1

A PROJECT REPORT

On

“COMPETITORS ANALYSIS AND IDENTIFYING

BUSINESS POTENTIAL FOR BEHR EGR”

For

“BEHR INDIA LIMITED”

By

“ADITI.R.TRIVEDI”

Under the guidance of

“MEENAL DHOTRE”

Submitted to

“University of Pune”

IN PARTIAL FULFILLMENT OF MASTERS OF BUSINESS

ADMINISTRATION(MBA)

Through

VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE

MBA (2007-2009)

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ACKNOWLEDGEMENT

It is always a difficult task to acknowledge all those who have been of tremendous

help in an academic project of this nature and magnitude. Success of a project is an

outcome of sincere efforts, channelled in the right direction, efficient supervision and

The most valuable professional guidance Nevertheless I have made a sincere attempt to

express my heartfelt gratitude towards all those who have contributed to the successful

completion of the project through the project report

At the outset I would like to extend my gratitude towards the University of Pune for

giving me an opportunity to take up this project which helped broaden my horizons. My

deepest gratitude towards Mr.Joy.Panda The Program Manager Behr India Ltd who

approved the topic and gave me the initial guidelines that helped framing and outlining a

specific direction to the work, his patiently mentoring and guiding throughout, For his

kind efforts in making all the resources available, and his honourable contribution to

allow me complete my Summer Internship in such an Esteemed Organization. I would

thank Miss Trupti Sharma for her enormous support and cordial contribution towards my

work.

I would like to offer my deepest gratitude to my Project Guide Prof Meenal Dhotre for

her constant support, guidance and encouragement.

Last but not the least I would like to thank all the Respondents for their valuable time,

family and friends for their strong encouragement and support

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PREFACE

As a part of an MBA, it is required to present a project report for this purpose one has to

associate himself/herself with an Industrial/Commercial service organization for a

specific period of Eight Weeks

The period contains a comprehensive treatment of marketing research and its result in

theoretical form as well as graphical presentation. This will enable the reader to

understand the study done thoroughly and will be able to evaluate its implications for the

Company, its Products and Services.

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Chapter 1

EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

The project topic was chosen as per requirements of Behr India Ltd .Behr was interested

in finding out the potential market size for its auto-component the EGR in the

aftermath. .Also the analysis of current status of aftermath with respect to the existing

players, their market shares, their relative strengths and weaknesses was required to be

found out. It is really a dream for any company to occupy the top brand in there brand

basket of company profile.

The Company Behr India Ltd was established in December 1997 for the manufacture of

air conditioning systems for automobiles, It has a state-of-the-art facility near Pune. The

Company is a joint venture between Anand Automotive Systems and Behr of Germany, a

leading name in the world for the manufacture of products and systems for engine

cooling and vehicle air conditioning as well as heating and cooling technology for the

industrial sector. The Company is a single source supplier to Mahindra & Mahindra-

Scorpio and Tata-Indigo with a 60% share of Tata-Indica. My topic of study was the

EGR developed by Behr, The Company’s profile, its product specifications, competitors,

business proposition was studied. The competitors selected were chosen as per the

requirement of the company, as management thought that these competitors could pose

serious threat in the future. Other basis on which they were chosen was their number of

years of establishment, their brand recognition, their presence in the market and the

strategy adopted by them. The facts and figures itself talk about competitors performance,

market structure and the potential market for supply. As the automobile market is

increasing intensively so its necessary for behr to compare their EGR product with the

competitors product.The Enza widens its clientele net. It’s likely to supply EGR’s to new

automobiles rolling out with Tata Motors, Ashok Leyland and Mahindra ITEC.On the

other hand Pierburg is offering electric EGR valves with increased durability,

performance and flow control. Behr has gone far and has made great progress in the

Research and Development field of the EGR.The EGR coolers being developed by Behr

are designed to achieve double the recirculation rate and a much higher pressure level in

comparison with the systems currently in use Behr’s EGR cooler was redesigned to

double the recirculation rate of cooled exhaust. The cooler redesigned now has

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increased power density, pressure strength and resistance to vibrations. For example, a

12-liter engine needs 120 kilowatts (kW) extracted from the exhaust gas in order to meet

2007 standards. The Behr EGR cooler has improved power density, robustness and

durability. Behr GmbH & Co. KG, Stuttgart, Germany, is a systems partner for the

international automobile industry. A specialist for automotive air-conditioning and

engine-cooling systems, the Behr Group is one of the world’s leading manufacturers and

suppliers of original equipment for passenger and commercial vehicles. Group sales in

the 2006 business year were approximately $4.2 billion. Currently Behr employs about

18,600 people at 17 development and 30 production sites, and an additional 13 joint-

venture locations worldwide.

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Chapter 2

OBJECTIVE OF STUDY

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OBJECTIVES OF STUDY

This is an accurate definition of research problem. It helps in understanding the

objectives of the research, and other resources available at hand.

This phase helps in understanding the information that in needed from research for

further analysis.

1. The primary objective is to find out different features of the EGR system in

Automobiles.

2. To obtain competitive information to counter the emerging competition, their market

structure, their performance.

3. To identify the business potential of the product and analyze its strength against its

competitors.

3. To study the prevailing trends in highly competitive market.

4. To make a comparatitive analysis of the different products manufactured by BEHR.

5. To devise a suitable plan of action to counter emerging competition and for better

business prospects.

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Chapter 3

REVIEW OF LITERATURE AND RESEARCH

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REVIEW OF LITERATURE AND RESEARCH

Methodology:-

The chapter deals with understanding the basics of Research Methodology.

Marketing Research:-

Marketing Research is the process of designing, gathering, analyzing and reporting

information that may be used to solve a specific problem.

Research Design:-

‘Design’ implies some purposive and thoughtful activity. A research design is the

specification of method and procedure used for acquiring the information needed. It is

overall operational pattern or framework of the project that stipulates what information is

to be collected from which source by what procedures.

TYPE OF RESEARCH DESIGN:-

Exploratory

Descriptive

Casual

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Review of literature:-

Relevant literature such as books, articles, reports and earlier research work helps the

researcher in the task of precisely formulating the research problem.

For the phase I of the project most of the research that was carried out was done on the

basis of secondary research source like the internet, business magazines etc.

Some information and figures about the competitors is taken from Autocar Professional

June15, 2008 and July 15, 2008.

Present Scenario of automobile cars is taken from Top speed Supplement.

Marketing literature as “Marketing Management” written by Philip Kotler. Theory

related to market is taken from the chapters as

1) Gathering information and measuring market demand.

2) Dealing with competition.

Survey method and Sample Size

• Primary Data Collection:-

Collection of Data through Schedules:

This method of data collection is very much like the collection of data

through questionnaire, with little difference which lies in the fact that schedules

(Proforma containing a set of questions) are being filled in by the person specially

appointed for the purpose. These enumerators along with schedules go to respondents,

put to them the questions from the proforma in the order the questions are listed &

records the replies in the space meant for the same in the proforma. Enumerators explain

the aims & objects of the investigation & also remove the difficulties which any

respondents may feel in understanding the implications of a particular question or the

definition or concept of difficult terms.

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Secondary data Collection:-

Secondary data means data that are already available. i.e. it refers to the data which

already been collected & analyzed by someone else. The secondary data is collected from

the internet and magazines.

Sample Unit:-

A decision has to be taken concerning a sampling unit before selecting a

sample. Sampling unit may be a geographical area such as state, district, village, etc or a

construction unit such as house flat etc. or it may be a social unit such as family, club,

school etc. or it may be an individual. So the sample unit in this study is a geographical

area as PUNE.

Sample Size:-

This refers to the no. of items to be selected from the universe to constitute a sample.

Limitations of Scope of the Study:-

Limitations were present in the process of collection and compilation of data. But an

effort has been made to obtain maximum authentic data. The limitations were as follows.

The research being conducted only in Pune area, the result of this research cannot

be generalized.

Time limit for the research was 2 months only.

Because of time limit a person conducting research has had no formal training and as

such might not have been able to do a very sophisticated analysis.

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Chapter 4

INDUSTRY PROFILE

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INDUSTRY PROFILE

AUTOMOTIVE INDUSTRY:–

The automotive industry is the industry involved in the design, development,

manufacture, marketing, and sale of motor vehicles. In 2007, more than 73 million motor

vehicles, including cars and commercial vehicles were produced worldwide.

In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in

Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in

Latin America, 2.4 million in the Middle East and 1.4 million in Africa. In 2008, with

rapidly rising oil prices, industries such as the automotive industry are experiencing a

combination of pricing pressures from raw material costs and changes in consumer

buying habits. The industry is also facing increasing external competition from the public

transport sector, as consumers re-evaluate their private vehicle usage.

A well developed transport network indicates a well developed economy. For rapid

development a well-developed and well-knit transportation system is essential. As India's

transport network is developing at a fast pace, Indian Automobile Industry is growing

too. Also, the Automobile industry has strong backward and forward linkages and hence

provides employment to a large section of the population. Thus the role of Automobile

Industry cannot be overlooked in Indian Economy. All kinds of vehicles are produced by

the Automobile Industry. India Automobile Industry includes the manufacture of trucks,

buses, passenger cars, defense vehicles, two-wheelers, etc. The industry can be broadly

divided into the Car manufacturing, two-wheeler manufacturing and heavy vehicle

manufacturing units.

The major Car manufacturer are Hindustan Motors, Maruti Udyog, Fiat India Private

Ltd., Ford India Ltd ., General Motors India Pvt. Ltd., Honda Siel Cars India

Ltd.,Hyundai Motors India Ltd., Skoda India Private Ltd., Toyota Kirloskar Motor Ltd.

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The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle

& Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The heavy motors like

buses, trucks, defense vehicles, auto rickshaws and other multi-utility vehicles are

manufactured by Tata-Telco, Ashok Leyland, Eicher Motors, Bajaj, Mahindra and

Mahindra, etc.

The automobile industry in India is the tenth largest in the world with an annual

production of approximately 2 million units. India is expected to overtake China as the

world's fastest growing car market in terms of the number of units sold and the

automotive industry is one of the fastest growing manufacturing sectors in India. Because

of its large market .India has a population of 1.1 billion; the second largest in the world),

a low base of car ownership (25 per 1,000 people and a surging economy). India has

become a huge attraction for car manufacturers around the world.

Though several major foreign automakers, like Ford, Suzuki, GM and Honda. They have

their manufacturing bases in India. The Indian automobile market is dominated by

domestic companies.Maruti Suzuki is the largest passenger vehicle company, Tata

Motors is the largest commercial vehicle company while Hero Honda is the largest

motorcycle company in India. Other major Indian automobile manufacturers include

Mahindra & Mahindra, Ashok Leyland and Bajaj Auto.

The automotive industry directly and indirectly employs 13 million individuals in India.

The industry is valued at about US$ 35 billion contributing about 3.1% of India's GDP

(nominal). India's cost-competitive auto components industry is the second largest in the

world. In addition, India's motorcycle market is also the second largest in the world with

annual sales of about 5 million units.

The Indian Automotive industry has the largest Three Wheeler Market in the World and

2nd Largest Two Wheeler Market in the World and 4th Largest Passenger Vehicle

Market in Asia and4th Largest Tractor Market in the World and 5th Largest Commercial

Vehicle Market in the World.

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HISTORY OF AUTOMOBILE INDUSTRY IN INDIA

Tata Motors launched its first truck in collaboration with Mercedes-Benz. While

automobiles were introduced to India in the late 1890's, the manufacturing industry only

took off after independence in 1947. The protectionist economic policies of the

government gave rise in 1950s to the Hindustan Motors Ambassador, based on a 1950’s

Morris Oxford, and, are still ubiquitous in the roads and highways of India. Hindustan

Motors and a few smaller manufacturers such as Premier Automobiles, Tata Motors,

Bajaj Auto, Ashok and Standard Motors held an oligopoly until India's initial economic

opening in 1980s. The maverick Indian politician Sanjay Gandhi championed the need

for a "people's car" the project was realized after his death with the launch of a state-

owned firm Maruti Udyog which quickly gained over 50% market share. The Maruti 800

became popular because of its low price, high fuel efficiency, reliability and modern

features relative to its competition at the time. Tata Motors exported buses and trucks to

niche markets in the developing world.

The liberalization of 1991 opened the flood gates of competition and growth which have

continued up to today. The high growth in the Indian economy has resulted in all major

international car manufacturers entering the Indian market. General Motors, Ford,

Toyota, Honda, Hyundai and others set up manufacturing plants. Rolls Royce, Bentley

and Maybach are examples of the few high end automobile manufacturers which have

entered India in the recent years. The Tata Nano is at the lower end of the price range

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costing approx US$ 2,500 and Bugatti Veyron at the other with a price tag of over US$ 2

million.

India's love affair with the automobile is famously embodied in 1920s Rolls Royce

collections of the erstwhile maharajas. The growing middle class aspires for the

automobile for its convenience and as a status symbol. Upper middle class and wealthy

car owners employ full-time chauffeurs to navigate the aggressive and seemingly lawless

traffic patterns of most cities. The construction of expressways such as the Mumbai-Pune

expressway has opened up new touring opportunities. The expected launch of a Formula

One circuit in New Delhi is expected to spark public enthusiasm for a motor sporting

industry.

LATEST ADVANCEMENTS IN THE AUTOMOTIVE MARKET: –

Japans third largest automobile manufacturer, Nissan Motor, has firmed up its

commitment to the Indian market. Japans third largest automobile manufacturer, Nissan

Motor, has firmed up its commitment to the Indian market with a decision to diversify its

product portfolio here. To begin with, we will offer Murano as a completely built import

in the following fiscal, informed Corporate VP, Global Communications, Nissan, Simon

Sproule adding that the manufacturer is also drawing up plans to locally manufacturer a

brand new, India-specific platform for the A segment at their Chennai facility by 2010.

Besides, Renault-Nissan has also tied up with Bajaj Auto for introducing a low-cost four-

wheeler, a prototype of which was showcased just before the Auto Expo, held in Delhi

earlier this year. The feasibility study on the final product will is still underway. When

asked whether the eight models up to 2012 will include that project, Sproule said it would

be a completely independent venture. Tata Vectra Motors (TVML) has scrapped plans to

introduce the one-tonne light commercial vehicle (LCV) in India. Tata Vectra Motors

(TVML) has scrapped plans to introduce the one-tonne light commercial vehicle (LCV)

in India. Binggo, as the proposed vehicle was called, has been found to be expensive for

the Indian market and unviable for mass production.

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Major joint ventures in the commercial vehicles space continue to be formed in India.

Major joint ventures in the commercial vehicles space continue to be formed in India.

After Force MAN, Ashok Leyland-Nissan and Volvo-Eicher, a recent manufacturing pact

saw global leaders in commercial vehicles, Daimler AG tie up with the Hero Group to

manufacture commercial vehicles in India. The 60:40 JV, with Daimler AG holding

majority stake, would result in the formation of a new company Daimler Hero

Corporation that will be set up with an initial investment of Rs 4,400 crore (700 million)

in the first five years. Of this, Daimler Ag would invest Rs. 1400 crore, and Hero Group

will pump in Rs 900 crore. India’s largest two-wheeler manufacturer, Hero Honda

Motors announced it would invest an additional Rs. 150 crore in the current fiscal in its

third plant. India’s largest two-wheeler manufacturer, Hero Honda Motors announced it

would invest an additional Rs 150 crore in the current fiscal in its third plant, inaugurated

recently in Haridwar, to scale up capacity. The company has already invested Rs 450

crore in the plant.

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Chapter 5

COMPANY PROFILE

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COMPANY PROFILE

BEHR

Behr India, is a joint-venture company between Behr GmbH & Co. KG of Germany and

Anand Automotive Systems of India, It has opened a new state-of-the-art manufacturing

plant, at Chakan in the Pune District in the state of Maharashtra, India.

Behr is one of the world's leading suppliers of original equipment for passenger and

commercial vehicles and Anand Automotive Systems is India's leading manufacturer of

automotive components and systems. The partners invested a total of $12 million in the

project in the year 2006 and have also invested another $5 million by the end of 2007.

Behr India's Pune plant is spread over ten acres. With state-of-the-art production

equipment, it produces a variety of automotive components including heating, ventilation

and air-conditioning (HVAC) modules, engine- cooling modules, as well as heat

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exchangers including radiators, charge air coolers, condensers and Visco(R) fan drive

systems.

The facility employees 400 people. With the new plant, the company has achieved sales

of $90 million in 2007. Sales are expected to increase by an additional 50 percent by

2010.

"Our vision is to make Behr India the clear leader in the Indian market in the fields of

automotive air conditioning and engine cooling," said Markus Flik, CEO, Behr GmbH &

Co. KG, who attended the plant's dedication. "Behr India is contributing to the company's

strategic goal, which is to generate ten percent of company sales from Asia by the end of

2010."

Behr India currently exports heat exchangers and Visco(R) clutches and also sources

components including castings, exhaust-gas-recirculation (EGR) cooler parts and wiring

harnesses for Behr worldwide. In India, Behr's key customers include Ashok, General

Motors, Mahindra-Mahindra, MAN Force, Leyland, Renault, TATA Cummins and Tata

Motors.

Together Anand Automotive Systems and Behr are manufacturing and delivering locally,

but it is guaranteed that their products are complying with same international standards

that are synonymous with Behr brand.

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BEHR BOARD OF MANAGEMENT

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BEHR STRUCTURE OF WORK –

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FACTUAL LEADERSHIP

Making decisions

Well thought out

Entrepreneurial

Timely

Agreeing on targets

Participative

Ambitious

Focused

Planning

Thorough

Far-sighted

Circumspect

Organizing

Logical

Economical with

resources

Well-balanced

Delegating

Based on skills and

abilities

Allowing sufficient

freedom

Providing sufficient

background

information

Monitoring progress

Consistent

With sound

judgment

Efficient

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BEHR FOUNDATION LIES ON THESE VALUES -

Independent

Leading-edge technology ensures Behr’s business success and independence.

International

Behr has a worldwide presence in all the key markets as a global systems partner to the

auto industry.

Innovative

As an innovation leader in air conditioning and engine cooling, Behr invests substantially

in research and development.

Systems Competence

There is a growing demand for highly integrated systems. In conjunction with its

partners, Behr takes overall responsibility for complete thermal management systems.

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Cooperative

Behr sets itself apart from its competitors through its successful collaboration with

customers, partners and suppliers.

Careers

Career opportunities at Behr have much in common with the tasks that they face each

day: they are exciting, global, challenging and stimulating.

Corporate Citizen

The Behr Group makes every effort to integrate ecological and social concerns into

company activities.

Outlook

By 2015, Behr plans to be firmly established as one of the top three international

suppliers for vehicle air conditioning and engine cooling.

THE BEHR FACTS

EMPLOYEES –

Behr Group has 19,000 employees worldwide, with a continuing upward trend. If their

entire workforce were to form a human chain, it would span the 23 km between company

headquarters in Stuttgart and the production plant in Vaihingen/Enz. This would be

reminiscent of their daily operating style: working as a team, hand in hand.

PRODUCTION –

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In 2006, 25,381,000 components for engine cooling and 8,334,000 HVAC modules left

the 30 production plants in 14 different countries. The number of new orders exceeded

their targets and will ensure continuous international growth.

SALES –

2006 Behr Annual Report showed sales of 3.188 billion euros. If we stacked one-euro

coins in this amount, this would create a massive tower 7,013 high, rising well above the

highest peak in the Andes.

RESEARCH AND DEVELOPMENT

Each year, around 7%of sales, or 229 million euros is invested in research and deve-

lopment, helping to make Behr an innovation leader on the international auto market.

Virtually no other company comes up with as many ideas for new processes and products

in the fields of air conditioning and engine cooling.

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BEHR PRODUCTS & MANUFACTURED PARTS

Behr encloses a wide umbrella of almost all the refined and ultra technological products

related to Air conditioning and Engine Cooling under its name Components, modules and

systems – Behr is a single source for thermal management in the auto industry, the name

Behr stands for bundled systems competence. Manufacturers can benefit from fully

integrated product solutions.

From its origins as a small vehicle radiator workshop in Stuttgart, Behr has evolved into a

global player and one of the leading suppliers of original equipment for passenger and

commercial vehicles. In our two divisions, Vehicle Air Conditioning and Engine Cooling,

they service all levels of the value-added chain: from components and modules to entire

systems such as the front end and cockpit.

Behr‘s organizational structure reflects their customers’ desire to work internationally

with an independent and efficient systems partner. The Air Conditioning and Engine

Cooling Global responsibility for development, know-how transfer and production as

well as for quality, costs and operational results.

Many years before a new car or truck hits the road, their engineers are already working

on the optimum design for the vehicle’s air conditioning and engine cooling systems. As

an experienced systems developer, Behr is able to provide the complete thermal

management system from a single source. No other supplier of our size has focused its

design and production competencies in this way.

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PRODUCT RANGE—

AIR CONDITIONING COMPONENTS

Individual climate comfort for cars and trucks

Air conditioning components from Behr are used to control the temperature in the vehicle

cabin and ensure optimal distribution of air

The components are as follows –

(i) Physico-control

(ii) Comfort vent

(iii) PTC auxillary heater

(iv) Roof Cooling Unit

In vans, optional roof cooling units ensure a high level of comfort, even in the second and

third seat rows.

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Complete thermal management

Behr is an innovation leader in the global air conditioning and engine cooling market.

From compact to premium-class passenger cars, and from minivans to heavy-duty trucks,

Behr provides a complete thermal management system that is perfectly tailored to the

vehicle in question. Based on its comprehensive systems expertise, Behr can offer a full

range of services, from components and modules to entire systems.

Joint venture partners such as Hella and Plastic Omnium help us to provide our customers

with highly integrated systems solutions.

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Behr develops individual engine cooling systems for each customer; brand, model, and

engine.

They are as follows-

(i) ENGINE COOLING MODULES

(ii) KOMO® 2

(iii) Visco® fan

(iv) Exhaust gas Heat exchanger

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BEHR INNOVATIVE EDGE

The HVAC research team

Maximum individual climate comfort in the Mercedes-Benz S-Class is provided by

thePHYSIO-CONTROL® climate control system, jointly developed by Behr and Behr-

Hella Thermocontrol (BHTC).The project team pulled together across company boun-

daries to bring an acclaimed and innovative premium product to production maturity. The

system, which meets the highest comfort standards, won the Manfred Behr Award.

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Comfortable—

In the Mercedes-Benz S-Class, Behr has redefined the concept of vehicle air

conditioning. The PHYSIO-CONTROL® climate control system allows each occupant to

create a climate that meets his or her individual comfort needs. This innovation sets a

benchmark in terms of noise control, temperature consistency, air distribution and air

conditioning system controls.

Innovation sets the company apart and is its key success factor. Behr is powering ahead

with inspiring ideas and effective solutions.

Safe –

Behr has developed optimally packaged engine cooling components for the joint venture

HBPO. These will be used in the front end module for the second generation of the

BMWMini. The compact design creates extra space between cooling package and

bumper bracket to absorb impact energy in a head-on collision. Crash boxes also ensure

superior pedestrian protection.

Sustainable –

With BehrOxal®, Behr has developed an especially eco-friendly chrome-free coating

process for A/C evaporators. The innovation not only complies with the EU End-of-Life

Vehicles Directive, but also provides better corrosion protection for the evaporator and

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prevents odour buildup. No toxic or carcinogenic chemicals, such as hydrofluoric acid or

chromic acid, are used in the process.

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Chapter 6

ANALYSIS OF BEHR INDIA LTD

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ANALYSIS OF “BEHR INDIA LIMITED”

“Behr India Limited”; was incorporated on 28th April 1997 for the manufacturing of

automobile air conditioning systems. Initially the company was a private limited

company but it moved to deemed public limited on 8th May 1998, and currently the

company is a public limited company but it is still not a listed company.

The company is a 60:40 joint venture between Behr (Germany) and Anand automotive

systems of India.

The Company is engaged in the manufacture of automotive air-conditioning systems,

parts and components thereof, heat exchanger and ventilation units for passenger cars and

trading in wiring harness and compressors. The Company also has an Engineering

Services Division that is involved in providing product design services to Behr group,

Germany.

Business details of Behr India Limited can be summarized and divided into the following

four categories:-

1) Domestic business

Core area: Manufacturing of automobile air conditioning components, engine cooling

fans and FICD.

Infrastructure: An assembly plant with state-of-art facilities to cater to the domestic

customers. Facilities include specially designed work stations, assembly fixtures and

advanced machinery to ensure best quality parts for new generation vehicles.

Customers: Behr India limited holds a major share of Tata Motors’ passenger car

business. It is the sole supplier for HVAC, Heater, Ventilation, and LHD HVAC for all

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models of Indica, Indigo and the new export vehicle, City Rover-UK. Also it has 100%

share of Mahindra & Mahindra’s prestigious Scorpio.

2) Export business

Core area: Manufacture of round tube mechanically expanded heat exchangers, viz.

aluminum condensers, evaporators, tubular components and manifolds for export and

domestic markets.

Infrastructure: A state-of-art-plant has been set up with most modern facilities for

making high quality heat exchangers and tabular components.

Customers: This plant is a major hub for manufacturing heat exchangers and caters to

the global requirement for AC units of Daimler Chrysler, MAN, Renault, Peugeot, Tata

Motors, Mahindra & Mahindra to name a few.

3) Design & Engineering services

Core area: Provides design and engineering support for HVAC systems, engine cooling

parts, EGR parts and oil coolers.

Infrastructure: With substantial investment made by the company in the latest hardware

and software for products design, with the team of highly qualified engineers are fully

equipped to develop locally, system solutions for engine cooling and air conditioning

needs for all types of vehicles.

Customers: Behr’s in-house design capability has enabled the company to provide low

cost and speedy development of complete cooling module and AC systems to Tata

Motors and Mahindra. Engineering support is also provided to the company’s global

partners for new generation vehicles like BMW, Mercedes Benz, Volvo, Audi etc. for

global market.

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4) Global sourcing

Core area: Sourcing and exporting of wiring harness, EGR parts, Gravity die casting,

pressure die-casting and rubber parts from India.

Infrastructure: With a dedicated team of highly qualified engineers, Behr has been

successful in providing complete and excellent support that includes quality assurance

and logistics management.

Customers: Behr plays a key role in sourcing and exporting auto components to its

global partners for Daimler Chrysler, BMW, Renault, Volvo, General Motors, and

Freightliner projects.

Behr India Milestones:

1996 - Project Feasibility.

1997 - Company formation

1999 - Commercial Production for Tata Indica

2000 – Global Purchasing Activity

2001 – Export of heat exchangers

2002 - Scorpio & Indigo SOP

2003 – Achieved Break-Even

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The trend of sales can be seen from the following bar chart:

These sales include sales of automobile air conditioners, heat exchanger and ventilation

units for passenger cars. These figures also include the revenue generated from providing

YEAR 1999 2000 2001 2002 2003 2004 2005

SALES (In

Rs.

Millions)

207 429 603 1256 2130 2524 2728

40

Fig.1

engineering services. Behr has seen increase in its sales volume every year. From

negligible sales of only Rs. 2.85 millions in 1997 due to which company was in severe

losses, company has managed to raise sales to Rs.2728 millions in 2005 giving a smart

net return of over 8%. Year 2002 doubled the amount of sales, which the company was

getting in year 2001. Year 2004 and 2005 has continued the rising pattern of sales

showing a combination of both growth and prosperity.

No. of Workers Working

The company has more than 300 permanent employees and average age of employees is

27. The young operating engineers are highly motivated and form an amiable

professional relationship. The work culture in the organization is healthy. The prominent

determinants of culture at Behr are:

The HR team in the company is very concerned on matters pertaining to employees

and always resolves such matters.

Unique monthly employee suggestion award scheme to drive innovation and

motivation at workplace.

Monthly communication meeting held every month towards communicating

employees on recent performance of the company in each functional area.

Monthly newsletter circulated internally on recent news and views about Anand

group and Chakan hub.

Annual function held every year which includes various cultural and sports activities

in which employees participate with their families targeted to bring out the softer skills in

the employees.

At the beginning of very year, the employees have to mention their KRAs (key result

areas) and the projects they would like to take up in the coming year, which forms the

basis for performance appraisal.

Every employee is insured under life insurance and medical claim policy from the

day he joins the company.

Features of Company

41

The work force in the company is very enthusiastic and self motivated and strives

towards constant improvement in the productivity and quality of the product.

The management in the company is highly concerned for people and is always open

for suggestions from the employees.

The company is in the process of acquiring TS certification & ISO 14001.

Achieving 100 ppm, cost reductions and inventory control are chief thrust areas for

internal control and improvement.

The company practices management techniques of Six Sigma, Kanban, towards cost

reduction and quality improvement.

42

Chapter 7

COMPETITOR ANALYSIS

COMPETITORS

Being one of the leading suppliers of EGR, BEHR has a list of its competitors. They are

as follows –

43

1. ENZA GROUP –

Ensa Vikas is the joint venture between the Vikas Group and Europe’s Dayco Group and

commences the commercial production of EGR (Exhaust Gas Re-circulation) coolers by

With Euro 4 norms due for implementation in 11 Indian cities by 2010, it would be

mandatory for diesel run vehicles to have the EGR technology .The Vikas Group which

manufactures host of automotive components ranging from catalytic converters, fuel line,

casting and machining components, exhaust systems, heat exchangers, fuel and fluid

products, etc through its various group companies forged a joint venture with Europe’s

Dayco Group. Dayco is a leading manufacturer and supplier of fuel lines, fluid

components carbon canisters, EGR systems, and transmission components, to name a

few. The group envisages clocking Rs 600 crore from its automotive business by 2007-08

against Rs 500 crore in 2006-07. An initial investment of Rs 20 crore has been made.

Small engines and ‘Heavy-duty commercial vehicle manufacturers like Tata Motors,

Ashok Leyland, and Mahindra ITEC have already initiated developmental work to meet

the new emission norms. The company already has orders from Maruti Udyog, now

Maruti Suzuki India, Fiat India, Tata Motors etc, to cope with the demand from the

passenger carmakers and CV manufacturers; Ensa envisages having capacity to produce

one million EGR’s by 2010 at its Faridabad facility, An initial investment of Rs 20 crore

has been made

2. PIERBERG GROUP -

Pierburg Inc., a division of Kolbenschmidt Pierburg, and one of the leading suppliers of

EGR (exhaust-gas recirculation) valves, has helped automakers face the realities of soon-

to-be-implemented legislation intended to significantly reduce the airborne pollutants

44

emitted by vehicles. Pierburg is expanding its offering of electric EGR valves in North

America to include light- and medium-duty truck diesel engine applications. EGR valves

are important components used to reduce environmentally hazardous nitrogen oxides

(NOx). Pierburg’s electrically-actuated EGR valves provide a number of distinct

advantages for turbocharged diesel applications, prime among them are increased

durability, performance and flow control. They are lightweight and modular in design and

provide excellent thermal resistance. A key design feature of the new EGR valve is the

unrestricted cross section intended for high through put exhaust rates. Kolbenschmidt

Pierburg, is a leading supplier of pistons, aluminium engine blocks, bearings, automotive

air management and emission control, oil, vacuum and water pumps, electric throttle

control, secondary air systems, and electric exhaust-gas recirculation valves,

Kolbenschmidt Pierburg’s four North American units have production facilities in

Fountain Inn, S.C.; Greensburg, Ind.; Fort Wayne, Ind.; Celaya, Mexico; and Marinette,

Wis., in addition to its North American sales offices in Southfield, Mich.Kolbenschmidt

Pierburg AG is a subsidiary of Rheinmetall AG. The company has approximately 11,700

employees at its five automotive divisions. Global sales for its KS Aluminium

Technology, Pierburg, KS Pistons, KS Plain Bearings and Motor Service divisions

totalled nearly $2.6 billion in 2005.

3. MODINE EGR -

Modine Manufacturing Company (NASDAQ: MODI) is expecting a significant growth

in the next four years, part of which will come from its entry in a new product category -

exhaust-gas-recirculation (EGR) coolers. The EGR technology is expected to generate

$50 million annually in new business partnerships for Modine within five years. Modine

is a leading supplier of heat-transfer systems and products, including oil coolers and

charge-air coolers for the global engine market. It is introducing EGR cooler technology

to help diesel-engine manufacturers reduce emissions to meet new government

regulations. Modine is positioned to lead the implementation of EGR cooling and the

development of additional heat-transfer solutions that contribute to the reduction of

emissions for the diesel-engine market. The company has addressed stringent durability,

45

corrosion, and fouling factors during the development of the technology and has

leveraged its expertise in heat-transfer surfaces and process technology to generate the

innovative EGR cooler designs. To help this development, Modine recently added a new

technical centre in Racine that includes engine test-cells and is duplicating this capability

in Europe over the next three years. The EGR cooler technology developed by Modine

can be tailored to different technical and application requirements that exist in various

diesel-engine market segments. Modine's EGR technology could also be applicable to

gasoline engines, if the need arises. The Modine EGR core design allows packaging

flexibility desired by engine and vehicle manufacturers, which will minimize the cost of

the cooled EGR system. The market for diesel-powered vehicles continues to grow. In

Europe, sales of diesel-powered passenger-cars are projected to account for 30 percent of

the market by 2002 (4.4 million units), an increase of more than 20 percent from 1998

volume. Combined with the continued strength of the on-highway truck markets in both

Europe and North America, the incremental market potential for Modine from the

introduction of EGR cooler products is significant. Modine is a world leader at solving

heating and cooling problems in vehicles, buildings, and off-highway and industrial

equipment.

4. VALEO GROUP –

The Noida-based Ashok Minda Group, a leading manufacturer of automotive

components, has recently inked a 50:50 joint venture with French major Valeo to

develop, produce and sell the entire range of Valeo Security Systems at a new facility in

Pune. The agreement would allow the joint venture to integrate the existing four-wheeler

security systems business of Minda. This is the first of the three proposed joint ventures

between the two companies. Auto Monitor was the first to report on three joint ventures

that the two groups are planning in India. A Memorandum of Understanding to this effect

has already been signed. The two other JVs would include one on starter motors and

alternators, while the third JV would be on Engine Gas Regulated (EGR) valves. The

new company - Minda Valeo Security Systems - will see an initial investment of around

Rs 75-80 crore over the next three years. Chairman, AK Minda Group, Ashok Minda said

46

the joint venture is expected to achieve a sales turnover of Rs 116 crore in the first year of

operation, increasing it to about Rs 300 crore by 2010. The new venture would earmark

20-25 percent of its production for exports and the rest for the domestic market.

The management board of Minda Valeo would consist three directors each from Minda

and Valeo with the financial controller and R&D head from Valeo. Head, Valeo Security

Systems, Michel Serre would chair the Minda Valeo board. Commenting on his plans for

the future, For Valeo, the new business opportunity in India would rather make a small

contribution to its global business. Valeo is a $10 billion company with interests in 12

independent businesses, including lighting, security systems, climate control system and

transmission systems. Serre said the company’s auto security business contributed $676

million to its top line in the previous fiscal. The Valeo Group has 131 production sites

and 68 R&D centres across 29 countries.

The past few years have seen the Ashok Minda Group growing and expanding its

business portfolio. As of today, the group has 18 manufacturing facilities in India, one

each in Indonesia and Germany and offices in Japan and Vietnam. Last fiscal, the group

clocked a turnover of Rs 630 crore and new business, both in the domestic and overseas

markets, could see the turnover reaching Rs 1100 crore by the turn of the current

financial year.

The primary function of Cooled EGR Systems has been to reduce the formation of

nitrogen oxides in diesel engines. Recently, Cooled EGR has been applied to gasoline

engines to improve fuel economy by allowing higher compression ratios.

5. Visteon Group –

Visteon Corporation is a leading full-service supplier that delivers consumer-driven

technology solutions to automotive manufacturers worldwide and through multiple

channels within the global automotive aftermarket. Visteon has about 72,000 employees

and a global delivery system of more than 200 technical, manufacturing, sales and service

facilities located in 25 countries Visteon's Exhaust Gas Recirculation (EGR) Cooler

portfolio uses state-of-the-art technologies to deliver leading performance in high heat

exchange efficiency at low gas side pressure drop within a minimum of package space.

All EGR cooler designs can be combined with a bypass function, including a robust

47

Exhaust Bypass Valve (EBV). A full range of I-flow and U-flow versions offer optimum

flexibility to meet engine package requirements and fulfil the toughest vehicle

manufacturer specification limits.

6. Delphi Group –

Delphi designs and supplies complete diesel engine management systems for light duty,

medium duty and heavy duty applications including injection systems and electronics. 

Delphi has 15 diesel design and engineering centres located in Europe, Asia, North

America and South America, and 21 diesel manufacturing facilities in 13 countries

enabling exceptional on-time delivery

Delphi is actively involved in the development of advanced diesel technologies to help

manufacturers meet stringent emissions standards and to help enhance fuel economy

Delphi Electronic Diesel Exhaust Gas Recirculation Valves are designed for diesel

engine programs targeted to meet future exhaust emissions requirements in Europe, North

America and Asia.  They are designed for both highway and off-highway applications

Delphi has partnered with Korea Delphi Automotive Systems Corporation (KDAC) to

strengthen its design and development capabilities for future diesel EGR valves and to

increase its global engineering resources.

Enza VikasModine

Group

Visteon

Group

Valeo

GroupBehr India

Market

Share35% 20% 25% 20% 12%

Investment EURO 20 EURO 20 EURO 48 EURO 35 EURO 20

48

millionmillion million

millionmillion

Customers

Maruti

Udyog,

Maruti

Suzuki,

Fiat India,

Tata Motors

Ashok

Leyland,M &

M,Renault

Hyundai,

Ford

Tata

Motors,M

&

M,Renault

Tata

Motors,M

Renault,Asho

k

Leyland,GM

Location North India South India North India West India West India

Product

Range

Compressor,

Hoses,

Control

Panel, Heat

E

Heating,

Ventilation,

Air

Conditiong,

Cooling,

EGR

systems.

Climate

Box,Compr

essors,

Heat

exchangers,

EGR valves

EGR,

security

systems.

Climate Box,

Heat

Exchangers,

Engine

Cooling,Air

Conditioning

Systems,EG

R systems

COMPETITORS ANALYSIS

* These figures are broadly indicative.

49

Chapter 8

PRODUCT PROFILE

PRODUCT PROFILE

PRODUCT HISTORY

50

HISTORY OF EGR:

Exhaust gas recirculation (EGR) systems were introduced in the early ‘70s to reduce an

exhaust emission that was not being cleaned by the other smog controls. Oxides of

nitrogen (NOx) are formed when temperatures in the combustion chamber get too hot. At

2500 degrees Fahrenheit or hotter, the nitrogen and oxygen in the combustion chamber

can chemically combine to form nitrous oxides, which, when combined with

hydrocarbons (HCs) and the presence of sunlight, produces an ugly haze in our skies

known commonly as smog. In the Evolution of the EGR systems was the first EGR

valves that appeared in 1973 on GM cars. Bolted to the intake manifold next to the

carburetor, it has ports to the intake and exhaust manifolds. It has a diaphragm that pulls

open a valve stem, which allows exhaust to enter the intake manifold when ported

vacuum is applied to it. Ported vacuum increases with throttle opening. A thermal

vacuum switch prevents vacuum from reaching the EGR during cold engine starts. This

system had many problems. It would often open too soon or too much, which caused a

hesitation on acceleration as massive amounts of recalculated exhaust hit the combustion

chamber. Many people simply disconnected it when it began to cause problems because

they did not understand its importance or design. By 1975, if you unplugged an EGR

valve, you’d have a drive ability complaint of engine ping. Manufacturers and technicians

of that era experimented with vacuum orifice restrictors and vacuum delay valves to try

to find a happy medium between clean air and performance.

Closed loop systems by 1981, closed loop computer controls were in place. EGR flow

was now more carefully controlled with dual diaphragm and back-pressure EGR valves.

Modulating the vacuum to the EGR valve’s pull, open diaphragm controlled the flow of

recirculated exhaust. Called by various names such as amplifiers, transducers and

modulators, both remote and integral vacuum modulated devices were used. The flow of

vacuum was further controlled by solenoids that blocked the vacuum ports until certain

criteria were met such as engine temperature, rpm and manifold absolute pressure

(MAP).

As the manufacturers began to use these complex schemes with vacuum amplifiers, delay

valves and solenoids, they added a lot of “spaghetti” to the engine compartment. Plastic

51

vacuum connections would break and rot with age and were not very reliable. Vacuum

diagrams were invented and became essential to the smog drive ability technicians of the

day. As these systems evolved, they had fewer parts and less vacuum tubing. This was

achieved by the use of pulse width modulated EGR solenoids. The PCM controlled EGR

flow through the use of these solenoids to modulate vacuum to the EGR valve instead of

just turning it on or off periodically. Early (1970s) EGR systems were relatively

unsophisticated, utilizing manifold vacuum as the only input to an on/off EGR valve;

reduced performance and/or drivability were common side effects. Slightly later (mid

1970s to carbureted 1980s) systems included a coolant temperature sensor which didn't

enable the EGR system until the engine had achieved normal operating temperature

(presumably off the choke and therefore less likely to block the EGR passages with

carbon buildups, and a lot less likely to stall due to a cold engine). Many added systems

like "EGR timers" to disable EGR for a few seconds after full-throttle acceleration.

Vacuum reservoirs and "vacuum amplifiers" were sometimes used, adding to the maze of

vacuum hoses under the hood. All vacuum-operated systems, especially the EGR due to

vacuum lines necessarily in close proximity to the hot exhaust manifold, were highly

prone to vacuum leaks caused by cracked hoses; a condition that plagued early 1970s

EGR-equipped cars with bizarre reliability problems (stalling when warm, stalling when

cold, stalling or misfiring under partial throttle, etc.). Hoses in these vehicles should be

checked by passing an unlit blowtorch over them: when the engine speeds up, the

vacuum leak has been found.

INTRODUCTION TO THE PRODUCT

EGR works by recirculating a portion of an engine's exhaust gas back to the engine

cylinders. Intermixing the incoming air with recirculated exhaust gas dilutes the mix with

52

inert gas, lowering the adiabatic flame temperature and (in diesel engines) reducing the

amount of excess oxygen. The exhaust gas also increases the specific heat capacity of the

mix lowering the peak combustion temperature. Because NOx formation progresses

much faster at high temperatures, EGR serves to limit the generation of NOx. NOx is

primarily formed when a mix of nitrogen and oxygen is subjected to high temperatures.

Types of EGR --

Based on temperature:

- Hot EGR

- Partly cooled EGR

- Fully cooled EGR

Based on configuration:

- Long route EGR

- Short route EGR

Based on pressure:

- High pressure route system

- Low pressure route system

EGR in spark-ignited engines

In a typical automotive spark-ignited (SI) engine, 5 to 15 percent of the exhaust gas is

routed back to the intake as EGR (thus comprising 5 to 15 percent of the mixture entering

53

the cylinders). The maximum quantity is limited by the requirement of the mixture to

sustain a contiguous flame front during the combustion event; excessive EGR in an SI

engine can cause misfires and partial burns. Although EGR does measurably slow

combustion, this can largely be compensated for by advancing spark timing. The impact

of EGR on engine efficiency largely depends on the specific engine design, and

sometimes leads to a compromise between efficiency and NOx emissions. A properly

operating EGR can theoretically increase the efficiency of gasoline engines via several

mechanisms:

Reduced throttling losses. The addition of inert exhaust gas into the intake system

means that for a given power output, the throttle plate must be opened further, resulting

in increased inlet manifold pressure and reduced throttling losses.

Reduced heat rejection. A lowered peak combustion temperature not only reduces

NOx formation, it also reduces the loss of thermal energy to combustion chamber

surfaces, leaving more available for conversion to mechanical work during the expansion

stroke.

Reduced chemical dissociation. The lower peak temperatures result in more of the

released energy remaining as sensible energy near TDC, rather than being bound up

(early in the expansion stroke) in the dissociation of combustion products. This effect is

relatively minor compared to the first two. It also decreases the efficiency of gasoline

engines via at least one more mechanism.

Reduced specific heat ratio. A lean intake charge has a higher specific heat ratio

than an EGR mixture. A reduction of specific heat ratio reduces the amount of energy

that can be extracted by the piston.

EGR is typically not employed at high loads because it would reduce peak power output.

This is because it reduces the intake charge density. EGR is also omitted at idle (low-

speed, zero load) because it would cause unstable combustion, resulting in rough idle.

54

EGR in diesel engines –

In modern diesel engines, the EGR gas is cooled through a heat exchanger to allow the

introduction of a greater mass of recirculated gas. Unlike SI engines, diesels are not

limited by the need for a contiguous flame front; furthermore, since diesels always

operate with excess air, they benefit from EGR rates as high as 50% (at idle, where there

is otherwise a very large amount of excess air) in controlling NOx emissions. Since diesel

engines are unthrottled, EGR does not lower throttling losses in the way that it does for

SI engines (see above). However, exhaust gas (largely carbon dioxide and water vapor)

has a higher specific heat than air, and so it still serves to lower peak combustion

temperatures; this aids the diesel engine's efficiency by reduced heat rejection and

dissociation. There are trade offs however. Adding EGR to a diesel reduces the specific

heat ratio of the combustion gases in the power stroke. This reduces the amount of power

that can be extracted by the piston. EGR also tends to reduce the amount of fuel burned in

the power stroke.. Disconnecting an EGR system is usually as simple as unplugging an

electrically operated valve or inserting a ball bearing into the vacuum line in a vacuum-

operated EGR valve. In most modern engines, disabling the EGR system will cause the

computer to display a check engine light. In almost all cases, a disabled EGR system will

cause the car to fail an emissions test, and may cause the EGR passages in the cylinder

head and intake manifold to become blocked with carbon deposits, necessitating

extensive engine disassembly for cleaning.

Important Facts about the EGR System --

1. E.G.R. lowers combustion temperature which lowers oxides of nitrogen pollution.

2. E.G.R. is not used at idle. (Would cause very rough or no idle at all)

3. E.G.R. is not used on cold engines in most cars. (Would cause poor, cold driveablity)

4. E.G.R. is not used at wide open throttle. (Would cause loss of power)

55

1. We will assume the fuel and ignition systems are working to specs.

2. If car hesitates on light acceleration, has tip-in sag, or a flat spot when transmission

shifts from first to second gear. Most probable cause is too much E.G.R. flow.

3. If car pings at cruise or light throttle acceleration, and has no pinging under heavy

acceleration, the most probable cause is little or no E.G.R. flow.

Possible Causes of Too Much E.G.R. Flow

1. Weak calibration spring in E.G.R. valve. Repair: Replace valve.

2. Restricted catalytic converter or exhaust. Repair: Check for exhaust restriction and

repair as needed.

3. Idle speed too high. Repair: Adjust idle to factory specs.

4. Wrong E.G.R. valve. Repair: Replace with correct valve.

Possible Causes of Too Little E.G.R. Flow:-

1. Defective E.G.R. valve. Repair: Replace valve.

2. Exhaust back pressure too low. Repair: Check for missing catalytic converter.

3. Plugged E.G.R. passage. Repair: Clean passage.

4. Idle speed too low. Repair: Adjust idle to specs.

PRODUCT TECHNICAL SPECIFICATIONS

BEHR EGR

INTRODUCTION:-

Exhaust gas recirculation (EGR) is a NOx emissions reduction technique used in most

gasoline and diesel engines. EGR works by recirculating a portion of an engine’s exhaust

56

gas back to the engine cylinders. Intermixing the incoming air with recirculated exhaust

gas dilutes the mix with inert gas, lowering the adiabatic flame temperature and (in diesel

engines) reducing the amount of excess oxygen. The exhaust gas also increases the

specific heat capacity of the mix lowering the peak combustion temperature. Because

NOx formation progresses much faster at high temperatures, EGR serves to limit the

generation of NOx. NOx is primarily formed when a mix of nitrogen and oxygen is

subjected to high temperatures. EGR works differently both in spark ignited and diesel

engines.

EFFECTS OF EGR ON ENGINE -:

Nox Reduction

Thermal efficiency decreases.

Heat rejection increases

Pressure levels increases

EGR have other contaminants which will affect corrosion rates,soot formation etc.

57

The copying, distribution and utilization of this document as well as the communication of its contents to others without expressed authorization is prohibited.Offenders will be held liable for the payment of damages. All rights reserved in the event of the grant of a patent, utility model or ornamental design registration.

EGR AUDI W19 U Flow.ppt

58

DESCRIPTION OF THE PRODUCT

Description Behr Product

Reduced combustion temperature due

to recirculated “inert” exhaust gas.

EGR rates at rated conditions:

10 – 20 % for EGR

20 – 30 % for high EGR

NOx-reduction potential:

40 - 50% for EGR

50 – 70% for high EGR

Winglet Tube

EGR Cooler with

Bypass

Plate Design

EGR Cooler

exhaust gascharge air

exhaust gascharge air

EngineEngine

CACCAC

EG

R1EG

R1

EG

R

59

Operation principle of existing EGR systems

• EGR system consists of an EGR valve, bypass flap and cooler

• 2 from each other independent switchable actuating elements Þ 2 actuators

• EGR valve can be situated on the “hot”or on the “cold” side

Bypass flap

EGR valveairsid

e

U-flow cooler

inlet

60

EGR MADE BY BEHR

61

EGR COOLER WITH GAS FIN

62

ADVANTAGES OF THE BEHR EGR:

Advantages for the automaker:

The EGR system avoids the need for NOx post-treatment devices.

The power of the cam-controlled electric motor offers dependability and enables

the valve to be opened and closed quickly.

The valve remains closed in the event of a malfunction.

The U-shaped circuit reduces the dimensions of the exchanger.

The exchanger and bypass valve are protected against high temperatures and

exhaust gas surges when the EGR valve is closed.

(when the valve is on the exhaust side).

The thermal efficiency of the heat exchanger is 85% with minimal exhaust gas

back-pressure.

Advantages for the user:

With an EGR system, vehicles can meet the requirements of Euro IV and

upcoming Euro V standards without a significant cost impact,

unlike other post-treatment solutions.

The EGR valve does not affect engine power.

63

Chapter 9

EMISSION STANDARDS

64

EMISSION STANDARDS

Emissions legislation is a key driver of innovation in the Engine Cooling Product

Division. In this context, Behr is encountering an increasing demand from manufacturers,

especially in the truck sector, to provide complete cooling systems. With innovative

concepts, individually tailored to the specific customer strategy, we support our

customers in meeting emissions requirements, and in giving them a market edge. In

addition, demands for durability and reliability are particularly high for trucks. Here,

Behr offers support and technical competence in designing appropriate components,

complete cooling circuits, and modules

Emission standards are requirements that set specific limits to the amount of pollutants

that can be released into the environment. Many emission standards focus on regulating

pollutants released by automobiles (motor cars) and other powered vehicles but they can

also regulate emissions from industry, power plants, small equipment such as lawn

mowers and diesel generators. Frequent policy alternatives to emission standards are

technology standards (which mandate the use of a specific technology) and emission

trading. Standards generally regulate the emissions of NOx, sulfur oxides, particulate

matter (PM) or soot, carbon monoxide (CO), or volatile hydrocarbons (see carbon

dioxide equivalent).

1. UNITED STATES OF AMERICA –

In the United States, emissions standards are managed by the Environmental Protection

Agency (EPA). The state of California has special dispensation to promulgate more

stringent vehicle emissions standards, and other states may choose to follow either the

national or California standards.

65

"Tier 1" regulations went into effect starting in 1994, and "Tier 2" standards are being

phased in from 2004 to 2009. Automobiles and light trucks (SUVs, pickup trucks, and

minivans) are treated differently under certain standards.

California is attempting to abolish greenhouse gas emissions from automobiles, but faces

a court challenge from the federal government. The states are also attempting to compel

the federal EPA to regulate greenhouse gas emissions, which as of 2007 it has declined to

do.

The EPA has separate regulations for small engines, such as grounds keeping equipment.

The states must also promulgate miscellaneous emissions regulations in order to comply

with the National Ambient Air Quality Standards.

2. EUROPE –

The European Union has its own set of emission standards that all new vehicles must

meet. Currently, standards are set for all road vehicles, trains, barges and 'nonroad mobile

machinery' (such as tractors). No standards apply to seagoing ships or airplanes. The

emissions standards change based on the test cycle used: ECE R49 (old) and ESC

(European Steady Cycle, since 2000).

Currently there are no standards for CO2 emissions. The European Parliament has

suggested introducing mandatory CO2 emission standards to replace current voluntary

commitments by the auto manufacturers (see ACEA agreement) and labelling. In late

2005, the European Commission started working on a proposal for a new law to limit

CO2 emissions from cars. Sigmar Gabriel, Germany’s environment minister, rebuffs calls

to extend deadline to implement CO2 reduction standards Transport (T&E) said new-car

emissions from European producers were reduced to 160 grams per kilometer (g/km) on

average last year (0.2 percent in 2006), still way off a voluntary goal of 140 g/km by

2008 Diesel passenger vehicles. Euro 3: effective as of 1.01.2008 Euro 4: as of 1.01.2010

Euro 5: as of 1.01.2014. These dates are postponed for two years to give oil refineries an

ability to modernize plants.

66

3. INDIA –

The first Indian emission regulations were idle emission limits which became effective in

1989. These idle emission regulations were soon replaced by mass emission limits for

both gasoline (1991) and diesel (1992) vehicles, which were gradually tightened during

the 1990’s. Since the year 2000, India started adopting European emission and fuel

regulations for four-wheeled light-duty and for heavy-dc. Indian own emission

regulations still apply to two- and three-wheeled vehicles.

On October 6, 2003, the National Auto Fuel Policy has been announced, which envisages

a phased program for introducing Euro 2 - 4 emission and fuel regulations by 2010. The

implementation schedule of EU emission standards in India is summarized in Table 1

Table 1: Indian Emission Standards (4-Wheel Vehicles)

Standard Reference Date Region

India 2000 Euro 1 2000 Nationwide

Bharat Stage II Euro 2

2001 NCR*, Mumbai, Kolkata, Chennai

2003.04 NCR*, 10 Cities

2005.04 Nationwide

Bharat Stage III Euro 32005.04 NCR*, 10 Cities

2010.04 Nationwide

Bharat Stage IV Euro 4 2010.04 NCR*, 10 Cities

* National Capital Region (Delhi)

Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur

and Agra

67

Overview of the emission norms in India –

1991 - Idle CO Limits for Gasoline Vehicles and Free Acceleration Smoke for

Diesel Vehicles, Mass Emission Norms for Gasoline Vehicles.

1992 - Mass Emission Norms for Diesel Vehicles.

1996 - Revision of Mass Emission Norms for Gasoline and Diesel Vehicles,

mandatory fitment of Catalytic Converter for Cars in Metros on Unleaded Gasoline.

1998 - Cold Start Norms Introduced.

2000 - India 2000 (Eq. to Euro I) Norms, Modified IDC (Indian Driving Cycle),

Bharat Stage II Norms for Delhi.

2001 - Bharat Stage II (Eq. to Euro II) Norms for All Metros, Emission Norms for

CNG & LPG Vehicles.

2003 - Bharat Stage II (Eq. to Euro II) Norms for 11 major cities.

2005 - From 1st April Bharat Stage III (Eq. to Euro III) Norms for 11 major cities.

2010 - Bharat Stage III Emission Norms for 4-wheelers for entire country whereas

Bharat Stage - IV (Eq. to Euro IV) for 11 major cities.

Emission Standard Indian Standard for vehicular

pollution - International Emission Standard for

Vehicular Emission falls into three categories:

1. European Emission system (EUROSYSTEM).

2. Japanese Emission system.

3. American Emission system.

The European Emission Standards are followed by most of the countries, including India.

EURO-I - are those that should have been applicable from year 2000.

EURO-II - are those that should have been applicable from year 2005.

68

EURO - I EURO - II

POLLUTANT PETROL DIESEL PETROL DIESEL

C O g/km 2.72 2.72 2.2 1.00

H C + Nox g/km 0.97 0.97 (IDI) 0.57 0.70

1.36 ( DI) ----- ----- ----- -----

P M g/km ----- 0.14 (IDI) ----- -----

0.19 ( DI) ----- ----- ----- -----

The Indian Pollution standard for vehicle: The Central Motor Vehicles Rules-115(II)

1989 says that the pollution standards laid down for carbon monoxide and inspected in

petrol vehicle should be as under:

2 and 3 wheelers - Idling Carbon Monoxide emission by volume:4.5%

4 wheelers - Idling Carbon Monoxide emission by volume : 3.0%

For Diesel Vehicles the emission standards for inspection of smoke density are as under:

Maximum Smoke Density

Light absorption co-

efficient (l/m)

Bosch

Units

Hartidge

Units

(I) Full load at 60 to 70% of maximum engine

rated rpm declared by the manufacturer.3.25 5.2 75

(ii) of Free acceleration 2.45 --- 65

The target fixed at Kyoto Protocol was an 8% reduction of emissions in all sectors of the

economy compared to 1990 levels by 2008-2012.

Relative Carbon dioxide emissions from transport have risen rapidly in recent years, from

21% of the total in 1990 to 28% in 2004, but currently there are no standards for CO2

emission limits for pollution from vehicles.

69

EU transport emissions of CO2 currently account for about 3.5% of global CO2 emissions.

Any action taken to reduce CO2 emissions will have to involve curbing transport

emissions.

By vehicle type

Passenger cars account for about half the transport-related CO2 emissions in the European

Union and air transport that accounts for 12% of the transport emissions of CO2 in the

atmosphere.

Obligatory labeling

The purpose of Directive 1999/94/EC of the European Parliament and the Council of 13

December 1999 relating to the availability of consumer information on fuel economy and

CO2 emissions in respect of the marketing of new passenger cars is to ensure that

information relating to the fuel economy and CO2 emissions of new passenger cars

offered for sale or lease in the Community is made available to consumers in order to

enable consumers to make an informed choice.

The legal framework consists in a series of directives, each amendment to the 1970

Directive 70/220/EEC. Here is a summary list of the standards, when they come into

force, what they apply to, and which EU directives provide the definition of the standard.

Euro 1 (1993) for passenger cars - 91/441/EEC.

Also for passenger cars and light trucks - 93/59/EEC.

Euro 2 (1996) for passenger cars - 94/12/EC (& 96/69/EC).

Euro 3 (2000) for any vehicle - 98/69/EC.

Euro 4 (2005) for any vehicle - 98/69/EC (& 2002/80/EC).

Euro 5 (2008/9) and Euro 6 (2014) for light passenger and commercial vehicles -

2007/715/EC

These limits supersede the original directive on emission limits 70/220/EEC

Emission Standard Level

(listed from least clean to cleanest)

T1 Tier 1 The least stringent emission

70

standards

TLEVTransitional Low

Emission Vehicle

More stringent than Tier 1

standards for hydrocarbons (HC)

LEVLow Emission

Vehicle

More stringent than TLEV

standards for both hydrocarbons

(HC) and nitrogen oxides (NOx)

ULEVUltra Low

Emission Vehicle

More stringent than LEV standards

for HC

SULEVSuper Ultra Low

Emission Vehicle

Even more stringent standards than

ULEV for both HC and NOx

ZEVZero Emission

Vehicle

The strictest emission standard,

permitting no emissions

Graphical representations of the emission standards for hydrocarbons

and nitrogen oxides are shown below:

71

72

Chapter 10

SWOT ANALYSIS

SWOT ANALYSIS FOR BEHR

73

Description - SWOT Analysis is a strategic planning tool used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business

venture. It involves specifying the objective of the business venture or project and

identifying the internal and external factors that are favourable and unfavourable to

achieving that objective. The aim of any SWOT analysis is to identify the key internal

and external factors that are important to achieving the objective. SWOT analysis groups

key pieces of information into two main factors -

Internal factors - The strengths and weaknesses internal to the organization.

External factors - The opportunities and threats presented by the external

environment.

The internal factors may be viewed as strengths or weaknesses depending upon their

impact on the organizations objectives. What may represent strengths with respect to one

objective may be weaknesses for another objective. The factors may include all of the

4Ps; as well as personnel, finance, manufacturing capabilities, and so on. The external

factors may include macroeconomic matters, technological change, legislation, and socio-

cultural changes, as well as changes in the marketplace or competitive position. The

results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For

example, it may tend to persuade companies to compile lists rather than think about what

is really important in achieving objectives. It also presents the resulting lists uncritically

and without clear prioritization so that, for example, weak opportunities may appear to

balance strong threats.

The Strengths of BEHR –

74

1. COMPANY DOSSIER –

Behr India Ltd. was established in Pune in 1997 as a joint-venture company between

Behr GmbH & Co. KG of Germany and Anand Automotive Systems. Behr India reported

sales of $65 million in 2005 and employs approximately 400 people Behr GmbH & Co.

KG, Stuttgart, is a systems partner for the international automobile industry. A specialist

for automotive air-conditioning and engine- cooling systems, the Behr Group is one of

the world's leading manufacturers and suppliers of original equipment for passenger and

commercial vehicles. Group sales in the 2005 business year were approximately $3.8

billion. Currently Behr employs more than 18,000 people at 10 development and 30

production sites in Europe, North and South America, Asia and South Africa. Additional

information is at www.behrgroup.com.

2. WORLDWIDE LOCATIONS –

Since its inception more than a century ago, Behr has evolved into a global systems

partner to the auto industry, with a presence in all of the world’s key markets. With new

production plants in the growth markets of China, India, Mexico and Eastern Europe, the

Behr network has also become much more closely knit in recent years.

Behr GmbH & Co. KG

Behr Kirchberg GmbH

Behr Thermot-tronik GmbH

Behr Service GmbH

Behr Industry GmbH & Co. KG

Behr France Rouffach S. A. S.

Behr France Hambach S. A. R. L.

Frape Behr S. A.

Behr Czech s. r. o.

Behr America, Inc.

Behr Japan K. K.

75

Behr Asia-Pacific Management (Shanghai) Co., Ltd.

Behr Korea Inc.

Behr Brasil Ltd.

Behr South Africa (Pty.) Ltd.

Behr-Hella Thermo control GmbH

HBPO GmbH

Behr Hella Service GmbH

Behr India Ltd.

Behr-Toyo Engine Cooling Systems K. K.

Toyo-Behr Japanese Components GmbH

Sanden-Behr Air-Conditioning Systems Co., Ltd.

Shanghai Behr Thermal Systems Co., Ltd.

Dongfeng Behr Thermal Systems Co., Ltd.

Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd.

Munich, Germany

Wolfsburg, Germany

Gothenburg, Sweden

Banbury, United Kingdom

Paris, France

Turin, Italy

Europe

North America

Asia

Other regions

Joint venture companies

3. FINANCIAL ANALYSIS –

76

Behr facts and figures -

Sales, profit, employees: The current five-year summary provides information on the

growth of the Behr Group.

Behr Group2003

HGB

2004

HGB

2004

IFRS

2005

IFRS

2006

IFRS

2007

IFRS

Sales 3,005 3,050 3,051 3,052 3,188 3,383

Europe 2,048 2,088 2,088 1,967 2,057 2,201

North America 731 708 708 762 774 733

Asia 55 100 100 140 161 222

Other regions 171 154 155 183 196 227

Earnings before taxes (EBT) 75 95 95 92 95 40

As % of sales 2.5 3.1 3.1 3.0 3.0 1.2

Return on capital employed 11.6 12.2 11.3 10.0 10.3 7.0

Balance sheet total 1,353 1,464 1,762 1,921 1,993 2,198

Equity ratio as % * 23.7 22.6 21.7 24.9 30.2 26.4

Capital expenditure in fixed assets 151 166 169 178 150 169

R&D expenditure 184 195 195 215 229 241

As % of sales 6.1 6.4 6.4 7.0 7.2 7.1

Employees (end of year) 16,122 16,986 16,986 18,103 18,594 19,448

All figures in millions of euros; annual average exchange rate 1 euro - 1.2546 US $

*According to HGB (German Commercial Code): shareholders' equity ratio; according to

IFRS: long-term capital and hybrid capital provided by partners and other shareholders.

4. COMPETITOR ANALYSIS -

77

The company has to compete with corporate giants with huge financial resources, and

also in some areas with agile, midsize enterprises. And clearly, Behr is also changing:

with their major initiative in North America, their expansion in Eastern Europe and South

Africa, and the business activities we are setting up in India, China and Japan — plus the

extension of their product range. All these changes make this an ideal time to refocus and

further develop. They have competitors like the Enza, Modine, Piezburg group.

5. KEY EVENTS –

Behr America has developed an improved exhaust gas recirculation (EGR) cooler that

adheres to the latest United States emissions standards for heavy trucks.

Laser Welding of Egr Coolers - A New Process Technology for Heat Exchanger

Manufacturing by Behr.

Worldwide No. 1 Supplier for Truck EGR coolers

Top 3 Supplier for Passenger car EGR coolers

Sales 2005: approx. 150 Mio USD

6. CUSTOMERS –

78

Indian customers like Tata and Mahindra & Mahindra, and global customers like MAN,

Cummins and Renault that have set up plants here in India.

7. PRODUCT DEVELOPMENT-

CustomersBEHR EGR

79

Product development process

Product development at Behr follows our product development process. Obligatory sub-

processes and links, milestones, quality gates, etc. are described and stored in the Behr

Development System (BDS). The best practice standards for the seven development

methods are also documented here. These methods are also binding — worldwide.

The product development process includes all steps from preliminary design to the start

of series production. By adhering to this process, we can guarantee our customers product

development of the highest standards at each of our global development locations.

8. PROSPECTS-

By 2015, BEHR’s goal is to establish a recognizable Behr culture in all Behr locations

worldwide, one that is also found in their joint ventures. Without denying their German

origin, they will give the various local cultures sufficient opportunity to contribute their

own strengths. What will Behr actually look like in 2015? Behr will still be an

independent company. They will be established as one of the top 3 global engine cooling

and vehicle air conditioning suppliers. They will be No. 1 in Europe and one of the top

three in the USA. Asia, South and Central America, Eastern Europe and South Africa

will all be important elements of the Behr network. The automotive industry will be their

primary business. Despite the fluctuations in individual markets, the demand from the

automotive industry will still be generally stable, because the need for mobility will be as

80

great as ever. Behr will be addressing that need by contributing towards safe, comfortable

and environmentally responsible mobility. The OEM business will still be their core

segment. In both business units, engine cooling and air conditioning, they will be

involved at every point of the value added chain: components, modules, entire systems

and major modules such as front-end sand cockpits. All automotive manufacturers

throughout the world will be on their customer list, with a particular focus on truck

makers.

Their second business segment in the automotive industry will continue to be the spare

parts business, including both original spare parts supplied to the retail organizations of

their OEM customers, and in the independent aftermarket, which we will still be

developing jointly with Hella. In 2015, they will rank among the top three in Europe,

America and China in terms of independent aftermarket sales. Outside the automotive

industry, their main activity will still be cooling systems for heavy-duty engines, plus

cooling and air conditioning systems for rail vehicles, buses and agricultural machinery.

These segments will be complemented with the supply of aviation and electronics cooling

products and motorcycle components. Behr Industry will account for ten percent of

Group sales. Looking at Behr in 2015, what will the customers mostly appreciate about

Behr? Their innovative strength and clear focus on their services, their proverbial quality,

their productivity, and their global presence. Behr – your performance partner!

Their business segments will provide outstanding growth and development opportunities.

They will seize those opportunities by employing every day the inner strength at the heart

of their company, their Behr culture.

WEAKNESSES –

Behr Industry has also displayed operational weaknesses over the past year

. The company develops and manufactures engine cooling and air conditioning

systems, in particular for rail and special vehicles, construction and agricultural

machinery, and heavy-duty engines.

The strong sales growth of 18.1 percent led to plant capacity overloads and the

build-up of substantial backlogs.

81

In addition, the sharp rise in the price of copper had a negative impact on results.

More focus on advertising and promotional activities.

Behr Industry is currently introducing new processes, expanding production in

Eastern Germany, and investing in employee training.

These measures will already generate a positive result in 2008. In this way, the

company is laying the foundations for further profitable growth.

OPPORTUNITIES –

BEHR has excellent opportunities for Indian mega giants like Tata.

Behr India will supply Tata with HVAC modules, manual control heads and

condensers from production facilities in Pune and Singur. Product development

for the program was done entirely in India.

"Behr will be equipping the Nano with state-of-the-art climate-control

technology," said Behr India CEO Sunil Kaul. "For Tata, we've created an air-

conditioning system that combines cost-efficiency with the capacity to fully

accommodate India's hot and humid climate conditions."

A special feature of Behr's air-conditioning technology is the integration of a

BehrOxal ([R]) coating process for aluminium evaporators. The innovative

process improves corrosion protection and condensed water drainage in

evaporators, while at the same time protecting the environment, since it does not

contain chemical coatings. BehrOxal technology won a coveted 2007 PACE

award from Automotive News.

"Behr is well placed to participate in the success of low-cost vehicles. We have

production locations in Brazil, China, Czech Republic, India and Mexico, as well

as development centres in Brazil, China and India," noted Klemens Schmiederer,

a member of the Board of Management at Behr Group. "They have also have set

up sales structures in all of the relevant markets and developed low-cost

products."

The Nano is nicknamed the "people's car" for its affordable pricing.

82

For the HVAC assembly, Behr currently is setting up a new plant in Singur, India

near Calcutta. Production at the new site is slated to start in mid-2008. Behr India

began its joint venture with Anand Group in 1997, and expanded its commitment

to India with the opening of a new production plant in Pune last year.

In the past fiscal year the Behr Group, the leading specialist in automotive air

conditioning and engine cooling systems, succeeded in boosting sales by

6.1 percent to 3.38 billion Euros.

At year-end, there were 19,448 employees in the Behr Group, 4.6 percent more

than in the previous year. Personnel levels increased mainly in the growth markets

of Eastern Europe, India and China. However, the company was also able to

create new jobs in Germany

THREATS –

EPA has set stringent standards for Emissions. These standards are forcing to

make changes to Product and Technology for reduced fuel consumption and new

regulations.

Further price increases on the raw material markets for aluminium, stainless steel

and plastics.

Recyclability Issues.

Electronics and Impact of Hybrid Vehicles.

Switching to Hybrid Cars with sheer Cost of Batteries or Fuel Cells and

Hydrogen. Infrastructure.

Competitive Pressures.

Chapter 11

83

FUTURE MARKET FORECAST

FUTURE MARKET FORECAST

84

Following India's growing openness, the arrival of new and existing models, easy

availability of finance at relatively low rate of interest and price discounts offered by the

dealers and manufacturers all have stirred the demand for vehicles and a strong growth of

the Indian automobile industry.

The data obtained from ministry of commerce and industry, shows high growth obtained

since 2001- 02 in automobile production continuing in the first three quarters of the 2004-

05. Annual growth was 16.0 per cent in April-December, 2004; the growth rate in 2003-

04 was 15.1 per cent. The automobile industry grew at a compound annual growth rate

(CAGR) of 22 per cent between 1992 and 1997. With investment exceeding Rs. 50,000

crore, the turnover of the automobile industry exceeded Rs. 59,518 crore in 2002-03.

Including turnover of the auto-component sector, the automotive industry's turnover,

which was above Rs. 84,000 crore in 2002-03, is estimated to have exceeded Rs.1,00,000

crore ( USD 22. 74 billion) in 2003-04.

The Indian Automobile Market is expected to grow at a CAGR of 9.5 percent amounting

to Rs. 13,008 million by 2010. The Commercial Vehicle Segment has been contributing

to the automobile market to a great extent. Many foreign companies have been investing

in the Indian Automobile Market in various ways such as technology transfers, joint

ventures, strategic alliances, exports, and financial collaborations. The auto market in

India can boast of attractive finance schemes, increasing purchasing power, and launch of

the latest products. Total sales of major car manufacturers in India registered a figure of

0.674 million units at the end of March, 2007. The number of car exports in India was

39,295 units. General Motors, Maruti, and Honda accounted for 60 percent of the market

sales at the end of April, 2007. There has been an increase in the purchase of motorcycles

and cars both, in the rural as well as urban areas. Some vital statistics regarding the

automobile market in India has been mentioned below:

Two wheelers - 2nd largest in the world

Commercial Vehicle - 4th largest in the world

Passenger car- 11th largest in the world

As such, the Indian automobile market comprises of a wide variety of vehicles such as

light, medium, and heavy commercial vehicles, cars, scooters, mopeds, motor cycles, 3

85

wheelers, and multi-utility vehicles such as jeeps and trax. The modern automobile

market in India has been considering key issues in the process of growth:

Customer care and not just 'service'

Domestic as well as multinational investments

Searing through cut-throat competition

Road safety

Anti-pollution norms.

Coordination with the government to enable advancement. Used vehicle trade

Automobile Dealers Network in India in terms of Car dealer networks and authorized

service stations, Maruti leads the pack with Dealer networks and workshops across the

country. The other leading automobile manufactures are also trying to cope up and are

opening their service stations and dealer workshops in all the metros and major cities of

the country. Dealers offer varying kind of discount of finances who in tern pass it on to

the customers in the form of reduced interest rates.

Major Manufacturers of Automobiles in India:

01. Maruti Udyog Ltd.

02. General Motors India

03. Ford India Ltd.

04. Eicher Motors

05. Bajaj Auto

06. Daewoo Motors India

07. Hero Motors

08. Hindustan Motors

09. Hyundai Motor India Ltd.

10. Royal Enfield Motors

11. Telco

12. TVS Motors

13. DC Designs

14. Swaraj Mazda Ltd

86

Government has liberalized the norms for foreign investment and import of technology

and that appears to have benefited the automobile sector. The production of total vehicles

increased from 4.2 million in 1998- 99 to 7.3 million in 2003-04. It is likely that the

production of such vehicles will exceed 10 million in the next couple of years.

Automobile Export Numbers

Category 1998-99 2004-05 (Apr-Dec)

Passenger Car 25468 121478

Multi Utility Vehicles 2654 3892

Commercial Vehicles 10108 19931

Two Wheelers 100002 256765

Three Wheelers 21138 51535

Percentage Growth 16.6 32.8

The industry has adopted the global standards and this was manifested in the increasing

exports of the sector. After a temporary slump during 1998- 99 and 1999-00, such exports

registered robust growth rates of well over 50 per cent in 2002-03 and 2003-04 each to

exceed two and- a-half times the export figure for 2001-02.

EVEN GROWTH:

87

Opposing the belief that the growth in automobile industry has catered only to the top

income-stratum of society, Growth of exports of 32.8 % in the first three quarters of

2004-05, the fastest growth in volumes has come from commercial vehicles as against

passenger cars.

Between 1998-99 and 2003-04, output of commercial vehicles has grown 2.8 times

compared to the 2.2 times increase in passenger cars. Furthermore, two-wheeler output

continues to dominate the volume statistics of the sector. In 2003-04, for every passenger

car turned out by the sector, there were 7 two-wheelers produced. In the two wheeler

segment, there is a greater preference for motorcycles followed by scooters, with both

production and domestic sales of motorcycles increasing at faster rates than for scooters

in the current and previous years. However, mopeds have registered low or negative

growth. Export growth rates have been high both for motorcycles and scooters.

The future of Indian Automobile market is bright as it looks forward to manufacturing

and implementing new innovations such as electric cars as provided by Reva, alternate

fuels like CNG and LPG, and probably customized Internet automobile orders.

Although India has been much discussed in recent years, and has been the recipient of

major foreign investment in its automotive industry, it has in many ways not received the

attention of the world’s other major developing country, China – but this is about to

change.

88

With the world’s second largest and fastest-growing population, there is no denying

India’s potential in both economic and population terms and the effect it will have on the

auto industry in the years to come. The country is already off to a good start, with a well-

developed components industry and a production level of one million four-wheeled

vehicles a year, plus a further five million two- and three-wheelers. India also has

substantial strength in mass production techniques and is particularly well served in the

fields of research and development and software design. Therefore, as always, the

question is when will expansion occur and to what level?

The implications, market drivers and scope of a future massive Indian vehicle market are

covered in the India Strategic Market Profile, a brand-new forecast of Indian automotive

and related activity to 2020. Based on Max Pemberton's unique relational long-term

forecasting model, it forecasts car and CV sales, demographics, materials usage, auto

industry employment, and explains their inter-relation with detailed analysis.

89

Chapter 12

BUSINESS PROPOSITION OF BEHR

90

BUSINESS PROPOSITION OF BEHR

Since its foundation in 1905, Behr has developed from a small family-owned operation

into a globally active automotive industry supplier that is active worldwide - with

continually increasing success. Today, the Behr name is synonymous with a seal for

future-oriented innovations and top-quality products. A team of some 19,500 employees

and a worldwide network of 17 development, 28 production sites and twelve joint venture

companies form the foundation for our close partnership with the international

automotive industry. Behr has continued to expand its position as a worldwide leading

original equipment supplier for vehicle air conditioning and engine cooling in passenger

cars and commercial vehicles. Its products contribute to safe, comfortable and

ecologically sound mobility. Their goal is to expand the company's international position

as the leader in innovations and become the number one in customer service worldwide.

We are consistently pushing our international expansion ahead and are currently number

three globally. Right now, we are expanding our presence on the growing Asian

automotive markets. Parallel to this, Behr is increasing its commitment in growing

markets such as Brazil, South Africa, and India. Behr India, a 60:40 joint venture

between Behr GmbH & Co. KG of Germany and Anand Automotive Systems Behr

GmbH & Co. KG of Germany is one of the world’s leading manufacturers and suppliers

of original equipment for passenger and commercial vehicles and Anand Automotive

Systems is India’s leading manufacturer of automotive components and systems. Behr

India is making a key contribution towards achieving the company’s strategic goal, which

is to generate 10 per cent of the company sales from Asia by the end of 2010.” Behr India

is currently exporting heat exchangers, Visco clutches and also sourcing components like

castings, EGR cooler parts and wiring harness for Behr worldwide. In India, Behr’s key

customers include Tata Motors, Mahindra & Mahindra, General Motors, Renault, Ashok

Leyland, TATA Cummins and MAN Force. Pune is one of the most important locations

91

for the automotive industry in India as Behr partners and customers are located here India

is the fourth-largest automobile producing country in Asia. Auto industry in India is

growing at the rate of 20 - 25 % year on year. Based in Pune, India, Behr India Limited

designs and manufactures advanced heating, ventilating and air-conditioning (HVAC)

units for the automotive industry. Business need: With diverse operating systems, server

platforms and applications, Behr India found its expansion plans were hindered by rising

IT costs; decentralized data storage presented a risk to the business, and existing systems

were not easily scaled up to meet new customer demands.

PUNE, India -- Behr India Ltd., Behr GmbH & Co. KG with the Anand Group, an Indian

automotive supplier, will provide air-conditioning systems for the Tata Nano starting in

June of this year.

Behr India will supply Tata with HVAC modules, manual control heads and condensers

from production facilities in Pune and Singur. Product development for the program was

done entirely in India.

"Behr will be equipping the Nano with state-of-the-art climate-control technology," said

Behr India CEO Sunil Kaul. "For Tata, we've created an air-conditioning system that

combines cost-efficiency with the capacity to fully accommodate India's hot and humid

climate conditions."

A special feature of Behr's air-conditioning technology is the integration of a BehrOxal

([R]) coating process for aluminium evaporators. The innovative process improves

corrosion protection and condensed water drainage in evaporators, while at the same time

protecting the environment, since it does not contain chemical coatings. BehrOxal

technology won a coveted 2007 PACE award from Automotive News.

"Behr is well placed to participate in the success of low-cost vehicles. We have

production locations in Brazil, China, Czech Republic, India and Mexico, as well as

development centres in Brazil, China and India," noted Klemens Schmiederer, a member

of the Board of Management at Behr Group. "We also have set up sales structures in all

of the relevant markets and developed low-cost products."

The Nano is nicknamed the "people's car" for its affordable pricing.

For the HVAC assembly, Behr currently is setting up a new plant in Singur, India near

Calcutta. Production at the new site is slated to start in mid-2008. Behr India began its

92

joint venture with Anand Group in 1997, and expanded its commitment to India with the

opening of a new production plant in Pune last year. Behr will continue to be an

independent company. They will hold a solid position among the top three manufacturers

in engine cooling and vehicle air conditioning worldwide. They are number one in

Europe and among the top three in the USA. Asia, South and Central America, Eastern

Europe, and South Africa, all play an important part in the Behr Group. The automotive

industry remains the central focus of their business. In both of their business sectors,

engine cooling and vehicle air conditioning, they are active at every level of the value-

added chain: components, modules, entire systems and large assemblies such as front-

ends and cock .They have launched a Behr Group-wide profit-enhancing project “2010”:

it encompasses production, development, administration and sales.Behr remains on

course for future growth, and will achieve sales of over 3.7 billion euros by 2010. The

basis for this development is their strengthened position in the growth markets, as well as

product innovations geared to reducing CO2 emissions pits. All automotive

manufacturers are Behr customers, especially concentrated on European manufacturers

and commercial vehicle manufacturers around the globe. The clear targets for 2010 are:

sales of over 3.7 billion euros, profits equivalent to 3 percent of sales, and an ROCE of

over 10 percent. The automotive industry will still be their primary business. Despite the

fluctuations in individual markets, the demand from the automotive industry will still be

generally stable, because the need for mobility will be as great as ever. Behr will be

addressing that need by contributing towards safe, comfortable and environmentally

responsible mobility. The OEM business will still be their core segment. In both business

units, engine cooling and air conditioning, they will be involved at every point of the

value added chain: components, modules, entire systems and major modules such as

front-ends and cockpits. All automotive manufacturers throughout the world will be on

their customer list, with a particular focus on truck makers. Their second business

segment in the automotive industry will continue to be the spare parts business, including

both original spare parts supplied to the retail organizations of our OEM customers, and

in the independent aftermarket, which we will still be developing jointly with Hella. In

2015, they will rank among the top three in Europe, America and China in terms of

independent aftermarket sales. Outside the automotive industry, their main activity will

93

still be cooling systems for heavy-duty engines, plus cooling and air conditioning systems

for rail vehicles, buses and agricultural machinery. These segments will be

complemented with the supply of aviation and electronics cooling products and

motorcycle components. Behr Industry will account for ten percent of Group sales.

Looking at Behr in 2015, what will their customers most appreciate about them? Their

innovative strength and clear focus on service, our proverbial quality, our productivity,

and our global presence. Behr – your performance partner.

94

Chapter 13

PLAN OF ACTION

PLAN OF ACTION

95

The Plan of Action can be devised as follows ---

(I.) With the stricter due implementation of New emission Standards from the

EPA the company needs to make the product compatible with the change in design and

technology

(II.) There should be Cost Reduction and Downsizing

(III.) Fourth Edition of Engine Cooling Systems. Given that there are an increasing

number of heat exchangers located at the front-end, packaging the engine cooling system

becomes increasingly difficult

(IV.) Competitive pressures should be handled by quick implementation of the

latest and Cost Effective Technology

(V.) Pedestrian Safety Regulations at front ends should be of Paramount

Importance and should be taken well care of.

(VI.) Research and Development should be constantly carried out in the field of

driving dynamics

(VII.) The Sectors that should be targeted should be the Construction Equipments,

Agricultural Machinery, Power Generation Plants, Commercial and Rail Vehicles and

Ships at a larger scale.

(VIII.) EGR coolers should be Environmentally Clean.

(IX.) The target fixed at Kyoto Protocol was an 8% reduction of emissions in all

sectors of the economy compared to 1990 levels by 2008-2012.So this should be taken

care of.

(X.) Implementation of Reliable high Performance Series of EGR coolers.

(XI.) Behr Industry entered a new business field: cooling for electronic

components. The broad product range also includes components for the motorcycle

industry. Among these are wheels, wheel rims, fuel tanks, and, sinceR744 as a New

Refrigerant.

(XII.) Progress to be made in the field of Durability and Acoustics Increased

standardization of methods, progress in virtual product development, and increased

productivity of the testing facilities which will contribute to cost cutting.

(XIII) Re-engineering and Re-designing should be done for Tomorrow’s Cars.

96

(XIV) Low internal and external leak designs help improve engine performance and

lower emissions.

(XV) Stainless steel valves and components provide robust performance and

resistance to corrosion, high temperatures and wear.

(XVI) There is also a trend for more compact engine cooling modules in order to

solve the space constraints under the hood.

(XVII) The EGR systems should improve the dynamic and thermal performance.

(XVIII) Hybrid EGR Systems should be developed.

(XIX) Customers want the best performance for the lowest price.

(XX) The competitors are offering electric EGR valves to include light and medium

Applications so such kind of improvements could be made to

increase durability, performance and flow control.

Chapter 14

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CONCLUSION & RECOMMENDATIONS

CONCLUSION

The Sales of Behr’s joint venture with the Indian Anand Automotive climbed to 52

million Euros. The development was strengthened in particular by high demand for Cars

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from Indian Automakers. The Portfolio is being extended to include engine Cooling

Products. The construction of the new plant will provide Additional Capacity to ensure

Behr America has developed an improved exhaust gas recirculation (EGR) cooler that

adheres to the latest United States emissions standards for heavy trucks Continued

Growth. In the Anticipation of the New Euro 5 Emission Standards

Behr has developed a new management system – called the “House of Reliability (HoR)”

– that keeps track of the reliability of the new EGR cooler. The HoR is based on seven

elements: mission profile, failure management and weak-point analysis, virtual

breakdown, component analysis, test strategy, field observation and validation.

Behr India Ltd., Behr GmbH & Co. KG with the Anand Group, an Indian automotive

supplier, will provide air-conditioning systems for the Tata Nano starting in June of this

year in the city of Pune

Behr India will supply Tata with HVAC modules, manual control heads and condensers

from production facilities in Pune and Singur. Product development for the program was

done entirely in India.

"Behr will be equipping the Nano with state-of-the-art climate-control technology," said

Behr India CEO Sunil Kaul. "For Tata, we've created an air-conditioning system that

combines cost-efficiency with the capacity to fully accommodate India's hot and humid

climate conditions."

A special feature of Behr's air-conditioning technology is the integration of a BehrOxal

([R]) coating process for aluminium evaporators. The innovative process improves

corrosion protection and condensed water drainage in evaporators, while at the same time

protecting the environment, since it does not contain chemical coatings. BehrOxal

technology won a coveted 2007 PACE award from Automotive News.

"Behr is well placed to participate in the success of low-cost vehicles. We have

production locations in Brazil, China, Czech Republic, India and Mexico, as well as

development centres in Brazil, China and India," noted Klemens Schmiederer, a member

of the Board of Management at Behr Group. "We also have set up sales structures in all

of the relevant markets and developed low-cost products."

The Nano is nicknamed the "people's car" for its affordable pricing.

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For the HVAC assembly, Behr currently is setting up a new plant in Singur, India near

Calcutta. Production at the new site is slated to start in mid-2008. Behr India began its

joint venture with Anand Group in 1997, and expanded its commitment to India with the

opening of a new production plant in Pune last year.

.

RECOMMENDATIONS -

The business unit has to monitor key macro environment forces (demographic, economic,

technological, political-legal & social cultural) & significant Microenvironment factors

(customers, cornpetitors, distributors & suppliers) that affects its ability to earn profits.

A marketing opportunity is an area of buyer need or potential interest in which a

company can perform profitably.

• The BEHR India should set up a marketing intelligence system to track trends &

important developments.

• BEHR India can meet the need for more information for making buying process more

efficient by using the internet. For ex. Enza vikas.

• A BEHR India can customize a product or service that was offered only in a standard

form.

• A BEHR India may be able to deliver a product faster.

• A BEHR India may be able to offer a product at a much lower competitive price.

• BEHR India has an opportunity to enter into a market of higher price vehicles (D

segment).

An environmental threat is a challenges posed by an unfavorable trend or development

that would lead in the absence of defensive marketing action to deterioration in sales or

profit.

• Threats of intense segment rivalry

For ex. Domestic competitors like Enza Vikas Group, ltd. Global competitors like Valeo,

Pierburg etc.

• Threats of new entrants

For ex. New entrants in EGR for automobiles is Delphi

• Threats of buyer’s bargaining power

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A better defense consists of developing superior product that strong buyers like TATA

and Mahindra & Mahindra cannot refuse.

• Threats of supplier’s bargaining power

The best defense is to build win-win relations with suppliers or use multiple supply

sources.

Internal environment analysis

Behr India should analyze their internal environment by performing strength & weakness

analysis.

Checklist for performing strengths & weakness

Factors Performance

Major Minor Neutral Minor Major

Strength Strength Weakness Weakness Weakness

Marketing

1. Company reputation --------- ----------- ----------- ------------- -----------

2. Market share --------- ----------- ----------- ------------- -----------

3. Customer Satisfaction --------- ----------- ----------- ------------- -----------

4. Product quality --------- ----------- ----------- ------------- -----------

5. Pricing effectiveness --------- ----------- ----------- ------------- -----------

6. Innovation effectiveness --------- ----------- ----------- ------------- -----------

Chapter 15

101

BIBILOGRAPHY

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BIBILOGRAPHY

1. Effect of fouling in Efficency of a Shell and Tube EGR cooler.Charnay.L.,Soderberg

E;Fredholm S.EAEC Congress Vehicles System

2. Performance of EGR ( Exhaust Gas Recirculation ) cooling on Direct Injection Diesel

Engine.Laudic H.,FISITA Congress,Oct 1998,Paris

3. Experimental and Numerical Investigation on EGR system of a new Automotive

Diesel Engine.Mattarelli E ; Bianchi G.M;Ivaldi D SAE paper 2000-01-0224,SAE 2000

World Congress,Detroit,Michigan March 6-9 2000

4. Ways to meet Future Emission Standards with Diesel Engine Powered Sports Utility

Vehicle(SUV) Zelenka P; Egert M; Cartellieri W . SAE paper 2000-01-0181. SAE 2000

World Congress, Detroit Michigan.March 6-9 2000

5. Vehicular Technology in India | Emission Norms - SIAM India

6. Heywood, John B., "Internal Combustion Engine Fundamentals," McGraw Hill,

1988.

7. Van Basshuysen, Richard, and Schäfer, Fred, "Internal Combustion Engine

Handbook," SAE International, 2004.

8. "Bosch Automotive Handbook," 3rd Edition, Robert Bosch GmbH, 1993 "World

Motor Vehicle Production by Country: 2005 - 2007". OICA.

9. "2008 Global Market Data Book", Automotive News,

10. Marketing Research by Tull and Hawkins (G. C. Ben Edition 2001)

11. Research Methodology (C.R. Kothari)

12. Marketing by Philip Kotler (Prentice Hall India — Millennium Edition)

13. Services Marketing by Christopher Lovelock (Pearson Education 4th Edition)

14. Autocar Professional June15, 2008 and July 15, 2008.

15. Topspeed Supplement from Lokmat Newspaper September 2008

16. Kothari handbook; MCCIA Pune.

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WEBSITES

www.mycii.org

www.google.com

www.wikipedia.com

www.automart.com

www.planetindia.net

www.hindustanmotors.com

www.bajajauto.com

www.tempoindia.com

www.cars.tatamotors.com

www.thehindubusinessline.com

www.familycar.com

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