The glum market scenario notwithstanding, Gurgaon-based Technico Industries has been clocking decent growth numbers over the last two years. Bulk of this growth can be attributed to the company's foresight in selective, yet significant investments through the downturn; with many of its products finding good acceptance in the industry now.
Recently, the company inked a 49:51 joint venture with Shiroki of Japan to manufacture seat and window regulators, with Shiroki holding the larger stake. Interestingly, till the JV was signed between the two companies, Shiroki held a minority stake in Technico Industries. In a recent interaction with this publication, Arun Gupta, Managing Director, Technico Industries Limited outlined the company's strategy in the years to come.
BUSINESS – USUAL GLOOM OR BRIGHT HORIZONS?
Gupta is optimistic about the medium-term growth prospects of the automotive industry. The manufacturer of window & seat components, hinges and other sheet metal components invested between Rs 150 cr to Rs 170 cr during 2007 and 2010. Although that proved to be a setback for Gupta initially, positive results have now started showing up for the company. Last year, for instance, saw the company post a growth of about 20 %, essentially a result of the investments made during the period in concern.
Gupta's positive outlook is also based on the plans Maruti Suzuki India (MSIL) has outlined for the next few years. MSIL is Technico's largest customer, and has a slew of product launches lined up over the next few years.
With the focus of those vehicles being fuel-efficiency, weight reduction is a key requirement from all suppliers, explained Gupta. Technico, owing to its efforts over the years has been able to achieve the weight reduction targets specified by MSIL, which was in the range of 30 %. Also, these components are going to be common across models, with minor modifications, adding further to the volumes, he added.
WEIGHT REDUCTION – HANDLING THE SCALES WITH CARE
A weight reduction of 30 % in any component demands extensive engineering and development. In the case of Technico, this was achieved through a combination of material selection and design optimisation. This development work was primarily done by the company's Japanese partner Shiroki. For products such as seat liners and adjusters, Technico is yet to build in-house design capabilities. That said, the company is in the process of developing its own capabilities in these areas in order to meet customer expectations in the years to come, Gupta informed.
The key trend to be seen over the next few years in the sheet metal industry will take place in the area of changing the raw material, from low-tensile to high-tensile steel. Handling high-tensile steel though is a different ball-game, he added, further stating that Technico is already equipped to handle such a grade of steel. This gives the company an edge since OEMs are demanding such capabilities but not many in the industry are equipped with the same.
Talking of the product development capabilities being fostered in the company, Gupta told us that Indian engineers have developed a screw jack on their own. Adding value to the achievement is the fact that the part was significantly lighter than its earlier version. Further, it was designed in a manner that its application was commonised across multiple models. Weight reduction was a paramount requirement since this wasn't a component built-to-print for an OEM, but was on the lines of art-to-part. Hence, it was essential to have a lead over competitors in a critical area such as weight to convince the OEM to adopt it. The effort paid off in the end and today the company is manufacturing about 1,000 screw jacks a day. The company now also possesses in-house development capabilities for hinges but for more complex parts it'll continue to learn from its Japanese partner.
Adding further on the industry's need to innovate and move away from the 'manufacturing to print league' to a more engineering-oriented mindset, Gupta said "that is going to be the driving force in the automotive industry in about a decade from now." With rapidly diminishing labour-cost advantage and low-productivity in comparison with global peers, innovation is what can drive growth for Indian suppliers, he added. That innovation though will need to be from an Indian perspective, he added.
Responding to the advent of mechatronics in the space his company operates in, Gupta said the Indian industry, which is dominated by A and B segment vehicles, is unlikely to accept mechatronics in a hurry.
Text: Arpit Mahendra