An automobile uses thousands of parts, and some of them are seldom looked at but are one of the most crucial elements. For large mechanical parts to run smooth, bearings are key components. From the wheels to the main shafts in the engine casing in a vehicle, bearings play an important role. One such company that has been a well-known name in the industry is NBC, part of National Engineering Industries Ltd (part of CK Birla Group).
To understand how the industry has coped up with EVs – as they have fewer moving parts – and to understand the company’s contribution in the last 75 years, Express Mobility spoke to Rohit Saboo, the President and CEO of National Engineering Industries Ltd.
What was NEI’s contribution, having been in business for the last 75 years?
NEI in the past 75 years has made constant strides, starting from being the first company manufacturing bearings in India to India’s leading manufacturer of bearings, maintaining the legacy of the brand. The company has undergone multiple economic, social and policy changes, to enhance the quality of its products and services, thereby addressing the needs of the stakeholders, keeping pace with the changing times.
We partnered with prestigious brands like Brenco Inc. (US) and NTN Corporation to expand the product portfolio. Recently, NEI also acquired Kinex bearings in Europe to enhance and diversify to provide best-in-class products to our existing and potential customers and to be close to the international customers.
We have aligned our objectives with the philosophy of ‘Atmanirbhar Bharat’ to showcase our commitment to the nation. We truly accredit our Research and Development team for upholding our excellence and meeting our vision. NEI is the only bearing manufacturer in the world to receive the Deming Grand Prize for its quality.
We produce over 20 crore bearings in more than 2300 variants per year, and export to 30+ countries including Germany, Japan and China. NEI believes in the ‘Zero-defect’ approach and is fully committed to its processes and requirements. Our product range includes ball bearings, taper roller bearings, cylindrical roller bearings, spherical roller bearings, axle boxes and our newly introduced- Needle Bearings. NEI supplies its products to automotive, railways and industrial segments. Apart from this, we are also making bearings for EVs and stepping our foot into aerospace and defence segments.
We have embarked on an Industry 4.0 journey and are making constant progress towards digitising our supply chains, optimising our inventory and predicting machine breakdowns using data analytics. Keeping in mind the current pandemic situation, we are making further investments towards technology and aim to fully digitise our manufacturing and non-manufacturing operations in the coming years.
What kind of auto components need to be localised?
With the disruption in the demand and supply chains, the localisation of the auto components industry is becoming a must and is the only way forward for us. According to data shown by the Auto Component Manufacturers Association of India, India imported components worth $17 billion in 2019. China accounted for 26 per cent or $4.5 billion of these imports, and the rest came from South Korea, Germany and Japan, among others.
The major components imported from China include drive transmission and steering parts, electronic and electrical items, cooling systems, suspension, and braking parts. A report by EY stated that power trains, automatic transmission and electronic components have contributed to over 60 per cent of the total imports by value. Some raw materials like platinum, palladium and rhodium, used for exhaust after-treatment devices are 100% imported, as they aren’t available in India.
We foresee the government extending their support in investment in the domestic industry. Localisation fully in the automotive sector can satiate the vision of ‘Make in India’ as well as ‘Atmanirbhar Bharat’. The Indian automotive industry has been able to gain momentum since early January 2021 and it is predicted that this alone may expect to reach USD 200 billion revenue mark by 2026. Auto components and parts imports from China dropped by around 42 per cent during April-July 2020 to $246.33 million from $424.32 million, a year ago. Nevertheless, there would be a dire need for cohesive support by the government needed on the roadmap of self-reliance for the auto components industry.
How do auto components differ for EVs compared to ICEs, especially bearings?
An EV powertrain, which includes the battery, motor, transmission driveshaft etc, has 60% fewer components than the traditional ICE (Internal Combustion Engine) powertrain. While a lot of components are different, the specification and requirements have changed for some of the components eg. cooling system, lubrication system, bearings etc. Although the number of bearings has reduced for EV, the specification for EV bearings have changed in terms of speed, noise, light-weighting and life.
NEI calculated the moves and have initiated the process of design, testing infrastructure and validation of its indigenously developed bearings for electric vehicles (EVs), which is high rpm capable, reduced noise and friction, power-dense and improved life. We have already launched these bearings and are supplying them to a few EV OEMs in the space of 2W, 3W and passenger cars. Speaking of being future-ready, we are working closely with both, domestic and international electric vehicles manufacturers to provide them with optimized bearing solutions for their upcoming vehicles.
What are the future and recent growth trajectory of Electric Vehicles and NEI’s contribution towards the same?
Electric vehicle sales have surged, with growth in all three top auto markets: China, the US, and Europe. Sales increased by 160% in the first half of 2021 from a year earlier. China remained the world’s top EV market, with 1.1 million vehicles sold in the first half, accounting for 12% of sales. According to recent reports, the global electric vehicle market is expected to increase at a CAGR of 26.8% from 4,093 thousand units in 2021 to 34,756 thousand units by 2030. However, the sales have been mostly confined to China, North American, and European markets, with Japan, Asia Pacific, and the rest of the world significantly lagging in EV sales.
To cope up, the market in the Asia Pacific is expected to develop steadily due to increasing demand for low-cost, low-emission vehicles, whereas the market in North America and Europe are expected to rise rapidly due to government initiatives and the increasing high-performance passenger car segment. By 2030 the government has decided to ensure that 30% of vehicles on Indian roads would be electric.
According to figures provided by the Ministry of Road Transport and Highways, till November 2021, 8.7 lakh electric vehicles had been registered in the country. Increased government investments in the development of electric vehicle charging stations and hydrogen fueling stations, as well as buyer incentives, will provide chances for OEMs to increase their revenue stream and regional footprint.
NEI is launching EV sensor bearings in early FY22. We are already in an advanced stage of design, testing and validation with a new age customer of indigenously developed sensor integrated bearings (SIB) for electric vehicles (EVs). We launched electric motor bearings (EMB) for electrical motors in the last financial year. At this stage, the base application of SIB is ready, more such parameters are accordingly added as per customer requirements and accordingly testing is done.
What are some roadblocks in achieving the government’s aim of fully electric vehicles/alternative fuel vehicles?
Although there will be a gradual transition to electric/alternative fuel vehicles, there are some challenges that need to be addressed. The two/three-wheeler segment has seen a rise in product launches and adoption, however, the passenger vehicle segment has not witnessed a similar trend. This might be due to the high price point as well as the inadequate range on one charge. Lack of charging infrastructure is also making people take the wait and watch approach.
There is still some work to be done on the efficiency of batteries, charging time, driving range and safety of vehicles and occupants. In our view, occupant safety for local conditions and scrapping policy needs immediate attention.
The Government has rolled out incentives for the manufacture of EV/hybrid vehicles which will help in bringing the costs down. With some consumer incentives, a gradual switch is expected to happen which will increase once the initial challenges are taken care of.
How can India become a global automobile manufacturing hub in the next five years?
The Indian auto-components industry grew at a 6% CAGR over the five years (FY2016 to FY2020). The industry accounts for a 2.3% share in India’s GDP and is slated to become 3rd most prominent in the world by 2025. India is already the largest producer of two-wheelers, three-wheelers and tractors globally, and the fifth largest manufacturer of passenger and commercial vehicles.
Over the years, the Indian automotive sector has become a dominant force with a large number of companies investing in India to cater both to the domestic and export markets. The Government of India also encourages foreign investment in the automobile sector and has allowed 100% foreign direct investment (FDI) under the automatic route.
The government has also approved the Rs 25,938 crore production-linked incentive (PLI) scheme to promote the transition to advanced technologies. This can accelerate the overall sectoral growth in the country. This will help in the localization of the auto components industry and gain a larger share in the global export market.
The need of the hour is less dependency on imported products and developing a local supplier ecosystem. This will help local manufacturers expand to not only cater to local demand but also explore international markets. And it is only right that India’s industries work on planning production, preparing their buffer inventories, forecasting demand, and rebuilding supply chains at optimised costs.
It is also a ripe time for manufacturers to invest in systematic research and development to maximise benefits from the globalisation of the industry. Government support is needed in ready availability of capital at lower rates, ease of doing business, low energy costs and internationally competitive logistics infrastructure.