On July 31, 2013, VE Commercial Vehicles (VECV), an equal joint venture between the Volvo Group and Eicher Motors Limited, inaugurated the country's most modern engine manufacturing plant in Pithampur that will manufacture Euro III, Euro IV, Euro V and Euro VI-compliant five and eight-litre medium-duty engines for the Volvo Group globally. This, in fact, is an excellent story of India's emergence as a global manufacturing hub.
The start of production at VE Commercial Vehicles' (VECV) powertrain unit in Pithampur, near Indore marks an unprecedented development in India's manufacturing story. A joint venture conceived on the objectives of collaboration on product development, purchasing and aftermarket support, has stood its ground well, and exactly five years since signing up, the partnership inaugurated what is technologically India's most advanced engine manufacturing plant on the last day of July 2013.
Built with an initial capacity of 25,000 units a year in the first phase, the plant is equipped to ramp up to an annual 100,000 units in a phased manner. While Phase 1 has attracted Rs 375 cr, the company has set aside an additional Rs 125 cr for further increase in capacity. For now, the Euro VI-compliant diesel base engines will be supplied to the Volvo Group plant in Venissieux in France, where these engines will be assembled for the Volvo Group Euro VI requirements. As per the agreement, the same platform will be adapted to Euro III and Euro IV engine technologies to meet the VECV requirements and other Volvo Group requirements for this type of engines in Asia.
Siddhartha Lal, MD and CEO, Eicher Motors is a content man, and is upbeat about the prospects for the company in the near- and long-term. He believes the new engine plant has puts the company in an extremely advantageous position vis-à-vis competition on engine technology.
That was precisely what the JV had set out to do. India's strength in frugal engineering, sourcing and manufacturing cost benefits were the key drivers for Volvo's investment in this market. Bertil Thorén, President, Volvo Group Alliance Office confirmed that sourcing engines from a low-cost base (read India) helps Volvo to be more competitive, so much so that the landed cost of the engines in Sweden could be 25 % cheaper than what it would have cost Volvo if it had produced the engine in Europe. It is also important to note that it will also help VECV source best-in-class Euro III and Euro IV engines based on Volvo Group technology, he said.
By the end of 2013, the VECV story will unfold further with the introduction of new products across its product range, which is likely to see a lot of synergies between the partners coming to fruition. Significant among them could be synergies in the areas cabin and engine management systems.
ENGINES – USP & PRODUCTION
The company claims the final assembly line is the most flexible, aided by the automatic guided vehicles and a smart cell technology, which helps assemble a cylinder head with 166 components in just two minutes!
Currently, Euro VI-compliant base engines with five and eight-litre capacity are being produced at the plant. These same base engines would be adapted for Euro III, Euro IV and Euro V fully built-up engines and shall be used for Volvo group automotive global requirement as well as for Eicher branded future products. Of the eventual 100,000 units to be produced at the plant each year, VECV would export 30,000 units for Volvo Group's global needs of Euro VI base engines. From the remaining capacity, requirements for Euro III, Euro IV and Euro V engines will be met in other Asian countries.
Vinod Aggarwal, CEO, VECV said the engine platforms have a power range of 180 to 350 hp, providing the highest power-to-weight ratio in the Indian commercial vehicle space. He harped on the fact that despite Euro VI regulations being still a far cry for the Indian market, the company is already ready with the technology. "This holds great promise in terms of our technology readiness," he said.
Add the current range of Eicher diesel engines – available in the range of 80 to 155 hp – to the VECV line-up, and you have a comprehensive engine range suited to meet various needs and demands in the Indian and global markets.
In a walk through the shopfloor, we were introduced to what is a fabulous model of high-precision assembly, yet frugal and competent – the smart cell. The VECV plant is only the second facility in the world to have this innovative assembly unit for the cylinder head. Designed by Italian automation major, Comau, VECV worked in close collaboration with Comau to develop the unit for the Indian requirement, said Rajesh Mittal, Senior Vice President & Head – Operations, VECV.
The operation, which involves a precise and synchronised assembly of 166 components, readies a cylinder head in 120 s. The unit is capable of handling the production work for the 100,000 engine units the company plans to make each year. Mittal explained that had it not been for the smart cell, the company would have had to invest in five 'expensive' robots for the same operation. The Volvo Group is now considering the introduction of the smart cell in some of its global plants as well, said he.
In its half a decade of partnership, the JV has clearly come out as one of the most successful partnerships in the CV space. Till the end of 2012, the company had invested more than Rs 1,300 cr and had ramped up capacity up to 5,500 units from the 4,000 units in 2008. Through this year and the next, the company is committed to invest a further Rs 1,200 cr to meet the requirement of ongoing projects, including the engine plant, a new bus body plant at Baggad, new products and further capacity expansion. Overall, VECV is set to challenge established competition for a healthy share of the market pie.
Text: Deepangshu Dev Sarmah