Escorts to bank on new products, R&D

Escorts Ltd’s automotive components division is gearing up to make the most of the resurgence in the domestic industry. Part of the company’s engineering division, it manufactures a range of automotive suspension products including shock absorbers, struts, telescopic front forks, leg assemblies, pistons, spark plugs and brake pads.

With a production capacity of about five million shock absorbers per annum, this division caters to OEMs in various vehicle segments including commercial vehicles, multi-utility vehicles, motorcycles, scooters and mopeds.

According to Manoj K Jha, executive vice-president, Escorts Engineering Division, some of its key customers include TVS Motor Company, Tata Motors from the Ace upwards to commercial vehicles, Yamaha India Motor, Suzuki, and Mahindra & Mahindra. “The division also exports its products to countries in South Asia, Europe, the Middle East and Africa. We have many OEM customers like Piaggio, Aprilia, Moto Guzzi and SAF-Holland to whom we have been regularly supplying for the past four years. We are also working with a couple of European heavy commercial vehicle manufacturers, some of whom we already supply and some where supplies will soon start. We are also working with Mahindra 2 Wheelers, M&M’s two-wheeler division. Our effort is to get on board with other big players.”

There are no plans to diversify into the passenger car component market and the focus will continue to be on the suspension business. The company is also actively engaged in developing new products and has recently introduced a co-branded engine oil called Mak Escorts 4stroke-4t for two-wheelers with Bharat Petroleum Corporation.

The recent downturn, according to Jha, has had a beneficial impact on Escorts' operations. “If anything, it has helped us to look closer at our manufacturing processes and improve efficiency. In fact, we have done better in the October 2008-September 2009 fiscal as compared to the previous year. Now we are ready to grow with the market.”

Eyeing the HCV market

The division is now exploring opportunities in the heavy duty commercial vehicle segment, in India and abroad. While it is not targeting the passenger car segment immediately, the gameplan is to develop and establish its technology before taking on the big players in the volume passenger cars segment. Jha says, “We have begun a few initiatives in manufacturing processes which have helped us in reducing costs, becoming much more responsive to customers through faster and more efficient deliveries, and finally better quality products. These are the areas of immediate focus. Through constant development and enhancement in manufacturing, Escort’s engineering division is and will be bringing in new and trustworthy products in the Indian as well as global markets.” R&D for growth

The division places much emphasis on R&D activity which it says it is its strength. “Research and development is a very important aspect for any manufacturer and we have renewed focus on this aspect. In the suspension business with every change in a model, there is a new product that comes up as the suspension is linked to the ride and handling and also safety. Our focus is to create newer technologies and we have filed for new patents in the suspension lines, two in shock absorbers and in the front forks also. This design will not only increase the reliability of the product but will also improve the economics of the product. For instance, a front fork has to undergo a regular service after every 10,000km but our product will not require it. Similarly in shock absorbers, our new design eliminates the problem of gas leaking out of gas-charged shock absorbers. Customers who use our products will have a technological edge over other two-wheeler manufacturers,” claims Jha.

The company is targeting excellence in all its activities, for which customer feedback is a critical input. Jha elaborates: “We have to be pro-active in terms of new product planning. Escorts has three focus areas: technological excellence, manufacturing excellence and marketing excellence. Technologically we should have products superior to others in the market, and in the manufacturing field, we should make products at a much faster and more efficient rate. Plus we should market our products in such a way that we can deliver to our customers quickly and anywhere they want.” The Faridabad plant is the division’s main production facility. This state-of-the-art manufacturing facility is used for superior product development, design, testing and substantiation. According to Jha, “We have now kept it free for high-end products while low-end products will shift to our new plant in Rudrapur. We are looking at acquiring stakes in companies abroad, but it is only at a preliminary stage and nothing has been finalised as yet.”

While Escorts' sales this year have been good, the company has revealed an ambitious 45 percent growth target