Engines of Creation
Nagesh Basavanhalli, MD & CEO, Greaves Cotton, has chalked out a long-term strategy aiming to make the company disruption-proof.
BY Jayashree Mendes
Many women diploma holders work at the numerous plants.
You recently reported a 12% rise in PAT. What are some of the things you did right?
Greaves Cotton is known for its brand reach and its capability. So one of the things we put together 20 months ago was a strategic business plan on taking the legacy and brand forward. This has helped us reach 3,500 dealer outlets and now we have to take it to the next level.
For the next 5 years, we have put together a strategic business plan which meant focusing on our key businesses such as mobility or engine business (both automotive and non-automotive) and growing the gensets business. There’s a need to grow by market range expansion so we expanded our range of gensets through additional customer acquisitions. Then we looked at the farm business and bringing in incremental new products and brought in indigenous power dealers and new products there, besides the aftermarket business where we launched multi-branded spares about 20 months ago and multi-branded service 12 months ago.
In the last few months, you have announced some strategic announcements to introduce technology. Could you give me an in-depth view into the nature of this?
If you look at the last fiscal year, we have shown a 10% growth after a long time. Our intent is to continue on the growth trajectory on the strength of these newer businesses and initiatives. We are also open for newer emerging areas such as engines.
Hitherto, we were strong in diesel, but now we are focusing on CNG, hybrid and electrical. In the case of CNG, what really grew our steps was bringing in the single-cylinder engine which is gaining significant traction and one that can compete in the Indian market.We are working with a technology partner to build a brand new CNG engine. In addition to the capability enhancement and bringing in the technology, we are keen to move from being a diesel engine company to a power train fuel agnostic solution and services company looking at additional values and that is exactly where we are.
An employee at work at the plant.
In India, hybrids and electrics have not yet taken off. How do you plan to make it go in your favour?
I think it will take its time but the good news is that we are ready when that happens. The plan is to go from being a diesel engine company to go to being diesel+petrol+CNG+hybrid and electric.
Consumer preferences change over time and we would like to be ready with all these technologies. With the partnership coming in, we are not trying to do all by ourselves. There are some things we can do inhouse fast and certain things we can do with partners. Catering to the customer whether it is just an engine front or giving a solution to the consumer or offering services or attending to aftermarket are all covered through our Greaves Care
Greaves Cotton makes one engine every minute.
Why don’t you consider in-house R&D?
We are proud of the R&D we have cultivated and both the world-class centres is Pune and Aurangabad and our small innovation centre in Bangalore stands testimony to our products.
Our next move is to play on the new opportunity and technology areas and so we are looking at CNG that offers clean burn and lean burn. It is the reason we have brought in a partner so we can make that leap where we are looking at 25% fuel efficiency. This way we can give a value proposition to end consumers wherein we can offer a lot more and whether it is hybrid or electric in some of these areas technologies are vying for each other such as battery swapping vs fast charging.
You have a strong legacy of R&D. What are some of the innovations to have come from Greaves Cotton last few years?
Our technical centres are working on all the diesel engines right from BSIII to BSIV and now to BSVI. In terms of CNG, we are co-developing it and we already have the petrol. Then there’s the farm equipment sector where we developed a power tiller that has an indigenous design. In terms of the gensets we went in with the CPCB2 and are getting ready for CPCB3. Over and above, besides the gensets ranging from 0kVA to 500kVA, we are now working on 550kVA and above.
The R&D team is working on these new areas and we believe that adding a partner can give us access to knowledge is what will help us reach faster to market.
How do you sell your products in India?
We have our dealer outlets and also distributors. Then we also sell directly to 30-plus automotive OE customers across the country.
What are some of the changes that need to be made to the engines to make them BSVI compliant?
The government has stipulated certain guidelines when we move from BSIV to BSVI. There are specific guidelines to be adhered to. Our engineers, whether working on diesel or petrol, constantly seek to find the right answers and a lot of work is being done on the stimulation level or prototypes. The goal is arriving at the right value preposition for the customers and ensuring that we stick to the government mandate of getting the right combination of power and fuel efficiency.
Less than six months ago, you strategically formed a core team. Considering that you have several goals now, what would be the role that the team will play?
I am proud to have a leadership team and the idea was to prepare ourselves for the disruptions in the market and seek out opportunities. The idea is to have domain leaders and take each one of these businesses forward. Another point was to form the strategic plan and understand where we are with capability and where do we want to go with capability enhancement.
This was the first step we took with different business levels of the company by bringing in a significant bench strength that can executive quarter after quarter.
The high performance electric powertrains developed with Altigreen. How does this work for you and for customers?
Whether it is our team or the vendors we are working with, what matters is offering the right proposition to the end consumers, be it the fleet operator or the owner in the last mile transportation. The key is getting our act right in the much coveted demand for fuel efficiency, performance, and power and, that to us, is the right total cost of ownership and value proposition. It’s the reason we are considering ways to leverage on technology and it is a matter of time before we have figured it out.
Bringing in a viable alternate solution that is moving towards clean tech and satisfies what the government has been campaigning for is what matters. That’s where we are focussed on with our partners.
Much of the R&D happens in-house at the technology centre.
In terms of farm equipment, what are the best practices you follow at your plants?
Our Ranipet plant is dedicated to farm equipment manufacturing. The plant has test cells and R&D engineers who are situated at the plant and that’s an enabler. There are test and validation tracks so the entire power tiller development can be executed well through the acres of field right behind the plant. It helps us evaluate the farming conditions when one is going from design to developing to validation and gives us a comparative advantage as the farmers also become our first users.
You recently launched a power tiller. What is its USP?
It’s an indigenously designed power tiller with a 14HP engine. We wanted to look at the farmer productivity, income and what they get in return.
When we consider the farmer productivity as compared to western countries in terms of per acre, India has a long way to go. Through the right mechanisation equipment, we can show the right fuel efficiency and yield per acre of hectares it offers. The key is understanding the farmer’s ideology, field and soil conditions and ways the power tiller has to perform in different duty cycles and terrains. That is something we are improving on. This is supplied through our dealer network.
What are some of the energy efficiency measures in place and the back -end technologies ?
The plant that is most sophisticated is the Aurangabad one where we produce an engine every minute. In terms of quality, technology and the TPM methodology, our engineers are well-trained and ensure that the products emerging out of the plant are world-class. Equipment, process and people contribute and aspire to continue with that.
The raw materials are procured through central procurement for all the businesses.
Can you expound on the Greaves Care philosophy?
This is one of the newer initiatives that I just talked about. Today an auto driver or a two wheeler needs to repair his vehicle, he has choices. But in terms of farm equipment, the farmer has no such choice. Moreover, with the large number of unorganised players in this sector, it was becoming difficult for him to accrue genuine parts.
One of the first things we did was put together all the multi-brand spare parts, be it engine, chassis, electrical, etc, and ensure that we can sell them through our dealer network. We have also added multi-branded service initiative and it is a one-stop shop so that any vehicle coming in can get quick service. Treat the customer with respect and help in reducing the turnaround time (TAT) so that they don’t lose time. Most of them are daily wage earners and cannot afford to lose time. Moreover, they are ensured of genuine parts validated by Greaves Cotton.
Offering the right service at the right time is what we believe in. We are in a sweet spot now after the success of our initial pilot phase. This has encouraged us to treat the service with more concern.