KNORR-BREMSE | SCALING UP TECH CAPABILITY FOR FUTURE GROWTH

KNORR-BREMSE | SCALING UP TECH CAPABILITY FOR FUTURE GROWTH

The present health of the Indian commercial vehicle industry is in a bad shape, and while some believe the bottom has been touched, others aren't sure yet. Echoing this thought was Kithur Mohamed, Managing Director, Knorr-Bremse Commercial Vehicle Systems India, during a conversation with us at the company's commercial vehicle factory in Pune, Maharashtra. Knorr-Bremse is one of the leading companies in commercial vehicle (CV) braking systems globally.

BUSINESS – LOWEST YET?

Mohamed told us that under present circumstances it's very hard to tell if things could deteriorate further. However, once the curve goes on an incline again, the company will be ready to meet the increased demand. Making the best of this situation, the company is readying itself for better times through implementing measures for improving productivity. Such methods reduce the cycle times and make work easier for the workforce, allowing quality engineers to make further improvements in the products, said Mohamed.

The company also operates a technical centre in India, aimed at the local as well as global markets, which is presently working aggressively on developing new and efficient products, added Mohamed. About 120 engineers are presently working in the centre collectively on railways and CV braking systems. The centre plays a vital role in the company's global plans as it's only the third technical centre of the company outside Germany. It focuses on leveraging the low-cost manufacturing of India in terms of software and hardware, he added. Expansion is on the cards at the centre, and the number of engineers would be ramped up to 200 as early as mid-2014.

The technical centre's global bandwidth lends the company an opportunity to explore international markets. Mohamed expects exports to account for a considerable portion of total revenues starting this year. With a target of about 35 % share for exports, Mohamed believes that the company's risks would be well distributed, giving it greater stability during cyclical fluctuations in one region.

Talking of the long-term prospects, he told us that Indian CV market will surely deliver on promised growth as the ratio of vehicles to population is still too low and a lot of economic development is yet to be made. While multiple factors have injected sluggishness in the market, the entry of many new players in the segment is a testimony of the future that India offers. By the start of 2015, things could start improving and unlike passenger cars, most new CV makers have unique offerings and would not compete with each other as fiercely as carmakers do.

Knorr-Bremse is also looking at legislations to drive growth in the coming years as talks and concerns about safety and mandating systems such as ABS continue to grow. The company is presently supplying to almost all CV makers in the country, with a varying range of product penetration. Helping the company is the fact that companies such as Daimler and Volvo are already buying from Knorr-Bremse outside India and hence find it easier to source parts from them here as well, rather than look for a new vendor.

Talking of upcoming trends in India, Mohamed said that the Indian CV market largely consists of a drum brake set-up. The next step would be the transition to a disc set-up, which would significantly enhance safety. Another technology is ESP for CVs, which is yet to be introduced in India. Knorr-Bremse is presently working on such a system for an undisclosed customer. Once introduced, this system could significantly reduce the toppling of vehicles. An indigenous development he talked about was the Anti-Roll Back system, which will prevent the vehicle from rolling back on hills and inclines. The system will be commercially launched sometime in 2014 and will be offered to all customers.

Knorr-Bremse

OUTLOOK

Mohamed highlighted Knorr-Bremse's unique ability to offer end-to-end solutions in the CV safety domain, which makes it easier and economical for customers to partner with them. He added that no other company presently offers a complete range of safety products like Knorr-Bremse, making them the only full safety solution providers for CVs. The low-penetration of seven to eight per cent for ABS in CVs also provides a high ceiling for the company to grow, he added. He foresees stronger demand for ABS in buses, especially the ones offered by international OEMs.

The present installed production capacity at the Pune facility is about 85,000 vehicle sets per year with room for further expansion. Only about 50 % of the plant is occupied, leaving the remaining space for expansion, particularly for exports.

Text: Arpit Mahendra