By Sumantra Bibhuti Barooah
New Delhi: September was a historic month for Endurance Technologies, a homegrown major supplier of various components for two and three-wheelers. The INR 6,500-crore company which began commercial production of the first batch of ABS units from the month-end added the first electronic component to its product portfolio. Endurance converted its present production facility in Aurangabad to manufacture up to 400,000 single channel ABS modulators a year. Production will be gradually ramped up, starting with 8,000 units this month.
Endurance Technologies’ new business is the reflection of the new opportunities triggered by regulations and megatrends. For the Tier 1 company, the regulation which makes it mandatory for two-wheelers above 125cc to be fitted with ABS from April 2019, provided the new opportunity.
Anurang Jain, MD, Endurance Technologies, anticipated the opportunity and signed the technology license agreement with BWI North America in 2017. “We expect to reach peak capacity in the current plant by July next year,” he told ETAuto. Jain wants to set up adequate capacity to tap the domestic ABS market size of around 3.5 million units.
The market opportunity is big, and so is the competition. Endurance Technologies, the only Indian two-wheeler ABS manufacturer according to Jain, will take on the German biggies Bosch and Continental, and the Japanese supplier Nissin in the ABS market. Of the three, Bosch has an estimated market share of over 80%.
Jain counts on affordable technology and excellence for his company to gain a respectable share. The first generation entrepreneur swears by technology as the key strategy to gain business. “Technology, at the end of the day, should offer better performance, durability, and cost,” he said.
Endurance Technologies spent around INR 55 crore to set up a proving ground on a 29-acre plot near Aurangabad to get more first-time-right products and reduce development cost and time. It played a crucial role in the company’s ABS development programme. “We must have saved around a year of lead time and a significant amount of money because of it,” Jain said.
“It would have cost us crores to do the testing and validation work for the ABS outside,” Ravindra Kharul, CTO, Endurance Technologies, said. In the absence of the proving ground, Endurance Technologies’ ABS market entry could have been delayed by two years or so. A six months’ loss due to Covid couldn’t be avoided though, he added.
A journey of its own kind
Of the four product divisions, aluminium castings, suspension, transmission, and braking systems at Endurance Technologies, braking systems is the third largest revenue generator for it. Given the market opportunity for braking systems, the pecking order could change in the near future. “Braking systems is the fastest growing vertical in the company,” Jain said. The company’s entry into the ABS segment is “a journey of its own kind”, he added.
The Covid pandemic restricted international travels for both Endurance and BWI. But the developmental work continued in their respective facilities, with both leveraging the time zone difference. “We were utilising virtually 24 hours of the day, as the American team worked on certain aspects while it was night in India, and vice-versa”, Kharul said.
Along with the ABS business move, Endurance Technologies has also made a backward integration move of aluminium forging for captive use. This move is both a cost saving and a “de-risking” strategy. De-risking because most of the two-wheeler industry’s requirement for aluminium forged products is imported from European countries as there’s only one domestic supplier, Jain said.
As the market journey for the new business commences, Jain is busy strategising some more moves. Some of them could be inorganic, to tap the growing EV megatrend. A few others are for the existing businesses. For the more regular expansion activities, Endurance Technologies has lined up a capex plan of INR 300 crore for the current financial year, Jain said.
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