India’s auto sector is yet to see regulations that will drive OEMs here to adopt lightweighting technologies aggressively as is the case in Europe.
07 May 2014 | 6069 Views | By Sumantra B Barooah
India’s auto sector is yet to see regulations that will drive OEMs here to adopt lightweighting technologies aggressively as is the case in Europe. But rising fuel prices in the domestic market and stringent emission norms in many export markets may well be the trigger to compel them to reduce ...
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India’s auto sector is yet to see regulations that will drive OEMs here to adopt lightweighting technologies aggressively as is the case in Europe. But rising fuel prices in the domestic market and stringent emission norms in many export markets may well be the trigger to compel them to reduce weight of their vehicles in order to increase fuel efficiency and also reduce the carbon footprint.
This is what perhaps makes Gagandeep Singh, CEO, Bright Autoplast, confident about strong growth in a lacklustre environment in the domestic market. “We are projecting 17 percent growth next year and next to next year, 20 percent,” says Singh, who sees a target as ‘normally sacrosanct’.
What gives a company, which saw a six percent drop in business in a tough 2013-14, such confidence? The answer is high-performance functional parts with higher value compared to the aesthetic parts that are its current strength with 85 percent of its product portfolio being in this space.
“Over the last two years, we have been working on how to grow more than the industry. We have done that for the past five years,” says Singh. After being acquired by Sintex, Bright Autoplast has grown from Rs 106
crore in FY’07 to Rs 367 crore in FY’13.
Some of the new high-performance functional parts that will help Bright Autoplast grow its business, and vehicles drop weight are fuel tanks, degassing tanks, hydraulic reservoir tanks, all made of plastic. The plastic fuel tank, for example, can be up to 26 percent lighter than one made from steel.
Bright Autoplast is focusing on supplying the tanks to diesel vehicles as the monolayer tank can be used only to store diesel. A petrol tank needs a multi-layer technology that Bright Autoplast currently doesn’t offer. With the commercial vehicle sector looking to enhance fuel efficiency, this is another area that offers scope for Bright.
To tap this, it has plans to offer range of plastic diesel tanks ranging from 90 litres to 415 litres. A typical plastic diesel tank for a truck can cost around Rs 9,000, which qualifies as a ‘high value product’ in the plastic components business, and can be 5 to 10 percent cheaper than its steel version. Such products for CVs will also help the supplier reduce its dependence on the passenger vehicle segment (around 90 percent of revenues come from the passenger vehicle segment). Some other products are plastic oil sumps which can be 31 percent lighter and engine intake manifolds that can cut weight by nearly 30 percent. The intake manifold can also be cheaper by up to 20 percent, in addition to being lighter than metal. A first-of-its-kind plastic side under-run protection device, which is mandatory for trucks now, is also being tested. This component can be cheaper by up to 25 percent over the steel version.
TECH RAMP UP
Bright Autoplast’s technology strengths got a shot in the arm after Sintex’s two successive acquisitions of Nief Plastic of France and Wausaukee Composites of the US. Wausaukee makes highly-engineered composite components for construction equipment, agricultural equipment, mass transportation, wind energy and other sectors. Nief Plastic is Europe’s leading player in thermoplastics with a strong presence in the high-quality insert moulding and bi-polymer injection technology and decoration areas. Bright Autoplast has leveraged the synergies with these two businesses in the past few years and plans to further leverage them.
In a couple of months, Bright Autoplast will inaugurate a new Wausaukee plant at its Pune facility to tap, initially, the construction equipment market and utilise it to add more value to its automotive portfolio later. “It is good to start with the technology they use, with the relationships they use to gain a confidence level. Then one leverages that for your own strength areas,” explains Singh. Wausaukee Composites supplies composite truck hoods and engine covers to the construction truck and tractor industry in the world.
With Nief, Bright Autoplast has ventured into high precision parts both for automotive and non-auto applications. “Using the same technology (as for electrical equipment), we are working on projects for airbags and EMS with some Tier 1 companies that are importing plastic parts that can’t be sourced locally,” says Singh. Processes or technologies like injection thermoset, gears are some that Nief offers which Bright Autoplast did not possess. The leveraging of advantages of both Wausaukee and Nief has begun but it may take another two to three years to stabilise and realise the benefits.
CARBON FIBRE A BRIGHT FUTURE?
Even as Singh and his team work on an organic growth strategy, he also leads a new strategic initiative to significantly enhance Bright Autoplast’s value proposition. That new area is carbon fibre products. Carbon fibre is currently considered among the best lightweight solutions available, with potential weight reduction of 50 percent over steel. But the high materials cost (nearly six times that of steel) is proving to be a major obstacle. But it is estimated that the increase use of carbon fibre may reduce costs significantly. The price difference between carbon fibre and aluminium is expected to shrink from 80 percent at present to around 30 percent by 2030.
To tap the strong potential of carbon fibre, Bright Autoplast may be joining hands with an R&D firm to offer components made of relatively affordable version of the lightweight material. We learn that the R&D firm has achieved 47 percent weight reduction by replacing eight steel/aluminium parts in a production vehicle with parts made of carbon fibre. Potential business is already available with Bright Autoplast as it will work with a key OEM customer on this project.
With this strategic move, the Indian supplier hopes to add significant value to vehicles and reap significant benefits when stringent regulations are introduced in India that will require OEMs to use more lightweight materials in addition to powertrain enhancements.
INTERVIEW GAGANDEEP SINGH, CEO, BRIGHT AUTOPLAST
Given the opportunities that the industry promises in the future and the challenges it faces currently, what is the growth curve looking like?
Over the last two years, our efforts at Bright Autoplast have been focussed on growing more than the industry rate. We are venturing into high-performance functional parts. Till now, 85 percent of our products are aesthetic. Now we are foraying into fuel tanks, degassing tanks and hydraulic reservoir tanks. These will propel us into a different league altogether.
We will definitely keep continuing with aesthetic parts. The third thing we are doing is entering into the electricals space. We are leveraging the strengths of our foreign companies – sister concerns like Nief plastics and Wausaukee – to bring these technologies to India.
Will Bright Autoplast’ India base also be an R&D or production hub for foreign operations?
For R&D, it’s too early but on the production aspect, we are already working with three types of synergies. First is Nief synergy, the second is Wausaukee synergy and finally, Sintex synergy. So with Nief we will do more production of precision parts, precise parts that have very low tolerances.
With Sintex-Wausaukee synergy, we intend to bring this LRTM (Light Resin Transfer Moulding) technology that has applications in off-roaders, and then move to commercial vehicles and passenger vehicles. LRTM gives an edge, gives a better surface finish. With Sintax, we have already started roto-moulding of fuel tanks.
Could you through some light on the route you plan to take to enhance Bright Autoplast’s technological capabilities?
The future is lightweighting. We are able to even get better properties than steel (with carbon fibre) but the issue is cost. That is why it is today in the R&D stage. We want to make it more affordable and then introduce it. We are working closely with a foreign company.
You would also like to reduce your dependence on passenger vehicles, right?
We are working on our de-risking strategy. It is not that passenger vehicle segment is not so good. Surveys suggest that it will grow but it is always better to de-risk your business. We will grow with passenger vehicles but we want to grow at a higher pace in two or three other segments.
And within that, what about two-wheelers?
Almost 10 percent of our sales come from two-wheelers. We would like to enter into more players in the two-wheeler segment.
Is it possible to increase the plastic content in scooters? The side panels, for example?
If we are able to replace a hood and a boot of a car, which I feel will have more impact, why not a scooter? Only the cost matters as the scooter is even more cost- sensitive, so we have to come up with appropriate solutions.
SUMANTRA B BAROOAH