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  The products offered by the Perkins and their use.

  Indian market demand of those products

  Business Environment of those products in India

  Competitive Scenario of those products in India

  Ability of the company

Diesel Engines 

Overview 

Industry Trends  

Supply Side

Segments 

Market Characteristic

Future 

Segments in Engineering 

 

Choose a segment  

Overview 

  Market - predominantly for diesel engines - estimated at Rs 2,700 crs (US $ 627.9

mln). This market does not include engines used by the auto OEMs for their vehicle

manufacture   Diesel engines used either for stationary applications (captive power generation) or

as prime movers (for pumps, harvesters, threshers, expellers, flour mills etc.)    Small (< 5 HP) engines use kerosene / diesel as fuel    Rajkot and Agra - major centres for small HP engines   Exports trends - mainly in the smaller engines category  

Industry Trends Diesel Engines Production 

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   Diesel engines used as prime mover in captive power generation    Kerosene and petrol engines used primarily in the agricultural sector- <5 HP   Used mainly for industrial and starting applications. 

Applications Segment  Capacity  Application Areas Small range  2-20 HP  Pumpsets, agricultural machinery, water pumpsets, threshers,

harvestors, and oil expellers. Medium

range  20-25 HP  Tractors, power gensets, industrial applications 25-140HP  Power generation, industrial applications and others. 

Large range  140-400HP  Power generation(captive standby sets), industrial application

400-750HP  Power generation and marine applications. Very large

range  750-

1200HP  Power generation 

1200-7200HP  Power generation(base load) and marine applications. 

Supply Side Industry Structure 

  Around 30 - 35 players in the organised sector.    The unorganised sector dominates the lower HP (<20 HP) range because of duty

benefits.   Rajkot and Agra major centres for lower HP diesel engine production   Other centres are Agra, Ghaziabad, Kolhapur and Coimbatore. 

Imports (9,300nos.-1997-98)   No domestic manufacture of Gas engines- all engines imported. 

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  Major brands are Catterpillar, Cummins and Ruston.   Gas engines gaining popularity. Competition 

Segments 

2-10 HP    Kirloskar Oil Engines (KOEL) a major player.   Greaves a relative small player. 

20-140HP    Most large players addressing this market- KOEL, Greaves, Cummins, Hindustan

Powerplus.   Each of these players has tied up with international majors.   Ashok Leyland manufacturing engines for captive use; also supplies engines inthe market. 

140-750 HP    Dominated by Cummins India and Hindustan Powerplus. 

  Greaves has a marginal presence   KOEL not present in 300-2000 HP range   Entry of many global players since 1991. However, presence not high - Volvo-

Penta, Perkins, Detroit Diesel, Mitsubishi, Skoda and FG Wilson   Pace of indigenisation sets Cummins and Hindustan Powerplus apart.   Hindustan Powerplus- import content high. Cummins- has greater price

flexibility, wider product portfolio. Cummins India a global sourcing base (10,000engines/ year). 

VeryLarge    Wartsila NSD a major player in the above 1 MW category- over 70% share. 

  KOEL breaking ground. 

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 Market Characteristic MARKET 

  Market mainly for diesel engines. Petrol and kerosene engines usage limited to lower

rating and to the agricultural sector. Gas engines yet to take off - fuel availablity acriteria. 

  One of the most polluting industries. Emission norms in India not very stringentcurrently. Changes expected in the near future. 

PRODUCTS   < 20HP engines used primarily for agricultural machinery , irrigation purposes.

>20HP mainly used for power generation.   Gas engines continue to be imported.   Not all Indian products meet international standards. international emmission norms. 

PLAYERS   Local manufacturer presence mainly in the lower rating(<20HP). these players are

located in Rajkot and Agra.   Higher ratings catered to by large manufacturers who have an all - India presence 

TRADE   Sales primarily through original equipment assemblers of alternators and gensets

(OEAs), who procure engines to assemble generators   OEAs get special discounts on engines   Services provided through external authorised service dealers by the company   Excise duty- 16%; Import duties: Basic-25%, additional duty-10%,CVD-16% and

SAD-4% 

Future Key success factors 

  Technology differentiation critical   Superior technology   Lower fuel consumption   Lower noise levels 

  In the small HP range, price, availability of finance, reliability and ruggedness keys to

success. Similarly in the medium range, price, fuel efficiency and after sales service

critical. Efficiency, spares and service, turnkey project handling and price - keydifferentiators in the large and very large HP segments.  

  Focus on reducing costs of operation and maintenance   Solution based approach could aid business 

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  Reach to end user industries critical to success. Accreditation with consultants(project, electrical) to increase presence in the industrial sector 

Demand drivers   Directly linked to the investment in agriculture, infrastructure and industrial growth    Dependent on the power scenario in the country - unreliable, insufficient and erratic

power supply from electricity boards driving need for captive generation, hence

engines. Dependence on the power generation segment accounts for 50 - 55% of therevenue of all major players 

  Growth in the irrigation sector will drive demand for engines    Dependent on new projects in these sectors. Replacement demand low  

Business concerns   High proliferation of small scale, low-tech units leading to excessive price

competition and compromise on quality   One of the highly polluting industries both in terms of atmospheric and noise

pollution. Stringent regulation from government could affect the industry   With increasing focus on environment, suppliers need to conform to these standards    Products do not conform to international standards   Increasing customer demand for better fuel economy, lower oil consumption and

noise levels Future outlook 

  Electricity demand supply gap, currently at 8%, likely to continue. Hence a growth

rate of 8-10% expected in the industry.   Exports could provide a fillip to the industry. Many suppliers tapping export markets   Emphasis shifting to environment friendly products. Indian producers gearing up to

bring out new products that meet emission requirements.