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Modern Automotive provides special steel engineering solutions to OEMs
Articles- Jun 26,23
Modern Automotives since its inception in 2005 has gradually seen a growth process with its added solutions in the global market. In the growing electric vehicle market, the company recently set its name to export Differential Pinion Shafts to BMW. Aditya Goyal, Managing Director, Modern Automotives Limited, in this interview shares that the company aims to increase export operations to 25 per cent by 2025
Kindly brief us about your company.
Modern Automotive was born out of a vision to provide special steel engineering solutions to OEMs. The company has gradually added processes and moved up the value chain. It has also value added to its customers by adding multi-locational delivery and stocking which resulted in optimised logistical cost performance and JIT (just in time) customer delight. Our cornerstone has been to service global leading OEMs as a tier-1, which helps us to create systems and processes to service global markets. We have become the leading auto component supply chain partner for all major OEMs like Honda 2-wheelers, Honda 4-wheelers, TVS, Kayaba, and Musashi. We also created our three delivery platforms that are Powertrain, Chassis and Suspension.
Between 2005-2009, the company started unit-1 with precision forging capacity to cater up to 1600 CC engine vehicle parts. Maruti Suzuki, Tata Motors, Volkswagen, General Motors businesses started through GKN, and for Honda and Hero, 2 wheelers products were started through Musashi. The engineering ecosystem was developed through the one-stop solution, so we started the machining and finished products.
Between 2010-2020, we started exporting connecting rods to Iran for Kia cars. We created satellite plants at Bangalore, Gujarat and Manesar to cater to the customer JIT requirements. 2020 onwards, we are working to be a sub-assembly/assembly system provider and to increase our export share to 25 per cent and are increasing thrust on EV/hybrid platforms. The company also is working on recycling its steels and intends to 100 per cent recycling by 2027.
Machining and assembly facilities were created for the crankshaft, gears, stem steering assembly, kick assembly etc and MAL added forging facilities of around 2000-3000 tonnes of steel consumption/per month. We are committed to individual responsibility towards society and the planet, and are focused towards delivering carbon neutrality and a green recyclable economy.
Recently, Modern Automotives became the first Indian company to export Differential Pinion Shafts to BMW AG for EVs. What is the significance of this development for the company?
BMW's order comprises 2.5 million units to be delivered by 2034. The total project revenue value is in excess of Rs 100 crore. This development is significant for the company since it is going to give a huge push to the company’s ambition of being part of the global supply chain of prestigious OEMs. BMW's order has reflected our technical strength to deliver products to the best-in-class mobility sector companies in the global market. Europe, America and Japan are markets that are seeing good traction for our special steel solutions. Since all our OEM approvals are global, we intend to leverage and service this demand.
What kinds of developments the company has seen in the past 2-3 years?
In Modern Automotives we follow our Vision 2030 which includes inter alia:
- Recycling: We are getting scrap from our customers to enable the use in preferably remelting of the same.
- Horizontal expansion: We have increased forging press capacity from 1600T to 4000T.
- Vertical integration: Semi to fully finished crank assembly, fully finished tie rod and fully finished suspension assembly.
- Exports: We will increase export business from 5 per cent to 25 per cent.
With the changing trends in automobile industries, for example, electric vehicles, what challenges and changes as a manufacturer do you see in the market?
We see increased opportunities for solutions on EV platforms (like rotor shafts for motors). With this, there are also increased sourcing opportunities for Indian companies from America and Europe as China Plus One sourcing norms are becoming standard. Another opportunity is increased consolidation of the ICE-based supplier matrix. EV alone may not be the solution but in complement with hydrogen/bio fuels-based combustion devices may be the answer towards carbon neutrality. Modern Automotive is paying equal focus to that side as well.
The challenges we see are that the growth rate of ICE two-wheelers in India may slow down. Two-wheeler EV makers selling products at less than cost value because of subsidies could mitigate possible gains from consolidation of the supply chain.
Experts say for India to become a global engineering hub, manufacturers have to adopt modern and smart (intelligent) manufacturing technologies. How true is this statement? Could you share your experience of opting for the latest technologies to boost efficiency?
Thanks to our esteemed customers like Honda and Yamaha, lean and efficient manufacturing is the cornerstone of our very existence. Now with technology and artificial intelligence, we intend to take this to the next level and service the global engineering demands. Such technologies are used for us in engineering (tooling and die design), forging, and machining. With simulation software and efficient machine tool forecasting, we are able to execute the first time right solutions to the customer saving money and time. In the field of inventory management, technology is helping us in minimum and maximum stock levels of different SKU’s we are able to forecast JIT material availability at the predicted call of the customer. This helps us manage our inventory yet always be ready for the customer's requirements.
We understand that we cannot have all the technology developed in-house, so we are tying up with global leaders to help us add those processes to our solutions. For example, We partnered with HEF, France for a DLC coating solution. These Diamond-Like Carbon (DLC) coatings present the advantage of possessing high hardness (1,500 -3,200 HV) but also a coefficient of friction much lower than that of conventional hard layers such as TiN, TiCN, etc (5 to 10 times lower).
Today, India is aiming to become a global manufacturing hub and the automobile industry is at the front to achieve that aim. How Modern Automotive is oriented to support this goal and help the Indian economy to grow?
Initially, the raw material for some gears used to be sourced from Japan & MAL with extensive R&D got the Indian steel approved for this prestigious car application being made in India, which indirectly helped to generate employment in India. Modern Automotives believes that we should be globally most competitive in our product range and has continuously worked with our OEMs on import substitution that is, we developed gears for Honda cars which were earlier imported from Thailand. MAL developed these parts and got approved in India and now being used in more than 5 million vehicles.
Similarly, with Make in India, we are servicing our OEMs with products from Australia to Brazil and now with BMW global supplies, we intend to take Make in India to the next level. We have recently received an appreciation note from Honda San for the good quality products supplied by us for their Australia region export assignments.
What are your growth plans for the next 2 years?
We are planning to increase the forging capacity up to 4000 tons and cold forging operations and hydraulic press from 800 tons to 1600 tons. A green field project for making parts for BMW vehicles is also coming and we are targeting revenue of 500 crore by 2025 with a planned expansion in exports by 25 per cent in 2024-25.
Modern Automotives
Aditya Goyal
Managing Director
Differential Pinion Shafts
BMW
Honda
TVS
Powertrain
Chassis
Suspension
Kayaba
Musashi
Maruti Suzuki
Tata Motors
Volkswagen
General Motors
GKN
Bangalore
Gujarat
Manesar
Electric Vehicle
Carbon Neutrality
Green Recyclable Economy
Europe
America
Japan
China Plus One
Rotor Shaft
Forging
France
Diamond-Like Carbon (DLC)
Australia region export assignments
Honda san
Hydraulic Press
Cold Forging Operations
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