ACGL

Automobile Corporation of Goa Limited is the manufacturer of Sheet Metal Components, Assemblies and Bus Coaches. It has got two main plants:

Plant I - Main Plant Honda – Sattari – Goa. Facilities for manufacture of bus bodies added in 2008 - including a state of the art Paint shop.

Plant II - Bhuimpal , Sattari – Goa. Setup in 1988.Manufactures Bus Bodies.

Since 1982, ACGL has been a major supplier of pressings and assemblies to Tata Motors' Pune factory. The buses which ACGL manufactures belong to three categories:

1. LCV (Lower carriage vehicle)2. MCV (Medium carriage vehicle)-School buses3. High tech-X Volvo (Espano)

Presently they are supplying a major order to Middle east with left hand drive.

Manufacturing process:The MS frames for the body are outsourced from local vendors based on the order quantity. This arrives at the shell line where they are further assembled by arc welding process. The floor for the skeleton is then then made, after which the FRP sheets for front, back and sides are fitted in. Finally the roof is fixed. The floor material may be either plywood or FRP depending upon customer’s requirements. Side panelling by sheet metal, other skirt panelling around tyres, engine and gear box, making of dents for other electrical fittings are carried over in phases in each of the respective zones of the shell line.

Then the partly assembled body is moved to the paint shop. This is considered as the bottle neck activity in the entire manufacturing process as it consumes more time. Spray painting is generally involved until the customer specifies higher end painting.

Then the painted body enters the trim line where the electrical works are carried out. After wiring is done, the frames for windows are fitted in. The light fixtures, other door and window accessories are also assembled in the trim line. Then the entire body is dropped on the chassis and necessary welding and fitting process are carried on. Then the final seats and other interiors are fixed in the final line.

Then the product moves to the testing phase where the quality inspector clears all quality defects and sends the vehicle for despatch.

Decision making process:Procurement: The body frames are outsourced from local welding companies. The FRP sheets comes from their other division of sheet metal and pressing. All other inventories for minor items are procured accordingly by the purchase department depending upon the order inflow. Special requirement of A/C provisions, sound systems are also procured on case to case basis. For painting, they have regular tie-ups with major suppliers since this is a continuous requirement. Other seating and relevant accessories are also outsourced and planned so that they arrive at appropriate time for assembling.

Pricing of products / services:

The pricing generally depends on the specifications of the customers and the volume of the order. And servicing of the buses is usually covered together with the chassis supplier under warranty.

RecruitmentFor labours, generally they have contract labour, who are paid on item rate basis. Therefore when the order inflow is low, the amount of labour is automatically adjusted. However, for specialised welding and fittings, they have permanent teams also. Workers are engaged in 2 shifts of 8 hours each. The staff recruitment is usually done by lateral interviews and they hire people for the workshop operations and the design centre and other administrative activities.

General marketing strategyMost of the orders are from Tata directly. They supply the chassis and ACGL has to only do the body building work and they are paid for the same. But some private cleints pitch in for turnkey contracts, wherein, ACGL themselves undertake procurement of chassis from Tata or Ashok Leyland predominantly and they do the body building works.

The marketing division mainly focuses on such turnkey projects where they can bank on margins for the chassis also. Such one-time customers can be priced accordingly. The Goa port is an added advantage to them so that they can ship the assembled buses to the Middle East where there is huge requirement for transporting labour. Till now, 80% of the revenues used to come from exports. The major clients are in the Middle East, including Saudi Arabia. Because of the recession, the revenues last year had come down to Rs 233 Crores from 330 Crores.This has compelled the company to relook at the strategy of dependence on exports. Now the company is eyeing on the domestic market.