Shandar Alam, Managing Director, Vehicle & Hydraulics & Balachandran Varadharajan, Director – Operations, Vehicle and Hydraulics, Eaton in India, speak to Amit Panday on developing solutions for India Auto Inc to enable CV makers benefit from the new axle load norms, BS VI regulations, vehicle electrification and also on introducing AMTs for trucks.
How do you assess Eaton’s positioning in India as a supplier of transmission systems to the automotive industry compared to the existing competition locally?
Shandar: For Eaton, India is a very strategic market. In the overall (growth) strategy, India forms a very critical part because of the opportunities that it offers. Globally, for more than 100 years, and for over a decade in India, Eaton’s Vehicle business has been providing leading-edge technologies and components that enhance power and fuel efficiency and make transportation safer and more reliable. Eaton’s Vehicle business is about a decade old (in India).
The Ranjangaon facility was our first greenfield plant (in India) from where we started our transmissions business with many leading OEMs – with whom we are engaged even today. At our Ranjangaon plant we make medium- and heavy-duty transmission systems and some of the other parts for commercial vehicles such as the clutches as well.
Eaton’s Vehicle business in India has seen significant customer engagement in these 10 years. From a market share standpoint, you will agree that many OEMs do their own transmissions. But when it comes to being materially integrated, Eaton is the largest shareholder of the transmissions market. Today I can proudly say that Eaton has more than 100,000 transmissions present on the Indian roads, all made here at the Ranjangaon plant. This is a great achievement for us.
Over the past few years, Eaton’s share has gone up significantly and the reason is rather simple – we understand the market needs. With new regulations, you need more reliable, robust and efficient products and that is where Eaton plays a very important role. With so much of action happening in India around axle load and increasing horsepower, the power requirements gain tremendous focus and that is where we offer value to our customers and the end-users.
Similarly on the automotive front, Eaton has two manufacturing plants for engine air management products, where we engage with passenger cars manufacturers and supply valves and valve actuation products. These products are fully compliant with the current norms and help OEMs design their engines in compliance with the incoming BS VI emission norms.
Driven by the emerging industry trends and path-breaking changes in the regulatory framework, Eaton is surging ahead on its technology-led innovation journey and building solutions that can potentially shape the future of mobility in India.
What kind of growth are you aiming for between now to 2020 in the wake of BS VI and axle load norms? How are you preparing to take on the customers’ demands in this evolving market?
Shandar: The mega trends are positive, with the infrastructure development phase, urbanisation, the growth in population; so the fundamentals are strong. With all these changing regulations and thus environmental improvements, it is good for a company like ours – who believe in technology, have products and capabilities to really meet the requirements of the industry.
So if I have to talk to you about our strategy for next 5 years, we see a pretty strong growth trajectory with a solid profitability. Of course, that comes with a lot of improvement work that we have laid out for stronger operational efficiency and customer engagement in front-end as well as back-end. We foresee pretty strong growth going forward and we have a list of actions for product improvement on operational efficiencies. We also have to get ready as per the new norms and regulations coming in the market – just like the axle load norms change that happened recently albeit it was more of a surprise to the industry.
By design, our product was already capable of taking that kind of extra loads, so these axle load norms helped our reliable, robust and efficient transmissions. From an overall standpoint, I am really pleased to share that Eaton is growing above the industry standards.
How critical is the Pune-based R&D center in Eaton’s global scheme of things?
Shandar: They are largely working on the global products of Eaton. We have a team dedicated on electric mobility globally. Likewise, we have a set of people in Pune working exclusively for the e-mobility specific requirements in India.
In Pune, we have our global R&D center that supports the global projects as well those for India. Our e-mobility team in India was set up and began operations earlier this year (2018). At present, we have around 40-45 people working on the e-mobility, and the team continues to expand. We are reporting e-mobility as a segment on Wall Street.
What new products does Eaton plan to introduce in the Indian market in the near future? Will the upcoming products be localised for India?
Shandar: On the transmission side, we have Ultrashift Plus that we are introducing in India on the AMT side of our business. This is an industry-leading range from Eaton. This not only provides more driving comfort to the driver, but also gives significant amount of fuel saving compared to the manual transmissions as well as the conventional automatic transmissions that are available in the market.
As per tests and research, it’s about 18-20 percent against conventional transmissions and 5-8 percent against the manual transmissions, thus ensuring strong savings on fuel efficiency.
Automatic transmissions offer a different feeling to the driver. There are some applications where the government is coming up with distinct regulations, especially for buses, where the AMT are mandatory. Since we already have the product in place, the scale up will only depend on regulations coming on the truck side as well as trucks still use the manual transmissions.
Bala: The good news is that this plant (Eaton’s Ranjangaon unit) has a product (in the area of electric mobility), which is ready. Currently we are discussing with local OEMs and we have already started supplies to customers in China, US and other few critical markets.
What is the share of manual transmission systems in India’s trucking industry?
Shandar: It is 100 percent (for MTs). There is no penetration in the domestic truck segment for AMT. It’s only in buses with certain capacities. So it’s a huge market for trucks. So either the OEMs have to bring that technology change or a company like Eaton can lead this change. We also have another product that we have integrated with Cummins engine ‘Smart Advantage Powertrains’.
It is an integrated system, which gives a significant amount of fuel saving. Our new product Ultrashift has a 6-speed platform for trucks and 10-speed for mining and other similar applications.
With the impending infrastructure development in India, and trucks and trailers potentially coming with higher engine capacity, Eaton is pretty well positioned with appropriate products to serve the future needs of the (CV) industry.
Do you cater to the farm equipment sector as well? Do you supply transmission systems to the farm equipment companies?
Shandar: Yes, Eaton serves the farm equipment industry in India in a big way.
No, we do not supply transmission systems to this industry. Instead, our engagements are on the hydraulics as well as the engine management side. We actually supply more hydraulic products into farming equipment such as tractors and harvesters. That’s a very big market for us in India and globally.
Bala, can you throw some light on the new advancements at Eaton’s Ranjangaon plant?
Bala: I’m sure you have heard about Industry 4.0. It is the buzzword across all major factories today. Eaton has also embraced it. We have our own roadmap. The good news is that in all ‘vehicle group’ plants in India, we have started implementing the Industry 4.0 initiatives. Be it manufacturing execution systems, automation, additive manufacturing, and other areas, we have started to pilot these technologies in all of our vehicle and hydraulics plants and we have a clear roadmap, vision and strategies.
What does Industry 4.0 mean to Eaton in India? Is it being deployed to connect all plants together to improve productivity and turnaround timelines?
Bala: That’s a long-term roadmap. But today we are taking the initial steps. First is that we need to make sure that people understand the imperatives, so we are currently forming, storming and norming. We are in the initial stages. We have a global roadmap, which is internally split into regions. So each region is working on its own strategy. We want to make sure that the regions mature and then we get globally aligned. So this is how we have laid the strategy and it is going well.
Firstly, we have started with plastics. We want to make sure that we get ourselves well equipped with plastics and then we will migrate to metals.
Where are these plastics used?
Bala: Tooling, jigs, fixtures, poka yokes, and several other areas. From a plant perspective, we are doing it and if you ask me have I started it in my own product, I would say not yet because the material sense has to improve.
In our aerospace business, we have started using metal. Coincidentally in Eaton, we have a global Additive Manufacturing Center of Excellence. So we now have a pool of experts. We take advantage of the Innovation Center in Pune. We have a lot of experts there who support global and local programs.
How much has the company invested here in this plant particularly?
Shandar: There is a significant amount of investment happening. When you walk through, you’ll see the kind of investment we have done. So there’s a lot of focus on organic growth in India. Whatever profitability we are generating is going to be re-invested into the facilities, expansion, new product development, localisation.
The monies will be used for AMTs, e-mobility products or even manual transmissions, new products. At the same time, the valve actuation products, getting ready for Euro 6, investment are in process. So we put a good quantum of money into the capital plans every year.
Is Eaton expanding the manufacturing capacity at its Ranjangaon plant?
Shandar: Absolutely yes because if we don’t expand the capacity, we won’t be able to hit our strategic plans. We are currently operating the plant in two shifts per day.
Apart from increasing the number of shifts, are there other ways to increase the capacity at present, if required?
Bala: Yes. For example, our assembly lines are pretty flexible. We can wax and wane depending upon the demand, by adding some additional stations and more operators. We do have that scope to play with the capacities.
Of all the anticipated megatrends that are driving the major advances in the automotive industry globally, which ones are driving or will drive the business for Eaton in the future?Shandar: Eaton’s strategy revolves around environmental sustainability. So our core focus is on managing power be it mechanical, hydraulics or electrical. All our technologies and solutions are about efficiently managing power so as to help our customer manage the power more reliably, safely, efficiently and sustainably. Globally, there is a lot of work going on and there are strong engagements on the automotive side as well. So Eaton will always be engaged with any technology change in any of our focus areas that will impact the environment and the lives of people.