Akzo Nobel creating end-segment-based market classification

June 19, 2013 8:27 am

“The strategic step of end-segment-based classification entails a concept of single window supplier and a wholesome opportunity mapping of the customers”
– M.V. Ravi, National Manager – Transportation, Akzo Nobel India
Automotive market has a high correlation to the country’s growth and GDP prospects. This market has been growing for more than 10 years; however, recently the market conditions have been a challenge. Akzo Nobel India is present in multiple submarkets of the automotive industry like commercial vehicles, construction equipment, railways, motor cycles, auto components, etc. In an exclusive interview with OEM Update, M.V. Ravi shares how Akzo Nobel has reduced risks and delivered steady performance.
What is the status of automotive industry in India? What are the trends that you foresee in this sector?There is a clear shift in customer preference for fully loaded vehicles, both in safety and other newer mobility features. This trend is being seen across the market including commercial vehicles and construction equipment OEMs. There is also an influx of global and Asian players into the Indian market.
The automotive industry in India will see a robust evolution in fuel efficiency, innovations on design, cost-efficient designs, and proactive aftermarket solutions.
What is your take on the status of automotive coatings industry in India and its growth potential? Automotive coatings industry is going through a rough patch as the consumption has declined. Capacity utilisation has slipped in the last few months. However, there are select submarkets which are still growing like LCV (Light Commercial Vehicle), MUVs, SUVs, etc. Many new players are setting up facilities in India and existing players are in the process of introducing new products. Additional government investment in urban transport, JNNURM (Jawaharlal Nehru National Urban Renewal Mission) city transport, freight corridor, policies for shipping companies, etc. This should help improve the prospects of the overall coating market for transportation-related industries. With investments planned by car makers for additional capacity expansion, the automotive coating industry clearly has a positive scope in long term.
The sale of automotive-related products has declined since the last one year or so. What were the reasons and how do you foresee the scenario?Automotive market has a high correlation to the country’s growth and GDP prospects. This market has been growing for more than 10 years and more recently is in lull. In the past decade, the markets related to the automotive industry have significantly evolved in India, whether it is vendor capability, aftermarket solutions or latest auto gizmos. The government impetus for growth of this industry is crucial and this could be another reason for decline in growth. Owing to this, many OEMs have postponed their capacity expansion or Greenfield project plans. However, the mid-term to long-term prospects of the industry are definitely positive. Investments are still being made by car makers, bus manufacturers, metro coaches, auto component manufacturers like wheels etc. which indicate the immense faith in the future of this market.
What are the challenges you felt in the last one year? What measures were taken to overcome these challenges?The market conditions have been a challenge. However, Akzo Nobel has presence in multiple submarkets of the automotive industry like commercial vehicles, construction equipment, railways, motor cycles, auto components, vehicle collision repair coatings, plastic coatings and so on. Such a broad base helps us in reducing risk and delivering steady performance. Also, we have been able to introduce various innovative solutions like the rapid repair programs and other product innovations. Customer-focused programs, services and dedicated trainings have also improved penetration. The key is to identify submarkets or related markets which are on growth trajectory like alloy wheels market.
What are your strategies to deal with the ongoing constraints? AkzoNobel has taken strategic steps in creating an end-segment-based market classification. The automotive segment falls under the transportation market end-segment, and this also encompasses other related markets like rail, commercial vehicles, aerospace, marine, off-road vehicles, two wheelers, and aftermarket finishes for passenger cars.
The strategic step of end-segment-based classification entails a concept of single window supplier and a wholesome opportunity mapping of the customers. For example, an automotive manufacture could have a presence across the transportation segments — be it cars, trucks, aerospace, leisure boats, off-road vehicles like tractors and construction equipment. This strategy of offering customer-focused solutions helps us in offering immense value propositions to our customers. What kind of new initiatives you have been taken in the last 1 year to maintain growth in this sector? Akzo Nobel is one of the only coatings manufacturers who can cater to the automotive industry with a range of coatings applications from plastic coatings and powder coatings to industrial high performance coatings and vehicle refinishes. Strong technical know-how and value-based brand positioning are our key levers, and we are recognised in the market for such.
What are the new paint technologies that could be offered to the automotive industry?Direct to metal coatings, high build, fast curing technologies, autobody powder coatings are some new paint technologies that are being offered in the market. These products enhance throughput for the consumer as well as offer sustainable solutions. Akzo Nobel also has strong belief in sustainability, and we promote eco-premium products which have low VOC, lead, and chrome-free topcoats matching the most stringent specifications. Long-term aesthetics through technologies like polyaspartic, polysiloxane etc. are also being offered to this market.