India turns key player in Kluber Lubrication’s global growth story

Growing demand for its products, particularly from the Indian two-wheeler market, has seen India become Kluber Lubrication’s third largest global growth driver even as the company focuses on increasing localisation levels as well as brand awareness.

Klüber Lubrication, one of the world’s leading manufacturers of speciality lubricants and part of the German-based Freudenberg Group, is amplifying its India business as a result of buoyant demand from the Indian auto market, which was its third largest growth driver globally in 2017. At present, nearly 20 percent of its revenue comes from the automotive sector in India which has grown 1-2 percent every year. The company supplies to key OEMs and Tier 1 and Tier 2 suppliers in India.

While the company’s 2017 revenue numbers have yet to be revealed, in 2016 total revenue was 646 million euros (Rs 4,938 crore). In 2017, it is learnt that year-on-year growth was in double digits. 

Frank Werner: "Shipping chemicals around the globe is becoming more and more challenging. The solution, therefore, is to be active domestically (in India)." 

Kluber is also leveraging its India resources as a regional hub for the Asia-Pacific region. The company has a modern plant and an R&D centre in Mysore; both are closely aligned to its HQ in Munich and are increasingly focusing on developing localised solutions for India. This helps drive down costs and in turn, gives a fillip to domestic market demand.

“We are known for our superior quality products and make sure that our own concept of quality will be maintained. This is our focus area in India. Given that regulatory compliance is getting tighter and shipping chemicals around the globe are becoming more and more challenging, the solution, therefore, is to be active domestically,” said Frank Werner, head of Business Unit, Automotive Industry, in a recent interaction with Autocar Professional. 

With BS IV emission norms already in place and the introduction of BS VI less than 800 days away, Kluber believes it has what it takes to make a difference in the Indian market. The company says it has the knowledge and expertise in lubrication for various vehicle applications including for under-the-hood components which are core elements in enabling engines to meet higher emission standards. These include EGR, turbocharger control, bypass systems, exhaust manifold control, and cold and hot management to comply with BS VI norms.

Mysore plant, which produces speciality lubricating oils, greases, pastes, aerosols and release agents across the Chem-Trend, OKS and Klüber brands, caters to India and APAC.

In a passenger car, there are 200 different lubrication points ranging from under the boot, chassis, body exterior and interior and electrical systems where Kluber lubricants find applications. Out of nearly 2,000 different Kluber products available globally, the company has an expansive range of  500 products for the automotive segment and in India supplies around 150 products.     

Kluber’s strength, among other things, lies in developing customised lubricants for vehicle OEMs who are keen to have their cars behave in a specific manner while reacting to the driver’s inputs, and how are the components are controlled. From sedate to sporty cars, the company says it has a product for all.

Globally, the company is well placed both in terms of manufacturing and R&D. India is one of the company’s focus markets globally and the company is focused on Indian passenger cars segment but also bullish on two-wheelers and commercial vehicles too.

The company's R&D facility. High focus on localisation to meet specific customer requirements is paying off in India. 

“In India and South East Asia, we are concentrating on the two-wheeler segment as it is the largest in two key markets; China and India put together sell around 17-18 million units every month. Meanwhile, in the commercial vehicle market, our focus is on the aftermarket segment. The total number of commercial vehicles on the planet is around 4-4.5 million units, of which two million are in China. We focus on the brake actuation in trucks and supply to key players like Wabco and Knorr Bremse,” says Werner.

The company has products like hub unit grease as a specific approach to the Indian market. This is a product developed in India for the local market for the commercial vehicle hub unit. In India, there is an aftermarket requirement for re-lubrication of hub units, unlike Europe where they get replaced. Also in India, there are maintenance intervals for CVs where
after a specified mileage new grease is put into the hub unit.

Driverless cars as a biz opportunity

Werner says there is a lot of hype around electric mobility across the world but EVs will be a long-term slow shift in the industry. Currently, over 100 million passenger vehicles are produced every year worldwide.

While the global megatrend of autonomous driving is not immediately relevant to India, it is certainly vital for road safety. From Kluber’s perspective, all the autonomous functions of a vehicle need to be actuated which is facilitated by electro-mechanic systems. It is in the electro-mechanic systems, which need lubrication, that Kluber foresees an opportunity in the global automotive market.

“Complexities of combustion technology are higher than electromobility. Reduction of complexities means less friction, which reduces the potential for us. But requirements in the interiors and chassis as regards noise, vibration and harshness, combined with electric vehicles with new areas like autonomous drive offer us a high degree of potential,” elaborated Werner.

Kluber showcased its strength through its four business verticals – Sigma Freudenberg NOK (sealing solutions), Corteco (components for independent automotive aftermarket), Kluber Lubrication and OKS – at the Auto Expo – Components Show 2018 last month.

Although the company sees superior growth in India, yet it feels customer education about the importance of speciality lubricants and how they help reduce the total cost of operations while improving safety and reliability remains a key challenge.

(This article was originally featured in the 15 March 2018 issue of Autocar Professional)