INDIA: DRIVEN TO COMPETE

Suppliers from around the world look to India

12/1/2008
BY STEVE EDER
BLADE STAFF WRITER
Spicer India, led by B D Singh, has prospered while one of its affiliates, Toledo s Dana Corp., has struggled.
Spicer India, led by B D Singh, has prospered while one of its affiliates, Toledo s Dana Corp., has struggled.

PUNE, India -- In early 2007, Kuka Automation Equipment set up a small plant in an automotive park in Pune, India, a strategic location that gives it quick access to the factories of major auto companies such as Tata Motors, Mahindra Motors, and Volkswagen.

Kuka, a German company that builds robots used in automobile manufacturing, is among hundreds of parts suppliers from across the world that are targeting the Indian market.

Rajendra Phatak, the president and CEO of Kuka India, says that as automobile manufacturing matures in India, automakers will move away from inexpensive, labor-intensive production and look to robots, which are safer and more efficient and bring down long-term costs.

"They don't go on strike and they don't eat lunch," said Mr. Phatak, referring to his company's signature orange robots - the same machines that can be found in a fully automated welding factory in the Jeep complex in Toledo. "If you maintain them properly, they don't cause you much trouble."

READ MORE: Driven To Compete: India's auto industry

For Indian automakers, who speak little about automation because of India's wealth of inexpensive labor, Mr. Phatak said there actually is great interest in robotics.

So far, Kuka India is building robots that will be used only in India.

But Dana, the Toledo-based parts supplier, is using its India operations to serve Dana customers in India and across the world.

Rajendra Phatak of Kuka India expects India s automakers to move toward robots to reduce costs.
Rajendra Phatak of Kuka India expects India s automakers to move toward robots to reduce costs.

Dana, which has had a presence in India since the 1960s, employs nearly 2,000 people at 12 facilities in 10 Indian cities. Dana's customers in India include Mahindra Motors, Tata Motors, and Ashok Leyland.

Dana's business in India operates largely through tie-ins with other parts suppliers, many of whom already have a significant presence in India. Dana's Spicer India Limited partnership is a joint-venture with Indian-owned Anand Automotive Systems, established in 1993, that manufactures axles, prop shafts, and other components for domestic and export markets.

"For a company to venture out of its country .•.•. you need a partner," said B D Singh, the president of Spicer India Limited. "If a partner is fair and ethical, it will attract people from overseas."

Like many of its counterparts, Spicer India has prospered while its American affiliate, Dana, has suffered with lagging demand in the United States. Dana's Chapter 11 bankruptcy filing had no bearing on the joint venture, Mr. Singh said.

"Our business is growing," Mr. Singh said. "We are going to get more business. It has a good reputation and a good product."

With more parts suppliers arriving, there also is more competition.

"That will be a challenge, but there's excitement about India," Mr. Singh said. "If India is growing, everybody would like to be a piece of that. We are hearing that people are coming."