastructure Purchase decisions Employees Manufacturer
  • 34. Source: CJI, Business Line, ACMA, SIAM, STC analysis
    • International companies eyeing to establish manufacturing & R&D bases in India
      • Lower production & manpower costs
      • Demand for construction equipment growing by 15% & expected to be 25% in next 2 years
      • There is increased government focus on infrastructure
      • Indian firms manufacture a limited range & only offer services to installation & commissioning of imported equipment
    R&D-displacement Competition and price reductions Globalization
    • Limited competition, with less than 200 private & public equipment & suppliers in India
      • Indian companies produce lower end equipment & offer products from foreign partners
      • Permit for free importation to end users of used equipment less than 5 years old
      • Stringent price reduction demands from the market.
    • International players setting up or expanding R&D bases in India, like, Visteon, Siemens VDO, Delphi, Denso, Yazaki, etc.
      • Availability of low cost, English speaking, computer literate manpower.
      • Growing demand for indigenous operations to avoid delays in supplies & increase after sales services
    TRENDS WITHIN THE CONSTRUCTION EQUIPMENT INDUSTRY - entering of major global players Trends within the Indian construction equipment industry
  • 35.
    • Overview Indian industry
    • Indian Automotive Industry
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 36. RECOMMENDATIONS FOR MAKING BUSINESS WITH THE INDIAN AUTOMOTIVE INDUSTRY Recommendations for making business with the Indian automotive industry 3. 2. 1. Country specific 3. 2. 1.
      • - India is becoming an outsourcing centre for number of global automakers
      • - Emerging as world hub for small & mini cars, castings & forgings
    Industry specific
      • - Open economy since 1990’s growing at 8%, one of the fastest growing economy
      • - Cheap & talented manpower available in abundance
      • - Indian IT majors (like TCS, Infosys) offering on-shore & off-shore engineering services to global players
      • - Global vehicle & component majors putting up R&D in India, either on their own or in
      • partnerships with local players (e.g. GM, Daimler Chyrsler, Johnson Controls etc)
    • Certain level of cultural differences in working from Europeans
    • - Being English as an official language, conversing is really not a problem
      • - Tie-ups at the Tier 2 or Tier 3 level with Indian companies
      • - Transitioning from being a supplier for the global aftermarket to a full-scale global Tier 1 supplier
      • - Industry has witnessed several JVs on auto – component manufacturing; Establish JV for manufacturing in India and service OEMs & Tier 1 suppliers in Europe
    Source: STC New Delhi - Being 3rd largest investor base in the world, FDI possible in almost all major industries - Huge domestic markets - Stable currency and inflation under control
  • 37.
    • Overview Indian industry
    • Indian Automotive Industry
    • Indian Construction Equipment Industry
    • Recommendations
    • References
    CONTENT
  • 38. HOW CAN STC IN INDIA SUPPORT COMPANIES TO DO BUSINESS IN INDIA Collaboration Partner Search Market Check Country specific Company Formation BSO Legal Advisory Visiting Program
      • - Incorporation of liason office, branch office or subsidiary office (pre + post corporation activities)
      • - Acquisition & mergers
      • - Analysis of most suitable channel partner to enter India. Partner search, distributor search, customer search,
      • supplier search (association consultation (ACMA & SIAM), Industry interview, primary & secondary search)
      • - Shortlist of most suitable entry route:
      • * Acquisition: Pre-acquisition analysis, Acquisitioning, negotiation, writing agreements using legal panel
      • * Joint Venture: finding the right partner, negotiation, legal documents, finalisation, post venture activities
      • A pre-feasibility study to check demand & market for their kind of products & services. Methodology involves
      • primary & secondary research, advisory from auto association ACMA/ SIAM, industry interviews etc
      • - Legal advisory on applicable entry routes in India, collborative ventures, things to remember
      • for business with India, Legal advisors on place to take advisory based upon the complexity of project
      • Arranging visiting program with potential partners / customers/ distributors, industry tour, location/ premises
      • search, Industry delegation visits
      • Hiring of consultant on 100% time basis acting as sole representative of Swedish company in India &
      • thereby taking care of sales & operations; Activities can be customised as per the requirement
    Source: STC New Delhi
  • 39. STC INDIA HAS HELPED NUMEROUS SWEDISH COMPANIES TO DO BUSINESS WITH THE INDIAN AUTOMOTIVE INDUSTRY Source: STC New Delhi Global leader in on-road load handling solutions with product offering for loading & delivering goods Leading manufacturer of heavy trucks and buses as well as industrial and marine engines IT solution & service company catering to after-sale market of commercial vehicle and off-road vehicle segment. Manufacturer of car covers that protects the varnish Global leader in polymer technology. Manufacturer of metal bonded rubber components. PROFILE COMPANY
  • 40. STC CARRING OUT A RECRUITMENT OF ‘KEY ACCOUNT MANAGER’ (KAM) TO STRENGHEN INDIAN SALES OPERATIONS FOR TRELLEBORG INDUSTRIAL AVS The main objective of the project was to support ‘Trelleborg Industrial AVS’ in appointing ‘Key Account Manager’ (KAM) for their metal bonded rubber components for Indian off-road vehicle segment STC role and contribution Results Goal
    • Advertising the job profile to recruitment agencies & job consultants.
    • Preliminary filtration of candidates based on Biodata profile
    • Conduct of 1 st round of face to face interview & shortlisted 10 potential candidates.
    • 2 nd round of meeting of shortlisted candidates with Trelleborg
    • Finalising the candidate & to discuss next steps
    • Shortlisted 10 potential candidates for KAM position
    • Arranging 2 nd round of interview
    Step1: Profile discussion Step 2: 1 st round interview by STC Outline of project
    • Discussion on characteristics of KAM candidate & requirement
    Kick-Off Workshop I
    • Shortlisting of 10 candidates for 2 nd round of interview
    • At the kick- off, STC was educated and the project outline was discussed
    • At workshop 1, STC presented the results from step 1 and gave profile of 10 shortlisted candidates
    • At Workshop 2, STC & Trelleborg will finalise the candidate & to discuss the post-recruitment activities
    Completed Completed Step 3: 2 nd round interview by STC + Trelleborg Workshop 2
    • Finalising the candidate & to discuss next steps
    To be Completed Source: STC New Delhi
  • 41. STC CARRIED OUT BSO (BUSINESS SUPPORT OFFICE) OPERATIONS AND ASSITED IN THEIR SALES IN INDIA FOR HIAB Support HIAB in the process of developing its sales through BSO set up & assisting them in establishing in India
    • Appointing & supervising the performance distributors
    • Generating leads
    • Visiting to potential clients as suggested by distributors
    • Assistance in technicalities of the crane
    • Support in custom clearance & transportation to the customer
    • Analysing budget & responsible for meeting targets
    STC role and contribution Results Goal Outline of project
    • HIAB in India has started its operations as per STC-New Delhi’s recommendations. The company has been doing a phenomenal good business as a liasion office at present.
    BSO (Testing Indian market for HIAB cranes) Expansion mode Sales breakthrough Appointing Distributors & supervising performance Strengthening business Strategise Sales, finding new verticals & meeting targets