VECV makes India a global hub for medium-duty engines
Though Euro VI norms is on a distant horizon in India, Volvo Eicher Commercial Vehicle (VECV), the five-year-old joint venture between Volvo Group and Eicher Motors, is ready with an engine that complies with this regulation. The company recently unveiled the Euro VI compliant engine at its new VE Powertrain (VEPT) facility in Pithampur near Indore. The plant has an initial capacity of 25,000 units per annum and was set up at an investment of Rs 375 crore. The capacity would eventually be increased to 100,000 units at an additional investment of Rs 125 crore.
The new facility is a global hub catering to requirements of Volvo Group for five-and eight-litre engines. The Euro VI-compliant diesel engines will be supplied to Volvo’s plant in Venissieux, France, where they will be assembled for Volvo Group Euro VI requirements. The same platform will be adapted to Euro III and IV engine (BS III/BS IV) technologies to meet the VECV needs and other Volvo Group requirements for such engines in Asia.
By setting up the facility, Volvo will benefit from low manufacturing costs while Eicher would be able to offer Volvo technology in its products. Around 88 per cent of the Euro VI engine components being sourced from the Indian supplies, has resulted in reduction in cost by around 25 per cent when compared to that in Europe.
Elaborating, Bertil Thoren, representing Volvo Group on VECV Board of Directors, said, “Both the JV partners will be benefited out of this top class engine facility. The global manufacturing hub at VECV is truly a win-win situation for both Volvo group and VECV. While on one hand, it will help Volvo Group to reduce costs by sourcing engines from this plant and on the other hand, it will help VECV to source best in class Euro III and IV engines based on latest Euro VI Volvo Group technology.”
By setting clear goals and operating parameters, VECV has been able to put the right systems and processes in place, which are delivering phenomenal results. The impact of this synergy is increasingly visible in their products, distribution, quality, customer satisfaction, and is truly on the way to transforming the commercial vehicle space in India.
“The setting up of this engine plant is crucial for us, as we are looking at 15 per cent market share in the country by 2015 from the current five per cent,” said Vinod Aggarwal, CEO, VECV. With the help of this, all our products will be upgraded with the new engines produced in Pithampur.
Siddhartha Lal, MD and CEO, Eicher Motors, said, “In India, price plays a crucial role in truck buying. CV majors Tata Motors and Ashok Leyland are offering a better proposition and occupy a majority of the market share in the country. But we are working on increasing productivity, reducing costs and also lifecycle costs thus increasing fuel efficiency.”
Replying to a question on automation levels and frugal engineering, Rajesh Mittal, Sr VP & Head – Operations, VECV,, said, “In our new powertrain facility we have achieved 30 per cent of automation and the level of frugal engineering will help us in being cost competitive. Our main focus will be on offering lifecycle cost benefits in terms of better fuel efficiency and low maintenance cost.”
As you enter the shop floor, you get the feeling that you are in a typical IT company. The high tech manufacturing plant is in line with Volvo’s international manufacturing standard that employs high levels of automation. The flexible final assembly line boasts Automated Guided Vehicles (AGV) and Smart Cell Technology, which can assemble 166 components in just 120 seconds without human intervention.On paper, the level of automation employed is 30 per cent, but the plant looks like it is fully automated and latest equipment like ‘Smart Cell’ enhances productivity. The plant is linked to Volvo’s global manufacturing set up through information technology, probably that could be the reason for comparing it with an IT company. All components are tagged through RFID trackers, so that a component does not travel in the wrong direction.
Smarter work place
Out of the entire engine assembly operation, ‘Smart Cell’ is the highlight. It is designed in such a way that coupled with a series of synchronised operations encompassing component kitting, fitment and parallel testing, it ensures a cylinder head is assembled in just 120 seconds. Mr Mittal admitted that the concept was developed in collaboration with Italian automation major Comau. A cylinder head requires 166 components to be
assembled, which means lot of time and manpower is required. This new layout not only saves time but also the cost by eliminating additional robots and manpower, Mr Mittal informed.
Looking at the sophisticated technologies employed and quality of the engines, it is a safe guess that Volvo would source more components from India. Mr Thoren outlined that there could be a possibility of exporting transmissions, axles and a few other major components.
Though the plant has been set up to cater to Volvo’s global requirement, the same could be adapted to manufacture Euro III and IV engines for use in heavy-duty trucks made by Eicher. Mr Aggarwal said, “We can manufacture engine platforms having a power range of 180 to 350 HP which will provide highest power to weight ratio in the Indian commercial vehicle space. We will fit this new engine in the Eicher range of heavy-duty trucks, which we will be launching in the
coming months. The new trucks will be in the 16-tonne GVW category and above. Apart from this engine, the truck will also be equipped with next generation cabins, gearbox and axles.”
In terms of technology, Euro VI engines will be mandatory in India in a decade and VECV has the first mover advantage by commissioning this facility. According to the company, the fuel economy and engine power would be best in class and that will be unique opportunity for the customers to earn more revenue.
Eye on exports
The engine is on a global platform and would be used to meet Volvo’s global requirement as well as for VECV’s domestic requirements. The industrial set up that has been planned for an eventual capacity of 100,000 units per annum, provides for export of 30,000 units for Volvo Group’s global needs of Euro VI base engines. Apart from that, there will be export of Euro III, Euro IV and Euro V engines to other Asian countries as per requirements from the balance capacity.
Commenting on the new bus body plant, Mr Aggarwal said, “The bus body plant will start commercial production by the end of this year. Our initial capacity will be 7,500 units that will be scaled up to 15,000 units as the market requires.”
The Swedish-Indian JV partner has till now invested Rs 1,300 crore and would expand with further investment of another Rs 1,200 crore in 2013-2014 to meet the requirement of ongoing projects like engine plant, bus body plant and new products and also for capacity expansion beyond the 5,500 units/month mark in order to prepare for a projected requirement of the CV market in year 2015.
Regarding future products, Mr Lal said the company would renovate its entire line-up of products (ranging from five to 50 tonne) starting from end of this year through 2015.
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