It's been a huge turnaround. At this time last year the Indian auto industry was in the midst of a slowdown, with CEOs and management looking at various options to handle the economic crisis. However, the pendulum swung to the other extreme in about six months as most industry segments survived the aftermath of the global downturn, thanks to cost-cutting, downsizing operations, and taking a closer look at reducing inefficiencies. All these measures not only helped them face the downturn in a stoic manner but now when the tide has changed, industry overall seems to be in an accelerative mode. Even the badly hit commercial vehicle industry has begun showing growth sequentially though it will take a few more quarters to really bring home the good news.
Sales numbers in November 2009 were a huge positive for the industry as it recorded the highest-ever growth in a single month – 45.8 percent. While the passenger vehicle industry posted a 66.5 percent growth, prominent two-wheeler players – Hero Honda, Bajaj Auto, TVS Motor Co and India Yamaha Motor – together recorded sales growth of 42 percent compared to November 2008. The CV segment grew by 97.99 percent but this tall figure is a result of the abysmally low figures in November 2008. In fact, the growth is less than 15 percent when compared with November 2007 CV sales.
India and the winds of change
There is optimism in the air and the overall feel-good factor in the industry is also a result of the higher-than-expected growth rate for 2009-2010. In fact, on December 23, finance minister Pranab Mukherjee injected even more fervour when he said that economic growth may accelerate at a faster pace and the stimulus package offered by the government would continue until the Budget in February. It’s likely though that the stimulus packages would continue till Budget 2010-2011.
One clear giveaway of the fast-improving India story is the upcoming Auto Expo 2010. Jointly organised by the Confederation of Indian Industry (CII) along with the Society of Indian Automobile Manufacturers (SIAM) and the Automotive Component Manufacturers Association (ACMA), it is to be held at the Pragati Maidan in New Delhi.
The 10th Auto Expo seems to be a barometer of the groundswell of positive feeling. All 140,000 square metres of exhibition space has been fully booked and over 2,100 exhibitors from 30 countries (800 international and 1300 domestic) have confirmed participation. There is not an inch left in 16 halls, 17 hangars and outdoor space. While leading international auto shows in 2009 – like those in Frankfurt and Tokyo – witnessed a subdued response from both exhibitors and trade visitors, Auto Expo 2010 has bucked the trend and how. It is reflective of the overall global sentiment that India is the current action station and will be for the next decade or so. The show will be prominent in the annals of SIAM and ACMA since both the apex bodies are celebrating their golden jubilee this year.
Like the 2008 expo, the theme remains ‘Mobility for All’ but the focus is on ‘Green Environment’. The Expo organisers are doing their level best to handle the sudden surge of exhibitors. Recent confirmations of overseas participants, resulting in an increase of 40 percent in exhibition area, bigger contingents from Germany and China along with a far stronger presence of Indian OEM and component manufacturers have all resulted in all space being sold out.
The demand for exhibition space has been so high that several companies are still waiting for a possible entry into the show. Speaking to the media on December 22, Rajive Kaul, chairman, steering committee, Auto Expo 2010 and chairman – CII Trade Fair Committee, said: “We are still working to accommodate a few more exhibitors.”
Many first-timers
The Expo will see a number of first-time exhibitors, all keen to make a mark on their India show debut. They include iconic American motorcycle manufacturer Harley- Davidson which has recently set up its base in India and Toyota, which is participating at the Auto Expo after a gap and will showcase its much-awaited small car, the Etios. According to Chandrajit Banerjee, director-general, CII, a large number of companies from Germany, China, Canada, Finland, France, Italy, Japan, Luxemburg, Spain, Taiwan and the UK have confirmed their participation.
The trend clearly indicates that India is a must-be market for global companies. At least four global vehicle launches are slated to happen at the Expo along with a number of India-specific launches in passenger cars, two-wheelers (including electric bikes) and commercial vehicles. Another indicator of the huge draw that the Expo is proving to be is that over 350 journalists from 12 countries have signed up for media accreditation. Expect to see and read – in print, on television and on the Web — lots of Expo-related news.
For the first time, the Expo will witness a display of concept vehicles by both Indian and multinational companies. Usually these displays, which manufacturers employ to gauge public opinion, are confined to only to the auto shows in Geneva, Frankfurt, Tokyo and Detroit and such places. In line with its ‘Green Environment’ theme, there will also be display of green technology with emphasis on hybrid vehicles and green engines.
The global attention towards India and the Auto Expo is not without reason. In fact it is to be expected. According to Dr Pawan Goenka, president, SIAM, that is thanks to a spate of developments in the industry in the recent past including the rollout of the world’s cheapest car, the Tata Nano and Tata’s acquisition of Jaguar Land Rover. Besides today almost every foreign vehicle manufacturer of repute has a presence in India, be it Volkswagen, General Motors, Ford, Mercedes-Benz, Mitsubishi, Suzuki, Renault, Nissan, Honda or Toyota.
Focussed pavilions
The 10th Auto Expo will witness a number of firsts. Like an engine pavilion which focuses on engines and technologies. “It was a conscious decision this time. Over the years we have tried and segmented the show for better visitor flow to defined segments. Since it is one of the major components for any vehicle and we have received sizeable participation from the sector, we have created a special pavilion for the same,” says Chandrajit Banerjee, director-general, CII.
Another first is earmarking the first day (January 5), which is also an exclusive media day, as a goodwill day open to the physically challenged. Special arrangements will ensure that physically challenged visitors can move easily from one pavilion to another.
Also, in a bid to encourage students, especially from the engineering sector, to take up automotive engineering and designing as a career, the organisers are conducting a ‘Styling and designing my car’ contest.
Other than these, the Auto Expo will have its usual focused pavilions for accessories, audio, alternate fuel, gas technologies, design, IT, diesel, garage equipment and the ‘Asli-Naqli’ pavilion that targets spurious parts manufacturers and dispenses information to visitors on how to spot a fake product and the need to buy only genuine parts.
Components industry at full strength
The automotive components industry is also doing its own bit to further India’s cause and the past few years have seen it penetrate global markets either through partnerships or acquisitions. Global suppliers like Visteon, Delphi, Magna, Continental and SKF either have a dedicated business here or are in tie-ups with Indian component manufacturers. Not only that, some of them have set up R&D centres to cater to their global requirements. Tyre majors like Michelin, Bridgestone, Pirelli, Dunlop and Continental as well as Indian heavyweights like Apollo Tyres, JK Tyres and MRF have carved their space in the Indian automotive industry. According to ACMA president Jayant Davar, Indian companies are gaining an international foothold and the increased focus on India is a result of the tremendous growth shown by the country, especially when global markets are still recovering from the economic downturn.
Expect to see scores of component manufacturer displays. The component industry has booked 38,000 square metres, about 10 percent more than at the last Expo. Davar says that some of the major component manufacturers from Germany, China, Japan and Thailand will showcase their latest product portfolios and China and Germany have increased their space by 22 percent and 18 percent respectively. This year, Chinese companies have taken about 5,000 square metres of space, which is about one-seventh of that booked by Indian auto component manufacturers.
Some component manufacturers will be announcing major innovations in their respective fields, especially their efforts in the area of green technology. This is one segment which is expected to show speedy growth in the near future, given the concern about growing emissions worldwide and the upcoming introduction of Bharat Stage IV norms in India in April 2010.
The Indian components industry will be at the Expo in full strength, out to make the most of the opportunity and the positive global sentiment towards India. With global automakers like Volkswagen, Toyota, Renault, Nissan, Ford and many others either setting up operations or expanding existing ones, the potential to click new business deals will be high. Furthermore, with many foreign OEMs looking at India as a global hub for their manufacturing operations and exploring tie-ups with Indian components companies to increase their localisation levels, Indian suppliers will be looking to capitalise on the opportunity that the Expo presents.
Expect a solid response from parts makers from all over the country, especially the north and the south. Of the large number of north India exhibitors, Allied Nippon will display disc brake pads, brake shoes and clutch facings while Cosmo Instruments will display air-leak / air-flow testers and digital pressure gauges. Anand Automotive Systems plans to showcase adhesives and sealants, air and oil filters, exhaust systems and parts; ARB Bearings will display taper roller bearings, ball bearings, thrust bearings; Autolite India will display headlamps and LED lamps while Federal Mogul plans to showcase pistons, piston rings, spark plugs, wiper arms, blades and bushes. Shriram Pistons & Rings will display pistons, piston rings, engine valves and piston pins while Sigma Corporation will exhibit rubber moulded components, engine mounts, strut mounts, axles and brakes. The Sona Group will display rack pinion steering systems, clutch plates and covers, propeller shafts, transmission gears and steering systems and Talbros Automotive will exhibit its automotive gaskets, sheet metal components and rubber components.
From the eastern region of the country, National Engineering Industries will display ball bearings, cylindrical roller bearings, clutch release bearings, tapered roller bearings. Paracoat Products will showcase reinforcement pads, anti-vibration pads, moulded carpets, hood roof and engine room insulation.
From western India, Bharat Gears will display transmission gears, turbochargers and steering components while Endurance Technologies will exhibit aluminium castings, shock absorbers and disc/drum brakes. Banco will showcase intercoolers, oil coolers and charge coolers while GKN Driveline will display geared components, driveshafts, propeller shafts and transmission units.
South India will have a strong outing at the Expo. Alkraft Thermotechnologies plans to display radiators, charge coolers, oil coolers and ECS modules. Amalgamation Repco will display automotive and tractor clutch components like clutch-driven plates, clutch cover assemblies and flywheel starter ring gear while Amalgamation Valeo will display clutch cover and disc assemblies. Fenner India will display power transmission belts, pulley, couplings, gearboxes, oil seals, rubber metal bonded auto exponents. Its senior vice-president C Suresh Kumar says the auto industry will grow by 15 percent this year and the company plans to leverage the opportunities through Auto Expo by focusing on oil seals and rubber belts manufactured at its new plants in Sriperumbudur and Nilakottai.
Meanwhile, Gates Unitta India will display transmission belts, tensioners and idlers and industrial belts. The L G Balakrishnan Group will exhibit chains, sprockets, fine blanking and gear components. Liners India will be at the Expo with its camshafts, crankshafts, kingpins and cylinder liners. Lucas-TVS will be out in full force with a host of auto electrical components including power window motors, lighting and diesel fuel injection equipment.
Madras Engineering Industries will display manual and automatic slack adjusters and brake actuators while Manatec Electronics will showcase a range of garage equipment. Coimbatore-based Pricol will have instrument clusters, fleet management systems and immobiliser systems on display and the Roots Group will showcase cleaning equipment and auto electrical accessories. Wabco TVS India will exhibit air compressors, anti-lock braking systems, electronic braking system and door control system among other things.
All these are just a few of the overall 1,000-odd Indian component companies at the Expo. The component manufacturers will be concentrated in Halls 1, 6D, 12A, 13 and 18 and at the Auto Enterprise section, which will see a host of small and medium enterprises.
All in all, the 10th Auto Expo is a much-looked-forward to event. It is expected to attract over 1.8 million visitors including over 150,000 trade visitors keen to make the most of the marketplace that will present itself over a week. The Expo organisers expect that order bookings will surpass 2008’s figure of Rs 100 crore, which is understandable given the rising importance of India in the global auto industry.