A flurry of new orders from car and CV OEMs sees Rane NSK Steering Systems firmly ensconced in the driver’s seat, ready to ride out the downturn.
Chennai-based steering column manufacturer Rane NSK Steering Systems, part of the Rane Group, has bagged several key orders in various segments that can potentially see the company weather the current slowdown. The company is in talks with Maruti Suzuki to become the second supplier of manual steering columns for the upcoming all-new Alto 800. Investments to the tune of Rs 50 crore are also being made to develop EPS systems for Honda Siel Cars India. The products for Honda should be ready in 16-18 months’ time and the onus will then lie on the OEM to duly equip its wares with the EPS. Talks are also on with Renault-Nissan to develop manual steering columns for its upcoming small car project.
From Mahindra & Mahindra, orders for all models to be made from the Xylo platform – as of now, the Xylo pickup for exports and the mini-Xylo – and an export version of the Scorpio pickup truck – have been locked. Orders have also been bagged for the upcoming Tata Indica Vista electric vehicle and the Y1 LCV platform. Rane NSK is also the single-source supplier to both the LDT and HDT trucks from BharatBenz.
“These are exciting times,” says A Rajasekaran, president, Rane NSK. As a single-source supplier to two of the most successful cars in recent months – the Mahindra XUV500 and MarutiErtiga – the company’s order graph shows no sign of the slowdown. Yet, it has to “be choosy” about accepting orders for EPS systems.
“We are not in a position to take on all the business in terms of EPS because that would take a lot of investment and resources. We don’t have that as of now, but we are working to get there. We also need to develop a proper supply chain source,” admits Rajasekaran reluctantly.
New plant in the offing
As part of developing the said capability, the company is looking at options to set up another EPS manufacturing plant within the next two years. Orders that would keep the lines running in the new plant are in the final stages of negotiation and Rajasekaran is confident that by the middle of 2013, he will know where his new plant will come up. However, it is most likely that the new facility will come up either in the West or South of India as Rane NSK already has a plant running full steam in Bawal, Haryana.
The Bawal unit, set up in 2008 with an investment of Rs 37 crore, manufactures 50,000 EPS units a month. The plant mainly caters to Maruti Suzuki’s needs. “As EPS units are sensitive and can’t be transported for long distances, our new plant will come up close to our customers,” Rajasekaran says.
Enunciating further on the EPS project for Honda, Rajasekaran admits that the roughly Rs 50 crore investment is unusually large for a single project. “It’s a high technology product. We are building up a lot of new technology and processes at Bawal. As each EPS unit is unique, we try as much as possible to standardise whatever we can,” Rajasekaran says.
The project also comes at a time when Rane NSK has been on a localisation drive. At present, 60 percent of its EPS unit is localised and Rajasekaran says that this can be pushed to a maximum of 80 percent. He says, “The Indian market still does not offer economies of scale especially for high-technology products like gears, motors, or sensors. We do not have the scale to get our suppliers to come and invest in India. It’s a much bigger capital investment for these products to be localised.” The company has also taken the help of Maruti Suzuki, one of its biggest customers for EPS, for this localisation drive.
Even though the orders for EPS units have kept flowing, Rane NSK has barely been able to catch its breath ever since it ventured the electric way in 2007-08. As of now, it has no R&D department that designs or develops EPS units and it is fully dependent on its JV partner NSK, based in Japan, for all the technology. But this scenario is slowly changing.
Rajasekaran says that NSK has been immensely helpful in this case. “We have four NSK employees from Japan working as line managers at our Bawal plant to help us in critical areas like engineering, material tooling and development, quality control. R&D per se is centralised in Japan. We’re more into application engineering here in India,” he adds.
One such employee of NSK spending time in the Chennai plant is Kensuke Kishimoto, senior vice-president. He says that most of NSK’s products don’t have a market in India, especially in the passenger car segment. NSK as such is adept at EPS systems rather than manual steering columns.
Kishimoto says, “Some of the performance requirements are different in India. We bring some technology from NSK, Japan, and develop some of it here,” adding that NSK has been working with Daimler in Japan for many years and the fact that Daimler has decided to use a similar platform here in India has only helped matters. He adds that he was personally involved with both the MarutiErtiga and the Mahindra XUV500 EPS projects and is happy to see them perform well.
Growing EPS market
Coming back to EPS systems, Rajasekaran says that the penetration of EPS in India is tremendous. “The biggest users of EPS in India are Maruti Suzuki and Hyundai and seeing how they make up for close to 60 percent of the Indian passenger car market, EPS is big,” he says.
However, for a company that began its operations in 1997 as a manual solid steering column manufacturer, Rane NSK has come a long way in the evolution cycle and now has the capability to produce world-class collapsible EPS units.
The time of manual columns is all but over, says Rajasekaran. “Very few cars use manual steering these days. Except for the Maruti Omni and the phased-out 800, all of them use EPS,” he adds. The Tata Nano uses a manual steering column and Rane NSK supplies those units as well.
It was this shift in demand that made the company set up a plant in Bawal in 2008 and move towards serving the CV market in 2004-05.
“The introduction of the Tata Ace did the magic for us. That product has done tremendously well,” he adds. He suggests that the Ace pretty much single-handedly helped the company ride out the slowdown in 2008-09. However, another interesting scenario is shaping up between Rane NSK and Tata Motors. “They (Tata Motors) have been making their own steering columns in-house for most of their CVs. For around 50-55 models, they make 70 variants of columns. We are now in talks with them to bring down this number to single digits with heavy standardisation models,” says Rajasekaran excitedly.
Spurred by the Ace project from a few years ago, Rane NSK had started exploring various avenues like tractors, off-road vehicles and off-highway vehicles. A few projects for John Deere and Polaris off-road vehicles were clinched, but none of them in big numbers.
For now, however, the company is happy with orders that have been bagged from Ashok Leyland and the Ashok Leyland-Nissan venture. “For Ashok Leyland, there is a new-generation ICV – what Ashok Leyland terms an Intermediary Commercial Vehicle – project. There is also the next level of Leyland-Nissan’s development in the LCV segment,” Rajasekaran adds gleefully.
Whatever the project and numbers, Rane-NSK is definitely in an envious position in the current tough environment.
KARTHIK H