With automakers in India increasingly outsourcing a large part of their powertrain development and other engineering requirements, the $25 million AVL group is hopeful of increasing business here substantially in the coming years. However, there is a bigger challenge for the company in terms of recruiting and retaining qualified engineers who are in great demand given their levels of exposure to different car models.

With high attrition rates coupled with a paucity of qualified engineers, the company has had to reach out beyond India to man its hi-tech centres. It has already recruited trained people from Europe at its companies here. “Our biggest problem is people and I am left with no option but to hire them from abroad. At present, there are three and this will be up to five this year,” says managing director of AVL India, Shashi Singh. At present, 270 people work on an all-India basis.

Training manpower does not come in cheap. On the instruments side, the company spent nearly half a million Euros on training while in engineering, engineers are learning abroad for two to three years. Retaining people is getting to be a huge problem for industry and AVL believes that one way to counter this is to be technologically ahead. Worldwide, it spends nearly 15 per cent of its turnover on R&D. There is a lot of research on fuel cells and alternate fuels, Singh says.

The three AVL arms in India are part of the $500 million AVL group based in Graz, Austria. It is the world’s largest privately owned and independent company for development of powertrain systems with internal combustion engines, pollution monitoring equipment and engine instrumentation/test systems.

According to Singh, there has been a dramatic change in the functions of OEMs following rapid growth in the auto market. Earlier, they would do almost everything but are now asking their suppliers to do the research. As a result, both are liable should the product face any problems in the market. This trend has been increasingly visible during the last four years.

AVL TRIO IN INDIA

The three AVL companies in India are joint ventures with an Indian group called Sowar comprising technocrats and business people who are investors without any role in operations. The trio is AVL Technical Centre, AVL Software and AVL India. “India has always been important to AVL even before all this euphoria began. This is evident from the fact that it has been investing here since the 1980s when the market was not even open,” Singh says.

AVL Software does a lot of work for its global parent. It develops software for instrumentation and application purposes also. “On the instruments side, we manufacture in India and export a small amount. We also do research here on some instruments and processes procured from Austria. We have come out with quite a few unique solutions in AVL India which is not available with AVL worldwide like end-of-line testing,” he says.

##### Again, on instruments, AVL India is a preferred supplier to Bosch, GM and Ford. It is part of the global chain because these companies are present in India. As Singh says, GM, Ford, Hyundai etc already have Euro IV engines and do not have to do research like Indian OEMs. However, a new market will call for localisation and this is whre AVL comes in. “Our presence is relevant not only for Indian companies operating here but also for global companies coming into India,” he adds.

AVL India is a leading manufacturer of diesel smoke meters, exhaust gas analysers, computerised pollution monitoring equipment for diesel and petrol vehicles (tamper-proof PUC centres) and other important engine diagnostic equipment.

HYDERABAD PROJECT

The company networks with transport departments. It makes PUC systems and develops software for networking. The company recently executed a project for 250 stations across Hyderabad. “These are pollution centres with a camera system. We supply to transport/police departments, petrol stations etc which is unique for AVL,” Singh says.

The division dealing in instrumentation is the single window partner for OEMs and component suppliers. The company undertakes R&D and also gives testing solutions applicable for Euro IV and Euro V. “We are single source for persons who are looking for technology upgradation and for testing,” he adds.

AVL is also the competent centre for two- and three-wheelers worldwide and any need for compact engines it is referred to its technical centre. The Indian arm is also a supply source for some test bed equipment.