Diesel engine industry is ready to meet the myriad upcoming market challenges driven by emission compliance, operational economy and user expectations.
To begin with, Off Highway Research, a part of KHL group in their half yearly report that in terms of percentage growth, India is expected to be the most buoyant major market in the near-term, with 21 per cent growth forecast this year, and further improvements out-pacing global average growth in 2017 and 2018. It is expected to be the only major construction equipment market to show growth in 2016. In terms of numbers they expect 58,465 units to be sold in the country during 2016, adding the number of diesel engines required for generators, air compressors agriculture pumps and other direct drive applications in utilities sectors, is the overall purview of this market´s size, in addition to automotive, railways, marine, defense and other sectors.
Our focus is on diesel engines which are the prime power source and backbone of all light, medium and heavy construction and mining equipment, across the board. Over the years, the emission norms have been updated and made more stringent. The next level emission norms are around the corner and major equipment OEMs will have to incorporate the engines that conform to the emerging emission landscape. It is evident that that in line with the changing needs of the market, the engine makers are endeavouring to deliver diesel engines with high-tech systems to provide the best possible fuel efficiency, desired emission compliance and cost-effective products, in India´s highly price-sensitive and competitive market.
According to recent industry analyses, APAC accounted for the highest market share for diesel engines in 2015. The demand for diesel engines is expected to be on the rise, owing to the high growth of the automotive industry and the growing construction activities in this region. The region is witnessing increased investments in the construction market, which has driven the demand for diesel-powered construction, mining and material handling equipment.
According to Farrokh Cooper, Chairman and Managing Director, Cooper Corporation, the total market for engines currently in India is about 500,000 units per annum including imports from China. Out of this the share of industrial engines is about 200,000 units.
¨Sectors like road projects and mining are picking up. With the market growth in these segments, we see a positive trend and a good business from the equipment side for our engines ¨mentions S Prabhakaran, Vice President Product Management Industrial, AB Volvo Penta, Sweden.
Products and solutions
Although the product range required for construction and mining equipment is huge, many OEMs have in house and captive solutions, while others offer a selected range of diesel engines in conformance to their individual markets.
Volvo Penta, a major player in the engines market, offers various ranges of engines to construction equipment OEMs apart from other industrial OEMs. Prabhakaran elaborates on the company´s offering, ¨Volvo Penta today offers engines from 105 kw to 565 kw for off-road applications in five models: 5 litre, 8 litre, 11 litre, 13 litre and 16 litre. In power generation, we offer engines from 85 KVA up to 650 KVA from our 5 litre, 7 litre, 13 litre and 16 litre engines. In gensets, we operate in the 100-650 KVA range in the Indian market. The market size would be roughly about 10,000 units for the whole range.¨ He further adds, ¨When we do the portfolio of our products and services, we have a global perspective. We try to offer the most competitive and the latest technical solution for all the markets and adapting to suit those environments prevalent there. Anywhere in the world, whether it is Africa, India, any of the developed market or developing market, the product is the same, only need to fine tune to meet the local environment. In that way, we are offering the same product across the world.¨
Cooper Corporation offers engines to mainly the gensets´ market. ¨Our existing power range is 12-280 hp. By next year, we are planning to enhance the range to 5-625 hp,¨ informs Cooper.
Continuous upgrade in technology and engineering is a mantra for the diesel engine manufacturing community. Some common aspects are:
Emission compliance and fuel economy: Fuel efficiency in tandem with emission compliance rules this tech trend. Some manufacturers are ready with advance generation engines while others not far behind. However, they offer engines in accordance to relevant regions and progress to upgraded versions commensurate to the market conditions.
Prabhakaran elaborates ¨As a leader in engine technology, we offer engines meeting all emission norms. Our minimum standard is EU Stage-II or EPA Tier II, and then we moved to Stage-III or Tier-III and Tier-IV Final, and in 2019 Tier-V is coming in Europe. Currently, in India when it comes to off-road, we have the emission standard called CEV-III which is equivalent to EU Stage-III. We have the products conforming to this norm and are available in the market. Even we have the products that can comply with the next emission level, the CEV-IV which is equivalent to Tier-IV Final or EU Stage IV. So as and when the new emission norms are announced, we have the products to offer.¨
Comments Cooper, ¨When we formed tie-up with Ricardo in 2006 we had already decided our engines to be compliant with the latest emission standards abroad. So we don´t have a problem in meeting the requirements of BS-IV. For BS-VI, depending on the requirement either for construction equipment, road equipment or such equipment, some additional after-treatment to the fuel is needed. This will depend on the quality of the fuel available and sulphur content in it.¨
¨The construction equipment vehicle (CEV) engine norms are not yet published which are in the final stages ¨says Cooper. He further explains his modus operendi ¨We work closely with the Indian Diesel Engine Manufacturers Association (IDEMA) which plays a major role in terms of formulating the emission norms along with AIAI. They say that there is a problem in the availability of 10 ppm sulphur fuel to meet the latest emission norm. I think very soon this could be solved and the norms are going to be released for construction equipment engines also, based on the commitment from the Union Minister for Petroleum on the availability of diesel fuel with 10 ppm sulphur.¨
On enhancing fuel efficiency, Cooper describes his initiatives,¨Using high-pressure fuel injection equipment, optimising timing and using low friction materials can enhance the efficiency of engines. Fuel system pressures are going to play a mjor role in addition to optimising the injection timings and also using the compression ratio of the engine, because higher the emission better the emission will be. In addition, we need to look into the other aspects such as the fuel economy. It is a big challenge for the industry to meet both the emission norms and fuel economy.¨ Lightweighting and downsizing: Reducing the weight of the individual engine components and downsizing the displacement capacity of engine but increasing total power out, automatically contributes to fuel efficiency. The latest trends in engines and transmission products are lightweighting and downsizing by design or use of alternate materials or both. Use of these concepts is leading to improved operational efficiency by virtue a higher power to weight ratio. A high power to weight ratio results in lower power required to overcome the inertia of higher weights and thus lower fuel required leading to improved fuel economy.
According to Prabhakaran, predominantly lightweighting is an automotive phenomena. He adds, ¨When it comes to Volvo our heritage comes from automotive - commercial vehicles background. So automatically, all our products have the features required on the Lightweighting and all are automatically incorporated into our range. Whenever depending on the application needs, they are modified to suit those requirements. For eg, we use a lot of aluminium in order to reduce weight. Also we develop more power output for displacement, thereby size of the engine is compact. Our engine efficiency is quite good so the heat rejection to the radiator or coolant is very less. We also use a lot of composite materials which also helps in reducing the weight and noise coming out of the valve cover.¨
Cooper says, ¨We do Lightweighting by reducing the section thickness of casting and using aluminum and composite materials. Our engines are already downsized because the power density compared to competition is very good. We are ahead of the time in this concept.¨
Cost impact: For years, the industry has demanded premium prices for technically advanced and fuel efficient engines, under the guise of so called plausible reasons resulting in higher production costs. This paradigm no longer applies to current global and domestic markets. In the present business environment, only the best and the cheapest will survive. As such the industry is redefining final price points for their offerings packaged innovatively..
Prabhakaran comments, ¨I think the business today is quite global and there are no market restrictions for any player to operate in this country. We have aligned with respect to the international market. When it comes to commercial front, we focus on the top of the market where our range of engines is acceptable to customers who look for long running hours, high reliability and durability, total cost of ownership and uptime where does it matter.¨
Cooper comments, ¨I don´t think it is very much because we are almost 90 per cent to the way there.¨
On the change in customer expectations with respect to the changing industry trends Prabhakaran states, ¨I don´t think the expectations have been changed, but if you look at from a manufacturers´ point of view, everybody would like to have a shorter lead time and seamless logistics solution. We are able to provide this. From a consumption point of view, India is one of the top five markets in the world. So our intention is to get the production in a step-by-step approach for India. So by first quarter of 2017, we will roll out some of our off-road engines from our Indian facility based at Pithampur.¨
As stated earlier. the Indian construction equipment market is going to be most buoyant in the near future, according to Off-Highway Research report. With many global OEMs set up manufacturing facilities in India and the new emission norms around the corner, the engine manufacturers have new market opportunities opening up and a good business out of it.
¨Volvo Penta would like to remain a significant player in the Indian market providing solutions which are interesting for our customers and value to their business which will add value to our environment as a whole. So in this process we would like to keep offering new emission steps as and when it happens, hopefully it will happen in 2019 or 2020. So we are excited to offer our product range as we already have it in our portfolio. Also we are looking at enhancing the energy efficiency and the economy of our operations for the customers. We would like to see ourselves both on the electro mobility and the connected services towards our market place as and when the market is ready,¨ states Prabhakaran.
More potential entrants are waiting in the wings to join this existing growth environment full of promise for the futue.