CHAPTER 1

PROFILE OF THE INDUSTRYTHE INDIAN AUTO ANCILLARY INDUSTRY

The Indian auto ancillary industry is one of India's sunrise industries with tremendous growth prospects. The automotive industry is an important segment of the economy in any country as it links many industries and services. The Indian auto industry has the potential to emerge as one of the largest in the world.

Presently, India is:

The largest two-wheeler manufacturer in the world.

The largest three-wheeler market in the world.

The second-largest two-wheeler market in the world.

The fourth largest commercial vehicle market in the world.

The fortunes of the automotive components segment are linked to the performance of the auto industry. The auto ancillary industry gives support to sectors such as metals that includes steel, aluminum, copper and also to many other machine tools, plastics, rubbers, polymers, glass, surface transport. As per Indian Suppliers report, The automotive sector in India contributes to 5% of the nations GDP and 17% of the indirect taxes as a result of which the government last year charted a 10-year blueprint for the sectors growth. This envisages the automotive sector output reaching a level of $145 billion accounting for more than 10% of the GDP by 2016.Indian auto industry has evolved around three major clusters: Mumbai-Pune-Nasik-Aurangabad (west); Chennai-Bangalore-Hosur (south); and Delhi-Gurgaon-Faridabad (north).Export-oriented companies have formed base in the west/south regions, due to proximity to port.

PROSPECTS: Looking forward, the industry displays tremendous potential in generating employment and boosting entrepreneurship in the country. The spate of new investment plans announced by global and domestic automobile manufacturers promises the emergence of India as a global hub for auto components. The industry is transforming, and the boost in demand will see the emergence ofseveral new players in the industry. The vast market for auto components, and the diverseproducts and technology involved ensures a place and role for many. At the same time, the entry of several global automobile manufacturers will bring in more regulation into the industry and see a pruning of the spurious market. Among the smaller players in the unorganized segment, this implies moving away from being standalone companies, to entering into either contract manufacturing or being ancillary units. The newly defined rules are specialization, development and delivery that hold the key to success in the auto component industry.

ASSOCIATION

The Automotive Component Manufacturers Association of India (ACMA) is the nodal agency for the Indian Auto Component Industry. It's active involvement in tradepromotion, technology up-gradation, quality enhancement and collection and dissemination ofinformation has made it a vital catalyst for this industry's development.

Its other activities include participation in international trade fairs, sending trade delegations overseas and bringing out publications on various subjects related to the automotive industry. ACMA is represented on a number of panels, committees and councils of the Government of India through which it helps in the formulation of policies pertaining to the Indian automotive industry. ACMA represents over 600 Companies, whose production forms a majority of the total auto component output in the organized sector.

Quality

The industry has been making rapid strides towards achievement of world-class Quality Systems by imbibing ISO 9000/ISO14001/QS 9000/TS16949 Quality Systems. Till now 562 companies in ACMA membership have been certified to ISO 9000, 208 companies awarded to ISO14001, 445 companies have been certified with TS16949, 99 companies havebeen certified with OHSAS18001, 15 Companies have won TPM Award, 11 Companies won the Deming prize 1company won Japan Quality Medal, 1company won Shingo Silver Medallion and 3 companies won the JIPM Excellence award.

Exports

The industry has been exporting around 13% of its output. In the year 2009-10, industry has exported US$ 3.8 billion. Principal export items include replacement parts, tractorparts, motorcycle parts, piston rings, gaskets, engine valves, fuel pump nozzles, fuel injectionparts, filter & filter elements, radiators, gears, leaf springs, brake assemblies & bearings, clutch facings, head lamps, auto bulbs & halogen bulbs, spark plugs and body parts.

PROFILE OF HI-TECH ARAI PVT LTD MADURAI

Hi-Tech Arai Ltd is a Madurai based oil seals and automobile components manufacturing company. Having joint venture with Arai Seisakusho co Ltd Japan and Mitsubishi Corporation, Japan. The company previously called as Hi-Tech ancillaries ltd after joint venture with Arai Seisakusho co ltd, the company name has changed to Hi-tech Arai ltd.

The company was established to produce rubber components and oil seals for the world famous companies like Maruti Suzuki, Bajaj, TVS, Honda, Yamaha, Toyota, etc. The company was founded by Mr.R.Lakshmi Narayanan, with the capital ofRs.4.5 lakhs and with the manpower of 75 as a family owned concern. Mr. B.T.Bangera and Mr.R.Lakshmi Narayanan both were the ex-employees of Fenner (India) ltd. Their good relationship made them to form this great venture in 1985. Later the company entered into technical collaborations with m/s Mitsubishi Japan and with Arai Seisakusho ltd

Japan formanufacture of oil seals, O-rings, reed valves, molded rubber product, valves stem seals etc in1987. The percentage of collaboration is 88.84% forArai Seisakusho Ltd and14.29% forMitsubishi Corporation

B.T.BANGERA MANAGING DIRECTOR

HI-TECH ARAI LTD

Growing and achieving excellence through people is the motive of the organization. The core belief is that it is possible to achieve zero defects and achieve leadership in the market. The company also owns 23 wind mills each with the capacity of producing 11MW power. Hi-Tech Arai is the only manufacturer of reed valves in India. I-Tech Arai is controlled by 9 boards of directors. Among them

3 Promoter Directors

5 Directors from Arai Seisakusho Ltd

1 Director form Mitsubishi Corporation

MISSION:

To produce high quality products

At competitive prices

Combined with on-time delivery

Strictly adopting environmentalfriendly processes.

VISION: 1993: Market leader in the country in 5 years

1997: One of the top 3 in the world andin the field of Oil Seals

2007: To become thepreferred supplier of all customers

2010: Aims to touch 400 corore turn over by overtaking the past one of294 crore

QUALITY & ENVIRONMENTAL POLICY

Strive for continual improvement of our quality performance by meeting the changing requirements of our customers and our environmental performance byprevention of pollution and maintenance of wastes.

Manufactures high quality products at competitive prices by adhering to the system, processes and procedures and continually improving the same.

Promote energy savings and conservation of resources.

Comply with all applicable legislative, regulation and other requirements including those that apply to environmental aspects governing our activities.

Achieve the above by creating awareness among our employees through propertraining and providing conductive work environment.

MILESTONES:

1985: Hi-Tech Ancillaries was registered.

1986: First unit in Tanakkankulam was started.

1987: Technical collaboration with Arai Seisakusho Company Ltd, Japan.

1990: Totally professionalized.

1991: Second unit in Trichy was started.

1991: Awarded best SSI unit in the District.

1992: Awarded best SSI unit in the State.

1993: Third unit in K Pudur was started.

1994: Joint venture with Arai Seisakusho & Mitsubishi Corporation, Japan.

1994: Hi-Tech Ancillaries changed to Hi-Tech Arai Ltd.

1995: New compounding unit in Kappalur.

1995: Fourth unit in K Pudur.

1997: Fifth unit in K Pudur (dedicated to MUL)

1999: Most modern factory at K Pudur.

2000: Won 1stprize on quality circle convention at state level & regional Level.

2000: Madurai jasmine quality circle (National level)

2000: Initiation of Environment Management System certification Program &obtained the certification in July

2001: White raised quality control won1st prize in state level & national Level.

2001: Quality award from Lucas TVS Ltd.

2002: Award from Keihin Lie Ltd Pune for cost optimization.

2003: Awarded best SSI unit in the State Level.

2003: The Company was accredited ISO 9001:2000

Certification

2005: CII & APAC awarded Best Industry practicing the HIV/AIDS Prevention for its Aids prevention and control project.

2006: First Export order from China.

2008: Received ISO TS-16949:2002.

2010: Himalaya quality circle of Hi-Tech Arai ltd won the Par Excellence Award in the national convention on quality concepts-2010held at Visakhapatnam.Company products:

Oil seal

O Rings

Reed valve Assembly

Joint carburetor

Moulded Rubber Products

PROFILE OF PRODUCTS

a) Oil Seal: Oil seal is a micro precision product.

Oilsealsareespeciallymeantforpreventingoil leakage particularly in two wheelers & four wheelers like wheel hubs, front fork, transmission, and gear shift arm etc.,

Failure of oil seal in engine parts may lead to a serious damage to the vehicle.b) O Rings:

Circular products having round cross-section or any customers

specified sectional from which just fits in assemblies (pumps,

carburetors etc) to avoid or stop leakage of fluid gas from the

system.

c) Reed Valve Assembly:

Reed valve assembly is used in all modern two stroke engines as

a device to control over air fuel mixture sent into the engine

combustion chamber.

It is used for fuel efficiency and optimum output.

Reed valve assembly ensure complete combustion of fuel inside

the engine combustion chamber for avoiding emission of

unburned gases thereby contributing towards pollution control.

c) Join carburetor:

Itisadevicethatblendsairandfuelforaninternalcombustion

engine

The carburetor works on Bernoulli's principle: the faster air moves, the lower its static pressure, and the higher its dynamic pressure.

d) Moulded Rubber Products:

Moulded rubber products are the products developed to suit

the specifications and design of customers, so as to meet the

Exact working conditions of particular model of vehicles.

Usually the moulded rubber products reduce the noise, stroke

Vibrations and protect certain othercomponents from dust,

Water, oil etc.

The company is the single source of supply for mouldedproducts throughout the country.