Renault India's new small car opens up big opportunities for Nipman Fastener

The launch of Renault India’s small entry level hatchback (codenamed XBA) on May 20 will open up a plethora of opportunities for Nipman Fastener Industries, a key supplier to the model.

The XBA will come with an all-new 800cc, three-cylinder petrol engine (codename: BR8). Based on the new, highly flexible CMFA platform, the Renault XBA, rumoured to be called the Kayou, is expected to have styling that is more like a crossover than a compact hatchback.

Nipman Fasteners is gunning for a turnover of Rs 30 crore from the Renault business in 2016-17. This business also marks Nipman’s entry into the four-wheeler market. Thus far, it has been a major supplier to Hero MotoCorp with supplies of fasteners mainly to the two-wheeler segment. The company, which registered a turnover of Rs 150 crore in 2014-15, is targeting a turnover of Rs 210 crore for 2015-16.

Autocar Professional had in its 1 October 2013 issue written (‘Nipman Fasteners' brave new vision’) about the component maker bagging orders for two of Renault-Nissan’s upcoming A-segment cars – XBA and Nissan’s i2, slated for a 2015 launch. It is believed that Nissan will roll out its i2 small car some 7-8 months after the Renault launch.

About 60-70 Nipman fasteners will go into each Renault XBA. With the French carmaker competing with Maruti Suzuki's Alto, Renault is likely to be pitching for similar volumes in the range of 200,000 units annually to start with. Besides, fasteners will also be exported by Renault India in engines, body parts and trim parts to Renault Brazil for assembly operations of the XBA in Latin America.

“Our business and relationship with Renault-Nissan has grown and it has to now deliver results. All  major fasteners have been used in the Renault small car and we have supplied them even for the engines. Until now, Renault was importing these fasteners from France or Japan – this is the first time that an Indian company has participated in this venture. Renault has used 60-70 of our fasteners in one model, almost all of them being from Nipman with a few also coming from the TVS Group. We have worked closely with the carmaker for almost one-and-half-years and are now working with them on models which are already existing in the market,” Pravin Malhotra, chairman of Nipman Fastener Industries (pictured above), told Autocar Professional in an exclusive interaction. 

Also read: Nipman joins hands with IL Ryung of South Korea for technical collaboration

This has also been a big learning lesson for Nipman Fastener as it has led to acquisition of knowledge and upgradation of its capabilities in tandem with Renault’s requirements. The component maker’s  upcoming design and engineering facility at its most modern plant at Bawal in Haryana has gained traction with this interaction. The carmaker’s audit system has been integrated into Nipman’s internal audit systems and quality assurance system for checking the quality of the end product. Thereafter, the system has been extended across all its manufacturing locations at Ghaziabad, Manesar and Haridwar in addition to Bawal.  

Supplies of fasteners for the Renault small car will follow from Nipman’s plants at Ghaziabad, Manesar and Bawal where phase I is over. The formal inauguration of the Bawal plant though is a few months away.

Renault-Nissan CEO Carlos Ghosn in every India visit has underlined the importance of frugal engineering in the cars of the Alliance partners in order to make them qualitative and cost effective. A natural corollary, therefore, was the query on the type of frugal engineering that has gone into the fasteners for the A-entry car of Renault.

Malhotra says fasteners being a critical component, quality is of paramount importance. Hence, vehicle manufacturers are more comfortable importing them but now with the strong focus on localisation and lowering costs in a cost-competitive market like India, OEMs are looking to actively support this initiative.

For Renault, it was the first time that it was localising fasteners in India which meant that regular quality checks and tests of the fasteners were the order of the day to meet international European standards. In fact, Nipman Fasteners is now in Renault’s global catalogue.

A separate engineering team comprising  7-8 people from Nipman has been working closely with Renault  supported by a cross-functional team from processes with a Renault official present at the Nipman plants every 15 days to upgrade their prowess. This has improved the parts maker’s processes and kept them ahead of the competition curve. Along with Sundaram Fasteners of the TVS Group, Nipman developed on its fasteners from existing drawings.

The Delhi-based parts maker will also be a supplier of another 20 parts to the Renault Duster, an order worth Rs 2 crore annually, with an additional 30 parts carried forward from the small car to the Duster, adding upto 50 parts in total. 

Even before the Renault small car launch, Nipman has begun receiving enquiries from Renault subsidiaries in Europe for quotes for fasteners. In addition, Nipman’s fasteners will be making their presence felt in the new Honda Jazz that is slated for a rollout later this year as also in the new City. Nipman has begun development work with Honda Cars India over a year ago.