Leon Liu, president, Wabco, Asia Pacific Business Unit, tells Kiran Bajad why the India market is strategically important for Wabco and on bringing its AMT tech for CVs here.
05 Jun 2014 | 4789 Views | By Kiran Bajad
Leon Liu, president, Wabco, Asia Pacific Business Unit, tells Kiran Bajad why the India market is strategically important for Wabco and on bringing its AMT tech for CVs here.
How you see Asia as a growth market and what is India’s contribution to it?
If you look at commercial ...
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Leon Liu, president, Wabco, Asia Pacific Business Unit, tells Kiran Bajad why the India market is strategically important for Wabco and on bringing its AMT tech for CVs here.
How you see Asia as a growth market and what is India’s contribution to it?
If you look at commercial vehicle production in Asia, the annual CV production is around 60-65 percent globally and growing. Wabco is strongly present in China, Japan and South East Asia. But the value per vehicle that we supply to truck manufacturers in the region is at a very low level. In Europe, we supply 2,000 euros (Rs 1.61 lakh) per vehicle; in Asia, this number is very low. While it is $ 200 (Rs 11,800) in China, it is a little higher in India but still very low. We are leading in Asia but still we have a lot of scope by increasing the value per vehicle to our customers with the introduction of new technologies like our AMT OptiDrive.
The potential is big when it comes to the role India plays, not just within Wabco Asia but Wabco global. India plays a very strategic role for Wabco in two ways. Firstly, it contributes to Wabco in terms of the business we generate from India-based customers with a very strong market share in the past five decades. But it’s more than that. The second role India can play is to leverage the capabilities and resources we have in India in product development, manufacturing and supply chain to support local Wabco. At present, we have more than 300 local engineers in India of which half 150 are from mechanical design and other software development; they are the second major hub within Wabco’s global engineering network. These engineers are not just for India but they are for our global customers. So India plays a significant role for Wabco and its contribution will continue to grow because the market in India is growing and we will continue to invest.
Are you looking to make any fresh investment in India?
We have been continuously investing in India and the introduction of AMT OptiDrive is another example of this new investment. To introduce the technology to customers in India, you have to localise the supply chain, which is our intent, and localise manufacturing which needs investment. We are relying more and more on local engineers for development and refining of this technology.
At present how much does the India business contribute to Wabco globally?
Globally India contributes less than 10 percent but it is growing. The market has been facing a big challenge in the past few years, which has pulled down growth but like I said before the sales that we generate in India are only part of the contribution India makes. I see the second area as more important.
How you see the Indian market growing in the next few years?
We see a lot of optimism around the election of the new government and the equity market seems to be responding favorably. The CV industry has seen some improvement in the past two months and now with the new government in place we are very hopeful that the industry will be on the path of strong recovery and growth.
While it’s difficult to predict how much India will contribute to our global sales, a conservative estimate will be five percent growth compared to last year, but I hope the market does much better than five percent.
What is your assessment of China market compared to India?
Well, China produces more trucks so you can’t have that comparison. Both India and China contribute to Wabco very significantly but in a slightly different way. China is a big market and we need to work on growing our business with customers there. In India we have two missions – to grow the market and also leverage capabilities to support Wabco global.
AMT OptiDrive in India thus far is being chosen for buses. Do you see it go onto trucks as well?
Yes, OptiDrive AMT technology is for both trucks and buses. However, in India, the first focus is buses because we have a lot of city buses from State Transport Undertakings (STUs) which are using automatic transmissions (AT) today. Wabco’s AMT offers the same comfort and safety of the AT but at a much lower cost and at much better fuel economy. Even the STUs are becoming more sensitive towards costs due to their budgets and rising fuel prices. So we feel there is a very good value postposition we can offer to the city bus segment, but the technology is for both buses and trucks.
Will the same AMT will go into trucks?
The trick of the OptiDrive is about tuning – you have to optimise the specific application, tune it to different parameters like the engine, gearbox and our systems to make sure it works perfectly.
When will we see Wabco’s AMT Optidrive in a truck on Indian roads?
I think by the end of this year. We have that with Ashok Leyland. We are working with other OEMs in India besides Ashok Leyland and are getting a very good response in India and other emerging markets.