‘Supply chain disruptions are still possible as some components are still being imported from China’: Rishi Aggarwal

From its early foray into mobility solutions, JCBL as a group has established a strong presence in all major sectors like mobility applications, defence, railway and bus components, agriculture, finance, and international business. JCBL also works with global brands like Daimler, Toyota and Harley-Davidson. Rishi Aggarwal, Managing Director, JCBL Group takes us through the company’s future plan and areas of interest.

As you work with OEMs, which sectors are you mainly looking at when working with them? Are you looking at EV or ICE?
We work with OEMs for special application vehicle manufacturing. We work with different OEMs in different ways. For instance, we manufacture a lot of special application vehicles for Tata Motors. For Ashok Leyland, we develop buses and tippers, and for BharatBenz, we are developing special application vehicles like sleeper coaches and motorhomes. For Eicher, we are developing motorhomes and other applications too, so it depends on the OEM we work with. During Covid period we developed ambulances for the army that were quick response vehicles by Ashok Leyland.

Do you also co-develop standalone projects with OEMs?
Yes, we do a lot of co-development projects with OEMs. We developed ambulances jointly with Ashok Leyland four years ago, and for two years, the ambulance was in testing with the Ministry of Defence, where we developed the body and the application, and Ashok Leyland developed the chassis. All the iterations required were done jointly. As soon as Ashok Leyland gets the order, we get the order too. So it's a constant process. We recently launched motorhomes in Kerala with BharatBenz.

With the automotive industry moving towards electrification, how well are you poised as a company to take on those challenges in the future?
Currently, we do not have a complete electric product, but we are working with companies like Ashok Leyland. All the electric buses from Ashok Leyland running in Chandigarh have been made by us. Also, we're working with a lot of international players to help them launch their products in India. For JCBL, we're still trying to evolve our EV strategy because a lot on the infrastructure, policy side needs to happen here and the technology is going to change very fast. So as an organisation, we're still evolving and working on our electric strategy.

As a service provider in the automotive space, where do you reckon most of the growth will take place?
I think as all the transporters move toward efficiency; growth is inevitable. If you look back, the need for efficiency was low. What was happening was that you had one product that was used for multiple applications even if it was not that efficient, but as we move towards efficiency, you will need special products catering to special needs. That's where JCBL will see growth. Its R&D centre will come handy because, as cognition, we develop almost 60 to 70 applications here. Our ability to design a product suited to our customers' needs is what is going to help us move forward together.

Do you take into consideration the localisation of the critical and supply components as one of the factors for business?
Most of the products are more than 90 percent localised. When it comes to BharatBenz trucks, they have achieved 95 percent localisation. Wherever there's a gap in the value chain or in the supply chain, there's an opportunity, but these are all temporary bottlenecks. This is not a long-term solution. At JCBL, we are always on the lookout for new opportunities, and we believe that plastic is one of them. As with electric buses or electric products, you need lighter products. The weight is going to be a huge challenge, so that's where products like fiberglass, carbon fibres, or specialised composites will come into play. That's one area where we'll be concentrating our efforts in the future.

What are the biggest challenges in the auto industry that the industry will face in 2023?
In 2022, we suffered from more than just the pandemic. We were hit by a chip shortage. The problem will prolong in 2023 too. We will see spurts of chip shortages across the globe. Across industries, there will also be supply chain disruptions because some of our subcomponents are dependent on China, and the rest of the world will also face a challenge. These, I believe, are the two major challenges that will result in supply constraints.

How different is the job of making a conventional engine versus an electric motor vehicle engine for a bus in terms of conformity, and do you face any challenges?
There is definitely a huge difference. I always say that the engine is the heart of the vehicle. For EVs, they do not have an engine; instead, they have a battery-based system and then an alternator, and everything works on it. So it's a huge change. From an application builder's perspective, the changes are in how the weight will be distributed on the body because earlier the weight was centred around the joints. Now we have the flexibility of distributing the batteries across the body and balancing it well, so that's going to be one of the challenges the design teams are going to face.

For your research division, are you able to take advantage of the PLI schemes that the government is offering?
No, currently we are not taking advantage of the PLI schemes because they are more dependent on fresh investments, and our fresh investments are small increments. We are not making a large new investment to take advantage of this opportunity. As a group, we are setting up two new plants, and we might be taking the PLI investments there.

Overall, what is the business plan for JCBL for 2023?
2023 is a year for growth. We plan to record 2x growth in the next three years, so this is the foundation we're laying. We are looking at ramping capacities, enhancing manpower competencies, and also looking into other areas of upgrading technology. It is going to be planned as it is a crucial period for the group across all our businesses. For our plants in Chennai and North India, for our railways sections, and for our defence plants all over the country.

Container conversion is a relatively new concept for India.
Container homes saw a very big spur during Covid. If someone owned a plot of land, they might think, "Why not put a container here and convert it into a farmhouse?" This would save them the trouble of obtaining clearances and going to the government for environmental reasons. But as the economy opened up, it slowed down a little. This will take some time for the idea to shape up.

Continuing with the container conversion business, what would be an ideal business model in your opinion?
An ideal business model would be to have a proof of concept ready across India. Having a couple of container homes or container farms ready and using them as a benchmark to market is the primary factor, and the second most significant thing is having standardised concepts ready to ship, as there will always be customised business and there will always be a standard 2-module business, 3-container business, or 4-container business. Placing a catalogue order and then just shipping them in the shortest delivery period is going to be the model ahead. That would be a niche, lowmargin, high-volume business, but it will take time.

What is the focus of your R&D division?
The R&D division was initially formed to design and prototype buses, but over time it expanded into building all different kinds of applications. Over the years, we have been making 4x4 ambulances, motor homes, armoured vehicles, mobile ATMs, and mobile display vans. The reason is that our team is very creative, and we do not have any mental blocks and restrictions. As a team, we have done and achieved every kind of idea, and I give a lot of credit to the chairperson of the company, my father, who heads the R&D department directly. He strongly believes there has to be a solution to every problem. And that's what we've been doing.