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August 18, 1997


Parametric to go for India's auto sector

In the last year or two, the Madras-Bangalore belt has become a hotbed of activity in the automotive segment.

With Ford, Hyundai and Mitsubishi setting up manufacturing facilities in Madras and the Volvo and Toyota projects coming up in Bangalore, the auto industry in this area is flourishing.

Consequently, the component suppliers and auto ancillary units have to be more competitive and streamline their operations. An offshoot of this is the immense market potential for CAD/CAM software vendors in the country.

Parametric Technology (India) Private Limited, a subsidiary of the US- based $684-million Parametric Technology Corporation which deals with CAD/CAM software products such as ProEngineer, ProEngine and the like, has declared 1997 as the 'Year of the car' worldwide.

In India too, the company plans to focus on the automotive segment, especially in the South.

"We will be focusing on component suppliers and original equipment manufacturers," says Kishore Rao, country manager, Parametric Technology (India).

According to Rao, Madras is one of the first geographic segments to go in for CAD/CAM software for the auto industry.

"We plan to launch special products for the auto industry like the ProSuspension and ProBodydesign for designing suspension and body of the automobile. We have already launched ProEngine for engine design."

According to Rao, the local component manufacturers, however, big or small, are increasingly going in for CAD/CAM solutions to cut down costs and improve delivery time.

"Foreign auto majors are looking at new standards in terms of reduced cycle time from component vendors and the cycle time is getting shorter and shorter. There is a high benchmarking of quality and very low standards for cost. The margin pressure is also quite high for original equipment manufacturers due to intense competition," he said.

All this has forced the automotive industry to react to survive. "Component suppliers have to implement technology in all areas and not just in CAD/CAM to increase productivity. If the local vendors are found wanting in efficiency, they will have to face the threat of being elbowed out by the foreign auto majors who will bring in their own component suppliers to set shop in the country. In fact, some of the vendors of Hyundai have already set up a presence in Madras and have tied up with local component manufacturers," Rao said.

PTC's customers range from big names such as Lucas TVS and Bajaj Auto to lesser known smaller companies. Rao sought to dispel the notion that only bigger companies go in for CAD/CAM software for product design.

"In fact, there are a lot of small OEMs who have been able to reduce cost and delivery time by adopting computer-aided design. We are even tapping companies with turnovers between Rs 20-50 million," he said adding that the companies were able to reduce the number of prototypes of a model and thus reduce the time involved by about 50 per cent.

Worldwide, around 70 per cent of the company's revenue comes from repeat business from existing customers. In India, however, repeat business accounts for only 30-35 per cent. This is mainly because CAD/CAM is still a fledgling business in the country and companies are yet to test it out.

The company currently has around 23 per cent market share in the country and plans to increase it to 30 per cent this year. SDRC, its closest competitor, has an 18 per cent market share and Autodesk, which is in 2D computing, has 42 per cent.

EDS Technologies is the company's distributor in the country. Rao said that as a matter of policy, the company would not expand its distribution channel since this would lead to a loss of focus.

He said the company has identified India and China as the emerging markets with special focus on the automotive industry in these two countries. "From our side, we are also pushing the need to set up a software development centre in India - not just because of the cost benefits but due to the availability of expertise in analysis which is critical in CAD/CAM software," Rao said.

Last year, the company notched up a turnover of $2.5 million and has a target of $4 million for the current year.

- Compiled from the Indian media

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