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Event Summary: India Commercial Vehicle Summit 2013

11 April 2013 Release

BMGI Presents Roadmap For Incubating Innovation In Indian Commercial Vehicle Industry
As the strategic advisor for India Commercial Vehicle Summit 2013, held in Westin, Pune on the 4th and 5th of April 2013, BMGI presented the roadmap for innovation for the Indian CV Industry. The event was organized by Shanghai based Lnoppen who facilitates business through events and market research across Asia & Europe. The event comprised thought leaders from across the world from the commercial vehicle industry with senior management representations from OEMs, Tier 1 & Tier 2 suppliers that included Ashok Leyland, JAC Motors, Daimler India Commercial Vehicles, John Deere, Volvo-Eicher Commercial Vehicles, Volkswagen, to name a few. The event was kicked off by the chairman Mr Naresh Raisinghani, CEO & Executive Director, BMGI, who pondered on the “India Story” for the Commercial Vehicle Industry. He outlined the key challenges that the industry confronts today that include managing customer preferences and managing the input costs, besides the total cost of ownership and the strict environmental norms. Mr Raisinghani identified two key enablers that can be leveraged: The latent need and the support available. Given India’s vehicle density on the lower side coupled with the planned spending on the infrastructure (40% on ports & roads till 2020) he left the group with the question “Is the current gloomy picture just a blip?” Shri. Jeevanrao Gore, Chairman of MSRTC stressed on the importance of public transport. He reminded the audience about the benefits public transport brings including the reduction in emissions and fuel consumption. While MSRTC provides the 3000 buses MSRTC provides every year, these are only replacement of the scrap buses and the increasing demand is not catered to. He humbly requested the industry to support the cause MSRTC in meeting its objectives. Substantiating on the event chairman’s India story, Mr Amit Kaushik, Principal Analyst, Truck Forecasting / Advisory, IHS Automotive, presented the trends and growth drivers for the industry. While the global markets are affected by high unemployment rates and the euro crisis, the GDP growth and business confidence indicators (Purchasing & New Orders) seems to be in favour of India. This further seems to be validated by the shifting of the global output towards emerging markets like India. Mr Kaushik hypothesized that if the motivation for purchase today is price and brand of the commercial vehicle, it would be the total cost of ownership & service offered by 2020. Supporting the India Story, Mr Sudhir Mehta, director of Force Motors in his talk on “Behaviour of Different Competitive Forces Driving the CV Industry, During The Next 5 Years ” conjectured that the centre of action will shift to rural emerging markets. With schemes like NREGA, the rural market has witnessed increased income causing higher consumption in turn causing higher demand for goods in turn leading to higher transportation requirements, he shared. With the LCVs forming about two-thirds of the market share in Indian CVs, Mr Mehta believes that the rural Indian story remains solid. He alerted the Industry to be watchful of the issues like increased fuel prices, taxation policies, labor unrest and most importantly, the seemingly slower GDP growth. The drivers and restraints for the India story was re-emphasized by Mr Nitin Seth, Executive Director, LCV, Ashok Leyland, as he shares his thoughts on the “Future of CV Industry”. Mr Seth believes while restraints like political instability and increasing inflation could pose a threat to the Indian CV scenario, the increasing disposable income and increased spending by the Government for infrastructure development provide a hope for India. The entry of global OEMs and the Indian’s preference to road over rail as the mode of Page 1 of 5

Ms Jina Kang of JAC Motors. Outlining four growth strategies. before taking the members through a case study of RIE as applied to a company in the CV industry. Head – Truck Operating System. Mr Pandey shared Hella’s company vision which is to reduce the road accidents and how this transformed the company which was at the verge of exiting India. the processes and practices that have not yet been transitioned into India.. focused on the flipside of the India Growth Story as he recollected the statistics of road accidents which are currently 1 every minute resulting in 1 death every 4 minutes. With a comprehensive SWOT and positive indicators. The challenge of railways posing a competition was further re-emphasized besides the ability to manage competition. solution is denied to the customer and it is the customer who stands to lose. can only be supported by Innovation as he shared how Innovation can be incubated in CV Industry for exponential growth. he explained. Daimler India Commercial Vehicles showcased Daimler’s Truck Operating System (TOS) and the importance of standardizing operations in the shop-floor through Daimler’s journey in adopting best practices across geographies. Substantiating the need for imbibing true world class practices. Managing Director of Hella Lighting. With the average company lifespan reducing consistently. which is BMGI’s unique methodology to bring concepts to action. Mr Banerjee said. Mr Ramashankar Pandey. Mr Seth recommends tailor made products instead of introducing a product intended for developed markets besides shifting towards richer product mix and strong sales-service network.9% while the M&HCVs are pegged at 7.Event Summary: India Commercial Vehicle Summit 2013 freight goods reaffirms the promise. Business head. increasing LCV and declining M&HCV sales. who identified the availability of credit as one of the key enablers for CV sales. BMGI probed the audience with a teaser and asked them if it was through cutting costs? He said that in cutting the costs. He endorsed the earlier stated views that the Indian truck market would eventually move to optimum-cost market from the current low-cost market. Reinforcing the above thoughts on the market drivers was Mr Vivek Kumar. Speaking about the entry of global OEMs to India. He further added that improved road infrastructure and increased average running speed on highways have made it a profitable solution for providers to opt for HCV in place of MCV. With the GDP growth touted as the slowest in a decade. He recounted the initiatves by Hella towards this direction and mentioned about the Club D2S campaign that is an inclusive campaign intended to sensitize people about road safety and road sense. He presented the structure of Rapid Innovation Events (RIE). he contrasted the differences in thinking process between the traditional and the innovation based thought. Mr Kellner elaborated the procedure through which Daimler benchmarked some of the practices involving the people on the shop-floor – which also meant. Corroborating the shifts in market viz. the process of growth. He criticized the tendency to assign the fault to the driver and urged people take a more responsible stance by shifting the focus on use of technology by the automotive aftermarket companies.. Mr Christian Kellner. He stressed the innovation based thinking which involves the concepts of Job To Be Done and identifying the opportunity for innovation based on the outcome expectations. he added. pictured as the third key shift the CV Industry was headed to.24%. Associate Director of CRISIL. India. how would a typical CV maker react? Mr Nirmalya Banerjee. With Page 2 of 5 . demonstrating through mocks. with presence in over 100 countries that has demonstrated a rapid growth in sales for 21 years shared JAC’s plans to enter India. Mr Seth shares that the goods LCVs are predicted to grow at a CAGR of 16. The RIE is a journey towards the ideal solution which banks on a set of tools to generate “edge of the circle” ideas. He mentioned about the importance of lighting and the quality of lighting that improves visibility which is a significant factor in preventing accidents.

helps to stop vehicle quickly. What is the impact of a low weight CV & sub-assembly level improvements on emissions? Mr Nandkumar Khandare. The director of the 122 year old company emphasized to clean up the cities by using vehicles that are powered by biogas – generated by using waste from cities and bio-ethanol. He then explains how the opportunity can be exploited at the subsystem level including in-wheel drives and retro-fitments. seemed to find an answer through Mr Thulin Krister. she added. Ms Kang revealed JAC’s plans to setup its CKD operations within 2 years and looks at India as the global manufacturing base five years from the start. improving combustion efficiency and electrification of accessories. Mr Bendke outlined the challenges that included developing a commercial scale process is the key to commercializing vegetable oil based lubricant and the cost-intensive manufacturing process. Scania Commercial Vehicles India. Nissan – Ashok Leyland Technologies looked to answer this question by noting that the forces acting against the prime mover – resistance to acceleration. Mr Kasliwal outlined how softwares es-ice & STAR-CD can help engine development through the various features like full cycle diesel combustion and knock prediction despite a fully loaded suite of vehicle simulation components that are available. it is not a surprise that JAC introduced the first bus chassis of the nation and has since been the biggest chassis manufacturer. Business & Coach. but. Perhaps as an aid to innovating at the subsystem level. local market driven business and managing the aftermarket.Event Summary: India Commercial Vehicle Summit 2013 a unique management system that looks at technology innovation. With the transport sector heavily dependent on oil. On the lookout for a partner in India. Mr Roy shares. He shared that reducing the vehicular weight not only saves metal and its processing energy. Mr Bendke described the driving factors for bio-based lubricants that include search for environmentally friendly materials with potential to replace mineral oils owing to the depletion of world fossil fuel reserves. who made a case for Biogas & Bioethanol powered vehicles. the acceptability by the consumer as the biggest barrier for this as he recollected the past efforts in the country in the said direction. rolling and gradient besides aerodynamics. Mr Harsha then shared the solutions to enable Page 3 of 5 . Sharing that the Indian driving context requires a significant part of the energy in managing the tyres and the driver behaviour. He reminded the participants that it is a city dominated world with the cities are only expected to grow to mega-cities while higher deaths in the world caused due to air pollution. Mr Shridhar Bendke of Mint Biofuels outlined the challenges & prospects of green energy & technology. Introducing some specific products. Sharing the view on depleting oil resources. management innovation. system innovation and marketing innovation. new geographical focus. Mr Amit Kasliwal of CD-Adapco India shared how 3D modelling can provide more detailed visualization and understanding of the flow processes within the engine in a CV. He described the bio-diesel process followed at Mint before narrating the advantages. This will provide a closer opportunity to save cost on the material. CEO. Sree Harsha from Dassault Systems addressed issues from Designs through technology to Manufacturing. Mr Sudipta Roy of Tara International projected the need for electric mobility in India. could counter this in addition to meeting the emissions challenge. is today’s transport mechanism sustainable? The double-bind we find ourselves with today: how to replace the oil consumed and how to reduce the CO2 emitted. which includes producing 80% less Carbon dioxide and almost 100% less sulphur dioxide with the disadvantages of being inoperable during winters and need for frequent replacement of filters. Director. He began with the challenges CV manufacturers face – new ownership experience. he stressed.

shared Mr Ajay Kavade. it is needed to synergize the technology. the industry is bound to grow. Echoing the thought of indigenous development capabilities to enhance the effectiveness of the Commercial Vehicles. AGM Body Shop. Mr Sadashiv Pandit. Outlining the structure of business excellence. JVs are always driven by the need and it is perhaps towards technology. Mr Khandare stressed that this business is a necessity as if we look around. also at the sub-system level. Vice President. but. suitable and intuitive customer experience in addition to being lean. It was collectively agreed that a JV may not necessarily fail. everything we see would have travelled in a CV in some form at least once in its lifetime. The second theme of discussion revolved around the new players and the existing players and if the new players posed a threat to the existing ones. This has the potential to fuel organizational growth at rates higher than 20% CAGR explained Mr Pradip Parode. He took the audience through a case study and demonstrated that using tools like Ishikawa diagram to identify the causes and working with the root cause would yield to substantial improvements. Mr Roy opined that there is no necessity that the old player would have to move away. In a panel discussion moderated by Mr Raisinghani. CEO. showcased the company’s abilities in design and innovation in its products which is evident from the fact that it is the first company to manufacture sheet metal yokes. With this big a scope. Business Excellence from John Deere. with Mr Nandkumar Khandare. It was felt by the panel that this is a passing phenomenon as the nature of the industry is cyclical. The panel looked at the joint ventures and pondered about the time when the foreign companies collaborated for understanding the local market. To manage the challenges of increasing customer expectations while keeping an eye on profitability creates a need for business excellence within organizations. Volkswagen. Mr Khandare felt the larger players need to have a strategy in order for growth. Pradip detailed the elements of John Deere’s Business Excellence blocks which included Innovation. there is room for all. Mr Kumar emphasized the need for innovation not just at the OEM level. Deployment Head. He signed off collating the benefits out of the initiatives that included a cumulative bottom line addition of 8million USD. About BMGI Page 4 of 5 . Fleetguard Filters Pvt Ltd mapped the aggressive growth plans banking on their design capabilities. Executive Chairman. Nissan-Ashok Leyland technologies & Mr Partho Roy Asst. Mr Praveen Kumar. the broad themes of discussion were if the growth would really happen given the gloom. The CEO of RMP Bearings. one would notice that the industry is actually growing. A disciplined approach to solving problems at the shop-floor that would lead to increasing utilization and efficiencies and would in turn lead to Improving the capacity and productivity.Event Summary: India Commercial Vehicle Summit 2013 global truck development that includes providing a customized. market and the investments. He explained how BMGI’s SCORE™ methodology of problem solving has helped John Deere achieve its organizational objectives year on year. He shared the importance of involving the leadership and top management in identifying the improvement opportunities and the structure of driving this to the deployment level. Foton Motors on the panel. The panel concluded that if one takes a step back. green and compliant. with the market as huge as it is.

Daimler. Headquartered in Longmont. A few major clients BMGI has worked with in India include Volkswagen. BMGI’s Problem Solving capabilities have made it known world over as the best operations excellence consulting Page 5 of 5 . preferences of customers and expectations from stakeholders offer the Business Advisory Services to its clients to help them align with the right designing and execution of strategy for successful businesses transformations. ITC. BMGI partners with organizations in leveraging and promoting innovation. BMGI leads in building a culture of innovation across the enterprise that transcends from top management to the lowermost execution level. Contact: Business Division Vishnupriya Sharma Phone : +91 22 4002 0045 Email : press@bmgindia. BMGI helps organizations solve problems harnessing the power of cutting edge Corporate Office Divesh Sawhney Phone : +91 22 4002 0045 Email : press@bmgindia. Reliance Industries. and Oracle. Fiat. John Deere. Accenture. Vodafone. innovation. For More Information. L&T. Bajaj Auto. BMGI has offices in 13 countries around the globe. problem solving and business transformation. BMGI's business strategy consultants work with organizations to build and execute successful strategy implementation and drive growth. Asian Paints. BMGI with its deep understanding of changing trends in nature of markets. USA. In India.Event Summary: India Commercial Vehicle Summit 2013 BMGI is a global consulting firm that specializes in providing management consulting solutions in strategy. BMGI is located in Mumbai.