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MOTOWN INDIA Vol 2 / Issue 12 September 2012

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The pulse of the automotive industry

Vol-2 / Issue-12 / September 2012 / `100/-

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Reva NXR electric car by


Sept-end 2012
Pages 32-35

Prabhakar
Kadapa, CEO,
Avtec Ltd.

Anand targets 1000Cr


aftermarket business
Pages 36-39

avtec Ltd.

Engineering Powerhouse

Countdown begins for


Automechanika show
Pages 54-55

RNI No DEL ENG/2010/34562

PLUS

Technology spotlight : selfdriving vehicles

ZF-EcoLife transmission set to


improve Indian city bus mobility

25 years of front passenger airbag


from Mercedes

Tte--tte: Nalin Kapoor,


Sr. GM & Group Head
Marketing, Hyundai Motor India
Tte--tte: Pter Bolesza,
Vice President, EEU & Emerging
Markets at Nav N Go Kft.

Cover report

Cover report

Engineering
powerhouse

hether it is the blazing


tracks of F1 circuits or the
congested roads of New
Delhi, driving a car needs
tremendous skills and high
levels of concentration. The cars, in turn, need
to have sound engines and efficient gear
boxes, without which neither a car nor its
driver can make any progress. It is here that
companies like Avtec Ltd painstakingly make
our world more efficient and worthy. Avtec,
part of the CK Birla group of companies, is
Indias leading manufacturer of engines and
transmissions. Whether it is a gear box for a
small car or a huge truck, Avtec makes it all.
Their forte goes beyond this.
Having acquired Assag, a Switzerlandbased engineering company sometime back,
Avtec is looking at both inorganic and organic

Report: P.Tharyan & Cover photography: Mohd. Nasir

22 September 2012 / Motown India

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routes to surge ahead. In the current fiscal it


hopes to generate total gross revenue of 920
crore. The company has plans to become a
2,500 crore company in five years time.
The company which started business with
its own group company Hindustan Motors,
has progressively moved forward in the last
several years. The gearbox and engine for the
HM Winner LCV is supplied by Avtec. The GM
Tavera BS III engine and gearbox are supplied
by Avtec. The company is working on a BSIV
engine for its customers . Ford India cars
including the hot selling Figo car today runs
on gear boxes assembled by Avtec. Avtec
supplies certain components to Mahindra
& Mahindra which go into the Bolero and
Scorpio. For the Tata Nano, the company
makes all the gear elements. While Avtec
supplies the parts for the Nano, Tata Motors

Motown India / September 2012 23

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Cover report

Within the powertrain domain wherever competencies exist


we are keen to explore the opportunity.
company assembles the gear box. Avtec also
supplies parts to Tata Prima, the world truck.
It supplies transmission parts as well as axle
parts.
Leading engine and transmissions
manufacturer
Avtec is today a leading manufacturer of
engines and transmission for automobiles.
In the off highway segment too it offers
its transmissions. Off highways include
the sectors of mining
construction, oil field
applications, railways,
etc. The company has
drawn up plans to enter
the area of industrial
gears. Industrial
gears are used in the
industries of steel,
cement, processing
and power, to name a
few. While components
are another area it has
identified, the company
has made inroads into
manufacturing gensets.
The gensets are being
manufactured with
EFFICA brand name.
It is for the first time in
India that a company
is manufacturing gas
gensets that can run on multiple fuels, which
clearly demonstrates Avtecs technological
superiority.
Most of its customers are global players.
Back home it supplies engines and
transmissions to GM, Ford, Tata Motors and
Mahindra, Ashok Leyland Nissan, Allison
Transmissions and Daimler, among others.
The company is supplying three products
to Daimler. Avtec supplies engines for light
duty trucks below 12 tonnes. For Bharat
Benz trucks above 25 tonnes, the company
is supplying a part of the axle assembly. The
company is working with them on some
interesting assignments. For off-highway, the

24 September 2012 / Motown India

company supplies to the likes of Caterpillar,


BEML etc.
Assag, the recently acquired Swiss
company today has a turnover of 100 crore
approximately and employs roughly 50
people. There is more to come, says Prabhakar
Kadapa, Chief Executive Officer of Avtec Ltd.
In an exclusive interview with Motown India,
Kadapa says that his company is exploring
both the organic as well as inorganic routes
to grow in the coming years. A four-year

strategic growth plan has been drawn with


the help of McKinsey, a global consultancy
firm.
We have established a footprint in
Switzerland. Assag is more of an R&D and
prototype development company. In India
we do R&D as well as manufacturing. The
Assag plant does not do volume production,
only small and limited production. We have
great synergy with Assag in Europe, he says
enthusiastically.
Assag is known for its solution in crown
gear differential drive, harmonic drives,
planetary drives and pioneer in face gear
technology. Assag has a design and assembly

facility in Switzerland and a manufacturing


facility in Netherlands.
Kadapa also explains that Assag is into
speciality gear cutting process which is
called a facegear technology. The difference
between normal gears and face gears is
that the latter can be moved axially. Aircraft
landing gears, for example, experience
temperatures as diverse as minus 50 deg C
to plus 53 deg C, all in a span of few minutes
of being airborne to landing. These parts
are subjected to extreme
temperatures, resulting in
the clearances between the
two meeting gear points
shrinking. At this point
jamming can take place. Face
gear technology ensures that
there is no jamming. This
has been supplied to A380,
the new generation aircraft.
Similarly Assag has several
patents to its credit, informs
Kadapa.
Assag, he says, is a growing
company. The company has
also designed a key part of
the central gear differential
in a new Audi car. Assag has
always been into very niche
applications. The starter
motor gears of a Porsche car
too were designed by Assag.
The know-how of Assag and the capability
of Avtec shall complement each other.
This shall reinforce Avtecs commitment
to customers as a one-stop solution from
concept to design, proto tying and series
production. This partnership will bring our
customers a better technology, world class
quality, on-time delivery at competitive
price and in turn make Avtec the first choice
supplier for power train and precision
engineered products and services, says
Kadapa.
Avtec has also tied up with PCM, a division
of PSA Peugeot Citroen and are ready to
offer Euro IV and Euro V to any automotive

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Prabhakar Kadapa, CEO, Avtec Ltd.

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Motown India / September 2012 25

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hakar Kadapa
Stefan Schoen of Assag with Prab

manufacturer in India and abroad. With a couple


of OEMs we are doing a feasibility study for another
automobile which is not part of PSA or Avtec. We are
looking at anyone who wants a third party support. We
are ready to offer Euro IV and V engines, he notes.
Recently the company won business with GM
Autovaz Russia. This is for a manual gear box for an
SUV. We also won business for a 4X4. This is one we
are designing and are trying to bring new features in
the 4X4 different from what they are having today. This
testifies the relationship we have with GM, he says.
Developing five verticals
Avtec has four manufacturing outlets in India. The
company manufactures engines and transmission parts
for domestic as well as global OEMs. The company has
1,600 people employed at its plants in India of which
around 450 are management staff which includes
engineers etc. The rest are workers spread over the
four factories. While two factories make automotive
products (Pithampur and Kharagpur), the other two
make off-highway products (Hosur and Chennai).
We are into B2B business as well as B2C business. In
the B2B business we do contract manufacturing. The
customer sends an RFQ to us we respond to it with
a code. Our responsibility is that we take the design,
understand the technology then procure the parts
and manufacture them. The assembling, testing and
warranty etc are our responsibility. In this case the
customer takes the lead because the design belongs
to him. The second case is that we design and we have
a product with us, we go to the customer, and offer
them the products to them whether it is A, B or C, and
tell them probably it may suit their platform, points out
Kadapa.
The gearbox in the Dost LCV being manufactured by
Ashok Leyland Nissan venture belongs to Avtec. We
approached Ashok Leyland-Nissan with our gearbox.
Then they wanted us to test this gearbox against one
of their partners. We proved to them our product
was equally good. In our line of business we cannot
have a completely off-the-shelf product. But an off-

Vertical machining centre


Kharagpur plant

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Motown India / September 2012 27

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the-shelf product could be a start point. We do


reasonable changes if required, so that customer
requirements are met. This cuts down the cycle
time drastically, notes Kadapa.
Avtec works on products that are likely to
be developed by its customers in the long run.
Based on this, it approaches its customers with its
own products. In several cases it offers them the
products it has with it. The OEMs in turn suggest
modifications. Thus starts a new business relation
with the customer. Some companies do not like
to outsource powertrains. Some do, but at the
end of the day it depends on the strategy of the
customer, he says.
Sixty five per cent of Avtec revenues come
from automotive. The remaining 35 comes
from off highway sector. The automotive sector
includes passenger cars, LCVs, SUVs and HCVs. The
company does not make any parts for two and
three wheelers.
When we did a strategy study with McKinsey
we came out with five verticals. These are
automotive, off-highway, components, industrial
gears and gensets. Industrial gears are big
gears compared to automotive gears and the
technology here is different too. The speeds and
the torques too are different. They are heavy and
weigh anywhere from one tonne to 10 tonnes,
says Kadapa.
The genset business is corollary to its existing
business of engine manufacturing. We make
CNG engines. We make CNG gensets. We will
grow as CNG is made available for the public for
commercial use. We have a best in class product.
We have done a comparison as what is globally
available also. Our CNG engine is the best in class.
We have exported more than 8,000 pieces to FG
Wilson in the past. We have already entered the
30kw range. We want to go up to 120kw. Here
there is both a B2B as well as B2C element. We
have already done a soft launch in the eastern part
of the country. We have set up a regional office
in the east and have tapped the markets of West
Bengal, Bihar, Odisha and Assam. We want to
also tap the markets of Nepal. We have just about
initiated sales in Delhi wherein we have sold a few
CNG sets as Delhi has got adequate availability of
CNG, reveals Kadapa.
In the first quarter of this fiscal the company
made its presence in genset business in the
eastern part of India. In the second quarter it plans
to come to northern part of the country and by
next year it plans to enter the markets of west and
south India. Its green coloured gensets run on
gas---CNG, PNG, LPG and bio gas. The gases have
their own calorific values, yet a trained person or
technician can ensure that the genset switches
on to a different gas, all in a matter of an hour or
so. The market for gas run gensets is very limited
as this market is dominated by diesel. As CNG

28 September 2012 / Motown India

Hosur Plant Component machining

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Motown India / September 2012 29

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availability improves, the market is expected


to shift towards gas based gensets.
Though the company has prepared
a four-year strategic growth plan with
McKinsey, Kadapa notes that business from
the automotive segment would continue
to dominate total revenues to the tune of
60pc. Even as the size of the cake increases,
automotive would continue to constitute the
larger slice of this cake.
The four-year strategy
Last year, Avtec recorded gross sales of
750 crore, excluding revenues from overseas
operations. This fiscal the company hopes
to grow to 920 crore inclusive of overseas
operations. In the next five years time, we
want to take the company to the half a billion
dollar mark ( 2500 crore approximately) in
revenues. We also want to become the most
preferred powertrain supplier to both Indian
and global OEMs. Having these two in mind,
we interlaced our business plans. The business
plans roll out every year. This is also inclusive
of organic and inorganic growth. We did one
recently. We are examining a couple of them

30 September 2012 / Motown India

Cover report

closely. These are based overseas. Today we


are looking at international companies but
we are also open to domestic companies.
It could be a company with solid design
capability. If they have a manufacturing
capability, it would be good. Otherwise we
can definitely support them. We have proven
credentials in application engineering,
product development and manufacturing. So
if they have a very good design capability we
could probably lend manufacturing support.
Or if it is a complete business on its own, it will
be completely fine with us. We are looking at
areas of industrial gears and automotive, he
says.
In the business of gensets, the company is
capable of manufacturing gensets upto 125
kw. We have 100pc design capability. From
the pollution standpoint the next revolution
will come in the genset industry. We are
preparing ourselves and our products are
capable of meeting the next level of norms.
We have already tested them. Currently we
are looking at M&A in industrial gears. In
automotive we are not looking at generic
auto component field because we ourselves

are not
such a
company.
Within the
powertrain domain
wherever competencies
exist we are keen to
explore the opportunity, says
Kadapa.
From the transmission point,
yes we are working on more modern
technologies. Our company Assag has
developed gear boxes for electric cars.
They also supplied gear boxes for electric
monorails. There are three elements of
product development. The first one is
application engineering. We were doing
it a couple of years back. From there we
progressed towards development. The third
one which will be the ultimate test is the basic
R&D. Thats why we set up a new R&D centre
in Hosur, he adds. With Avtec working so
furiously towards achieving its goals, it can
easily be assumed that Avtec has emerged as
a formidable engineering powerhouse, not
just in India but globally too. MI

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EFFICA Gas & Diesel Gensets

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Motown India / September 2012 31