The automotive industry today finds its largest challenge and opportunity in the form of its pursuit of efficiency. Towards this, the combustion process is one of the first areas to undergo improvement. At such a time when legislations too are inclined towards lower emissions, suppliers in the powertrain domain have a promising future. NGK Spark Plugs India is one such company and is planning a massive expansion in the years to come. Through our visit to the plant, we got exclusive information on the production strategy and the new product plans.
It’s been about six years since NGK Spark Plugs India started production at its plant in Bawal, Haryana and since then growth has been achieved in an accelerated manner. The company is presently the third-largest spark plug maker in India, spanning business across OEMs, OE spare parts as well as the aftermarket. It plans to achieve a three-fold growth in the next decade or so. That, officials said, would be driven by the multiple expansion and product strategies they have in place.
In the Indian OEM segment, NGK’s present marketshare is estimated at close to 50 %, while in the aftermarket sector it’s pegged at about 12 %. Within the product portfolio, sensors and spark plugs account for equal business for the company.
PRODUCTION & GROWTH
The plant in Bawal is spread across an area of 5,520 sq m and presently produces spark plugs only. The production process at the plant is mainly an assembly operation with an annual capacity of about 18 mn units, while peak hourly production is rated at 4,000. Parts such as insulator and metal cells are received from NGK’s operations in Japan and Thailand, and assembled into the final product at the plant. Presently, the plant only produces nickel spark plugs, while the iridium and platinum spark plugs are imported from Japan. The company’s product portfolio also comprises of oxygen sensors, knock sensors, glow plugs and plug cap, all of which are presently imported.
Talking of the lack of localisation, Keiichi Okumura, Managing Director, NGK Spark Plugs India, said that the volumes in India presently do not justify local production for most of its products. In addition, the global strategy for NGK is to have one plant being responsible for supplying knocked down parts to other assembly plants in a region. In the case of Asia-Pacific, the plant in Thailand plays that role.
This strategy ensures the required production volumes for a given plant, and managing quality too is easier. The production expansion planned through the next 10 years too can be managed without localisation, Okumura said. The metal shell could be the first part to undergo local sourcing, but that would be decided by volumes.
Production presently takes place in two shifts on two assembly lines, comprising of a manual and semi-automatic one. Major machines at the plant include a gap forming machine and crimping machine and are complemented by a final inspection line. The production process is all about precision, and witnessing the process firsthand gives a feeling similar to that of being in a watch factory. We were told that the final inspection line is unique in the way that every spark plug produced at the plant goes through a visual inspection to ensure no defective pieces make their way off the line. The process is carried out by people who are trained to spot any visual anomalies in the final product.
Within the production process a few steps are critical for realising the optimum final quality. These include the insulator assembly, which in case of any quality or manufacturing defect can allow the voltage to pass from the sides and reduce the efficiency of the spark. The next critical process is that of bending, which forms the gap between the ground and centre electrode. Any unwanted difference could disrupt the ideal combustion process.
The facility has full testing capabilities in-house, consisting of a sparking tester, air tightness tester and impact tester. The production machines are imported from NGK Japan, where they’re manufactured. All of them play an important role in calibrating products to meet Indian requirements. The sparking tester ensures the achievement of an accurate sparking process. The impact tester is a key to achieving the right calibration for India. It creates an artificial environment of movement experienced by the engine due to variations on road surface. This is key to performance of a spark plug under various conditions through its life.
Helping the case of growth is the expandable area at the plant, which is estimated at more than 80 % of the total area. By the end of 2014, a new assembly line will be installed within the facility, thereby adding six million to the production capacity. Further, a new factory will be set up within the premises in the near future. The total investment in this new facility will be in the range of Rs 20 cr. The company is also considering the assembly of some more parts, which are presently imported. Any decision to that effect is yet to be taken.
In order to meet all required production standards of the country and its own global benchmarks, NGK’s plant follows a low-waste and proper treatment policy. The company sells all of its waste material to authorised vendors, who in turn ensure proper treatment and recycling of the materials. The company recently received the ISO/TS 16949 certification, which is required by some larger OEMs for their suppliers. This certificate in simple words reflects the ability of a manufacturer to prevent the generation of defective parts.
There is a strong focus within the company to automate the production process and the new line too will be a semi-automatic one. As a result, despite the addition of the new line, the increase in employment will only be in the range of 5-10 %.
Since there are no design and development operations in India, all of the product development is carried out in Japan. As Indian emission norms presently lag those found in Europe and Japan, it’s more cost-effective to bring a technology from Japan rather than re-develop it here.
One of the recent new technologies NGK has launched is the high ignitability spark plug, which is presently being supplied to Honda Motorcycle & Scooter India (HMSI). This product has been developed specifically for markets such as India and Indonesia as the requirements here are quite different from that in developed markets. The rapid pace at which the Indian two-wheeler market has grown and the potential it offers has been a key factor in the development of such a region-specific product.
The difference between a conventional spark plug and the new one is the design. A longer and slimmer metal shell allows for the spark to take place much deeper in the combustion chamber, thereby improving the combustion process. The slimmer design increases the combustion area within the cylinder, allowing for more efficient burning of the air-fuel mixture.
We were told that the cost increment for the new spark plug is significantly high, when compared with a conventional one. Given the higher cost, we expect this technology to be adopted gradually by more companies, more so driven by legislation. This could be one reason why this spark plug is presently being imported. There are plans, however, to localise the assembly of this product as the demand increases.
Another example of design-led improvement is the ‘V Groove’ spark plug, which has been around for some time now. The ‘V’ shaped groove in the centre electrode helps produce a straighter spark towards the ground electrode. This considerably optimises the combustion process and improves efficiency.
NGK is presently supplying oxygen sensors to some Indian customers but the volumes aren’t much as the present emission norms do not necessitate the inclusion of such technologies. Over time, this will change, as legislations force OEMs to reduce tail-pipe emissions. That is when NGK expects a significant growth in the two-wheeler sensors business.
Similarly, precious metal spark plugs too are expected to contribute significantly to the business as emission norms tighten. The advantage these spark plugs offer is a significantly higher life. This happens because the precious metal, due to its properties, is able to prevent electrode erosion, which affects the life negatively, if present. The higher cost of these products holds back companies from adopting it as the price sensitivity is extremely high in India. With tightening norms though, it’ll be a different story as adoption of new combustion technologies will become imperative.
NGK has laid a strong foundation for growth and the present environment and customer trends are expected to further help it. With companies and governments chasing efficiency more than ever, NGK’s product portfolio seems to be well-packed for a take-off. As the Indian norms and automotive industry get closer to western standards, vehicles will have to use a combination of precious metal spark plugs, oxygen sensors and knock sensors.
Adding further to the prospects is the fact that the company is not just looking at bringing technology from other regions to India. As the new high ignitability spark plug reflects, the lack of product development in India doesn’t translate into lack of India-specific products. The company continuously reviews the market and customer demands and will develop specific products as and when they make business sense.
At this time one could wonder about the long-term global prospects of NGK due to their products being aimed at internal combustion engines. Okumura told us that while a shift is still a long time away, NGK Japan has already developed solid oxide fuel cell (SOFC) – a high-efficiency hydrogen fuel-cell and is also a testimony of the fact that NGK is making every possible effort to be future-proof.
Text: Arpit Mahendra
Photo: Bharat Bhushan Upadhyay