January 2016 | Sangeeta Menon
'This year looks set to be a record year'
York Transport Equipment (Asia) has been based in Singapore since 1985. In the business of manufacturing axles and suspensions for trailers, York became a Tata enterprise in 2007 when it was acquired by TRF. Since then its footprint has grown rapidly outside Singapore to cover India, China, the Middle East, South Africa, Australia, Indonesia, Thailand and Turkey, among others.
PV Balasubramaniam, CEO, York group of companies, in an interview with Sangeeta Menon, explains that one of the reasons for the company’s success is that customers are quick to perceive the benefits of a good quality product that reduces lifecycle costs.
York became part of the Tata group in 2007. Has that translated into new directions at the organisation?
At the time of acquisition, York’s manufacturing was based out of two plants in Singapore. Our manufacturing setup and capabilities have changed quite a bit since then. Today our manufacturing plants are located in China and India. One Singapore plant has been shut down and the other is being used as a warehouse for the South East Asia market.
Before it became a Tata company, York did not have a strong engineering and R&D strategy as the focus was more on outsourced contract manufacturing. Post-2007, we recognised the need for this and set up a dedicated engineering and R&D unit in Pune, India, where we carry out detailing, analysis and validation of the new products that we develop.
Has there been a shift in York’s focus markets in recent years?
Prior to 2007, the main markets were Australia, Indonesia, Thailand, Saudi Arabia, the UAE, and some markets in Africa such as Nigeria, Ivory Coast, Tunisia, Zimbabwe and Malawi. Since then we have entered new markets and expanded our business in existing markets. We went into South Africa, where we are now the market leader with almost 30 percent market share. We expanded our business in Thailand and continue to be the market leader in Indonesia.
|York's footprint has grown rapidly to cover India, China, the Middle East, South Africa, Australia and Indonesia, among others|
The core markets for us now are India, Australia, Indonesia, Thailand and the UAE. In UAE, we have set up an office with Tata International in Dubai, and also started a warehousing operation. The other markets to watch in the Middle East are Saudi Arabia, Qatar and Iran.
How do you see the Indian market shaping?
When we entered India in 2007, the domestic trailer sector was unorganised and manufacturers had no real idea of the benefits of axles and suspensions made specifically for trailers. We invested a lot of effort in educating the Indian market and we slowly started gaining acceptance.
Today 70 percent of the Indian trailer market is organised. Even though the Indian market is price-sensitive, we find that people are willing to pay for quality. Despite having the most expensive product in India, we have the maximum market share because customers realise that our products lower their total cost of ownership. We have over 200 service stations spread across the country. Five years ago, we could not have imagined having this kind of a distribution and service network.
We started manufacturing in India in 2010-11 at Pune to cater to the growing Indian market. We did exceedingly well in India that year. The market collapsed in 2012-13 and we struggled for two years. However, 2014-15 was a good year and 2015-16 looks set to be a record year. India has been quite a success story, and along with China, it will lead the growth for York in the coming years.
What is the current mix of products at York? Do you expect any change on that front?
Axles contribute to around 60 percent of the business, while suspensions and accessories make up for 30 percent and 10 percent, respectively. Within suspensions, we have almost a 50-50 split for air suspensions and mechanical suspensions. We have capacity of around 50,000 axles per annum in India, and the China facility will soon reach a similar capacity. In terms of new directions, we tied up last year with the US-based Temper Corporation, which has developed a patented technology for measured preloading of bearings.
|York specialises in axles and suspensions for trailers|
Is there a plan to sharpen the company’s focus on R&D and innovation?
Yes, definitely. The deal with Temper is an example of how we will continue to look for new technologies to complement our own R&D efforts. We stumbled upon this company because of our thrust on innovation and our constant endeavour to create better products and solutions for our customers.
Our Pune facility will lead our research and innovation initiative for new product development. We also have a clear emphasis on standardising the quality and experience that we deliver to our customers across the world. No matter where in the world a York product is being used, the customer must experience a single quality and a single standard.