Minda Industries banks on R&D

The technical license tie-up that MIL had with TYC since 2004 has been called off recently. “Now we are on our own and this has given us the freedom and the flexibility to pursue newer technologies and develop new products. It also gives us an opportunity to give life to our dreams. We will acquire some companies, if required, to pursue our mission,” he adds. These initiatives will enable the company to provide innovative and cost-effective solutions to OEMs as the company’s workforce includes engineers from many reputed institutions including the National Institute of Design who have specialised in styling, photometry, lighting and optics, he adds. The company also works with IITs in Delhi and Mumbai to carry out research, says Minda.

“We are creating our own designs as we have a separate R&D in India for lighting with about 10 specialised engineers now. We also have about 40 engineers involved in new product development and engineering. These two teams work in tandem on new product development. While R&D will focus on coming up with new ideas and concepts, the other team will be involved in new product development. The amalgamation of the two teams will help us provide innovative concepts during new product development for our customers. We also have affiliations with engineering and design centres in Europe and Taiwan to support our research activities. We do work for them and also learn during the process.

The objective is to upgrade our skill sets,” Minda says. Yet another issue Minda was concerned is the tooling which lighting system manufacturers generally depend up on imports. “We are developing tooling for tail-lamps to begin with and will go in phases, covering high-mounted stop lamps and fog lamps. We cannot depend up on imports anymore,” he says. The import process takes time and puts the brakes on addressing the market faster. With vehicle lifecycles getting shorter, OEMs are looking at accelerating their new product development process which calls for several capabilities within the vendors. “Tooling is a major step we have taken,” affirms Minda. He is of the opinion that while technology is also improving, the cost levels are not keeping pace. For instance, customers want LEDs at the cost of conventional lamps, which is not possible given the current price structure of LEDs. However, he admits, that this might be possible in the future. “Therefore, we need to constantly upgrade technology to meet emerging requirements,” he says.

MIL, at present, has five plants in Sonepat and Manesar near Delhi, Haridwar, Pune and Pantnagar. Though there is a sudden spurt in demand from OEMs, the company could manage as, “we do mid-range business plans which help overcome fluctuations. It takes a year to 18 months to develop a headlamp and tail-lamp to be commercialised and therefore the planning methodologies help us,” he said. The planning also encompasses building manufacturing capabilities in parallel while the product development is progressing. Currently the company is expanding capacity at both its Sonepat and Manesar facilities by about 30 percent.

Last year the company bagged an order from Maruti Suzuki for supplying headlamps for the Eeco van, which made Minda to enter into the business of manufacturing headlamps for passenger cars. Till then it had concentrated on the two-wheelers and tractors. MIL has recently bagged an order to supply headlamps and tail-lamps for Volkswagen Polo. In line with this project, the company has recently completed a Rs 50 crore expansion at its Pune facility.

“Currently the Indian automotive industry is averaging around 30 percent growth and we are matching the capacity to the demand. We will also be expanding our Pantnagar facility,” he said. MIL will be investing about Rs 225 crore this year on different projects.

Vendor gameplan

As the value chain is vital, MIL is working with its vendors to enhance their capabilities. “Like we have been upgraded by our customers (OEMs), we are upgrading our vendors down the line. We have created dedicated supplier clusters with each cluster comprising of a maximum of eight vendors. The Supplier Quality Assurance team visits the suppliers’ shopfloor often and helps them upgrade their process capabilities. We learn from each other,” he said.

Meanwhile, MIL’s subsidiary PT Minda ASEAN Automotive, which operates from Indonesia, will commence manufacture of lighting products soon. Before this, it was not engaged in manufacturing lighting systems due to restrictions imposed by its erstwhile licensee. However, it has been supplying fog lamps to Daihatsu, manufactured in India and catered through PT Minda, which is also into trading. The manufacturing will be taken up in phases beginning with fog lamps and followed by high-mounted stop lamps, small lamps and other products.

In the current fiscal, MIL hopes to record a turnover of Rs 225 crore with about seven percent contribution from exports. Last year it reported about Rs 150 crore.