Archive for ‘Manufacturing’


Transforming lives in India’s manufacturing hubs – BBC News

By day she works as an assistant engineer, leading a team of 10 in a car factory manufacturing parts for Renault-Nissan Alliance vehicles.

The Make in India scheme aims to make the country a global manufacturing hub

Like hundreds of thousands of people across India, Sujitha‘s journey from an under-developed village in India’s south to the outskirts of the city of Chennai (Madras), has transformed her life.

“My native place is a small village called Kizhattur. There is not even proper transport over there,” says Sujitha. “Because I grew up in that situation, I knew that I had to study hard and find a job.”

And she did just that – albeit against the wishes of her family who wanted her to marry and settle down.Sujitha secured a diploma and when Renault-Nissan advertised a position for a junior engineer five years ago, she jumped at the opportunity.”I can’t even imagine what I would be doing if I did not work in this factory. Perhaps I would be in the village doing small jobs on the farm,” she says. “I would just about make ends meet.”

Detroit of Asia

Nissan and Renault are two of several international carmakers that have set up shop outside Chennai in the last 10 years.

Nearly a fifth of all cars made in India are produced in the area around Chennai in Tamil Nadu state

Today the area, known as the “Detroit of Asia”, is a thriving manufacturing hub where cars are produced for export as well as for the domestic market.India makes about 24 million vehicles a year, nearly a fifth of them in this region of Tamil Nadu state.

“We have seen a number of other car manufacturers establish plants in the state and that has helped us attract and help local suppliers relocate and set up in Tamil Nadu itself,” says Colin Macdonald, managing director of Renault-Nissan.

“Since 2010, we had about 15% of our suppliers in the Tamil Nadu area. We are now operating with 60% of our Indian suppliers in Tamil Nadu. So from an employment perspective, this is huge.

“High unemployment

Creating jobs is central to Prime Minister Narendra Modi‘s Make in India campaign, an effort to promote inclusive growth in the country.Modi has promised foreign players he will make it easier to do business in India.

But more than two years after taking power, and after introducing a raft of policies, unemployment rates are at a five-year high.According to a recent government survey, about 77% of Indian households have no regular wage or salaried person, and so for many, life is not improving fast enough.

Domestic market growth

Despite that, success in places like Chennai is a sign that India remains appealing to foreign companies.Now that the area has become an auto hub, cost-effective raw materials can be sourced. With the port less than 100km away, it is easy to import parts and export products back out. Labour is cheap too.

Several car companies have set up shop on the outskirts of Chennai. Workers here are seen at Ford’s plant in Chengalpattu

The growth of the domestic market only adds to India’s appeal.”Today, only 20 in 1,000 people in India own a vehicle but we expect that to grow dramatically in the next five years and we expect the market to be five million cars by 2020, making India the third biggest market on the planet,” says Colin Macdonald.

A matter of pride

For Sujitha Rajendrababu, owning a car one day has become more of a reality than a dream.

“What I had dreamed of becoming in the future was made true by this job. I do not know how to express this.”

The daughter of a farmer, she has already used the money she has earned to buy a fridge, a TV, some jewellery and even a holiday around India. But her ambitions don’t stop there.

“My long-term goal is to become the manager of the stamping shop. I don’t only want to be the manager of the stamping shop, but of this organisation as well.”

And she wants the same for other people just like her.

“A lot of people in my village ask me if I can help them find jobs for their children. That makes me feel proud.”

Source: Transforming lives in India’s manufacturing hubs – BBC News


Daimler to sell Mercedes-Benz branded all-electric battery cars in China | Reuters

Germany’s Daimler AG plans to sell Mercedes-Benz branded all-electric battery cars in China, its China chief said on Wednesday, as the automaker capitalizes on government initiatives aimed at growing the market for new-energy vehicles (NEVs).

Hubertus Troska said the government’s push, which involves tax breaks and other policy support, helped the number of NEVs sold last year surpass 300,000, making China the world’s biggest market for electric, gasoline-electric and other such vehicles.

The majority of those vehicles were priced under 250,000 yuan ($37,515) and offered mainly by Chinese automakers, Troska said at an analyst and investor conference in Beijing.

Given factors including the government push – which falls under a broader drive to cut oil dependence and air pollution – Daimler is “very confident NEVs will be an important factor of the Chinese market,” Troska said.”Mercedes-Benz is also going to play a role in China in NEVs,” he said, referring to the planned cars.

He also said he sees demand over time shifting toward a “higher segment” of more expensive and capable all-electric battery cars and plug-in hybrids.Troska did not elaborate on the planned cars such as cost, pricing, models or launch dates. But investor relations head Björn Scheib said Daimler plans to show a concept electric car at the Paris Motor Show which opens to the public on Oct. 1.

Daimler currently sells one all-electric battery model in China under its smart brand, and one under the Denza brand it operates with local partner BYD Co Ltd.

Its China line-up also includes plug-in gasoline-electric hybrid versions of the Mercedes-Benz C-class and S-class sedans and GLE crossover sport utility vehicle.

Source: Daimler to sell Mercedes-Benz branded all-electric battery cars in China | Reuters


Indian manufacturing growth at 13-month high in August | Reuters

Indian factory activity expanded at its fastest pace since mid-2015 in August, helped by surging new orders, while only modest price increases should give the central bank scope to ease policy further, a survey showed.

The data will cheer policymakers after an official report on Wednesday showed Indian annual economic growth slowed in the April-June quarter to 7.1 percent, short of expectations for 7.6 percent in a Reuters poll.

The Nikkei/Markit Manufacturing Purchasing Managers Index rose to 52.6 in August from July’s 51.8, marking its eighth month above the 50 level that separates growth from contraction.

“Manufacturing PMI data show that the positive momentum seen at the beginning of the second semester has been carried over into August, with expansion rates for new work, buying levels and production accelerating further,” said Pollyanna De Lima, economist at survey compiler Markit.

The new orders sub-index, which takes into account both domestic and external demand, was 54.8 in August – its highest since December 2014 and indicating robust demand for Indian manufactured goods.

That pushed factories to increase production and the output sub-index climbed to a 12-month peak in August.But price growth lost momentum last month, with raw material costs increasing at their weakest rate in six months and output prices barely rising at all, suggesting consumer inflation could cool in coming months.

“In light of these numbers, the Reserve Bank of India has scope to loosen monetary policy in the upcoming meeting to further support economic growth in India,” De Lima said.On Oct. 4, the RBI is due to announce its first policy decision under newly-appointed governor Urjit Patel, who economists expect to broadly follow in outgoing chief Raghuram Rajan‘s footsteps.

Economists in a Reuters poll last month predicted the RBI would cut the repo rate by 25 basis points to 6.25 percent in the final three months of the year.

They see little steam left in the RBI’s current easing cycle, in which the policy repo rate has come down by 150 basis points since January 2015, to its lowest in more than five years.Consumer inflation in India was 6.07 percent in July, well above the RBI’s March 2017 medium-term target of 5 percent.

Source: Indian manufacturing growth at 13-month high in August | Reuters


This Is Why It Is Difficult to Make in India – India Real Time – WSJ

PHOTO: Employees worked on the cabin of a Sikorsky S-92 at the Tata Advanced Systems Ltd. facility at Adibatla in the south Indian city of Hyderabad, June 07, 2016.

Having signed a string of multibillion-dollar orders from foreign firms to make parts for helicopters, jet fighters and trains, India is struggling to find people with the skills to build them.

In a $3.3 billion push, it is racing to equip 15 million people by 2020 with the skills necessary to realize Indian Prime Minister Narendra Modi’s aim to bring more high-grade manufacturing to the country.

But the challenges are significant at a time when foreign suppliers including Boeing Co., Airbus Group SE and Alstom SA often can’t find the employees with the training and experience to help fulfill Mr. Modi’s ‘Make in India’ program.E

More than 80% of engineers in India are “unemployable”, Aspiring Minds, an Indian employability assessment firm, said in a January report after a study of about 150,000 engineering students in about 650 engineering colleges in the country.

A lack of specialized courses mean companies have to train their own people from scratch. At one training center outside Hyderabad in southern India, young workers in their early 20s toil with high-precision hand tools as they are taught for the first time how to fix rivets on aircraft-grade aluminum sheets as part of a year-long training program.

Source: This Is Why It Is Difficult to Make in India – India Real Time – WSJ


India factory growth at 3-month high in June on strong demand | Reuters

Indian manufacturing activity edged up to a three-month high in June, driven by stronger demand, but firms barely raised prices, a private survey showed, leaving the door open for another rate cut by the central bank this year.

The Nikkei/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 51.7 in June from May’s 50.7, its sixth month above the 50 mark that separates growth from contraction after it fell below that level in December for the first time in more than two years.

“The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business,” said Pollyanna De Lima, economist at Markit.

“There were also signs of an improvement in overseas markets, as new foreign orders rose. However, it looks as if lackluster global demand remains a headwind for Indian manufacturers.

“While retail inflation hit a near two-year high in May, the survey’s output prices sub-index fell to a three-month low of 50.1 in June versus 50.5 the previous month, as input costs rose at a weaker pace.

There was also broadly no change to manufacturing employment in India during June, the survey showed.

“This lack of inflationary pressures provides the Reserve Bank of India (RBI) with further leeway to boost economic growth through cutting its benchmark rate,” said De Lima.

According to a Reuters poll, RBI Governor Raghuram Rajan could deliver another rate cut before his term ends in September. After cutting rates in April, he has left the key interest rate unchanged at a five-year low of 6.50 percent.

However, at the June policy meeting he signalled another rate cut later in the year if monsoon rains were sufficient enough to dampen upward pressure on food prices.

Rains are expected to be above average this year which could keep prices in control and give the government room to focus on key economic reforms in tandem with low interest rates.

Source: India factory growth at 3-month high in June on strong demand | Reuters


Why It Could Be a While Before Apple Can Open Stores in India – India Real Time – WSJ

India’s finance ministry has rejected a government-panel recommendation to exempt Apple Inc. from local sourcing requirements, two government officials said, in a decision that could effectively block the technology company’s plan to open its own retail stores in the country.

“We are sticking to the old policy,“ said one of the officials. “We want local sourcing for job creation. You can’t have a situation where people view India only as a market. Let them start doing some manufacturing here.”

An Apple spokeswoman didn’t immediately respond to a request for comment.

India is a crucial market for Apple as it holds huge sales potential. Like China, which for years fueled the Cupertino, Calif., company’s growth, India is a large, developing economy in which more people can afford its high-end gadgets every year.

India wants to use the company’s interest in its market to attract investment and create the manufacturing facilities and jobs the country needs to sustain long-term growth.

Source: Why It Could Be a While Before Apple Can Open Stores in India – India Real Time – WSJ


Foxconn replaces ‘60,000 factory workers with robots’ – BBC News

If manufacturers like Foxconn and high street companies like McDonald’s and, no doubt soon, offices too start replacing humans with robots, where will it all end? Where will all the ‘surplus’ people find jobs and pay.  And, eventually, who will be able to afford the iPhones, the hamburgers and so forth?  Won’t it be self-defeating in the long run for the employers with no customers or, at best, not enough customers to keep all the robots occupied and earning their keep.

“One factory has “reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots”, a government official told the South China Morning Post.

Xu Yulian, head of publicity for the Kunshan region, added: “More companies are likely to follow suit.”

China is investing heavily in a robot workforce.

In a statement to the BBC, Foxconn Technology Group confirmed that it was automating “many of the manufacturing tasks associated with our operations” but denied that it meant long-term job losses.

“We are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees, and through training, also enable our employees to focus on higher value-added elements in the manufacturing process, such as research and development, process control and quality control.

“We will continue to harness automation and manpower in our manufacturing operations, and we expect to maintain our significant workforce in China.”

Since September 2014, 505 factories across Dongguan, in the Guangdong province, have invested 4.2bn yuan (£430m) in robots, aiming to replace thousands of workers.

Kunshan, Jiangsu province, is a manufacturing hub for the electronics industry.

Economists have issued dire warnings about how automation will affect the job market, with one report, from consultants Deloitte in partnership with Oxford University, suggesting that 35% of jobs were at risk over the next 20 years.

Former McDonald’s chief executive Ed Rensi recently told the US’s Fox Business programme a minimum-wage increase to $15 an hour would make companies consider robot workers.

“It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who is inefficient, making $15 an hour bagging French fries,” he said.”

Source: Foxconn replaces ‘60,000 factory workers with robots’ – BBC News


U.S. Design Company Redesigns the Cycle Rickshaw to Make it ‘Sexy’ – India Real Time – WSJ

It is not quite reinventing the wheel, but one company is trying to overhaul an old-fashioned form of public transport–the cycle rickshaw.

Funded by the Asian Development Bank, Colorado-based Catapult Design has produced a new, flashy design for the vehicle — ubiquitous in Indian and other South Asian cities — that includes electrical assistance and gears for tricky hills.

Cycle rickshaws, or pedicabs, in South Asia provide backbreaking but vital work for the drivers who pedal passengers often on short “last mile” trips from other forms of transport to their final destination.

Dhaka, Bangladesh’s capital, has half a million cycle rickshaws alone, Bradley Schroeder, who is leading the $340,000 project to develop an open-source design of the pedicab, said. But the design hasn’t improved much in 40 years.

The ADB will spend $150,000 on manufacturing 60 prototype vehicles and testing them in Nepal’s capital Kathmandu, and Lumbini, a tourism hotspot in the Himalayan nation and the birthplace of Buddha, over the coming months.

Half of the new rickshaws will be pedal-only, and the rest will have built-in electrical assistance provided by a lithium-ion battery, the company said.

Most rickshaws are currently made from tubular steel and if they have electrical assistance, it is provided by a heavy car battery, Mr. Schroeder said. Exposed parts of the rickshaw’s mechanics mean that clothes such as saris can become caught and cause accidents.

The new design is made from stainless steel and the mechanics are fully enclosed and include gears. The lithium batteries are more lightweight and the electrics comply with European Union standards, he added. The vinyl cover on the rickshaw provides protection from the elements.

“We wanted to make the body very sexy,” Mr. Schroeder said. The designers talked about adding seatbelts but decided against it since the the speeds were so low.

The new cabs are more expensive – they will cost $750, compared with about $400 for an average rickshaw. That cost, Mr. Schroeder says, is a result of the reduced weight and the addition of smartphone vehicle-hailing and driver-evaluation technologies as well as touch screens that can deliver tour guides to passengers.

“Weight is everything in the pedicab industry,” Mr. Schroeder wrote in an emailed response. The lighter model will mean that the pedicab will have a top speed of 15.5 miles an hour, but, Mr. Schroeder wrote, “essentially the vehicle will go as fast as the wallah (driver) can pedal and since the vehicle is lighter and now has gears, the wallah should be able to go faster.”

The drivers of the rickshaws for the trial in Nepal will be taken from the existing pool of the cities’ rickshaw chauffeurs, Mr. Schroeder said.

His team spent several months interviewing drivers, owners and garages. “There are a lot of questions, it’s not always easy. But over time we win them over and they are happy,” he said.

“They live on the fringes of society and are very concerned about making money every day,” he said. “They can see their industry is in decline.’

But although the cycle rickshaw is steeped in tradition, its drivers aren’t resistant to change.

“If you show them a 3-D printed model of the design, they’re blown away,” Mr. Schroeder said.

After the trial, Mr. Schroeder hopes a bicycle, motorcycle or auto company picks up the unpatented design and uses it to manufacture the product.

Source: U.S. Design Company Redesigns the Cycle Rickshaw to Make it ‘Sexy’ – India Real Time – WSJ


In ‘Milestone’ Move, GM to Sell Chinese-Made Cars in U.S. – China Real Time Report – WSJ

Yale Zhang, the head of Shanghai-based consultancy Automotive Foresight, called the export of the Buick Envision SUV from China to the U.S. a “landmark.”

“It means that China’s manufacturing quality has met the requirements of the world’s strictest market,” he said.

GM introduced the Buick Envision SUV in China last October. Since then, it has been one of the best-selling cars sold by GM in the country. According to the China Association of Automobile Manufacturers, a government-backed industry group, the Envision ranked seventh in China’s fast-growing SUV market in October, with monthly sales of 17,300 vehicles. Data from Automotive Foresight show that sales of Buick Envision SUVs totaled 100,826 cars in the period from January to September.

Despite the progress, experts say that Chinese home-grown car manufacturers will continue struggling to compete with foreign brands, even in China.

China is already the world’s largest market for cars in terms of sales and production. But global auto makers have been slow to ship Chinese vehicles to the U.S. and Europe on worries that Western buyers would shun them over quality concerns. European car maker Volvo Car Corp., which is owned by China’s Zhejiang Geely Holding Group Co., was the first to challenge that assumption when it started shipping sedans from a plant in China to the U.S. this spring. A Volvo China spokesman declined to disclose how many Chinese-made Volvos have been shipped to the U.S., saying only that it is a “small volume.”

A study released by automotive industry consultants J.D. Power in October shows that although Chinese car makers have been improving in quality in recent years, they still lag behind international brands in producing reliable vehicles. According to the study, Chinese brands had 120 problems for every 100 vehicles this year, compared with 131 in 2014 and 155 in 2013. International brands had 98 problems for every 100 vehicles in 2015.

“Buick is a household brand in the U.S.,” said Ms. Li from Deren Electronic. “American consumers are probably not aware that the car is made in China. But Chinese local  auto brands, like Chery and Geely, are little known outside of China.” Victor Yang, a spokesman for Zhejiang Geely Holding Group Co., said that as a global player, it’s normal for GM to sell its China-made cars at home in the U.S. “All the cars made by foreign companies in China should be produced in line with their global standards,” Mr. Yang said.

“Geely aims to sell its cars to developed markets including the U.S. By doing so, our quality and technology will be well recognized,” he said, without specifying a time frame. Jin Yibo, a vice president for Chery Automobile, said that Chinese home-grown auto makers “will absolutely go to the U.S. and other developed markets to sell their cars.”

But he cautioned: “It will take time.”

Source: In ‘Milestone’ Move, GM to Sell Chinese-Made Cars in U.S. – China Real Time Report – WSJ


Prepare for Takeoff: China Rolls Out First Large Passenger Jet – China Real Time Report – WSJ

China’s first large passenger jet rolled off the assembly line on Monday after years of delays, bringing Beijing’s dream of developing a rival to Boeing Co. and Airbus Group SE closer to reality.

As WSJ’s Chun Han Wong reports: Still, the single-aisle C919 airliner won’t be delivered to airlines for at least another three years, highlighting the difficulties

China has faced in becoming a global player in aviation. Developed by the state-run Commercial Aircraft Corp. of China Ltd. (Comac), the twin-engine jet was initially set for its first flight in 2014, ahead of commercial deliveries starting in 2016. Production setbacks forced Comac to extend its deadlines repeatedly. Company executives say flight testing should start next year, with deliveries expected in 2018 or 2019 at the earliest.

Thousands of guests, including government officials and aerospace executives, witnessed the C919’s rollout at an assembly plant near Shanghai’s Pudong International Airport, according to Chinese state media.

Source: Prepare for Takeoff: China Rolls Out First Large Passenger Jet – China Real Time Report – WSJ

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