Market leadership in CV segment maintained
By R. Natarajan, Managing Editor & Publisher
For the 60-year-old Cummins Turbo Technologies (CTT), its Indian operations contribute significantly to its overall growth. India is also one of the two major economies in the world accounting for a lion’s share of the company’s sales revenue, particularly from the CV segment.
This was disclosed to the MOTORINDIA Managing Editor & Publisher, R. Natarajan, in an exclusive interview at the company’s state-of-the-art Pithampur plant by Ms. Tracy Embree, President, Cummins Turbo Technologies, USA.
Ms. Tracy was in India to participate in the two important and memorable occasions of Cummins, i.e., the 50th year celebration of Cummins India Ltd., and the 60th year celebrations of Cummins Turbo Technologies worldwide. She said that countries like India and China are equally important as far as the company’s revenue earnings are concerned. Though CTT, as a global player, has expanded its manufacturing operations from the UK to other parts of Europe, US, China, Brazil and India, it has set a uniform standard of delivering quality turbochargers. This is one of the key factors that drives the growth of Cummins Turbo Technologies among its worldwide customers.
Similarly, though Cummins has acquired Holset long ago, it uses the same brand everywhere and keeps the brand loyalty. Today, CTT is known more as Holset. It also has the sourcing strategy both at the global and regional levels to meet uniform production requirements. Overall, the aim is to provide world-class turbochargers that meet customer expectation and are at low cost. Since India has a different market approach with rapid change in ideas, the company has translated it to business.
Ms. Tracy expressed confidence that India is very much part of CTT’s growth story and the Indian domestic market will continue growing at a phenomenal rate.
Referring to the CTT India growth story, Mr. Arun Ramachandran, India Business Country Leader, Cummins Turbo Technologies , said overall Cummins has four business verticals, i.e., engines, power generation, distribution and components. The journey of Cummins Turbo Technologies (CTT) began in 1952 when Holset Engineering of the UK commenced producing the first turbo-charger. In 1973, Cummins acquired Holset, and in 1994 it started a joint venture with Tata International in the name of Tata Holset Ltd. by setting up a plant in Dewas, Madhya Pradesh. This was originally a shoe factory, that earned recognition as a modern turbocharger manufacturing plant. Later, in 1998, the company underwent massive expansion-cum-modernisation. Soon, with its major focus on R&D, Cummins set up its Engineering Centre at Pune.
In March 2007, the JV became a wholly-owned subsidiary of Cummins. CTT signed the MoU of investing in Pithampur with the MP Government during the period. Soon thereafter, the ground-breaking ceremony of the new state-of-the-art modern plant at the Special Economic Zone of Pithampur took place. In fact, the Pithampur plant started production in a record time of just 10 months. The plant achieved profitability in the first full year of operation in 2009.
Since its strength lies in developing new products in line with the change in emission standards, CTT has become a major beneficiary by getting big orders from commercial vehicle OEMs. With the change in emission norms in India from BS II to BS III in 2010, the company secured business from Ashok Leyland, the execution of which led to the set up of a plant at Rudrapur. Similarly, with the change in emission norms for tractor industry last year, the company was able to get major business from farm tractor manufacturers. With its three manufacturing facilities located at Dewas, Pithampur and Rudrapur, CTT produces light duty, mid-range and high horsepower turbochargers of 200, 300 and 800 Series.
According to Mr. Arun Ramachandran, during 1996-2009, the company achieved a faster growth, and the turnover increased multifold. In the last five years, the company has equal focus on domestic and exports business. The automotive business mainly catering to the CV segment still remains its primary focus, and CTT continues its undisputed leadership in the medium & heavy commercial vehicle segment.
CTT has already emerged a major supplier of turbochargers to most of the leading OEMs in India, including Ashok Leyland, Tata Motors, Volvo-Eicher, MAN Trucks India, New Holland, Mahindra & Mahindra, Simpsons, International Tractors Limited Sonalika, Escorts, etc. Dewas and Rudrapur plants mainly cater to domestic demand and the Pithampur unit is dedicated for exports. Currently the company is embarking on a major expansion plan at the Pithampur plant with its potential to grow three times the existing level of production.
The company has made an initial investment plan of Rs. 20 crores for the first phase of expansion and has plans for an overall investment of around Rs. 120 crores in a phased manner. With the expansion activities in progress, CTT is targeting doubling of its sales revenue within the next three-five years. Currently, the company’s Indian operations account for around 12 per cent of its global revenue, which now stands at $1.3 billion.
The Pithampur plant not only produces and sells turbochargers but also components for the product both for Indian and overseas operations.
Normally, turbo-chargers run at a speed of about 200 thousand rpm, and thus require high standard and reliable critical parts. CTT believes in using a high standard of product technology without compromising on quality. The company has also taken measures to increase the indigenisation level in order to reduce the cost of production.