Fortunes of metalworking sector are closely linked to automotive industry's performance as auto and auto components industry reportedly account for 60 per cent of the machine tools consumption in India. Rise in demand for electrics vehicles have direct ramification on the metalworking industry, which needs to be ready with solutions, says Rakesh Rao.
Despite challenges like GST and no clarity on the electric vehicle policy, the Indian auto industry registered record sales in 2017-18 with 29,075,605 vehicles (which included passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle) being sold. Indian two-wheeler industry, for the first time in the history, surpassed the 20-million sales milestone in 2017-18 by selling 20,192,672 units in the domestic market. All these auger well for machine tools (metalworking) industry. Traditionally, machine tools mainly catered to the automotive industry. In fact, the automotive and auto components industry reportedly account for 60 per cent of the machine tools consumption in India. Hence, the fortunes of machine tools sector are
closely linked to automotive industry's performance.
V Anbu, Secretary, Director General & CEO, Indian Machine Tool Manufacturers’ Association (IMTMA), explains, “Machine tool industry has got a symbiotic relationship with automobile and auto component industries. Auto components are broadly made by machine tool industry. Presses are used for making automobile bodies. Engine and transmission lines are made by metal cutting. A significant portion (around 60 per cent) of machine tools are sold to the auto component industry. The growth of a country’s automobile and auto component sectors drive the demand for machine tools. When there is growth in these sectors companies increase their capital expenditure and the relative increase in demand bring good business generation for machine tool industry.”
“The growth in the automotive sector along with the global alliances of Indian companies with some of our international customers has had a positive impact on our business. This 2017-19 year alone we have seen a 30 per cent increase in orders which is very encouraging,” says Kishore A P, National Sales & Marketing Manager – India, ANCA Machine Tools Pvt Ltd, which provides high quality CNC tool and cutter grinders.
The growth of automotive industry is encouraging many suppliers to machine tool makers to set up shop in India. For example, MMC Hartmetall established a new plant at Aurangabad last year to manufacture special and make-to-order cutting tools in order to cater to the Indian automotive industry more closely. MMC Hartmetall provides complete solutions and cutting tools from Mitsubishi Materials for drilling, milling and turning of different machining materials.
Healthy show recorded by automotive industry is clearly reflected in the performance of the metalworking industry. “The metal working industry is a part of the Indian auto component industry which contributes 2.3 per cent to the GDP and employs about 1.5 million directly and 1.5 million indirectly. The automobile industry posted a growth of 14.78 per cent in 2017-18 over 2016-17. The Automotive mission plan (AMP 2016-2026) formulated by the government aims to propel the Indian Automotive Industry to be the engine of the Make in India programme, as it is amongst the foremost drivers of the manufacturing sector. This, clearly indicates the close association of the metal working/auto component industry and how it depends on the automotive industry’s performance,” opines D K Sharma, Executive Vice President and Business Head, Godrej Tooling, a leading tool room in the country.
Since its inception, Godrej Tooling has evolved to emerge as a key player in design, manufacturing and proving of die casting, stamping dies & industrial machines. The company manufactures high quality tooling that caters to a wide cross section of OEMs & auto component suppliers in the automobile sector, amongst others.
Anbu says, “Indian machine tool industry is battling challenges when it comes to applications in automobile and auto component industries. Customer requirements are changing and becoming more stringent when it comes to reliability, productivity and cost. There is tough competition from foreign players who are having upper hand when it comes to technology, workmanship, robustness, quality, delivery commitment, etc. Domestic machine tools are advantageous in terms of cost and after-sales and well positioned for medium accuracy requirement. However, the industry needs to develop technology to meet customer requirement as well as fend off competition and substitute high imports.”
With stringent regulations coming into force, auto OEMs are also demanding accuracy and reliability from their suppliers. “Auto component manufacturers are increasingly demanding machine tools with improved technology, better accuracy, low maintenance and easy availability of spares. Also they are shifting their requirements from individual machines to turn-key solutions with focus on reliability, productivity and operation cost. Manufacturers in this segment are also seeking optimised solutions such as tool design for fixtures and cutting tools, machining and manufacturing solutions with process design to achieve least manufacturing cost,” informs Anbu.
Automotive industry is witnessing a host of technological and market driven trends such as share mobility, improved emission & safety standards, electrification, etc. Sharma observes, “The automotive sector is transforming at an unbelievable pace and these changes will be mainly spurred by evolving technologies. In addition to the government’s planned electrification of the sector, the industry will witness a major move in technology driven areas such as shared mobility, connectivity and autonomous driving. It would also be pertinent to point out that most of the new-age vehicles are connected. It means that such vehicles use technology enabled tools not only to point out their location and guide them during their journey but also effectively communicate in times of emergencies. In fact, such high levels of connectivity and artificial intelligence also allow these vehicles to properly diagnose a faulty component and suggest remedial measures.”
With lightweighting becoming top priority of the OEMs, many of the leading auto makers, especially in western countries, are using aluminium. This trend is likely to catch up in India as well. “There are several key advantages and disadvantages of aluminum vs. steel in automotive applications that influence decisions of their future use. Satisfactory high tensile strength, corrosion resistance, and recyclability of aluminum alloys are among key factors contributing to accelerated growth of aluminum applications in automobiles. Light weighting will lead to replacement of certain steel parts with aluminum. High strength steel components also help in reducing weight and increasing strength. The challenge for the tooling industry would be in designing and proving of the tools which will be more complex,” says Sharma.
On the back of the huge demand of automotives, majority of the machine tool builders have enjoyed tremendous growth over the last four to five years. At the same time, the demand for automation in machine tools industry is rising. In CNC machining and other types of manufacturing, the adoption of cloud computing - collecting data from many devices at one point - will be transformative, allowing intelligent, autonomous decisions throughout supply chains. The cloud is one of the ‘nine pillars’ making up Industry 4.0, and critical for the Internet of Things (IoT) trend, which McKinsey predicts will create nearly $ 5 trillion in value in business-to-business (B2B) settings annually by 2025.
“We have seen that since 2014 the number of our customers ordering CNC grinding machines with robot loaders has increased from 10 per cent to 50 per cent of all machines sold. Robotics now has greater capabilities and more flexible applications in the grinding process. With increased capability, simple automated loading applications have been followed by wheelpack changes and other possibilities. We have also seen great success with the integration of high accuracy tool measurement using laser metrology that operates in cycle,” opines Kishore.
Speaking about some the emerging trends being observed in metalworking technologies with respect to application in automobile and auto component industry, Anbu says, “Over the years Indian machine tool industry has improved in technology and is well positioned for the requirements. Many machine tool players are developing new products and adopting new technologies in their offerings. For instance, Indian manufacturers developed cost effective twin spindle machines to compete with drill-tap centres. The industry is also open to implementing cross-industry best practices, collaborating with preferred suppliers after learning their requirements. Emergence of smart machines, internet of things, 3D printing and information in digital form, advanced machine learning, etc. are other trends changing the manufacturing technology related to automobile and auto component industries.”
Anbu elaborates, “Automobile and auto component sectors together account for around 60 per cent of machine tool consumption. The push given by the government for electric vehicles is likely to have an impact on machine tool industry in the years to come. The industry is foreseeing some tapering down of demand from automobile sector. To overcome this challenge, the machine tool industry is bracing up to tap emerging opportunities in other sectors such as aerospace, defence, railways, medical equipment manufacturing, and so on. Since the government has ushered in 100 per cent FDI in defence equipment manufacturing, aerospace, etc many off-shore manufacturers are setting up their bases in India in collaboration with Indian industries.”
Though the market for machine tools is growing, Indian manufacturers need to build machine with better capability comparable to imported machines At the moment, approximately 50 per cent of Indian machine tool consumption is catered by imports. If Indian manufacturers are focusing on high end machines, there is always a good opportunity to take away some part of the share catered by imports.
The world of metalworking is very complex and the needs of automotive industry are in transition phase. Machine builders, who can comprehend the complexity and understand evolution that is currently underway in automotive industry, have the potential to emerge as the winner.
The push given by the government for electric vehicles is likely to have an impact on machine tool industry in the years to come. The industry is foreseeing some tapering down of demand from automobile sector.
Light weighting will lead to replacement of certain steel parts with aluminum. The challenge for the tooling industry would be in designing and proving of the tools which will be more complex.
We have seen that since 2014 the number of our customers ordering CNC grinding machines with robot loaders has increased from 10 per cent to 50 per cent of all machines sold.