Apollo Tyres | Cooper Acquisition Fuels Global Ambitions

INTERACTION apollo, TATA MOTORS

APOLLO TYRES | COOPER ACQUISITION FUELS GLOBAL AMBITIONS

By the end of the last month, Apollo Tyres Ltd’s share price fell nearly 40 % from the levels it was trading on June 12, 2013. The company’s decision to acquire US-based Cooper Tire & Rubber Company, which meant it had to raise fresh debt to fund its ` 14,500 cr ($ 2.5 bn) acquisition, was met with caution by investors. What was one of India’s biggest global acquisitions was met with tepid market response. Two days later, in an interaction with the media, the Apollo Tyres management tried to allay all apprehensions. Neeraj Kanwar, Vice Chairman and Managing Director, Apollo Tyres reiterated that the acquisition was a de-risking strategy for the company – a move that would give Apollo access to two of the largest automotive markets globally – the United States and China. Explaining the rationale, Kanwar said the company now acquires a low-cost footprint close to the most important global end-markets, in addition to a set of complementary products and sale. Apollo meanwhile, will retain the Durban Apollo Tyres (Post Cooper Acquisition) brands. Moreover, the acquisition helps Apollo plant that manufactures truck & bus radial tyres Combined Sales (proforma) $ 6.6 bn reduce its dependence on one market (read India) and off-highway tyres used in the mining and EBITDA (proforma) $ 794 mn and become a diversified global tyre company. construction industries. Margin 12% The Cooper acquisition makes strategic sense No of Plants 14 COMBINATION BENEFITS for the Indian tyre behemoth from a market acces- Tyre Capacity 80 mn sibility perspective. Both companies have almost Global Position 7 But first, details of the deal: the terms of agree- no geographic overlap, leaving immense potential ment promise Cooper stockholders $ 35 per share for growth. The combined company will be unique- in cash for the acquisition that is expected to be ly positioned to address large, established service around $ 450 mn. completed within the second half of 2013. The markets, such as the United States and the Euro- Additionally, the proceeds of around $ 40-50 closure of the deal will see Cooper becoming a pean Union, as well as the fast-growing markets mn from the South African sale would also go privately held company. of India, China, Africa, and Latin America where towards reducing the debt. “The banks have fully The combined entity will result in Apollo Tyres there is significant potential for further growth, underwritten the amount. The interest coverage becoming the seventh largest tyre company in the Kanwar said. “Our combined portfolio of brands for both the entities is comfortable. There is world – the largest by revenues in India, and the and products will be amongst the most compre- hardly any risk,” said a confident Kanwar. fourth largest tyre company in North America. hensive in the industry.” Combined pro forma sales (2012) stand at ap- OUTLOOK proximately ` 35,000 cr ($ 6.6 bn), with an FINANCING STRUCTURE EBITDA of $ 794 mn. Its presence in four conti- Although the Cooper acquisition is considered to nents across 14 manufacturing plants takes the As per the financial plan disclosed by Kanwar, be a high-risk deal for Apollo Tyres, strategically, total production capacity to 80 mn. The combined Apollo India has a manageable debt load, which it this could be a master stroke from the 40-year- entity is expected to deliver additional value in the can meet from its cash flows. As much as 85 % of old company. Together, they’ll have 50 % of its range of ` 465 to 700 cr per annum at the EBIDTA the $ 2.5 bn debt is not guaranteed by Apollo manufacturing in low cost countries. Moreover, level, in three years from now. Tyres Ltd, and would have exposure to the compa- the 55:45 revenue prospect from high-margin It must also be noted that in May this year, ny’s overseas arms in the US and Europe. “We will western markets and high-growth emerging Apollo Tyres had announced a transaction with raise $ 1.9 bn through issue of bonds largely in markets, reflects a sound business strategy pre- Sumitomo Rubber Industries (SRI), by which SRI the US market, and another $ 200 mn will be pared for the future. would take over Apollo Tyres South Africa (ATSA), brought in via asset-based lending,” said Sunam including the Ladysmith passenger car tyre plant. Sarkar, Chief Financial Officer and Wholetime The 80 mn capacity is adjusted for this potential Director of the company. Its India business would Text: Deepangshu Dev Sarmah

4 www.autotechreview.com TATA MOTORS | TECHNOLOGY AS A GAME CHANGER

Marking a first in the Indian automotive land- top, which requires for an optimisation of bush scape, Tata Motors recently launched eight new settings for both the spring and damper. In the models across five platforms on the same day. At new suspension, engineers have separated the the same occasion, the company also unveiled a load paths of the spring itself from the damper. new corporate strategy HORIZONEXT, which has This means the compliances for both can be been explained in detail in our Shopfloor section better optimised, allowing for a reduction of up in this issue. All these vehicles are essentially to one-third in ride vibrations at the seat over a facelifts or upgrades. Of these eight vehicles, the conventional suspension. three most important ones include the new Indigo Tata claims an improvement in NVH models eCS, Sumo Gold and the Nano. Completing the across all its 2013 model range and Leverton line-up are CNG versions of the Indigo eCS, Indica told us that this has been achieved by creating and the Nano along with a Safari Explorer and a noise package spread across various areas of petrol Indica. the vehicle. The company created a package, On the sidelines of the event we spoke to which covers parts such as beadings, insula- Dr Timothy Leverton, Head – Advanced and tion and many others, all of which lower the in- Product Engineering, Tata Motors Ltd. He gave cabin sound levels. This also includes changes NEAT PACKAGING us an insight into the technical changes done to related to resonance within the exhaust system some of the vehicles in the 2013 line-up. at a detailed level, and not fundamental. Al- CNG models do offer high fuel efficiency from a though we weren’t given a figure for the im- cheaper fuel but mostly at the expense of boot TECHNOLOGY DETAILS provement in NVH, Leverton called the improve- space. With the Nano already being a small car, ment “quite noticeable”. using the boot space to store the CNG tank/cylin- The new Indigo eCS and Indica features revised ex- Talking about changes in fuel efficiency, he der would render it almost useless. Understanding teriors and interiors, but the main change comes in said that Tata Motors already has a strong posi- the same, engineers designed the CNG system for the form of an updated powertrain. The new CR4 tion in this area and has concentrated on im- the Nano in such as way that space usability isn’t engine is now equipped with F-Shift gearbox, which proving the drivability and in-cabin experience affected. The CNG cylinder instead of being is claimed to offer smoother and easier shifts. in the new models. The new Sumo Gold, however, mounted in the space behind the seats has been Another key update in the car is the Duo Float sus- features an improvement of about 4 % in fuel- integrated in the centre of the car. This set-up pension, which Leverton said, is a dual path strut efficiency along with an improvement in driva- provides consumers with all monetary benefits of suspension and will offer improved ride quality. bility. The improvement has been achieved by using CNG without giving up anything on space. He told us that in a conventional set-up all looking at areas such as gearing, frictional Such an arrangement is not a global first, but to the struts and springs react into one bush at the losses in the system and more. achieve it on one of the world’s smallest and tightly packaged cars is quite an achievement in our opinion. At the launch, we were told that the 2013 Nano features a new steering system among many other inclusions and is claimed to be the lightest to operate among manual steering equipped cars. Explaining the changes, Leverton said the team looked at all possible improvable elements in the steering system. These meant changes to the joints & rack design and reducing friction in order to reduce the operating effort. The tyres and suspension geometry were also looked into along with caster angles but the details of these weren’t disclosed. In addition, the steering wheel itself has been enlarged slightly and as a combination of all these changes, the steering is claimed to be significantly lighter than the earlier model.

Text: Arpit Mahendra

autotechreview July 2013 Volume 2 | Issue 7 5 INTERACTION Polaris, TELIT

POLARIS INDIA | CREATING MASS FROM NICHE

As Indians take up newer lifestyles, adventure added that if numbers justify and there is the re- sports are gaining more popularity. One of the quired economy of scale, the company could look most accessible segments is power sports, where at local assembly. Polaris is a major player. Globally, the company Talking of the range of engines, Dubey told us posted revenues of $ 3.2 bn in 2012. India being a that the company presently offers 50 cc to 900 cc new market is relatively small, but growing. To get units. Of these, the 200 and 500 cc powered vehi- a clear picture of this niche industry and the cles are doing particularly well in India. The company, we caught up with Pankaj Dubey, Man- company also has the option of petrol, diesel and aging Director, Polaris India Pvt Ltd on the side- electric motor for its vehicles. The electric ver- lines of a drive experience of Polaris vehicles. sions use a lead-acid battery pack and can be The India story has been promising for Polaris, driven up to 70 km in off-road conditions. said Dubey and has grown at a good pace starting January 2011. And despite many challenges, the NEW BUSINESS AREAS journey has been satisfying. The company presently has about 100 people working for it directly The nature of its vehicles has led to interest for and indirectly through 14 dealers across the serve as a strong foundation for the next level of Polaris India from government organisations, es- country. Being present in all key areas of the business growth. pecially in the national security area. There are country has played an instrumental role in the many areas alongside the borders of our country business growth and brand building, said Dubey. PRODUCT RANGE and within, which are impossible to be manned on The company presently has 16 experiential tracks foot. The company had given product demonstra- in India, which have played an important role in The company presently offers various product tion to some organisations earlier and as a result introducing the new concept of off-road adventure ranges – snowmobiles, ATVs, RZR and utility vehi- some of them have already bought Polaris vehi- vehicles to the market. From being confusedly cles. Of these the ATV segment in particular has cles. There are some more in the process of buying known as similarly-named software, creating a received good traction in the market, primarily these vehicles, adding to the future business. now well-known identity for vehicles has in partic- due to the popularity within the adventure and Dubey said the adventure and tourism sector ular been quite rewarding for Dubey. tourism segment. Among other products, the RZR too has made a significant business contribution The company doesn’t share month-wise sales 800 has performed very well. The utility vehicles, in the past two years. There are young entrepre- data but we were told that the company already depending on the model, can carry up to one neurs, who are buying these vehicles and offering has more than 500 customers in the country. tonne of weight in the form of people or goods. drive experiences, and making profit from it. Even Dubey believes that such numbers in two years Presently, the company imports all products from though this segment is an immediate major, of operations is a healthy indicator and will the US and will continue to do so, said Dubey. He Polaris expects sales from armed forces and security agencies to become a significant revenue source in the next couple of years. Given the kind of terrain India has, the coastal terrains are a challenging area for any vehicle. Some coastal agencies have done trials with other vehicles but they succumb to damages arising out of the saline water. Polaris vehicles, however, have undergone trials of thousands of kilometre without any reported problem, said Dubey. These segments, along with newer applications would drive growth in days to come. Going forward, Dubey expects the market for such vehicles to grow to about 5,000 units per annum by 2018, if growth continues even at the present pace. Given the expected business from the armed forces the number could be significantly higher too.

Text: Arpit Mahendra

6 www.autotechreview.com TELIT COMMUNICATIONS | DEMAND FOR CONNECTIVITY TO DRIVE GROWTH

As vehicle applications and technology continue without any costs. The system also offers the to grow at a fast pace, communications is becom- ability for over-the-air maintenance and man- ing an increasingly viewed domain. Within the agement of firmware and application software broad domain of communications, cellular ma- on the module. Silicon chips for the final product chine-to-machine (M2M) communications is a are sourced from Intel and Qualcomm presently. fast growing vertical. Ashish Gulati, Country Manager, India Operations, Telit Communica- INDIAN BUSINESS tions SpA gave us a thorough rundown on this domain. In India Telit’s business is divided into four divi- sions – energy, telematics, handheld and teleme- THE TECHNOLOGY try. The division covering the automotive industry is telematics as it provides solutions for applica- The M2M concept is based on devices and sensors tions such as fleet management. Revenue from communicating with each other and relaying in- the automotive telematics customers in India formation over conventional wireless communica- presently accounts for about 20 % of the total do- tions network. Using embedded SIM-based com- mestic revenue. munication technology enables creation of a wide Presently, the company derives majority of its variety of applications, Gulati said. revenues from the aftermarket but is in talks with through global R&D facilities and there are no The product aimed at automotive applica- OEMs too for offering their products. This busi- short term plans to establish these capabilities in tions is the LE920, which can connect to LTE and ness though will take some time to develop, said India. The immediate plan for the company is to HSPA+ cellular modes. Full backward compati- Gulati. One of the key areas to witness growth in work with system integration companies. This will bility with existing EDGE and GSM/GPRS net- terms of M2M communications in the country is allow for better market penetration and a system works through integrated quad band radios infotainment systems. As the consumers demand level approach. The company is already in talks enables the module to offer connectivity across a more features and better connectivity, products with some undisclosed Tier I automotive suppliers wider area. This quality makes it suitable for au- offered by Telit will find increased traction. for integration of its products, said Gulati. tomotive applications such as vehicle tracking. One of the recent adopters of the technology A key challenge in India is the relative lack of LE920 can be optionally equipped with an is the Delhi Transport Corporation (DTC), which the right service providers. In the recent years, embedded GPS/GLONASS receiver and antenna uses tracking devices in some of its new buses. however, there has been a significant improve- diversity circuitry. Its interface is claimed to These devices have been imported from one of ment in this area and Gulati expects it to improve offer ease of integration of peripherals and actu- Telit’s clients and reflect the increasing adoption significantly in the next few years. ators. It also supports addition of certain fea- of M2M. tures aimed at providing extended functionality The company’s products are developed Text : Arpit Mahendra

autotechreview July 2013 Volume 2 | Issue 7 7 INTERACTION TG KIRLOSKAR, AES

TG KIRLOSKAR | TECHNOLOGY TO HELP OVERCOME CHALLENGES

gaining in popularity and acceptance. Private Limited is the Indian unit of Japan’s Transformation to such solutions isn’t going to automotive parts manufacturer Toyoda Gosei (TG). happen overnight. There is a process that needs to The company presently caters only to the be followed, Jain said, and added that it is unlikely automotive sector, with no plans of diversifying its to see commercial application in a short time. product line into any other sector at this point of Jain believes technology would continue to be time. The Tier I supplier is into the manufacturing the main catalyst in driving the company further. of plastics and PU-based products for the The company does have plans to introduce newer automotive sector, including bumpers and grille technologies into its manufacturing processes, as exterior products and consoles and instrument specific to the Indian context. Although no amount clusters for interior applications. of R&D work happens in India, certain A number of other parts, which use a development activities on new processes and combination of plastic and polyurethane (PU) are products are undertaken. The Bangalore plant is also manufactured, an example being the solely dedicated to manufacturing. steering wheel. Other categories of plastics used for production are polypropylene (PP), CHALLENGES WITHIN THE SECTOR acrylonitrile butadiene styrene (ABS) and polycarbonate/acrylonitrile butadiene styrene TG Kirloskar Automotive Private Limited, the Ban- The ineffective implementation of free trade area (PC/ABS). ABS and PC/ABS are hard, paintable, galore-based manufacturer of safety system prod- (FTA) agreements by the government is one of platable and are highly resistant to heat – ucts, Interior and exterior parts, is planning to di- the major concern areas, said Jain. Moreover, a qualities and properties that explain why they versify into the production of new components in large part of raw materials are still being im- are preferred. They are mainly used in the the area of plastics. A viable area of interest is ported, which doesn’t augur well for the sector. production of grills for vehicles. vehicle body panels in plastic. Speaking to Auto “The monopolistic control some companies have TG Kirloskar currently supplies its products Tech Review, Amit Jain, Deputy Managing Direc- over the import of raw materials, paired with to two OEMs, one being Toyota Kirloskar Motor, tor, TG Kirloskar Automotive said research and poor foreign exchange rates, acts as a very big while the other was not named. Having limited development work on the replacement feasibility challenge. Therefore, localisation of processes, access to the Indian market, in terms of of certain metal parts with plastics is being un- including raw materials and components, is the customers, performance of the OEMs directly dertaken at the company’s headquarters in Japan. answer to help improve the performance of this reflects on the performance of TG Kirloskar. The Weight reduction is a major area of focus for sector in the long-run,” said Jain. Growing com- slowdown in car sales across the market this most automotive manufacturers, owing to the petition can be curbed only with the introduction year has meant slowing business for the efficiency benefits it offers. The use of plastics, of new technology that will create fresh markets company as well, Jain said. polymers and even high-end solutions like carbon- and improve competitiveness. fibre reinforced plastics (CFRP) is increasingly Established in 1998, TG Kirloskar Automotive text: Naveen Arul

Toyota Kirloskar Motor is one of the two vehicle manufacturers TG Kirloskar supplies its products to

8 www.autotechreview.com AES CONCLUDES 7TH EDITION IN CHENNAI

Organised by Focussed Events, the Automotive the ArmMax CMM machine from Accurate. The Prism Surface Coating, Kistler, PTC and Henkel. Engineering Show recently underwent its suc- machine is claimed to offer a smaller physical Themed seminars covered subjects such as cessful seventh edition in Chennai, Tamil Nadu. footprint and fatigue free operation. It features a smart sensing & real time communication proto- The theme for the show was technologies for the carbon fibre arm to avoid the drooping effect cols and sustaining good performance with car plant, which aimed at helping component usually associated with such machines. Since grass root innovation. makers to deploy the right technology. Inaugu- the machine doesn’t need compressed air, the There was also an interactive session rated by VK Shanmugam, Vice President, Opera- operating costs are lower than other such ma- wherein global technology providers and plant tions, TVS Motor Company, the show also served chines. The measuring machine is integrated professionals discussed multiple solutions and as a good connecting point for the related with easy-to-use and customisable software. methods to further improve the efficiency of systems and process providers. In total, the Another notable solution was the Automated manufacturing. OEMs and component makers show attracted 120 participants and more than Guide Vehicle (AGV) from Hi-Tech Robotic also submitted case studies, the selection of 3,500 industry visitors from OEMs, and tier one Systemz for engine assembly applications. which was headed by Anup Wadhwa, Director, to tier three suppliers. Auto Tech Review was one Known as Intellicart, the system can be used for Automation Industry Association (AIA). Winners of the media partners of this event. quicker and more precise assembly operations. in this area included Ford India, Ashok Leyland, The system is powered by battery and requires Tata Motors, Fenner India, Greaves Cotton, TECHNOLOGY SOLUTIONS minimal human intervention. With an assembly Bosch, Mahindra & Mahindra, Brakes India, line cycle time of 282 s, the system can lift loads Visteon Automotive systems, and many more. The show covered a wide range of manufacturing up to 1,200 kg. The AGV uses a magnetic induc- solutions for the industry spanning across a variety tion guide technology, wherein magnetic layers CONCLUSION of areas. Some of the key areas covered were IT so- are installed in the floor of the plant. lutions, automation systems, assembly line The overall response for the show was encouraging systems, productivity enhancers, laser welding, SPREADING INFORMATION and given the number of innovative solutions show- material handling systems, painting equipment, ro- cased, the purpose too seemed to have been solved. botics and quality inspection system. The show also played host to a number of semi- The next and eighth edition of the show will be held Among the solutions, an interesting one was nars held by companies such as Indo MIM, Faro, in Pune on a date yet to be announced.

autotechreview July 2013 Volume 2 | Issue 7 9 News MISCELLANEOUS

VOLVO FUELWATCH | IMPORTANCE OF DRIVING PRACTICES illustrated

Volvo Trucks India showed the importance of best consideration, while adjudging the winner, but While driver development, correct mainte- driving practices in attaining higher fuel efficien- variables like idling time during loading and un- nance practices and optimised specifications are cy, with results that were obtained from the fourth loading of materials were not included. factors that affect fuel efficiency, almost 50 % of season of its FuelWatch competition that was held This year’s competition saw 16 drivers each the transport cost in mining operations is ac- on June 11-12, 2013 at the WCL coal mine in driving approximately 19 km on difficult terrain. counted for by fuel, Birla added. Chandrapur, Maharashtra. Volvo uses the ‘Dynafleet’ trip manager software, A driving training centre, located at Volvo Through the results, Volvo concluded that up installed in the trucks, to collect, monitor and India’s factory in near Bangalore, has so far to 24 % of higher fuel efficiency could be analyse data. This ensures no human interven- trained over 35,000 drivers since its inception in achieved just by driving appropriately. The trucks tion, and a credible source of data. 1998. Drivers go through a detailed course that used for this competition were the company’s FM The winner of the Indian edition of the compe- helps the drivers understand the latest truck 400 and FMX 440 tippers, models mostly preferred tition will move on to the Asian round that is to be technology, its proper use, safe driving practices in the mining sector. Qualitative parameters such held in Australia in October this year. The global and ways of achieving better fuel efficiency. as safety and driving attitude were also taken into finals of FuelWatch 2013 will be held in Sweden Onsite training for drivers at a customer’s location sometime in the beginning of 2014. are also beginning to take place, the company said. The training programmes offer a five day CREATING BETTER DRIVERS basic driver training course, which includes prac- tical and theory programs. The primary purpose of this competition was to The company also showcased its latest offer- educate drivers, as well as create awareness ing in the Indian market for the mining sector, the among customers and shareholders alike, to bring FMX 440 8x4. Its predecessor, the FM 400, has out the best driving practices in order to enable since been phased out from off-road applications. efficiency, and maximisation of profitability, said The truck sports a 12.8 l, in-line 6-cylinder AK Birla, Executive Vice President, Sales, Market- engine, with a power output of 440 hp and 2,200 ing and Aftermarket, VE Commercial Vehicles Ltd. Nm of torque.

audi-adi | new collaboration DürrEcoclean | pune Technology Centre inaugurated German carmaker Audi has selected Analog Devices Inc (ADI) to provide pio- neering technologies to support their goal of manufacturing the most innovative and appealing vehicles on the market. The two companies would collabo- Adding further to its rate strategically within its Progressive Semiconductor Program (PSCP), an technical capabilities initiative to engage selected semiconductor suppliers with Audi in making in India, DürrEcoclean, future cars reliable and functional. a parts cleaning solu- The objective of the collaboration is to break new grounds by bringing tion provider opened its tailored, innovative and cost effective solutions to Audi customers. ADI’s new technology centre technologies enable optimised system partitioning, from sensing to signal in Pune. The technology conditioning, via digitisation and signal processing in powertrain, safety, centre offers customers and infotainment systems. with the facility of carrying out cleaning trials using a variety of parts The continued washers from DürrEcoclean. Spread over an area of 6,000 sq ft, the facility complexity of semi- features machines for aqueous and hydrocarbons industrial part cleaning. conductor-enabled With a local presence, DürrEcoclean’s customers will no longer have to applications contin- spend money and time for sending sample parts to Germany. Equipped with ues to increase. The the required technology for cleaning trials and Millipore tests, the new centre Audi-ADI combine will allow customers to check, evaluate and select the right process in a more aims at engineering efficient and cost-effective manner, a release issued by the company stated. greener and safer Speaking at the inauguration, Mangesh Agarwal, Managing Director, Dür- cars that comply with rEcoclean said, “The industrial parts cleaning market in India is continuously global regulations developing with customers demanding locally manufactured machines. Dür- and legislation. rEcoclean meets these needs with its Universal 81W made in India.”

10 www.autotechreview.com LANXESS | singapore Plant Opens New Solution | Dassault Launches “Target Zero Effect” Built at an investment of € 400 mn, LANXESS recently opened its new butyl rubber plant on Jurong Island in Singapore. The plant is the most modern of its kind in Asia and will produce premium halobutyl rubber, along with regular butyl Dassault Systèmes recently launched a new industry solution “Target Zero rubber. The company also produces butyl rubber in its facilities in Sarnia, Defect”, which is claimed to provide an integrated and open collaborative en- Canada, and Zwijndrecht, Belgium. The butyl rubber facility in Singapore went vironment tailored to enable zero defects across the entire product develop- into operation in the Q1CY13. Commercial production is scheduled to start ment process. A key feature of the solution is its systems engineering capa- Q3CY13, and is tipped to achieve full capacity in 2015. bilities that enable virtual design, “This is the largest investment in the company’s history, and underlines the simulation and validation of importance of Asia as a location for our synthetic rubber business,” said Axel C complex vehicle Heitmann, LANXESS’ Chairman of the Board of Management during the opening systems and com- ceremony. “We have clearly built this plant with the future of mobility in mind ponents. Using because we think and act long-term.” the system The butyl rubber market is expected to grow on average by 5 % in the can potentially coming years, with mo- lower the risks bility being the main for OEMs and driving force. Around 75 suppliers and % of sales at LANXESS’ avoid costly affairs butyl rubber business such as recalls. unit is accounted for by In another development, the company’s 3D EXPERIENCE CATIA was select- the tyre industry, and ed by Pininfarina to design a new concept car. The CATIA application allows over 50 % of sales is designers and engineers to develop an aesthetically sound and aerodynamic generated in Asia. design in a short span of time.

New Architecture | Renault-Nissan Common Module Family

Marking another synergy-driven initiative, the Re- ised components and vehicles per platform. It also in significant cost reductions that allow us to roll nault-Nissan alliance recently announced a new covers all expenditure areas through synergies, out our innovation policy in terms of environment, engineering architecture, Common Module Family shared volumes and shared risks, while reducing safety and new technologies for all our customers.” (CMF). The architecture will include vehicles from investment costs for product development. CMF is Given the architecture’s focus on small cars, it multiple segments and will cover areas (big expected to provide an average reduction in the could play an instrumental role in the alliance’s modules) such as engine bay, cockpit, front & rear range of 30 to 40 % for entry cost per model and growth in emerging markets such as India, where underbody and electrical/ electronic architecture. 20 to 30 % reduction in component cost for the al- consumers are very price-sensitive. Offering a Since the architecture can involve multiple areas liance. This will be possible due to the greater larger number of models with lower buying cost on different types of platforms, it shouldn’t be con- economies of scale arising out of shared parts for and more features could stimulate growth in such sidered as a platform in itself. The CMF instead is both companies. areas. Tsuyoshi Yamaguchi, Alliance Director added more of a cross-sector concept. A key technical requirement for the CMF is that that the CMF will allow the alliance to benefit from CMF will be introduced in more than 10 coun- the big modules must comply with the guidelines of volume efficiencies and enable introduction of new tries through 2020 in order to maximise its bene- the Alliance Integrated Manufacturing System technologies at a faster pace than present. fits. Its first use will be in the compact and large (AIMS) process, which is a standardised, car segments, including 11 Renault models and flexible process that allows for a par- three Nissan models. The first application of CMF is ticular product to be manufactured expected to cover about 1.6 mn vehicles. First vehi- at multiple locations or multiple cles from Nissan to use it will be the Rogue, Qahqai products to be manufactured at a and X-Trail in late 2013, while for Renault the single location. debut will be done through Espace, Scenic and Speaking of the CMF, Jean- Laguna in late 2014. Michel Billig, Engineering, Quality & Using the CMF will allow the companies to in- IT Director, Renault, said, “With CMF, crease the modules common to several platforms, the investments in vehicle architecture thereby resulting in a larger number of standard- and non-visible parts are mutualised, resulting

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