Company Description: AVL
India is a joint venture with AVL List GmbH, Graz, Austria, which is the
world’s largest privately owned and independent company for the development of
powertrain systems with internal combustion engines, pollution monitoring
equipment, as well as engine instrumentation and test systems. Incorporated in
1984, AVL India started production of these equipments in 1992. Today the
company is a leading manufacturer of diesel smoke meters, exhaust gas
analysers, computerised pollution monitoring equipment for diesel & petrol
vehicles and other engine diagnostic equipments. Having started operation in
the Indian market with just half a dozen people, it has now grown to an organisation
of more than 300 people and most of the employees are engineers and are based
at Gurgaon in a 10,000sqm. AVL India also has a software unit called AVL India
Software, which is engaged in providing business and customised solutions to
its global clients.
It’s a known fact that AVL
India, a wholly-owned subsidiary of Austrian AVL, the technology solutions
provider in powertrain engineering, instrumentation and test systems. But what
kind of services have you offered specifically to Indian OEMs? Can you shed
some light on that?
Basically we have two divisions. One is into supplying
engineering services for the powertrain (engines+transmissions). So we design
and develop new engines and transmissions and also upgrade or downgrade existing engines as per
the requirement of the OEMs. These kinds of services, which are offered to both
domestic and multinational OEMs, are done jointly in India and our global
headquarters in Austria. However, for high-end products like Euro-VI engines,
etc, all the activities are carried out in Europe. We are also engaged in the
development and export of state-of-the-art software for instrumentation and
engine test systems. We also manufacture instruments in Gurgaon. We have sales
and support structures in most of the automotive hubs in India.
As far as your powertrain
expertise is concerned, you have worked with a number of OEMs? But have you
been able to set any benchmarks in technology upgradation?
We are doing a fair amount of work on hybrid vehicles.
And I think we are the only company which is doing a dedicated hybrid programme
for Indian OEMs. As Mahindra & Mahindra (M&M) has allowed us to talk
about it, I can share that they are working on a hybrid-diesel SUV in
association with us. The vehicle is expected to be on a new platform and AVL
has been entrusted with engineering the powertrain and providing hybrid
systems. We are also working with a number of automakers to reduce the cost of
the vehicle without using any aftertreatment devices like catalytic convertors,
etc.
You had earlier set up an AVL
India Skills Centre in New Delhi which offers training on all AVL
instrumentation test applications, systems and equipment. How is it helping AVL
India?
The Skill Centre is helping both AVL India and its
clients. The equipment that we supply for high-end work involves a lot of
training and application know-how. Moreover, we have to deal with after-sales
service and warranty-related issues of our products. To increase our focus on
the Indian automotive industry and to ensure that its engineers’ skills are
honed further, AVL has set up an ‘AVL India Skills Centre’ in New Delhi. It
will offer training on all AVL instrumentation test applications, systems and
equipment. We call trainers from all over the world for training of engineers
from OEMs. And this is a paid service. We have also introduced support at the
customer site and Help Desk Support (Hotline) in order to provide the user with
comprehensive assistance during daily operation. The Start-up / Operation
Support helps to get newly introduced systems into productive operation
quickly. AVL experts assist in optimising running test facilities and specific
testing tasks. Help Desk Support is provided as Hotline or AVL CAREline. Most
of the problems are resolved on telephone.
If I am not mistaken, AVL
India is eyeing projects for helping build technical centres of engine
manufacturers. You are also involved in providing infrastructure and testing
equipment and also training manpower. But what about your own R&D centre?
Our technical centre, which began its operations in 2002,
is focussed on engine research and development. Nearly Rs. 80 crore was spent
on it. Any engine upgradation can be outsourced by any OEMs (both domestic and
international) to us. This centre, which has a total strength of around 125
people, is actively involved in global projects. We send these boffins to
Austria for training and other projects. If we need any high-end expertise, our
engineers from Graz are flown in here. They give us inputs on transmission
development too.
Hero MotoCorp has gone on
record saying that it has already tied-up with AVL for bike and engine
technologies? Could you shed some light on that?
Yes, you are correct. While Hero MotoCorp has already
begun investing in its in-house R&D capabilities, the two wheeler maker has
just announced a tie up with us to develop a new range of engines that will
propel Hero MotoCorp into the future. Hero’s team, in close coordination with
AVL India Technical Center, is working on a few options across motorcycles and
scooters. There could be two aspects to it. One is driven by emissions that the
automakers need to comply with. The other is designing a new engine. We are
aware that Hero MotoCorp has a royalty based technical agreement with Japanese
two-wheeler giant Honda until 2014 for using engine technology. Even though we
would not replace Honda, we would be one of Hero MotoCorp’s technology partners
in the future. We would be developing engines of all sizes to make new products
and also refurbish the existing product lines.
AVL has launched its compact
product range to help engineers in the automotive industry get reliable
measurement results. And what does the range include? And what are its price
tags?
This is quite a big topic. AVL globally produces
sophisticated products to meet Euro-V and Euro-VI emission norms. But in India,
such sophisticated technologies are incompatible. Having said that, parameters
like accuracy, quality, etc are still required here. So we decided three years
ago to form a joint development team between AVL India and AVL Graz to produce
instruments that can meet Indian and other developing markets’ requirements. So
we came up with this compact product range to help engineers in the automotive
industry get reliable measurement results. We rolled out a couple of these
products in India. Going forward, we would like to manufacture as many
instruments as possible. The products are 30-40pc cheaper than what our global
unit is producing.
There has been an influx of
global players into India for the past 5 years. Moreover, there are new players
setting up their shops here? So do you expect enhanced business opportunities?
If yes, can you run us through it?
For us, there are two aspects of business. While one is
emission-driven, the other one is underpinned by competition. As the market
demands better products, the automakers will come to us. The more competitive
the market gets, the better it is for AVL’s business. Moreover, as Indian OEMs
go global, they seek our expertise to develop products for matured markets like
Europe, United States, etc.
A lot of wannabe car buyers
are shifting to diesel versions. So has there been any shift in your strategy?
No, I don’t think so. The ‘AVL’ name is synonymous with
diesel. We started as a diesel-centric company in the 40s. And we were the
first ones to propagate direct injected diesel engines that meet NVH
challenges. We have been doing a lot of diesel-related work in India. AVL was
founded by Professor Doctor Hans List in 1948, after he became an independent
engineer. The company was primarily focused on diesel truck engines, and after
great success, branched out in 1960 to include an engine instrumentation
division.
Is the LCV segment something
which you are eyeing aggressively? And do you get good margins on that?
I would say the LCV is one of the booming segments in the
Indian automobile industry. But with the construction of national highways,
even 40+ tonne trucks are doing brisk business. These products are made by
Indian OEMs in association with their JV partners and engines are insourced
from Cummins, etc. But small light trucks like the Tata Ace, Mahindra Maxximo,
etc, were never available abroad. This segment has been completely unexplored.
We are actively allying with Indian truckmakers to make transmissions for such
light trucks.
Are your services available
for component manufacturers also, besides automobile manufacturers?
Yes, we work with a number of tier-I suppliers like
Bosch, Delphi, Denso, etc. Now we are extending our services to auto parts
makers who are looking to upgrade and test their products. This is because the concept of ‘Indian Auto
Component Manufacturer Partly Responsible For Manufacturing Defects’ is fast
catching up.
How much, in terms of
percentage, is AVL India able to generate its business from India? How
pertinent is the Indian market in your global set up, especially in the Asia
Pacific area? Last but not the least, what is your vision for the company? What
new trends will you see with your clients?
At the moment, our turnover is about 50-60 million Euros,
which is about 300 crore. AVL globally
has clocked 850 million Euros. So we are just below 10pc. In the Asia pacific operations,
we are second only to China (at 100-120 million Euros). We are hopeful to post
a growth of 20-30pc on a CAGR basis in the next few years. My vision for the
company would be able to get into hybrids, where we have a negligible presence.
This is because most of such activities happen in Germany, Austria, and the US.
In our AVL perspective, about 20-30pc of the powertrain will be into
electrification or hybridisation in ten years time .We will also zero in on
reduction in Co2 emissions which is also a big challenge.