Company Description: Hella
India Lighting (HIL) is a subsidiary of HellaKGaA Hueck& Co, Germany and is
into manufacturing and marketing of automotive lights of commercial vehicles
along with Agro and other Special Original Equipment (SOE) groups like
construction, mining etc. Hella originally established itself in India in the
year 1959 as a joint venture with JMA. With a manufacturing location in
Derabassi, near Chandigarh, the company works closely with local SOE customers
such as Tata Motors, Ashok Leyland, Volvo, Mahindra & Mahindra, AMW, JCB,
Mercedes-Benz, SAME, CLAAS and with Independent After Market (IAM) customers to
develop and manufacture head lamps, tail lamps, aux lamps, fog lamps, work
lamps, day time running lamps with bulb & led technology and various types
of switches. The company is ISO/TS 16949 certified. HIL has recently launched
its company vision as “Technology of Tomorrow for the Life of Today, on Indian
Roads”. The company has launched an ambitious ‘Nation Wide Road Safety Mission’
as part of its core strategy.
How do you see the automotive
lighting industry in India evolving over the years?
When Tata started rolling out trucks
in India, we also began our alliance with them. So we initially started as a JV
with JMA and started making horns and lights in the initial phase. The Indian
auto lighting witnessed a gradual evolution even though we lost pace with
global technology in the middle of our course of action. By this, I am specifically referring to the
CV industry in the country. The design and technological properties (of the
lights) remain the same as earlier. So we can bring in a lot of design and
technical capabilities in the upcoming products of our clients and change the
landscape further.
How important is the Indian market
for HIL globally? And with the recurrent economic slowdown, are you redrawing
your expansion plans?
It is true that the automotive
industry has been cyclical and ideally it is best not to forecast anything
(growth) at this moment. So a firm has to be very agile and flexible in order
to take on these cyclical effects of the industry. The long term potential of
the Indian automotive industry is huge and we will not go slow on our
investment plans. Within Asia, even though our market development activities
started later vis-à-vis China, we are taking full advantage of Hella’s global
network to achieve the ‘Technology Jump’ while building our production and
development infrastructure in the country. Our parent company in Germany has
figured India among the strategic key markets in the world. So we are
definitely building up our infrastructure here.
How much does the automotive
vertical contribute to your overall business?
We are only in the automotive space
in the current period. We are having a small vertical in the special
application called “Hella Industries”. But this is still very nascent and yet
to take shape. So we are focussing only in the automotive vertical.
Which specific segment in the
automotive industry gives you the maximum volumes? And is there a segment which
you find very promising?
For us, the biggest contribution
comes from the automotive industry. So the maximum volumes are derived from
trucks and buses. With the entry of high-end players like Volvo, Scania, and
Mercedes Benz, a lot of buses are offered with next-generation lighting
technologies. Many models equipped with projector lamps in these buses are
supported by us. So we are pretty hopeful that the CV industry will witness the
adoption of many high-end technologies. In addition to that, we are catering to
other segments like SUVs and cars through our Aftermarket channel.
You have recently developed a highly
indigenised light emitting diode (LED) lamp for commercial vehicles. Could you
talk a little bit about that?
Yes, we have developed India’s first
fully-built light emitting diode (LED) lamps for CV application at its
Chandigarh plant. We realised that we can make a big difference (in CVs) by
ensuring that there is safety on the road. So it’s a product which is ahead of
the curve and is also affordable because of the heavy local content. The
special features of the newly-developed product include up to 90pc less power
consumption, superior lens and optic material, ultra-wide visibility optic,
high UV resistance, completely water-proof IPK system, and extra-high vibration
and temperature control. It also carries a five-year warranty for commercial
vehicles, which is a real bonanza for vehicle operators. The product is fully
tested and certified before being supplied to the customers. Even though the
purchase price of the product will be higher, the maintenance costs are very
minuscule. This product has been approved technically by reputed CV OEMs in
India, and Ashok Leyland has started using the same. We are holding similar discussions with other
OEMs too. The product is now undergoing trial with fleet operators like VRL
Logistics.
HIL has also adopted a new strategy
to reorient its future activities towards ensuring road safety in India? Could
you shed some light on that?
Since 2008-09, we were a bit
struggling as we wanted to come out of our JV with JMA. As we became a
Hella-owned company, we were striving for profitability as we had accumulated
losses in crores at that point of time. So we were initially focussed on
improving the bottomline by improving sales and winning back our lost
customers. This was achieved by improving the quality of our plant (at
Chandigarh) and get into a profitmaking mode. By 2011, we improved our
financial health and by then our parent company also expressed a lot of
interest in the Indian market. So thenceforth, we reoriented ourselves and laid
out some well-defined plans wherein we met most of our customers to know their
demands and needs. We then came up with a strategy that dealt with the menace
of road deaths (in India). The latest statistics reveal that there are more
than one lakh deaths occurring due to road accidents. Hence the company is
committed to road safety by launching safety enabling products, enhancing
awareness of risks involved in night driving and also by attracting the
attention of NGOs, Industry associations like ACMA-Automechanika, and
Government departments like NHAI, to the seriousness of the problem. This is in
line with the company motto of ‘Technology of Tomorrow for the Life of Today’.
So we made a vision statement that by 2020, we should impact reducing the
number of road accidents by 10pc.
Where do you build your products?
Are you planning to have a dedicated facility for auto lighting solutions?
We are running our manufacturing
unit at Dera Bassi near Chandigarh. The state-of-the-art facility has been
refurbished with fresh investments worth €2 million. We are able to produce
75,000 headlamps and 70,000-75,000 tail lamps per month and can also churn out
80,000 LED lamps per year from this facility.
The plant supplies to Tata Motors, Ashok Leyland and other leading CV
makers. We simply follow the ‘Blue Ocean’ strategy to explore virgin market
space like developing LED application in CV’s, Agro & Construction segment
where Indian market has a lot of potential. Nearly 53 pc of the output is
catered to the aftermarket vertical and roughly 15pc (out of the total
production) is exported to countries like Europe, Singapore, Dubai, South
Africa, Germany, etc. We have also garnered sizeable orders from Hella US,
So the German OEMs are giving you
the maximum orders?
We are getting excellent response
from German OEMs. They are in fact our lead customers for bringing high tech
products for ‘Road Safety’. As the competition
is increasing in the CV industry, there is a trend among Indian OEM’s to adopt
global benchmark on using lighting components. One of the successful example is
Ashok Leyland started using fully built LED tail lamps for their new
Intermediate Commercial Vehicle (ICV) platform. We have a balanced customer
portfolio. Going forward, I foresee enhanced business opportunities not only
from German automakers, but from European ones and others too.
You have kickstarted the Hella Value
Partners (HVP) programme in 2011. Does
that mean the aftermarket vertical is indispensable for you?
As I mentioned earlier, the
aftermarket vertical is indispensable not only in India but worldwide too. In
fact, it is one of the three key pillars of growth. We are growing our retail
base from 8,000 franchised outlets currently to nearly 45,000 outlets in the
next two years. Through the Hella Value Partners (HVP) programme, select key
partners across the region are awarded the status of HVP and are fully backed
by Hella with direct access to the company’s expertise in the areas of sales
support, marketing expertise, product and technical know-how support and
reliable logistics service. We don’t believe in the principal-agent
relationship with our dealers. They are like our business partners.
Could you talk a little bit about
your R&D centre at Chennai?
Our Engineering centre of Hella
India Automotive (HIA) at Chennai is working for both domestic and overseas
markets for lighting development. It is into design, development, simulation
and allied activities in automotive lighting domain. So there are more than 120
engineers who are working on next-generation solutions for the global auto
lighting industry.
Lastly, do you foresee a lot of
growth in India in the next few years in your line of business?
What kind of revenues are you
looking at in HIL?
When I started as Director on the
board of HIL in 2009, the company finished 2008-09 with 28 crore-annual
business. During last fiscal year we closed at 74 crore and in the current fiscal,
we should be clocking close to 90 crore in revenues.