BASF banks on innovation

BASF has increased its focus on the growing Indian automotive sector and is taking a number of initiatives to increase its presence. According to Prasad Chandran, chairman, BASF Group India and head – South Asia, “Our strategy is to market our products to automakers as a full-fledged portfolio, rather than as an individual business line. The automotive industry purchases coating systems and many types of plastics, catalysts, as well as brake fluids and fuel additives from us.”

To ensure that the company taps into the opportunities present in the global automotive industry, BASF has established its Global Automotive Steering Committee (GASC). This group is made up of the presidents of the operating divisions of all BASF businesses that sell to the auto industry. They coordinate their actions at the highest level to meet the automakers’ needs and help to speed up their access to new technology in order to be more competitive. In Asia, BASF has Team Automotive Asia (TAA), with similar country teams in China, India, Korea, Japan, and the ASEAN region. While TAA handles the global automakers operating in the Asia-Pacific region, Team Automotive India concentrates on getting business from manufacturers in India. With this structure, BASF aims to support manufacturers, by supplying parts locally, while offering them global innovations and cutting-edge technology at the same time.

Despite the recent dip in the market, BASF is very confident about the long-term prospects of the Indian market. Chandran states: “India is an emerging automotive economy, facing the challenges of growing its automotive industry even though it has an incomplete road system. Yet despite these challenges, we are optimistic about the country’s automotive future. This stems from the contrast between India’s past economy and its present state, particularly from the government’s increasing encouragement of the automotive industry.” Among the recent major investments by BASF to boost its presence in the Indian automotive sector are a new engineering plastics compounding plant in Thane (still under construction), a new CAE lab for automotive customers which became operational in March last year and the expansion of its catalyst manufacturing plant in Chennai during the current year.

“The Indian automotive industry is growing both in size as well as in technology with almost all the major automobile producers in the world having made firm commitments by investing in local production facilities. This provides opportunities for us and we want to supply them locally with our products and services. Thus, we will continue to develop our position as a prominent manufacturer of coatings, plastics and catalysts in the Indian market,” clarifies Chandran.

Contribution to the Tata Nano

BASF is particularly proud of its contribution to the Tata Nano project, for which it supplied engineering solutions and products that helped Tata meet overall cost targets. The company says that efficient processes were the key to ensuring lower costs without compromising on quality. BASF used its global research expertise to come up with a number of innovative solutions for the Nano that reduce its emissions, enhance fuel efficiency and improve the overall looks of the car.

“BASF is well positioned as a global supplier and we have successfully developed plastics and coatings solutions for manufacturers of low-cost cars, both in Europe and in Asia. In doing so, our goal is not just to supply the cheapest product. Instead, we work with customers to develop the most efficient processes in terms of energy or costs and are supplying the Nano with catalysts, the plastic air intake manifold and have been approved for some of the colours,” confirms Chandran.

He adds, “We believe that helping our customers to be more successful is strategic to our future growth. The Tata Nano project has been special to BASF as we were able to cross geographical, technical and intellectual boundaries to meet Tata’s specific needs.”

Developing products for the Nano was a challenge that required customised solutions and processes that focused on the specific needs of Tata Motors. This involved drawing together experts from the worldwide BASF network to create synergies that fostered innovation. For example, BASF Catalysts has developed a catalytic converter for the Nano to meet India’s current emission standards. BASF local experts in India were supported by colleagues in the USA to achieve this cost-effective regulatory compliance. BASF will supply the catalyst from its Chennai manufacturing plant.

Also, the Nano’s plastic air intake manifold will be produced by Tata Visteon using BASF’s ‘Ultramid’ glass-fibre reinforced engineering plastic. Generally, air intake manifolds, that supply air to the engine, are made from aluminium. Using Ultramid helps lower the weight of this part by 40 percent, which in turn boosts fuel efficiency and lowers emissions. BASF also provided development support ranging from computer simulation studies in the design phase, to component tests in the trial phase, at its engineering plastics technical centres.

Finally, the company’s most noticeable contribution to the Nano is the colour and lustre of the vehicle’s exterior. BASF has been supplying automotive coatings to Tata Motors since 1998 for the company’s Indica, Sumo, Safari, Indigo and other commercial vehicle models. Now, BASF Coatings has been approved by Tata to supply some colours for the Nano as well. “Innovative products, service and efficient processes are particularly important to supply a project like the Nano,” stated Hermann Althoff, Group vice-president and head of BASF’s Automotive Industry Coordination Group in Asia-Pacific. “BASF is well positioned as a global system supplier of such programmes. Our goal is not to just supply the cheapest product. Instead, we work with customers to develop the most efficient, overall solution in terms of cost and performance.”

Talking about working on other such cars like the one being developed by Renault-Bajaj, Chandran says, “BASF sees the small car segment as a growth opportunity and is well positioned to meet the needs of this segment. At this moment we do not have anything specific to announce regarding the low-cost car being developed by Renault-Bajaj.” BASF also plans to begin supplying parts to the new Volkswagen Polo in India when the German carmaker commences production in December this year at its new Chakan manufacturing plant. In fact, BASF is already a major supplier to Volkswagen worldwide and the New Polo marks the extension of this relationship into India.

Explaining how BASF can help automakers meet the tougher emission standards of the future, Chandran says, “We have a special focus on energy efficiency and solutions to curb emissions. BASF is delivering top-of-the-line fuel additives, lube oil packages, brake fluids and auto catalysts to fulfill all these increasingly stringent requirements.

"As the world’s leading supplier of catalysts, we have unsurpassed expertise in the development of emission control technologies. Today we offer a catalyst that makes it possible for the first time to convert up to 96 percent of a vehicle’s emissions into harmless end products.”

Development opportunities

The company strongly believes that its innovative products and systems help its customers become more competitive and overcome the current global economic crisis. Hence it plans to keep its R&D expenditures at a high level and will continue to invest in growth and pioneer new areas of research. Chandran explains: “We expect the small car segment to grow and India is likely to become a manufacturing hub for small cars. Further, with the vast engineering talent pool available in India, we see that more development activities will be shifted here. All this will lead to increased competition, while technology, responsiveness and customisation for local requirements would become key success factors. BASF, with its global technology leadership and local engineering and development capabilities, is well positioned to be a leading supplier.”

An example of this approach in India is the company’s CAE lab at Thane near Mumbai, which was started in 2008. This facility is a significant step forward in reinforcing BASF’s commitment to long-term growth in the engineering plastics market in India. The lab utilises the latest technology and is integrated into the company’s global R&D network, and Indian automotive customers and their overseas offices can benefit from this network. At this lab, BASF engineers design and optimise new engineering plastic parts in close cooperation with customers.

BASF Coatings also has an application centre in Mangalore for developing automotive OEM coatings. Here the conditions at the customer’s paint shop can be perfectly simulated so that the BASF coatings team can respond to special requirements quickly. The centre is equipped with state-of-the-art testing facilities, conveyorised, advanced electrostatic bell applicators and two electrostatic spray guns for ESTA application.

“To succeed, India’s manufacturers and suppliers need to accelerate the perception that quality vehicles and quality automotive components can be made in India. This will help them to find their niche in the global vehicle market with, for example, small and inexpensive cars. They also have to manage their businesses on a worldwide scale, which includes global logistics, sales, and distribution.” explains Chandran.

According to BASF, some of the other critical factors that would help to drive the growth of the Indian automotive industry are the strengthening of the country’s R&D capabilities and skilled labour pool, as well as building more and better roads. Equally important, the government needs to hasten the vehicle friendliness of Indian cities by building wider roads and providing more parking spaces.