Transcript Slide 1

VI Foundry Conclave
1-2 March 2013
Customer Expectations
Ashok Rao
Automotive Axles Ltd
Mysore
Automotive Axles Limited
BSE / NSE Ticker Symbol: AUTOAXLES
• Established:
• Equity Share:
April 21, 1981
Meritor 35%
Kalyani
Public:
• Land Size:
• Current Location:
• Total Employees:
35%
29%
202,343.5 Sqm
Mysore, India
2000+
2
Footprint
PANTNAGAR & BHUJ
N
• Final Axle assembly plant for AL & AMW
• Brake component manufacturing and assy
NOIDA
• Trailer & Tag Axle manufacturing
PITHAMPUR
• Axle manufacturing unit
• Brake component manufacturing & assy
JAMSHEDPUR & LUCKNOW
• Brake component mfg and assembly
PUNE
• Warehouse for aftermarket
BANGALORE & CHENNAI
• Technical center
Current
MYSORE
• Export component manuf
• Axle manufacturing
• Drum & Disc Brake Assembly
Future
3
Major Customers - Domestic
4
India Product Portfolio – Current
MHCV Drive
Axles
Off-Highway &
Military
Brakes
Non-Drive
Axles
Front Axle
Axle for Truck mounted
cranes
Single Reduction Solo
& Tandem Axles
Drum brake for
M&HCV application
Tag Axle
Twin-Speed Reduction
Hub-Reduction
6x6 & 8x8 Military
Axles
Disc Brake for Truck &
Coach application
Exports
5
Trailer Axle
India Product Portfolio – Future Additions
LCV Axles
Off-Highway
Military
MS02 for sub 2T
vehicles
Suspensions
Bogie Suspension
Front Drive Steer Axle
Motor Grader Axle
MS04 for 6T vehicles
Slipper Suspension
Compactor Axle
MS06 for 8-10T
vehicles
High Mobility
Independent
Suspension (HMIS)
Loader Axle
Lift Device for
Tag / Trailer Axle
Exports
6
India Economic Overview
GDP Growth
GDP
9.0
• Robust growth for 10-12 years till 2008
• 2012 affected by global headwinds, de-growth in exports
• 2013 appears to be bottoming-out
8.4
6.9
2008
Industrial Production
8.3
2009
6.5
2010
2011
5.5
2012
2013
2.9
3.4
2012
2013
Industrial Production Growth
15.6
• Robust growth till 2008 post economic liberalization in ‘91
• Recovery phase between 2010-12 after global recession
• 2013 will see minor improvement over 2012
8.2
2.5
2008
2009
5.3
2010
2011
Inflation
Inflation
9.9
• Traditionally have been at 7-8 percent levels
• High inflation recorded in 2011 & 12
• 2013 levels to stablize at 7 – 7.5 per cent levels
8.0
4.8
2008
8.9
7.5
3.6
2009
2010
2011
2012
2013
M&HCV Vehicle Production ('000)
M&HCV Industry
• Growth levels closely mirrors IIP growth
• Weak demand in 2013 – negative sentiments in market
• Should grow at 7-8 per cent levels from 2014 onwards
293
360
352
271
159
2008
7
317
2009
2010
2011
Source: RBI / MOSPI / SIAM
2012
2013
Commercial Vehicle Sales
LCV Domestic Sales Trend (‘000)
MHCV Sales Trend
1200
500
1000
400
800
300
600
200
400
100
200
0
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2008
2017
2009 2010
2011
2012 2013
2014
2015 2016
2017
LCV Sales expected to cross 1 Mn mark by 2017
MHCV Total Sales expected to cross 500K by 2017
Vehicle Model Proliferation
Competition Proliferation
2006
2011
2017
MHCV
5
8
~ 13-15
LCV
7
9
~16-17
Approximately 25-30 new vehicle
models are released every year in MHCV
segment
Approximately 8-10 new models are
released every year in LCV segment
8
CV Market Key Changes …
• Volume comes with Variety
• Uncertainty is certain – Forecast passé?
• Competition at Customer & within Suppliers will drive
• Quality
• Product Performance
• Time to Market
• Price
• Product Liability
9
Part Quality
Metallurgy /
Dimension
• Consistency
Fettling
• Reduced Fettling
• Consistency
Surface
Finish
• Improved Finish / Consistency
• Eliminate Sec. Oprns - Spot facing
Surface
Protection
• Salt Spray : 500 Hrs
Raw Casting ppm Domestic : 20000 vs Global : < 5000
10
Part Delivered Quality
Typical Delivery Condition
Better Delivery Condition
One Quality : Export = Domestic
11
Axle Performance
Metric
Earlier
Current
Expectation
Global
Warranty
1 yr or
100,000 Kms
3 yrs or
300,000 Kms
500,000 Kms
Reliability
B10 Life
100,000 Kms
400,000 Kms
1 Million Kms
Oil Change
Interval
40,000 Kms
200,000 Kms
250,000 Kms
• Product Abuse – No Change
• Domestic CV Performance expectation ~ Global Standards
• Good Engineering & Manufacturing to closer
tolerances Key to success
12
Time to Market
• Concept to Customer continuously shrinking from
couple of years to ~1 to 1.5 years
• End to End Design / Validation (Product & Process) on
Digital Platforms
• Early involvement of Supply Chain thru these
Platforms – requiring good Engineering capability –
Product / Process for upfront participation
• Program Management within the Foundry Organization
to ensure on-time – FTR delivery of new programs
• Follow & strictly adhere APQP
13
Recent Experiences of Complex Castings
Casting Imported from France
•
•
•
•
Equivalent Domestic Casting
Landed Casting cost of Imported << Domestic
Quality Level of Imported >> Domestic
Imported Casting Wt ~ Design Wt
Local Casting Wt ~ 1.2x of Design Wt.
Why ?
• Future Domestic products will use complex Castings
Are we Ready ?
14
Pricing
• Converted from
Castings to Forgings
because of poor
Delivery & Quality
• Apart from per pc
savings addn savings
from avoidance of
COPQ
Challenge : Make
Castings always a
compelling, competitive
& preferred Option
15
Other Expectations
•
•
•
•
•
Focus on Fundamentals …
Invest in Advanced Technologies ….
Support Innovations ….
Support Skill Upgradation / Continuous Trg …
Transform Foundries into a preferred destination
for work at all levels
16
To Conclude
Use Lean period to
prepare to be in better
shape for future
We need each other to
be successful.
Together we can do it !
All the Best !
17