Eaton targets larger share of bus market

Having systematically looked at which countries and regions drive demand in the bus sector worldwide, Eaton Corporation believes India offers possibly the most exciting prospects after China.

“As the country adds more and more road infrastructure, we believe buses are a very strong solution for the intercity and urban transportation,” says David Bennett, vice-president and general manager for the new Asia-Pacific division of Eaton’s Truck Group. “There’s only so many cars you can put in a city.”

And only so many people can afford cars, adds Pavan Pattada, country manager for the Truck Group in India. The company has already seen very good response in the market for its Fuller six-speed transmissions on Sutlej Lexia integral coaches, in which they have logged over a million kilometres. Sutlej is now stepping up the production of these buses following the “distraction” of the Mercedes project, Pattada says.

It’s interesting to note here that the first product Eaton should adapt for an Indian customer is for a bus application, following a bitter lesson learnt in the early 1980s when a batch of truck transmissions supplied to Ashok Leyland from Eaton’s UK plant failed miserably within months. “Eaton very much appreciates the work with Sutlej. It was one of the first customers here that had the confidence and the trust to work with us. The market in India is very different for a bus than say the market in China, or Brazil, or Europe, so we went very slowly and systematically to make sure we resolved problems and built some reliability and credibility for ourselves internally,” says Bennett.

A defining characteristic of the traffic in most of the major cities in India is the intense start-stop cycles, he adds. “Consequently the demands on a vehicle here are among the toughest in the world — I’m not sure many other countries set that level of expectation. We recognise that it’s important that our experienced team here takes the time to understand what you need to do to have a robust product to survive in the market.”

Following its success with Sutlej, Eaton now intends to help Corona Bus in a similar manner. “Right now we’re at the stage of gathering all their requirements in order to be able to spec the best solution for them. After that, there’s the question of convincing them why that is the best solution,” Pattada quips.

“Engineering a new driveline is quite an effort for these manufacturers, being as they are from the busbuilding side, and they typically require you to do this for them. So that’s why we’re now putting a team together just for the bus market,” he explains, adding that Eaton is in various stages of dialogue with a number of other OEMs besides these two that have shown interest in the bus segment.

“In India, up until recently it was only Volvo, JCBL, and Sutlej that really had buses with higher-horsepower, higher-torque engines. The Sutlej Lexia that has our gearbox is powered by a 235hp Cummins engine, for example. But Tata and Ashok Leyland till very recently had very, very low torque outputs. “But that’s now changing, and they are all trending towards what China’s already at,” he points out.

Bennett says Eaton has the right technologies to take them there. These include automated manual transmissions (AMTs), and one of the world’s first parallel electric hybrid systems for city buses that it has developed with Beiqi Foton AUV Bus Company, a division of Beiqi Foton Motor Corporation in China. Started in 2005, this project is Eaton’s first hybrid power project outside North America and its first hybrid-powered city bus project anywhere. The company has also adapted its hybrid technology for use with CNG engines in Chongqing, and has done some BRT work now with Yutong in Zhengzhou.

“For Eaton our investments have been when you move to electronic engines. You can optimise the transmission and the shifting strategy, you can do things you could never do when you didn’t have electronic engines. So the pending emissions changes in some of the major cities opens up alternatives that weren’t there 12 months ago,” he says.

Growing interest among OEMs

Starting off with the recent Delhi tender there has been a “heightened” level of interest from the OEMs not just in AMTs and hybrids, but also in upgrading the torque levels in conventional buses, Pattada says. “With hybrid there’s more of an interest to target the Commonwealth Games. But for the Delhi tender I think it’s more AMTs and higher-torque manuals. We are at various stages of dialogue with all the major OEMs, and we feel fairly good about the progress we’re making.”

While the cost of a hybrid vehicle of this type in Europe is typically 30 percent higher, Bennett believes Eaton’s system offers significant cost advantages for OEMs. “We haven’t run city buses in Europe or the US, but some of the systems run by our competitors in those countries are extremely expensive. We’d like to think that we are significantly below that acquisition cost even at these early stages — my guess would be half,” he says.

Volvo, which premièred its self-developed hybrid bus (with a similar system architecture to what Eaton supplies) at the IAA last September, claims that fuel savings would help the operator recover the extra cost of the bus in six or seven years. Incentives to purchase hybrid vehicles have typically been in the form of government subsidies, but in India this is complicated by the fact that almost none of the public transport undertakings makes a profit.

From this perspective the Eaton system would appear to have an advantage in this market, because Bennett says it will only eventually be offered as a viable business solution. “Last July we ran a series of tests at the Chinese national test facility at Hainan island to quantify the fuel savings. We ran three series of tests — on a conventional bus with AMT, an LPG bus, and one with a hybrid system. On the hybrid bus the fuel consumption reduction compared to the conventional bus was 28 percent plus. Compared to a bus with an automatic transmission it’s almost 58 percent!” he says.

“But beyond the fuel savings, we were really after the emissions reduction. And CNG is a journey that we are making progress on. We’ve run some of the CNG systems, but data from initial testing in Chongqing on a limited number of vehicles show an emissions reduction from 30 to 60 percent depending on the cycle they ran. We clearly want to narrow that down.”

Pattada admits that it is going to be an effort to engineer its system for the requirements of this market. “We cannot do it independently. It will have to be in conjunction with the OEMs. There’s a lot of integration required. We’ll definitely learn from the mistakes we’ve made in other parts of the world, but that development cycle will still be required here because it’s a new environment, new duty cycles, new realities of how you service it in this market, and things like that. The good news is that we have a standardised approach that we will follow in putting it into new applications, into new markets. So that part we don’t have to reinvent. But the integration will still have to be done with the OEM from ground up.”

A collaborative approach involving not just the customer but also the civic authorities and other government agencies is vital, for the success of such a technology, and Pattada says all the cities Eaton has approached have been very receptive. “As opposed to going to every single city, we’ve gone to the big metros for now because typically their problems are all fairly similar – congestion, pollution, – so we felt that at least addressing the policymakers and bureaucrats there would be the right approach. We’ve had some very preliminary dialogue so far.”

From Pattada’s perspective Delhi is clearly one of the most progressive. “At least Delhi has shown the ability to execute on a direction it has taken. I think the more progressive cities have really demonstrated the ability to push the envelope, and Delhi clearly has shown that,” he says, admitting that Eaton’s confidence level in introducing a new technology there would naturally be higher — “but I’m not saying we’re targeting Delhi alone!”

Given that Eaton is in the awkward position of promoting AMTs and hybrids at the same time, what prospects does he see for AMTs in that scenario? “It depends on what the duty cycles are. If the duty cycles are such that you don’t get the entire benefit of a hybrid, an AMT might make more sense. You can have multiple solutions in a city,” he points out.

Bennett explains that while the rule of thumb is that hybrids make the most sense in stop-and-go traffic, there are also questions of terrain and idle time that would necessarily have to be taken account of especially in any discussion on hybrids.

Untouched by the recession

Despite the recession Eaton is busy expanding capacity at its Ranjangaon plant in Pune with the addition of a line for its Fuller 10309 transmission, which it will supply to Tata Motors and AMW. “We are in a unique situation — people who have fully established ongoing production year over year have seen a downturn. For us, 2009 production volumes over 2008 is still growth. We’ve only just reached the end of our localisation, so from that standpoint there’s a lot of work for us still,” Pattada explains.

“We have a global manufacturing footprint. Our plant is a blend of making components and transmissions. So on the component side every plant supports every other plant. So component manufacturing also gives us some volume. But a lot of our focus is also on localising the nine-speed products for this market and also setting up the new assembly line. So 2009 will be a busy year for us, like 2008 has been.”

"Eaton has also seen success in this market in penetrating our products with customers and getting long-term commitments. “2009 is a year when a lot of our programmes are getting launched. So for us it’s going to be a growth year despite the market trend.”

"While the FS 10309 for Tata’s LPS 4923 is currently supplied from the Tczew, Poland plant, and the FS 6406 for Sutlej comes from Wuxi in China, a locally produced six-speed 6406 will first appear in a Mahindra Navistar truck in the middle of the year, followed by the 6209 nine-speed, “applicated for 25- and 40-tonne applications for some customers”. Pattada reveals that Eaton’s Roadranger 9-, 10, and 13-speed twin-countershaft transmissions for 420 hp and 1,800+ Nm applications will also be introduced “very shortly”.

Bennett admits that the launches, originally intended for the beginning of fiscal 2010, have moved out six months because of the prevailing economic conditions. “Like everybody else, we will watch the policy steps and the economic activity coming back. We’ll be, like everybody else, prudent with cash, and prudent with our investments, because there’s no sense having idle assets sitting around. But there is year-over-year growth for the group, so it gives us a little more breathing room in terms of staffing, in terms of getting quality processes in place, and also getting our supplier engagement up,” he says.

Does he see scope for AMTs in trucks? Absolutely, Bennett replies. “We would love to be running demonstrations in the marketplace in the near future. It takes time to understand the right solution, but we have seen that around the world, when electronic engines come into the market, other alternatives like AMTs come about. There are vocational customers in the construction and mining business that have always been out at the forefront of looking at automation and we’re searching for those people!”

A big commitment from the team in India is localising a lot of the supply base for its products. Of course, given the structure of Eaton’s global manufacturing footprint, none of them will ever be fully localised, Pattada says. Meanwhile the localising is happening in phases. “Right now we’re on track with all the phases we’ve laid out. The six-speed, for example, is already at more than 55 percent. Will that increase? Absolutely. But some of the longer-lead-time items require more qualification time, which right now is in the process. And while that’s going on, we’ve started localising the next product family.

“Bringing business into the local supply base is something which is going on at a very aggressive pace. We don’t mean localisation necessarily within 100 sq km of Ranjangaon — it’s more optimising the product for selling from India, what is the most cost-effective way for us to support our customers?” he says.