Leading manufacturer of spark plugs and related products for internal combustion engines, NGK Spark Plugs has adopted an aggressive growth strategy in the Indian market over the last few years. Present in both OEM and aftermarket businesses, it's the retail market that is a key focus area for the company. Takahiro Matsuura, Deputy GM Aftermarket Technical Service, NGK Spark Plugs Co Ltd gave us an insight into the company's business and future product strategy over a quick meeting just before Auto Expo 2014 began.
Business – Present & Future
The business for NGK in India is presently split into three areas – OEM direct sales account for 45 %, aftermarket accounts for 10 % to 15 % and the rest comes from OE sales (authorised parts). Although the present aftermarket business is new and relatively small, the company has aggressive growth plans for it in the coming years. Matsuura aims to increase the aftermarket business in the coming years by about three-folds. In order to support such an expansion, NGK is planning to invest in a new assembly line at its plant in Bawal, Haryana.
One key reason for this optimism is the growing performance of the aftermarket business despite declining sales on the OE front. Globally, the aftermarket business contributes about 70 % of the total business, while OE business accounts for the rest. In India, the plan is to grow this number to about 35 % by 2020, mainly through utilising OE technology to offer better performance in the aftermarket sector. In line with the same strategy, NGK's display at the Auto Expo primarily included products, which are likely to get good response in the aftermarket.
Despite a growing volume and further projections for significant growth, the company plans to stick to its strategy of assembling spark plugs at its plant instead of localising the supply of components. The reason for this is that ceramic, which is a key component in spark plugs involves a complex and demanding manufacturing process. While the ceramic content will continue to be imported, the company might look at localising the metal parts in the coming years, but Matsuura declined to give any timeline for the same.
New Products & Trends
At the Auto Expo, NGK introduced a few new products for the Indian market, including the spark plug being supplied to the K-Series engine of Maruti Suzuki. Developed completely in Japan, the K-Plug (KR6A-10) spark plug offers twice the life in comparison to a conventional one. We were told that even the OEM service manual suggests a spark plug change interval of 40,000 km opposed to the usual 20,000 km. The longer life has been achieved by usage of a special ceramic material, with a unique internal construction and layout. The size and weight of the unit though remain the same as conventional spark plugs due to OEM specification.
An important launch for the aftermarket was that of the high-ignitability spark plug used by Honda Motorcycle & Scooter India (HMSI) for its Honda Eco Technology (HET) portfolio. This technology played an important part in the 11 % increase in fuel-efficiency claimed by HMSI and will now be available for aftermarket consumers as well.
The company also has a strong expertise in oxygen sensors, which are presently supplied in limited numbers but are expected to grow significantly once India's emission norms progress further. The present product portfolio of NGK in India is inclined towards petrol engines. Talking about the underlying opportunity in the diesel sector, Matsuura told us that the company recognises this opportunity and is already supplying glow plugs to Fiat and Maruti Suzuki. With growing demand for diesel vehicles, the company is looking at launching them in the aftermarket too within an undisclosed timeline.
Talking of future trends, Matsuura said that spark plugs will become smaller and lighter in the years to come as engines are constantly being downsized to meet efficiency requirements. With both the two- and four-wheeler industry expected to make progress in this direction, NGK is already ready with the core technology and will continue to enhance its market-based product customisation, Matsuura concluded.
Text: Arpit Mahendra