Record aftermarket sales in a short span of time
Gujarat, from where Mahatma Gandhi hailed offers a lot of manufacturing opportunities. In fact, the State is known as a major hub for production and export of a variety of industrial and automotive products, mainly bearings. For instance, KCI Bearings (India) Pvt. Ltd., promoted by the well-known Gadani family, was set up at Surendranagar 35 years ago. However during last two years under able leadership of, its Managing Director, Mr. Hasmukh Gadani the automotive division is growing at more than prevailing Industry growth rate.
Outlining the company’s journey as well as success over the years in an interview to MOTORINDIA, Mr. Rajeev Hiwale, Vice President – Sales & Marketing, KCI Bearings, said that, though started in a humble way, the KCI bearings have today become one of the well accepted and preferred brands in the country. The company’s overall performance is well reflected in the growing acceptance of its products by the major automobile OEMs in the country. Today, out of total 40 crore revenue for the year 2011-12, Rs. 24-crore sales revenue came from the OE business and CV segment accounted for almost 70 per cent, of it.
Currently, KCI supplies Needle roller and Cylindrical roller bearings to almost all commercial vehicle manufacturers like Tata Motors, VECV, Mahindra Navistar, MAN and Force Motors, apart from meeting the requirements of Maruti, Escorts, ITL , ZF, Rane-TRW, Lucas etc. In fact, for the Tata Motors Gear Box Division, HVTL Jamshedpur, KCI has emerged one of the most preferred suppliers, and has even won overall recognition, including the Value Engineering Award from Tata Motors. KCI has also received Best Supplier award twice from Rane TRW in the year 2007 & 2012.
Expansion plan
With growing demand for KCI bearings in the automotive sector, the company is setting up a modern plant at Surendranagar under its expansion plan. Though the mother plant at Surendranagar produces bearings for both automotive and textile sectors, the new plant will be fully dedicated to automotive bearing manufacturing with semi automation. The company endeavour is to supply high technology products at sustainable cost. It has successfully developed Needle Roller bearing cages from compound material of engineering plastics, like PA 46 for the first time, which can make the product, cost effective and lighter but matches the performance of steel cage bearing. This explains the company’s business philosophy and logo ‘Designed for Life’.
The new plant, which is being set up at an outlay of Rs. 10 crores will be ready for production by the third quarter of this year. It will have an overall capacity of 15 million bearings per annum to be attained within the first six months of its operation.
A flying start in aftermarket
According to Mr. Hiwale, though the KCI foray into the automotive aftermarket business by establishing the marketing headquarters in Pune is less than two years old, it has had its flying start in the sense that the company’s sales revenue in the aftermarket segment has gone up from just Rs. 3 crores in the first six months to Rs. 8.5 crores in one year. For the current year, the company is aiming at a Rs. 14-crore revenue from aftermarket bearing sales.
In order to serve the growing market requirements, KCI has already introduced 450 different bearings, including Needle Roller, Taper roller, Clutch and Kingpin bearings. In order to become closer to customers, the company has opened offices in different parts of the country. Currently, with the dedicated marketing team and brand loyalty, the company has established a wider network of 120 dealers and stockists all over India, which reach out to about 5000 retailers directly. Since the southern States are more quality conscious, the company had initially started with aftermarket sales in south to prove the quality of the product. After its success in test marketing its bearings in this region, KCI expanded the dealer network and product availability to cover the other parts of the country.
As a testimony to product quality, KCI happens to be the only manufacturer offering a warranty for its bearings up to two lakh kilometres in the aftermarket, a rare practice among companies. This clearly brings out the quality-driven technology of the company, which also ensures it never compromises quality to reduce the cost. Of the planned overall sales revenue, the OE and aftermarket would account for 40 per cent each, and exports for the remaining 20 per cent. The main export markets for its bearings are Sri Lanka, Nepal and Bangladesh, and the company is trying to expand to other Asian markets such as Malaysia, Indonesia, as well as European nations.
The success of aftermarket sales is mainly attributed to the management’s dedicated efforts of grass root canvassing to generate demand for its products and also by constantly raising its overseas market share. Though known for its low-profile, conservative approach, the company is now coming out in open more aggressively by creating greater awareness of its products through participation in different fairs and exhibitions, to consolidate its brand image in the market.