international conference 2012 : indian steel industry : challenges & opportunities 1 steel...

International Conference 2012 : Indian Steel Industry : Challenges & Opportunities

1

Steel requirement for Steel requirement for Auto sector Auto sector

Deepak ThukralGeneral Manager

Supply Chain Division

Maruti Suzuki India Ltd

Presentation by

International Conference 2012 : Indian Steel Industry : Challenges & Opportunities 2

ContentsContents

Update on Auto Industry & Maruti Suzuki India Ltd

Steel requirements and future trends of steel

Expectations from Steel Mills

International Conference 2012 : Indian Steel Industry : Challenges & Opportunities 3

Indian Automotive Industry-Hubs

NORTH

EAST

WEST

SOUTH

MAN

New Hub : Uttaranchal

Indian position worldwide in automobile manufacturing

Two wheelers 2nd

Small cars 3rd

Overall car production 7th

Commercial vehicles 8th


Automotive Industry viewed as “Locomotive

for Growth”

Turnover

$ 35 Billion to

$145 billion

Turnover

$ 35 Billion to

$145 billion

Automotive Plan 2016

Will contribute 10% of the Country’s GDP and 30~35% of the

Industry GDP

Document prepared by Government of Indiain consultation with

ACMA & SIAM

Export

$ 4.1 Billion to

$35 billion

Export

$ 4.1 Billion to

$35 billion

Employment

+ 25 million

Employment

+ 25 million

Automotive mission plan 2016


Rising Family Income Exchange of Cars

Favorable duty structure

Improved Infrastructure

Changing lifestyle

Keydrivers

Finance Availability Poor public transport system

Low car penetration

Key Drivers for Growth


Annual Income (INR) Number of Households in 2010(million)

Expected Households in 2015 (million)

More than10,00,000 1.2 3.3

5,00,000-10,00,000 2.4 5.5

2,00,000-5,00,000 10.9 55.1

90,000-2,00,000 91.3 106.0

Less than 90,000 101.1 74.1

TOTAL 206.9 244.0

Indian pockets growing deeper


+22%

+3%

+28%

+27%+14% CAGR

+8%

+8%

+15%

+4% +37%

+18%

+4%

Passenger Cars Growth Scenario


Source: Roland Berger, SIAM

441,710

146,156

68,835

331,535

Indian PassengerCar Export

Maruti

FY 08 ~09 FY 09 ~10

Automobile Export from India Increases

……….increasing opportunities!!

12 mn

18 mn

2008 2012

Global small car market to grow by 50% in 4 years

+50% +33%

India as a small car Hub!!


ABS( ) EBD( )

POWER[A/C]

AUTOMATIC

D F u e linjection

POWER

POWERMID

YE

ST

ER

DA

YT

OD

AY

14 Models

7Engines

933 Dealers in 666 cities

2946 service centers in 1395 towns

MSIL Update: Product & Services


5.7 6

.7 7.8

7.8

10

.3 12

.7

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

+17.3%+17.3%

Value is Lacs

MSIL Update: Sales over the years


MSIL Update: Capacity & Investments

ManesarCapacity 550k

GurgaonCapacity 750k

Further Expansion at Manesar for 250k


Steel Consumption Per Capita

Steel Consumption Per Capita of India

3337

4146 45

5055

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010

Year

Qty

in K

g

CAGR 7.8%

Steel Consumption Per Capita in India is steadily catching up with that of World Markets. Infrastructural investments in Tier-2 towns is going to

escalate the consumption.

Source: World Steel Association

Steel consumption per Capita in 2010 (in Kg)

1077

772

501427

299 267206

55

0

200

400

600

800

1000

1200

S Korea Taiwan Japan China EU (29) US WorldAvg

India


STEEL

ALUMINIUM

PLASTICS

OTHERS

STEEL53%

ALUMINIUM5%

PLASTIC14%

Others37%

WT. (KG)500~ 600

Steel is a major raw material for a car, it forms 50-55% of Car by Weight and 80% by Cost of raw Material in a car.

Typical Material Weight in Cars


MSIL Auto Grade Flat Steel Consumption Pattern

111

120 132 140195 210

286242170150120106

275

350

0

200

400

600

800

1000

1200

1400

FY2004-05

FY2005-06

FY2006-07

FY2007-08

FY2008-09

FY2009-10

FY2010-11

FY2015-16

Quanti

ty, '0

00 M

T

In-house Vendor's

243345

~ 1100

260

517

380

~ 636

226

Auto Grade Steel Consumption to grow by 15% in future

36%

15%


Trend of High Tensile usage & requirement

Crash Safety & Fuel Economy

‘10 ‘13‘00


Improvement of Crash safety

Weight Reduction

same weight

same absorbed energy

Normal Strengtht=1.4mm

Normal Strengtht=1.4mm

HighStrengtht=1.4mm

HighStrengtht=1.4mm

Normal Strength

t=1.6mm

Normal Strength

t=1.6mm

Crash Test

High Strength Steel (HSS)


590TRIP, high-burring

590TRIP590 high-burring

780high-burring

690TRIP

780DP

780

780

Soft Steel Sheet

Example of HSS in Automobile


Current Usage Future Usage

Volume

Ten

sile

Str

eng

th,

MP

a

270

340

440

590

Low HighVolume

Ten

sile

S

tren

gth

270

340

440

590

Low High

780 780

980

340~390 MPa

590 MPa440~540 MPa

260~270 MPa

Current 2011-12Current 2011-12

Forecast 2015Forecast 2015

Typical usage of Steel in Auto sector

Higher Usage of High Tensile Material


Steel Requirement of Future: GA

Non coated

GAIncreasing customer expectation of anti-perforation

Regulatory requirement for export models

GA would gradually replace CR to attain higher anti-rust performance

Current usage for Export Vehicle

Likely usage for domestic vehicle with increased customer expectation for antirust warranty

Domestic availability of GA is less.


59 12 15

0

30

40

0

10

20

30

40

50

60

% U

sa

ge

2010 2012 2013 2014

Future GA Usage

GA

Typical GA usage of MSIL

Domestic availability as per Spec is very less

100% GA is imported

Require more Local Source

GA would gradually replace CR to attain higher anti-rust performance


Steel Sourcing pattern

Grade of Steel Local Import

CR upto 270 MPA

CR 440 MPA

CR 590-980 MPA

HR upto 440 MPA

HR >440

GA CR 270 MPA

GA HR 270 MPA

GA CR 440-590 MPA

GA HR 440-590 MPA

Scope for Indian Steel

Mills to localise


Othersthk

82%

1.2 mm

4%1.4 mm

6%

1.6 mm

8%

1.2 mm

1.4 mm

1.6 mm

Others

Future Steel Usage : Thin Section HR

Typical distribution of different thickness of steel usage


Future Steel Usage : Thin Section HR

1.6, 1.4, 1.2 CR / HR

VAVE proposal for cost effectiveness 1.6, 1.4, 1.2 HR

Concern :Non avaialbility of thin section

HR

•Actual usage is CR in thin section even if design is in HR. •Designers forced to use CR as thin section HR not available.

•Indian Steel mills started producing 1.6 HR : •But limited quantity available due to productivity issue. •1.2 & 1.4 mm HR still to be stabilized and produced in mass scale.


Steel requirement: Fuel Tank

• Earlier Terne coat (Lead & Tin Coated) Steel was in use

• With the implementation of ELV compliance, Terne Coat has been replaced by Eco-coat (Tin-Zinc Coated).

• Indian Steel Makers are yet to offer alternate solution

Need for technology up-gradation by Local Steel Manufacturers.


Expectation from Steel Mills

Consistency in surface quality for Skin panel applications

Reduced rejection for manufacturing of Auto grade Steel, especially Skin panels

Close dimensional tolerances to be maintained

Defect free supplies

Packaging improvement and improve handling during transit

Expectations from Indian Steel Mills - Quality


Expectations from Indian Steel Mills - CostAverage Price domestic CR (CRISIL) (Rs/Kg)

30.00

32.00

34.00

36.00

38.00

40.00

42.00

44.00

46.00

48.00

50.00

Rs/

Kg

Rs/

Kg

Expectations from Steel Mills Stable prices

Long term price contract Half-yearly / Annual

Too much price fluctuations within

short span of 6 months

Too much price fluctuations within

short span of 6 months


Expectations from Steel Mills

Assured supplies inline to OEM production growth and irrespective of price fluctuations in market.

100% Conformity to delivery schedules and adhere to JIT supplies. Increase in reliability in case of single source supplier Low inventory at Vendor end and at OEMs Short Ordering lead time. Coming closer to OEMs and Vendor plants through Service Center/Warehouse

Expectations from Indian Steel Mills - Delivery

400000

500000

600000

700000

800000

900000

1000000

1100000

1200000

1300000A

pr-0

7

Ju

n-0

7

Au

g-0

7

Oct-

07

De

c-0

7

Fe

b-0

8

Ap

r-0

8

Ju

n-0

8

Au

g-0

8

Oct-

08

De

c-0

8

Fe

b-0

9

Ap

r-0

9

Ju

n-0

9

Au

g-0

9

Oct-

09

De

c-0

9

Fe

b-1

0

Ap

r-1

0

Ju

n-1

0

Au

g-1

0

Oct-

10

De

c-1

0

Fe

b-1

1

Ap

r-1

1

Ju

n-1

1

Au

g-1

1

Oct-

11

De

c-1

1

Fe

b-1

2

Pro

du

ctio

n V

olu

me

30.00

32.00

34.00

36.00

38.00

40.00

42.00

44.00

46.00

48.00

50.00

Rs/K

g

Average Steel Price (Rs/Kg)

Production Vol

Supply issues and capacity

constraint from Steel mills

Supply issues and capacity

constraint from Steel mills


Summary

High Tensile : Higher tensile material usage increasing -> Indian steel Mills to develop technology and localise the imports.

GA : Anti corrosion leading to more and more GA usage -> Require more sources to cater increased requirements. Thin Section HR : Increase availability for CR-> HR conversions Fuel tank material : Indian steel mills yet to offer such product.

Stable and long term pricing.

100% Conformity to delivery schedules and adhere to JIT supplies. Short ordering lead time and low inventory at customers

Consistency in surface quality for Skin panel applications efect free supplies

Summary


Thank You


1. Cowl Upper2. Front Lower Cross Member3. Floor Side Member4. Side Sill Inner – 1 & 25. Seat Belt Reinforcement

6. Rear Side Member7. 3rd Cross Member8. Fuel Lid

Maruti action on Antirust

GA Usage of 15% consist of following areas

6

1

24

4

8

5

3

7

CURRENT GRADEJ SC270CCJ SC270DC- 2J SC270DC- 2J SC270DNJ SC270DUJ SC270DUJ SC270ENJ SC340PNJ SC440WNJ SC590RNJ SH270CN- PJ SH270DN- PJ SH440WN- P

PROPOSED GRADEJ AC270CN- 45/45J AC270DU- 3- 45/45J AC270DN- 2- 45/J AC270DN- 45/45J AC270DN- 45/45J AC270DU- 45/45J AH270EN- 45/45J AC340PN- 45/45J AH440WN- 45/45J AC590RN- 45/45J AH270CN- 45/45J AH270DN- 45/45J AH440WN- 45/45

international conference 2012 : indian steel industry : challenges & opportunities 1 steel...

Documents

indian steel industry

industry gdpdocument

e 02d106864657023

e 02d106864655023

e 02d106864658023

e 02d106864654023

e 02d106848559023

e 02d106864903023