Bearings on a roll

In the plus-50 years of its existence, the Indian automotive component industry has attained the distinction of manufacturing a very diverse range of products that perhaps has very little parallel with its counterparts in emerging economies in Asia and even in other parts of the world. The range includes auto components which fall in the categories of engine parts, transmission and steering parts, braking and suspension parts, electrical and body parts.

Bearings for automotive applications, and there are many areas where their usage is found in the functioning of a vehicle as a whole, are among the several kinds of auto components which have been seeing high growth rates in terms of production as well as sales in the country. The potential that leading transnational companies like SKF and INA-FAG saw in the country for their products is what eventually led them to begin manufacturing operations here of which the former has been entrenched for many years now and the latter is relatively new.

Bearings are of several kinds such as ball bearings, tapered roller bearings, needle roller bearings, cylindrical roller bearings and others. Many of them are complex and continuously evolving technologically, depending on the applications for which they are required, and also utilise lubricating and sealing technologies. India has several manufacturers of automotive bearings – indigenous as well as MNCs. While companies like NRB Bearings make a very wide range of bearings both for automotive and other industrial applications, there are others such as Kirloskar Oil Engines which specialise in bearings for application in engines.

Domestically speaking, the mainstay business of most automotive bearing manufacturers in the organised sector is the OEM/Tier-1 segment where supplies are made to vehicle makers across various segments from two-wheelers to tractors. This is followed by the aftermarket (spares) market and exports.

EXPORTS SCENE

In the export market, buyers are from OEM, Tier-1 and the aftermarket segments as well. There are a few Indian manufacturers which have been exporting a more sizeable percentage of their production than diverting supplies to the Indian aftermarket. The organised sector accounts for 53 percent of the Rs. 3,000 crore domestic bearing industry. Global demand for bearings is projected to rise over five percent annually to over $40 billion in 2010.

Indigenous bearing makers could look to set up manufacturing operations in countries such as Thailand and Indonesia. Many have been exploring enhancing exports in emerging markets and former Eastern Bloc countries.

##### Bearing design and technology are constantly evolving to suit both product and customer requirements and hence manufacturers that wish to be ahead of the pack have been giving due attention to research and development activities not just in the developed countries of the world but in India as well. Timken for instance had established the Timken Engineering and Research facility in Bangalore in 2003 – the second largest Timken facility in the world.

The CEO of a bearing making company in the State of Gujarat told this writer that he expects his segment of products to grow at a rate of 20 percent annually for some years and foresees steady demand from the two-wheeler, passenger car, heavy vehicle and tractor industries.

OVERSEAS COMPETITION

The possible lowering of customs duties on auto components in the forthcoming Budget from the current level of 12.5 percent is a matter of concern for bearing manufacturers as they feel that it could open the doors wider for imports of bearings from China and other countries. Free trade agreements and other regional trade agreements with countries like Thailand was also earlier viewed as a factor that would hot up competition for bearing manufacturers in India.

Indian exporters of bearings are known to be facing competition in international markets from their Chinese counterparts. However, according to exporters here, overseas buyers are slowly realising that price advantages offered by Chinese companies could be at the cost of quality. The Indian auto component industry has been facing rampant counterfeiting of its products for many years and the bearing industry is not untouched. Most makers of bearings such as SKF, Galaxy Bearings and NRB have had to cope with counterfeits of both their products and packaging as well.

While they have been making their own efforts to combat the menace of counterfeiting, some such companies have been also taking part in consumer awareness exhibitions organised by the Automotive Component Manufacturers Association of India (ACMA) titled Asli-Naqli, which the Association has been organising during the Auto Expo series or its aftermarket and services exposition titled Partmart and Autocare.

COUNTERFEIT THREAT

Some of their products are so well counterfeited that it is not easy for a consumer to identify a genuine from a fake -- even in the packaging of the product. Holograms are introduced as a measure but have a short-term impact as they too are soon counterfeited.

Counterfeiting in bearings is not just being seen in India or other emerging countries but is also being faced in developed markets. Recently two of the world’s leading companies Sweden’s SKF and Germany’s Schaeffler Group (owners of the FAG and INA brands) took joint action in initiating a raid against a distributor, in Franconia, possessing counterfeits of the SKF, FAG and INA brand names. Together they destroyed about 40 tons of counterfeit roller bearings worth around eight million euros at the FAG site in Schweinfurt.