Further addition to product range underway
Federal-Mogul Goetze (India) Ltd. is the manufacturer of world-class pistons, piston rings, sintered parts and cylinder liners covering a wide range of applications, including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. It has the widest range of piston rings and pistons to offer, varying from 30mm to 300mm in diameter. Its most modern production facilities at Bangalore, Patiala and Bhiwadi are certified to the TS 16949, ISO 14001 and OHSAS 18001. The company, the market leader both in the OEM and aftermarket, exports its products to the SAARC countries. It provides leading-edge technologies and competitive solutions for original equipment manufacturers and the automotive aftermarket.
MOTORINDIA got the privilege to interact with Mr. Sanjeev Singh, Director, Aftermarket, India Region (India, Sri Lanka, Bangladesh, Nepal), Federal Mogul Motor Parts.
Edited excerpts from the interview:
How big is the aftermarket arm of Federal Mogul India?
Federal Mogul in India is a substantially big organization in the auto component Industry. As far as our aftermarket business is concerned we are amongst the top three players in the Indian market in terms of turnover. The aftermarket vertical contributes around 30 per cent of the Federal Mogul India business. Within the aftermarket space in India, as we grow both horizontally and vertically, we want to be market leaders in most product lines, especially in engine & braking categories. For example, we introduced brake linings for the CV segment last year, and this year we expect to double our sales on an year-on-year basis.
We expect to create similar success stories in other products like brake pads, wiper blades and many other product lines which we plan to add in the coming years. In the existing engine categories we are already market leaders and expect to further consolidate our leadership position in the coming years. In summary we are already big and we are looking to get bigger in the aftermarket space in India.
So how has the last financial year been for you and what are your projections for the current fiscal?
We did pretty well last year and are quite upbeat in the ongoing financial year. We are expecting around 10-15 per cent this financial year. This is because our product portfolio is robust enough to withstand any slowdown in the market. And I am confining myself only to the aftermarket division of our company.
As you are selling multiple components for various kinds of vehicles in the aftermarket vertical, which one would you consider as your flagship product?
In the aftermarket segment we have three verticals. The first vertical is of the Goetze branded Engine components like pistons, piston rings, cylinder liners, engine bearings and engine valves, and gaskets would be added soon. The second one is of Ferodo branded friction parts like CV brake lining, brake fluids and LV brake pads. We are planning to add more product lines in this segment focussed on the CV and bi-wheeler vehicle segments. The third vertical is of Champion-branded service parts which include products like spark plugs, wiper blades, glow plugs and coolants & chemicals. We do plan to make substantial addition of products in this vertical as well. Overall in our three verticals, the Engine Group currently constitutes 75 per cent of the business. Moving forward, while the engine vertical will keep growing, the rapid momentum and turnover growth will come from the other two verticals.
Does your aftermarket arm focus heavily on any specific vehicle segment?
No, we don’t look at product categories from the perspective of vehicle segments. This is because what we offer to the Indian consumers is across the spectrum of vehicle categories. If you look at engine product portfolio, we are present in CVs, PVs, UVs, tractors, two-wheelers, etc. However, we have specific products for a particular kind of vehicles. For instance, brake linings are meant for CVs only, brakepads are used for cars, and there are brakepads and brakeshoes particularly built for two-wheelers.
So will your brake linings for CVs replace the existing product in the friction category?
No, this is altogether a new product line added to the friction portfolio and is rolled out from our brand new plant in Chennai. Currently we are serving the aftermarket of Tata Motors, AMW, Eicher and Ashok Leyland applications. 
With our Ferodo range of brake linings, we are sharpening our focus on the entire HCV category (both buses and trucks).
What has been the response to your new product launches at Auto Expo’14?
We had showcased the entire gamut of our product portfolio under the three divisions of our aftermarket business. With the Engine Group, we have launched a lot of technology-driven pistons and rings. For example, we had molycoated piston range, Ceramic-coated aka CKS rings et al. While our brake linings were introduced in 2013, we have displayed the entire range catering to 96pc of the vehicle parc. In addition to that, we rolled out brake pads for PVs. These are the products which were highlighted at this year’s Auto Show. The response to the exhibition has been pretty good.
Do you roll out your products along with your OEM arm in the same plant or your products are having different facilities?
All the manufacturing plants that we have in India are catering to both OEMs and the aftermarket. Moreover, they are made at the same assembly lines. So the pistons and rings are made at both Patiala and Bangalore, spark plugs at Bhiwani, engine bearing plant at Parwanoo, and friction-based products at Chennai. Almost 95 per cent of the products for the aftermarket segment are produced locally. The remaining five per cent is for European or American vehicles. We also have a globally-integrated R&D centre in Bangalore for engine components which is for direct and aftermarket verticals.
Where are you exporting your products?
We are exporting to the SAARC countries. Our shipments to neighbouring countries have increased for the last few years. We will be concentrating on these regions only with new product lines. By 2016, we do expect our exports to account for 10 per cent of our (aftermarket) business.
Can you talk a little bit about your distribution network?
We operate through 18 distribution centres and four regional offices across the country. We have close to about 800 active distributors who are being invoiced directly by us. These distributors are located at all A, B and C category cities. So our coverage is pretty intense. People are present in close to 60 cities across the country and we virtually cover every nook and corner of the country. Furthermore, these distributors would not sell a single type of product but the whole product portfolio. Even though we are happy with the current strength of our network, we will definitely ramp up our count with newly-launched products.
Lastly, as we have a new and stable government at the Centre, do you see the auto component industry witnessing some sort of resilience?
Yes I think this is a positive development for the Indian economy. With a progressive government, I expect things to be moving very fast after some initial consolidation and course correction. We see a lot of positive changes happening with respect to policy implementation. We expect the overall economy to move in the positive direction, and once that happens the first rub off will be on the automotive Industry. As a result, I am very confident about the future of the auto and auto component industry in India in the coming five years.
I see a lot of activities happening in the infrastructure, power, mining, road and the manufacturing sectors. This growth will positively impact the growth of heavy duty and commercial segment in both the vehicle as well as component category. An improved economy will lead to higher sales of cars and two-wheelers, which will lead to increased demand for our products, both in the OE and aftermarket. I strongly believe that, with the improved economic activity the first segment to benefit would be the HCVs which, in turn, will help companies like us which are largely present in this segment. I am therefore very confident about our growth in the Indian aftermarket in the coming years.
So what is your vision for the company?
What I can reveal is that we intend to double our turnover in the aftermarket space in the next five years. We want to figure among the top two players in the aftermarket space in the country.