Engine electronics to fuel growth for India Nippon Electricals

India Nippon Electricals Ltd (INEL) is among very few home-grown companies which develop engine electrical and electronic parts in India. The rising share of electronic content in vehicles, specifically around the engine area as a result of rapidly evolving consumer expectations and the incoming regulations (BS VI, safety, RDE and others), will directly drive growth for the company in the foreseeable future.

India Nippon Electricals' Ravinder Sharma says the company is evaluating the feasibility of setting up a plant in Gujarat.

Speaking to Autocar Professional, Ravinder Sharma, CEO, INEL said, “We supply engine electrical and electronic parts to two-wheelers, three-wheelers and general-purpose engines. We specialise in the engine electrical and electronics domain. We supply engine ignition system that includes magnetos, ignition coil, rectifier, regulator assembly, CDI, TCI and others. We also make some controllers and sensors. We have now also developed an EFI (electronic fuel injection) system.”

About four years ago, INEL entered into a technical pact with a European company Athena, a known name in the ECU development domain. INEL has developed the EFI system under support from this alliance. “We have a technical arrangement with them. However, internally, we have our own R&D facilities as well. We are also working with a few customers in India on the development of EFI systems,” said Sharma.

Eyeing two-wheeler EFI demand
It is understood that all two-wheeler OEMs will have to source EFI systems for motorcycles and scooters to ensure adherence to BS VI emission norms from April 2020. The market size of two-wheelers by then is estimated to be more than 22 million units, pointing at a large-scale requirement for EFI systems (and assemblies) in India. This is a huge opportunity for suppliers of components required for the EFI system. However, despite such large-scale opportunity, INEL plans to approach the market softly.

“There are many big players in the EFI space. So, major customers are expected to source from them. We plan to enter this market in a humble way. The company will target somewhere between 5-10 percent of the overall demand for EFI systems initially,” underlines Sharma.

Nevertheless, INEL’s CEO aims to bank upon his company’s core strengths – agility and strong technical support. “Our USP will be the flexibility that we plan to offer to our customers. Not only supplying the entire (EFI) system but we plan to give them (customers) the liberty to select the sources (suppliers of smaller parts that go in EFI assembly) and we will integrate (entire EFI assembly) for them. I am hoping that this will encourage the customers in terms of cost reduction,” Sharma explained.

Typically Tier 1 suppliers, who are fast becoming aggregators, look at supplying an entire system or assembly (of small parts) to the OEMs. Nevertheless, INEL, in this case, aims to let the customer decide who they would like to source the smaller EFI parts such as throttle bodies, temperature sensors, fuel pumps, injectors and lambda sensors and others. This is understood to save costs for the OEMs, who are already expected to keep stringent checks on the rising costs under the BS VI program.

“I think the OEMs will look at ways to control rising costs under the incoming BS VI regime. This approach aims to help them in the same. However, there are times when the customer(s) tells us who they have chosen for sourcing specific parts. So in that case we can source those specific parts from respective suppliers and integrate the entire system for them,” adds Sharma.

R&D centre coming up in Hosur
To ensure smooth integration, the company is now investing an undisclosed sum in setting up what it calls a world-class R&D centre in Hosur. According to Sharma, the planned unit will have emission analysers, chassis dynamometers, and other capital-intensive critical testing and validation equipment.

Revealing INEL’s plan, Sharma stated, “The idea here is to offer support to the customer (on advanced engineering, product evaluations) so that we can jointly do the testing and validation thereby saving costs and time. It is scheduled to come up later this fiscal. R&D will drive the growth in future. We are a homegrown technology driven company. Our core focus areas are automotive electronics and software.”

INEL employs a mix of engineers in software, hardware and electronics domains. The company has manufacturing footprint across four locations with main R&D center and mother manufacturing plant in Hosur. Other units are located in Pondichery, Revari (Haryana) and Kolhapur.

 With increasing demand for electronic parts, capacity expansion is also on cards for INEL. Sharma says there is enough land bank across all locations to accommodate the same. INEL’s current manpower across all locations is about 1,500 people.

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“We have also developed integrated starter generator system (ISG). It is already under testing stages. ISG and EFI systems will be two main vehicles of growth for us in the near future. We make speed sensors, temperature sensors, pressure sensors and of other types. That is also an opportunity area for us. We make ECUs are biofuel engines for three-wheelers and Greaves Cotton is a major customer in this space. We are expecting FY2018-19 to be a good year with double-digit growth,” estimated INEL’s CEO.

INEL is also evaluating the possibility of setting up a plant in Gujarat. However, as per the senior official, this depends upon the orders from the customers based in the state. “The feasibility study is underway,” signs off Sharma.