CII Southern Region to help unleash potential of Tier-II cities for investment: R Dinesh
Infrastructure development, ease of doing business, promoting Tier-II cities, skill development, focus on MSMEs besides investor-friendly policies are the key priorities to promote investments in the region, R Dinesh, Chairman, Southern Region, Confederation of Indian Industry (CII) and Managing Director, TVS Logistics Services Ltd, told Bhargav TS of Auto Components India in an exclusive interview. Edited excerpts:
Q: What are your priorities to promote further investments in the Southern region?
Dinesh: The Southern states must tap the potential of the Tier-II cities, as they are the growth engines of the economy. CII Souther Region (CII-SR) is working with the respective State governments on this. However, what makes a region an attractive investment destination is not just infrastructure or its competitive advantages but also the status of the social progress. Hence, CII-SR is taking up many initiatives in skill development, rural job creation, increasing farmers income, water body and lake rejuvenation, universal education and healthcare.
Q: What role do you think CII can play in promoting South India as an investment destination for the automotive sector?
Dinesh: We believe that the Indian automotive industry has the potential to be a US$300 billion industry by 2026, from about US$ 93 billion today. Southern Region can contribute at least to one third of this growth. What we need are strong partnerships between the government and the industry. CII’s expertise in creating clusters and in engaging the government and regulators for policy advocacy can be effectively leveraged. For the automotive sector, an enabling policy environment is key to attract new investment. CII is working with the State Governments on sectoral policies including the automotive sector.
Q: What according to you are the key advantages for South India’s automotive sector? And the challenges?
Dinesh: South India is a force to reckon with for the automotive industry owing to proximity to market, vast supplier base, and good infrastructure. South India has the biggest automotive market. Having proximity to market is very important for the industry, and hence, this region is a good option for new investment and expansions. From the operations perspective, South India has a vast MSME and ancillary industries base. So, it makes sense to invest in this region. We have better infrastructure, access to ports, international linkages, and power generation.
South India has also emerged as an IT, knowledge and R&D hub. As the automotive industry gears to move up the value chain - into design, automation, and AI for smart and autonomous driving systems, and so on - they can invest in South India to leverage the IT product and research ecosystem that exist in this region. Further, the State governments by and large are growth hungry, and becoming increasingly business-friendly.
Q: What is vital for the automotive industry in the South to become even more competitive?
Dinesh: We have to move up the value chain to garner a niche for ourselves in the global markets. Hence, design and innovation are vital for the industry’s growth. We have to enhance our design and innovation capabilities to convert concepts into viable prototypes. CII is working on mapping industry readiness on IPR. We are also taking up Digital Readiness Survey of our members that include the automotive industry. CII is taking up its Manufacturing And Digital Excellence (MADE) initiative in a big way. We are also working with MSMEs in helping them understand and deploy Artificial Intelligence and Internet of Things in their business. These should help them become innovators.
Q: What are all the new initiatives that CII will implement this year to boost the economic growth in the region?
Dinesh: Education and skill development is big on our agenda. It is the supply side aspects such as availability of skilled and skillable labour that drive investment decisions to a large extent. We are undertaking skill gap study in labour-intensive sectors. We are working with the Tamil Nadu government on skill missions. We facilitate industry-centric skill policy in the southern states. Facilitating the setting up of Model Career Centres, organising Job Fairs in Tier II cities, Skill Competitions and creating best-inclass education framework aligned with industry needs are some of the other initiatives we have taken up as part of our skill development initiative.
Q: It has been a year after the rolling out of GST. How do you view its impact on the automotive industry?
Dinesh: One year after the roll-out, things have settled down. GST has resulted in the formalisation of enterprises, wider tax base and higher tax revenues. Transport and logistics have become more competitive and less expensive, with the elimination of interstate barriers and implementation of e-way bill system. GST has brought in opportunities for the industry to streamline its supply chains and optimise on warehousing and logistics costs. This could reduce operational costs. The time taken to transport goods has come down with the removal of state border VAT check posts. GST has simplified the tax regime by unifying over 15 different central and state levies into a single type of tax.
Q: What are the steps needed for India to improve its ranking in the ease of doing business globally?
Dinesh: The reforms measures rolled out by the Union Government in the last 4 years has improved India’s ease of doing business ranking globally. CII, as part of its policy engagement measures, has been facilitating in improving the ease of doing business at the state level. We are working with respective governments in helping them roll out Single Window systems and simplifying and computerising various approval processes. We are also advocating exclusive single window clearances for MSMEs.
In the ease of doing business index for States, Andhra Pradesh and Telangana are leading. CII is facilitating the learning and sharing of best practices among other Southern Region States in this regard so that success stories are replicated across the region.
Brakes India Pvt. Ltd., a part of the TVS Group, is building new capabilities to offer the next generation of braking systems for passenger and commercial vehicles. The product portfolio of the Chennai-based brake manufacturer, with the support of its joint venture partner ZF Friedrichshafen AG (ZF), includes calipers, actuation, drum brakes, valves, hose ABS and brake fluid for passenger vehicles, S-cam, hydraulic drum brakes, disk brakes and electromagnetic retarders for commercial vehicles and dry and wet multiple plate disk brakes for agricultural tractors.
The new line-up of the company includes Integrated Brake Control (IBC), radar and camera products for the passenger vehicles. It has developed a hydraulic-assisted disc brake system for light commercial vehicles (LCVs) with a gross vehicle weight (GVW) of over 7-tonne. “Brakes India continues to work closely with ZF to ensure that appropriate technologies are brought to the Indian market at the right time and at the right cost. This was clearly showcased through our first-ever domestically manufactured electric park brake (EPB) and through our early entry into anti-lock braking and advanced slip control systems. With our strong connection with the OEMs in India and our localised design and development capability, we will support our customers in launching vehicles with enhanced safety and convenience,” Sriram Viji, Deputy Managing Director, Brakes India, said.
Passenger vehicle products
Advanced electronics, driver assist systems and electronic stability control (ESC) are some of the products for the future mobility. With integrated brake control (IBC), Brakes India wants to meet the future requirements of low vacuum or vacuum-less braking systems. With the increasing quantum of electrification in powertrains, the company’s electro-hydraulic IBC unit would replace ESC, vacuum booster, vacuum pump (where needed), associated cables, sensors, switches and controllers. It offers superior performance through a single, integrated unit that brings with fuel economy and other emission benefits credited largely to the regenerative braking capability. There would be significant weight savings with less components, compact packaging and easier vehicle assembly process. IBC enables reduced stopping distance, fast brake-pressure build rates for systems such as automatic emergency braking, designed specially to enhance pedestrian safety.
IBC, according to Viji, can be scaled up to suit diverse requirements owing to compatibility with different powertrains from hatchbacks to lighttruck segments. Together with ZF, the company is looking at ways to install the EPB motor on the front caliper of the vehicles in India with calipers on the front and drum on the rear. “It is a very hard thing to fit as the space between the front wheel and steering column is far too limited. We are working on a novel design and a compact actuator to fit it on a 15 to a 16-inch wheel, even 14-inch, if we can work with OEMs upfront,” he said. With SOPs taking 3 to 4 years, the company is also targeting smaller vehicles with EPB on the front concept.
The electronics department at Brakes India is expanding. It is revamping its infrastructure and the team to develop facilities for testing and designing of products. Handheld
by ZF to ensure that the company doesn’t have to start from scratch, it is looking to reach a level from where it can serve customers from the design stage itself and not just the end-product level. AC1000, a fourthgeneration radar with an operating frequency of 77 GHz is said to enable vehicle and pedestrian detection and help vehicles meet 2016+ Euro NCAP 5-star ratings.
With the capability of combining camera in a sensor fusion system to enhance safety and comfort functions, it is claimed to be an ideal solution for effective highspeed adaptive cruise control and automatic emergency braking performance. S-cam3, a mono camera with a single lens front camera is compact and high on the performance front. It includes advanced object recognition technology aided by the Mobile EyeQ3 image processor and vision algorithms known to be combined with ZF’s longitudinal and lateral vehicle control algorithms for functions like adaptive cruise control, automatic emergency braking and lane keeping assistance.
Other features include traffic sign recognition, large animal detection and pedestrian automatic emergency braking made more attractive by use of a common housing design that is also said to be compatible with multiple OEM connector options. Its thermal design enables reliable high-temperature operations. The Tri-cam forward camera from the company can deliver long-range and short-range wide object detection for premium and semi-automated applications. Claimed to offer best inclass optical performance, it makes use of a fish-eye lens for optimum short-range object detection and a telephoto lens for long-range object detection of up to 300 metres. The compact mechanical design is claimed to be smaller than other stereo cameras on offer in the market. The multiple optical paths effectively support automated driving functions.
Commercial vehicles
Brakes India is looking to customise brakes based on the different CV duty cycles. Its hydraulic-assisted disc brake system is claimed to improve braking stability in commercial vehicles. It can improve the overall life of buses. Helping in significant weight reduction for the goods carrying vehicles, the hydraulicassisted disc brake system has the potential to better the return on investment (RoI) to customers. There is immense scope to offer a more cost-effective and lighter solution, without the need to compromise on performance, to LCVs in India with over 7-tonne GVW that adopt pneumatic brake systems, Viji said.
“Brakes India with its advanced engineering capability has developed an actuation system called Unibooster to extend hydraulic brakes up to GVW of 10-tonne. Coupled with hydraulic disc brakes and hydraulic ABS, it provides the end-user with a very optimised solution on safety, stability and performance,” he said. Many OEMs have signed up for the first SOP of the Unibooster to be released shortly. The company has been working to reduce brake noise in the intercity bus segment, Viji said.
Expands foundries
Brakes India’s Foundry division operates iron foundries in 4 locations, each in Tamil Nadu, Oman, Gujarat and Andhra Pradesh with a combined capacity of over 160,000 tonne of castings. Capacity has been coming on-stream at a regular pace in the last 7-10 years and this trend is expected to continue. The company has invested about Rs 300 crore on capacity expansion in the past 5 years. It has also improved quality and productivity of its existing lines. “We have added 2 new lines at the Jhagadia foundry in Gujarat, one line at Naidupeta in Andhra Pradesh and we have replaced one of our older lines in Sholingur to augment output,”
V Narasimhan, Executive Director - Foundry, Brakes India, said.
The Naidupeta project, set up at a cost of Rs 120 crore, will increase the product range of Brakes India. “Its line concept is a little different from what we have done in the past and enables us to produce slightly larger and more intricate castings. Starting off, this line will produce components for brake assemblies, turbo charger assemblies, certain commercial vehicle structural and engine parts as well as new orders that we have on the anvil. Based on the product-mix, we expect to produce about 12,000 tonne of cast products from this new line. We are already evaluating further expansion of capacity at this site with an additional foundry line by investing Rs 100 crore. This will be more like our existing moulding lines and serve to augment capacity by an additional 24,000 tonne,” he said. The company is witnessing a steady and growing demand in the automotive segment. In India, growth has been especially strong in both four-wheelers and commercial vehicles. The overall level of growth in the automotive sector was well beyond projections and this has led to a dearth of foundry capacity, and in some cases lost orders for OEMs due to the non-availability of castings. Due to this reason, many players have put in place or made announcements to increase capacity.
The Brakes India foundry started by supporting its captive demand for braking products. “Therefore, a major focus still remains in braking – both for passenger cars and commercial vehicles. Safetycritical brake parts constitute about 50% of our output. We also service a large range of turbo charger components, commercial vehicle engine and structural parts, steering knuckles, pump housings, fuel injection parts and some other automotive chassis components. The focus of the foundry is to produce parts which are critical either from a safety perspective or from a performance perspective. We also specialise in innovative metallurgy whether it is for high temperature applications such as turbocharger components, or for high strength applications such as chassis components,” Narasimhan said.
Brakes India has been focusing on long-term customer needs and on developing expertise in certain product lines. “Though we always look for new opportunities through innovative design and new material specifications, our bread and butter are our existing product lines of braking, turbo charger components and critical chassis and engine components such as steering knuckles, engine and chassis mounting brackets and bearing caps. Also, as product life cycles get longer, we find that many of our products have been with us for several years. Typical life cycles are changing from 5 years to 8 years and in some cases even over 10 years as certain products are carried over from one platform to the next,” he said.
Export has been a large part of the company’s revenues for several years now and it is one of the largest exporters of automotive ductile iron castings in the country. “Over 50% of our sales value from the Indian locations is towards export requirements, and further over 90% of the production in Oman is exported to Europe and North America. Based on our quality and our ability to adapt to customer needs, we are able to ensure a smooth supply chain for our customers across the globe,” Narasimhan said.