JBM Auto to diversify into bus manufacturing

After being in and out of the news for the last three years, component maker JBM Auto’s much-hyped bus alliance that signals its foray into the commercial vehicle sector is in the final stages of being sewed up.

A technical agreement has already been signed with an established West European bus maker – believed to be BredaMenarinibus (BMB) of Italy – and the ‘nitty gritty’ of the alliance is being worked out over the next two months. Nishant Arya, executive director of the New Delhi-headquartered JBM Group, confirmed to Autocar Professional that a new alliance company will be floated in India to make high-end integrated buses that cover an array of niche products.

Two greenfield facilities for the bus venture are being set up in Delhi-NCR with a phased investment of Rs 500 crore, with the main plant to be located at Kosi while the second facility will be located at Ballabhgarh, both near Faridabad in Haryana.

While fabrication and the bus structure will be made at the Ballabhgarh plant, the Kosi facility will assemble the buses. Initially 60-seater CNG city buses and diesel powered coaches will be produced with the Kosi unit to kick off production with an initial capacity of 1,800 buses annually that will be ramped up as per demand. Subsequently, inter-city, articulated and hybrid buses will be introduced in a phased manner.

High localisation level

The buses will sport a localisation content of as high as 90 percent with some aggregates to be imported. The buses will be based on an integrated or monocoque body structure without a chassis. This increases the life expectancy of the bus body and prevents toppling over. Other latest features that are not commonly found in Indian buses will be a front independent suspension for ensuring a comfortable ride, inverted portal axle that will enable a completely flat and low floor with a 340mm step. All disc brakes and a hydraulic retarder with the engine will facilitate higher braking efficiency and safety. At present, some of Tata and Ashok Leyland buses use drum brakes.

BMB, which is understood to be facing a financial crunch, is a popular name in Italy and is known for its CNG buses. It is believed that JBM is forging multiple alliances with West European companies for producing different types of buses in India. This is part of a larger gameplan to evolve the India operations as a low-cost hub for buses.

“We are working out a three-to-five-year business plan for buses across the value chain ranging from city buses, inter-city buses and luxury coaches. We plan to have multiple alliances for different products with the partnership to be a little more complex than it seems,” explains Arya.

“We were in talks for the last three years with many companies for this partnership as we wanted to strike the right kind of alliance. We want to deliver products that meet all the customer requirements as well as something above his needs so that we become his obvious first choice,” he adds.

A variety of engines with varying horsepower will power the buses with the West European partners providing the technology for the buses. Engines will be sourced both from external sources as well as indigenously.

The CNG city buses are expected to be powered by a 7-litre engine delivering 230 hp and 280hp. The coaches will have on offer 7-, 9 -and 11-litre diesel engines delivering 280 hp, 320hp and 400hp respectively. The buses are expected to be co-branded though the outlook, roles and responsibilities of both the partners are still being finalised.

Notwithstanding the downturn and sales decline in the CV segment, JBM Auto is bullish about its bus alliance hitting it off. Nor is the component maker deterred by the presence of established players in the bus market; on the contrary, it is banking on tapping the segment where it is not present.



The CV gameplan

In the proposed product portfolio, city buses will mainly cater to state transport undertakings, while luxury coaches will target the needs of private operators and inter-city buses will be pitched at both government and private operators. JBM also plans to make buses specifically for use by airport authorities.

While the current downturn has taken the steam out of the CV segment, it is believed that the purchasing power of both government and private owners for procuring buses remains intact thanks to various state schemes for new purchases.

JBM Auto plans to display the first range of products – city buses and coaches – at the upcoming Auto Expo 2014. The proposed plants in Delhi-NCR will go on stream this December but new products will roll out only in February to cash in on the demand of the visitors at the trade fair. Currently, the partners are jointly streamlining some aspects of the plant layout on the basis of which the production capacity will be determined for each bus variety. This includes individual capacities for different product streams. As an example, Arya elaborates that for an 18-metre-long bus, production capacity could be lower as the value per vehicle is higher. But a six-metre mini-bus will involve higher volumes.



From art to part

In terms of its auto components basket, JBM is a supplier of body-in-white and chassis parts for the Ford EcoSport SUV as well as the Honda Amaze saloon and will also supply a range of components ranging from skin panels, axles, body-in-white, chassis parts, exhausts and suspension parts to new models to come from Maruti Suzuki.

In line with the changing trend, JBM is focusing on enhancing its development capabilities that involves conceptualising the part design to its final production. Thus far, Indian part makers were given the product designs by OEMs and manufactured the parts based on specifications given to them. Now JBM is building competencies in chassis and suspension, designing complete cabs for CVs, new exhaust systems and other customer solutions. It has also kicked off partial production of complete cabs for the new trucks from VE Commercial Vehicles.

JBM Auto’s in-house R&D, based in Delhi-NCR, works in sync with its global R&D centres in Italy and Germany-owned by JBM subsidiaries. The JBM Group had earlier acquired a 51 percent stake in the UK-based engineering and design company, Tesco GO, through JBM Cadmium. This company is involved in the design of all vehicle types right from concept stage including packaging and engineering and is working on projects with Volvo, Fiat, Mahindra & Mahindra, Volkswagen AG, Ashok Leyland, Tata Motors and other OEMs. It also provides engineering services to Mercedes-Benz/Daimler, Lamborghini and McLaren. It is also strong in verticals like suspension, vehicle integration, electronics and trim and JBM is now tapping these avenues for growth.

While the parts maker is focusing on optimising its investments this fiscal, it continues to work on several new projects even as it waits for the market to pick up. ‘Being lean, mean and cost competitive’ is the company’s mantra to tide over the slowdown with flags flying full mast.

Though the market continues to be tough, a good number of component makers in India have not put their expansion plans on the backburner and continue to improve existing efficiencies to enable higher and better output. This is JBM Auto’s driving force as well.