Sandeep Sinha, Chief Operating Officer of Cummins India Area Business Organization, has been responsible for all the business operations of Cummins in India, since January 2015. Cummins India, a power leader, is a group of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, air handling, filtration, emission solutions and electrical power generation systems. Sinha discusses the progress Cummins India has made despite the struggles of the past year. Now that the rough patch is over, Cummins is all geared up for the Auto Expo 2018, with an impressive line-up of new technologies.
Kindly brief us about your company and its offerings.
Cummins India is a group of seven legal entities across 200 locations in the country. Our major products include diesel and natural gas engines for on- and off-highway applications; power generating systems and standby generators; engine filters, advanced exhaust after-treatment products; turbochargers; fuel systems; reconditioned components and engines and lubricants.
We have a solid presence in India with 21 manufacturing plants and close to 450 customer touch points. As of 2016, we are the sixth largest producer in the world with an average annual production of 24 million vehicles.
How was the industry impacted in 2017?
The extremely competitive automotive industry has displayed a steady growth over the past few years despite increasing complexities arising out of increasing numbers of products and variants, shorter technology cycles and increasing pressure to innovate to global benchmarks. The industry in 2017 was primarily impacted by the demonetisation drive implemented in November 2016. This affected the automobile industry with lower levels of enquiry, not just for two wheelers and motor cars, but also commercial vehicles in the rural and semi urban markets. Although the impact was more short term, paucity of cash drove buyers to defer their purchases and impacted business.
In 2017, the BSIII to BSIV transition also had a significant. Rising pollution levels, particularly in tier-1 cities, raised a huge concern with a number of environmental bodies. While this move was aimed to benefit the environment, many automotive companies and dealerships did take a hit.
The implementation of the Goods and Services Tax (GST) in this financial was yet another reason that contributed to the impact the operations of manufacturers, retailers as well as vendors.
The GST Council had proposed a four-tier GST tax structure of 5, 12, 18 and 28 per cent, with lower rates for essential items, higher rates for luxury items and highest impact on de-merits goods that would attract an additional cess. This led to a temporary business disruption during the transition from the current tax regime to a single GST tax pan-India.
How has Cummins India faced the challenges of the past year?
One of our highlights for 2017 was the successful launch of the fit-for-market BS IV engine in India from April 2017. We offered our customers the power of choice by making available both selective catalytic reduction (SCR) engines and exhaust gas recirculation (EGR) engines.
More than 90,000 engines produced by us now power Tata Motors vehicles. We launched the highest number of BS IV vehicle models ranging from 16T truck to 49T tractor trailer. Also in the past year our market share in M&HCV segment exceeded by 40 per cent as compared to 2016. All our plants are running to full capacity and it was one of the highest sales year for Cummins despite the BS IV launch and the related cost increase from BS III to BS IV transition.
In the components space, we are transitioning into an integrated solution provider - for instance - our components portfolio has expanded from turbos to also include after treatment systems, fuel systems, and electronics.
We also set up our components plant at the Phaltan Megasite and 54 components care centres across the country that will serve as a one stop solution for our customers for any service issues related to components.
As far as digital service innovations in concerned, we recently launched the ‘Cummins Care’ app which makes it very easy for our customers to lodge service requests and obtain real time updates.
There are various efforts on our part that are channeled towards converging IT, operational intelligence and advanced analytics to give the perfect fit. All this coupled with our customer centric approach towards our products, processes and customer services to deliver dependable and innovative offerings translates our market position.
What are your expectations from the Auto Expo Components Show?
With each passing year, Auto Expo has become bigger and better in terms of number of exhibitors, participants and visitors. It has earned the distinction of becoming India’s biggest, relevant and most accomplished event for the Indian automotive industry. “Make in India” is no more only a slogan but a reality and Auto Expo has been a significant enabler that has contributed to its success. The exhibition provides an opportunity to unleash the true potential of the Indian automotive industry. The event also acts as an excellent barometer of the dynamic automotive market, providing an opportunity for manufacturers and suppliers in this industry to network.
With the who’s who of the Indian auto industry as well as the media present here for the event, Auto Expo provides us a perfect platform for us to showcase ourselves as the credible leader in power technologies and solutions and position ourselves as the preferred supplier of choice. This opportunity also allows us to enhance brand recall to an extent that synonymises Cummins with power solutions.
How do you plan to execute your exhibitions at the Components Show?
Through the medium of the Auto Expo 2018, Cummins aims to demonstrate that we are uniquely positioned to win in power solutions no matter the technology. We have the scale advantage through our BS VI and powertrain solutions as we are the only company to showcase them. We will also showcase technological expertise for the BS IV ( EGR and SCR) engines.
Our exhibits will be a one-stop-shop solution provider for powertrain solutions, emission solutions, automation solutions and fuel system solutions.
Are you introducing any new products at the Expo? If yes, can you elaborate on it?
We have the Cummins On-Highway Exhibits that consist of the aforementioned BS IV engines and BS VI engines. This exhibit also includes a complete powertrain solution developed through a JV with Eaton. We will also showcase the electrification solution that is range extender with 2.8 L engine set.
Our other exhibit, Cummins Component Technologies Exhibits, consists of current and future turbocharger technologies; exhaust after treatment technology and solutions for BS IV and BS VI fuel system.
What is your outlook for the auto and auto component industry in 2018?
As of now three major trends dominate the Indian automotive landscape and there is a disruptive impact of technology at three levels. On the vehicles front you have the electric, driverless, connected cars trend. On supply chain and operations level, digitalisation and robotics dominate the discussion. As far as business models are concerned manufacturers and OEMs are exploring mobility as a service and vehicle sharing trends.
Another thing is the development of smart infrastructure for example, smart cities, alternative modes of transportation and the drive to enable electric vehicle charging infrastructure will change the face of mobility infrastructure.
Major regulatory interventions, such as the accelerated transition from BS IV to BS VI, adoption of electric vehicles, safety rules and stringent vehicle standards are leading to a shift in vehicle technology. This is creating significant challenges, not only for automotive industry but also in related sectors such as energy, oil and gas, transportation, and urban development.
What are your growth plans for 2018 (with respect to expansion, new launches, entering new markets/areas, JV, etc)?
We live in a world where technology is ever changing. We have shown time and again that when our industry and/or technology is changing, we win and grow big. We know we have to evolve and innovate faster and better than ever. There is no substitute for excellence in what we do. And we won’t stop there. As we think about the next generation of engines, we focus on innovations that can make the engine more efficient, more powerful, smaller, lighter, and reduced maintenance. We are also working to ensure that this next generation will interface with future technologies very effectively.
To do this, we will continue to focus on our investments in all spheres of technology. Our journey in India began in 1962. Ever since we have had a transformational journey and our growth story speaks volumes. In the last 12 years alone we have grown from Rs 3,000 crores to nearly Rs 11,000 crores today.
Over the last 10 years, our continued investments in infrastructure reflect our growing commitment towards providing our customers with superior quality products that they can depend on.