Diesel & Gas Engines Market in India -2011

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Diesel & Gas Engines Market in India -2011

The engine industry is characterised by a strong organised sector with limited international presence. Market is mainly dominated by diesel engines. Petrol and kerosene engines are limited to lower rating and are used mostly in the agricultural sector. Gas engines are yet to take off due to issues of fuel availability. Emission norms in India are not very stringent but future expectations are likely to impact the sector. Diesel Engines are the leading prime movers for agricultural construction, industrial and power generation applications. Diesel Engines are manufactured in both air-cooled and water cooled versions. Suppliers are regularly upgrading and improving engine manufacturing facilities to ensure the requisite quality at competitive cost. Suppliers are focused on offering eco friendly engines. There are around 20 players in the organised sector. Unorganised sector dominates the lower HP (<20 HP). 20-150 KW segment of engines used in industrial equipments. Key players in the industry includes Cummins, KOEL, Greaves, Simpson, M&M, Ashok Leyland, Escorts, CAT, Deutz, Volvo, GE Jenbacher, Rolls Royce, Wartsila, Waukesha(Triveni), Isuzu, Komatsu, Kubuto and Volvo.

Industry-rst Analysis On
Diesel Engine: Classication and Technology Competition Presence in India New Initiatives and Developments User Sector Overview, Product Applications and Market Future outlook for Diesel & Gas Engines Market in India Natural Gas Scenario in India: Gas Demand Outlook and Natural Gas Supply Situation Natural Gas Pipeline in India: Current and Future Industry Emphasis Shifting to Environment Friendly Products that meet Emission Norms

Diesel Engines Key Application Areas

Segment Small Range Medium Range Capacity 2-20 HP 20-25 HP 25-140HP Large Range 140-400HP 400-750HP 750-1200HP 1200-7200HP Application Areas Pumpsets, Agricultural Machinery, Water Pumpsets, Threshers, Harvestors and Oil Expellers Tractors, Power Gensets, Industrial Applications Power Generation, Industrial Applications and Others Power Generation (Captive Standby Sets), Industrial Application Power Generation and Marine Applications Power Generation Power Generation ( Base Load) and Marine Applications

Comprehensive Data Points On

Market Size for Diesel and Gas Engines during 2010-11 Market Trends in Demand for Diesel and Gas Engines Key Market Drivers and Enablers Expected Future Growth Rates Future Outlook: 2015 Application Across Segments: Industrial, Construction Equipment, Industrial Equipment, Agriculture Equipment, Mining Equipment, Railways, Oil & Gas, Marine & Shipyard, Power Generation, etc

Very Large Range

Key Highlights
Market Size and Share among Domestic and International Companies Market Spread between Large, Medium and Small Players Key Business Drivers Expected Market by 2015 Largest Company and its Strategy Operations and Services Model deployed by Diesel and Gas Engine Manufacturers Detail on New Market Entrants, likely Entrants and possibilities of consolidations in the Industry Product Substitution Threat in the Immediate Future Scope for Construction Equipment Manufacturers to build their own engines for In-house requirements and for the Market Industry protability to invest in R&D, Plant and Machinery, Expansion and Up gradation of Service Network Key Challenge: Providing Technology at reasonable Prices

Diesel engines are used either for stationary applications (captive power generation) or as prime movers (for pumps, harvesters, threshers, expellers, our mills etc.). Small (< 5 HP) engines use kerosene / diesel as fuel. Rajkot and Agra are major centres for small HP engines. Exports trends can be mainly noticed in the smaller engines category. Other centres are Ghaziabad, Kolhapur and Coimbatore. On the ip side, there are no domestic manufacturers of Gas engines in India and hence all engines are imported. Major foreign brands are Catterpillar, Cummins and Ruston. Gas engines are gaining popularity in Gas pipelined areas. Gas engines are widely used in prime power generation, captive cogeneration, gas compression and other mechanical drive applications. Other applications are peak shaving and stand by. Gas engines are deployed all over India for various applications in Chemical, Pharma, Ceramic, textile, steel, oil and gas, commercial buildings etc. for power generation as well as prime mover. Waukesha is a major supplier of gas engines to ONGC and Indraprastha Gas for compression application. Market demand is directly linked to the investment in agriculture, infrastructure and industrial growth. It is also dependent on the power scenario in the country which is unreliable, insufcient and erratic, driving need for captive generation, hence for engines. Power generation segment accounts for 50 55 percent of the revenue of all major players and growth of the irrigation sector will drive the demand for engines.

Future Volume Growth of Demand for Engines

Agriculture

Must Buy For

Engine Manufacturers Generator Manufactures Original Equipment Assemblers (OEAs) Original Equipment Manufacturers (OEMs) Bearing Manufacturers Relay Manufacturers Alternator Manufacturers Battery Manufacturers Consulting Companies Private Equity Investment Banks Brokerage Firms Industry Associations Casting Manufacturers Compressor Manufacturer
Power Generation Railways Construction Equipment

Industry Equipment Marine Oil & Gas

Mining

Low (0 to 5%)

Medium (5% to 10%)

High (above 10%)

Future Volume Growth of Demand for Engines

Diesel Engines Used Both Diesel & Gas Engines Used

Table of Contents and Storybroad

1. Executive Summary 2. Diesel & Gas Engines market landscape Variants of Diesel & Gas Engines Key business stakeholders Application matrix across segments Industrial ( Construction equipments & Industrial equipments, Agriculture equipments / Machineries, Mining equipments, Railways, etc) Oil & Gas Marine & Shipyard Power Generation Others 3. Diesel Engine Market Diesel Engine and its classication Current Technology & trends Market characteristics Market size in 2010-11 by companies by value and volume Market size in 2010-11 by ratings (upto 10,000 KW) by value and volume Market size in 2010-11 by end user segments Market size in 2010-11 by region Market trends SWOT 4. Gas Engines Market Gas Engines and its classication Current Technology & trends Market characteristics Market size in 2010-11 by companies by value and volume Market size in 2010-11 by ratings (upto 10,000 KW) by value and volume Market size in 2010-11 by end user segments Market size in 2010-11 by region Market trends SWOT 5. Competition Competition presence in India Competition & Customer segments matrix across application areas New initiatives & developments Business Practices M&A 6. Current and Future Innovations in Diesel and Gas Engines 7. Future Outlook for Diesel and Gas Engines Market in India Key drivers and enablers Likely future growth rates of end user segments Future outlook - 2015 8. Key User Sectors Details Construction sector overview Overview Application areas Market By players & rating Market drivers & trends Future market Oil and Gas Overview Application areas Market By players & rating Market drivers & trends Future market Marine and Shipyard Overview Shipyards in India An overview Application areas Market By players & rating Market drivers & trends Future market Mining Overview Application areas Market By players & rating Market drivers & trends Future market Agriculture Overview Application areas Market By players & rating Market drivers & trends Future market Railways Overview Application areas Market By players & rating Market drivers & trends Future market Power Overview Application areas Gas Demand outlook Natural Gas supply situation Diesel subsidy issue Trend in Fuel price 14. Key OEMs in India Select OEMs prole Top companies in construction equipments 15. Appendix Detailed Company Prole of Engine Suppliers Cummins India Limited Kirloskar Oil Engines Limited Caterpillar India Detailed Company Prole of OEs JCB India Limited Greaves Cotton Limited Bharat Earth Movers Limited Atlas Copco Telecon Kirloskar Pneumatics Emerging company in Diesel & Gas Engines market Likely New Entrants 13. Fuel Scenario in India and its impact on Business Dynamics Market By players & rating Market drivers & trends Future market 9. Opportunity in engine servicing business Typical Annual spend on Services of engines Spares and Manpower Practices and expenses related to energy audit and engine retrotting Positioning of key players Industry best practices 10. Existing and Emerging Substitute & Competitive 11. Governments Regulations, Policies and Initiatives Facilitative Resistance 12. PESTEL Analysis

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Index
1 2 Executive Summary Diesel and Gas Engines Market Landscape Diesel Engines Market (2010-11) Gas Engine Market (2010-11) Competition 3-6

ES SL ID

8-12 14-46 48-80 82-89 91-94 96-107 109-184 185-189 191-194 196-197 199 201-207 209-224 226-286

3
4 5 6 7 8 9 10 11 12 13 14 15

Current and Future Innovations in Diesel and Gas Engines

Future Outlook for Diesel and Gas Engines Market in India

Opportunity in Engine Servicing Business

Existing and Emerging Substitute and Competitive Products Government Regulations, Policies and Initiatives PESTEL Analysis

Key OEMs in India Appendix

SA

Fuel Scenario in India and its impact on Business Dynamics

PL

Key User Sectors Details

Overall Market Scenario in India for Diesel & Gas Engines : 2010-11

Domestic production XX,35,XXX Diesel Engine X,730

ES
Imports
3X,X3X XXX 325 400 37,960 980

Exports XX,XXX 1,060

Domestic Market
XX,32,XXX X,250

0
Gas Engine 0

SL ID
0 0 40,770 1,060

325 400

PL
XX,XX,XXX
X,7X0

Total Engines (Diesel & Gas)

XX,XX,XXX X,XXX

SA

Volume (Units)

Value (INR cr)

Domestic Market Size (2010-11) : By capacity range

Diesel Engine

INR X,XXX Cr

12.9%

SL ID
49.3% 27.6% 1.0% 5.5% 46.8% 26.4%

ES
7.7% 8.3% 7.8%

Market Size

0-20 kW

21- 150 kW

151-500 kW

501-1000 1001 -3000 3001-10000 kW kW kW

2.2%

0.3%

Total Engines (Diesel & Gas)

PL

INR X,XXX Cr

12.3%

Gas Engine

INR XXX Cr

0.8%

21.3%

63.8%

3.2%

3.6%

Capacity range 21 to 500 kW dominates the market with over 73% of the overall market
* Market for 2010-11 (April 2010 to March 2011)

SA

Diesel Engine : Industry Classification

Diesel Engine Classification
Sine wave

Function Rating Life Technology Fuel Cost Application

1 to 10,000 kW

5 15 years; depending upon the number of operating hours

Industry follows IS & CE Standard for manufacturing Engines are used predominantly for standby power generation, off-grid temporary source of power generation or as mechanical drive in construction equipment / and other applications

SA

PL
Diesel Medium to High Construction & Industrial equipments, Power generations (power gensets), Oil & Gas, Marine , Railways, Agricultural machinery and other industrial applications

SL ID

Is an internal combustion engine that uses the heat of compression to initiate ignition to burn the fuel, which is injected into the combustion chamber. Used for power back-up application & as mechanical drive

ES

Market Size : Domestic production (By capacity range)

Value INR X,XXX crs

PL
Value- INR crs
X X X X X X

E
Volume XX,XX,XXX units
Volume Units
X X X X X X

SA

Capacity range (KW) 0-20 21-150 151-500 501-1000 1001-3000 3001-10000

SL ID

ES

Value

Volume

Market Size : Domestic production (Players vs. capacity) - Value

SA

PL

SL ID

ES

Market Size : By players vs. Capacity

Player vs. Capacity Volume (Nos.) Player vs. Capacity Value (INR crs.)

SA

Volume XXX units

PL
Value INR XXX crs

SL ID

ES

SWOT

100% imported technology Technology driven market

Growing power crisis across states, affecting industrial development activities

Proven brand & technology awareness

Growing market supported with better application & technology support & service network

Regular technical innovation from global manufacturers to cater to Indian market Products conforming to International standards

Weakness

PL

E
Threats
Threats from New Technology developments & increase in awareness about Solar & Wind energy and Fuel cell technology for Back-up / Standby power applications No major domestic manufacturing of product
Import dependent Very high price product offerings in the market Availability of NG across country is an issue Limiting market penetration

SA

SL ID

Planned NG pipeline network of across country will boost demand in coming years Easy availability NG through piped network from GAIL & RIL will create market opportunities across segments

ES

Strength

Opportunities

Competition: Segments matrix in C&I equipment

ES

Players Cummins KOEL CAT Perkins BEML Ashok Ley Simpson AL-Hino Deutz Mahindra Isuzu Tata Komatsu Tatra Volvo

CR

BL

DU

EX

CP

MG

WL

SSL

TM

CP

DO

COM

PMP

TT

Remarks To market To market Captive usage To market Captive usage To market To market To market To market To market To market Captive usage Captive usage Captive usage Captive usage

SA
High presence

M
Medium presence

PL

SL ID
Low presence No presence

Innovations in the Diesel & Gas Engines Technology Low Emission Technologies
As part of its global emissions strategy, Cummins Power Generation focuses on meeting or exceeding U.S. EPA and EU emissions standards, as these standards are the worlds most stringent and all-encompassing The real challenge in designing cleaner diesel engines is to reduce NOx and PM emissions while maintaining performance The Cummins Quantum engine technology meets this challenge by reducing emissions without sacrificing engine performance or reliability, or complicating maintenance
Advanced In-Cylinder Combustion Technology
New combustion bowl geometry and multiple-event fuel injection capability provide more combustion control than ever before This has resulted in improved or maintained power ratings without increasing engine displacement or fuel consumption

Advanced electronic engine controls

PL

Quantum Engines
Durable, FCD cast iron pistons
All of the high-horsepower Cummins engines utilize a new FCD (ferrous cast ductile) single-piece, cast iron piston for an increase in power cylinder durability of up to 15%

SA

New electronic sensors and microprocessor-based controls have greatly improved fuel efficiency and power output while decreasing the production of both NOX and PM.

SL ID

Advanced Fuel Injection System

The new solenoid-controlled, electronically-actuated injectors precisely deliver fuel at 23,000 psi and provide fast response with multiple injection capability

ES

Future Market : Diesel engines (By segments)

Volume - Nos +11% +12%

ES
+10%

+9% X,XX,XXX

+12% +14% X,XX,XXX X,XX,XXX

X,XX,XXX

PL

SL ID
X,XX,XXX
215 327,855 665 240

X,XX,XXX

223,285

180 1,350 500

275 367,195 411,260

310

195

254,545 540

285,090 605

745 2014-15

835 2015-16 Railways

2010-11 Agriculture

M
2011-12

2012-13 Oil & Gas

2013-14 Marine

SA

Power Generation

Construction & Industrial Equipements

Shipyards in India An overview

Shipyard industry overview
Hooghly Dock & Port Engineers

In India there are 28 large, medium and small

shipyards

8 Public sector units

1 2 3 4 6 Tebma Shipyard Cochin Shipyard 5

Garden Reach

Hindustan Shipyard

E PL M
3. 4. 5. 6. 1. 2.

Shipyards - legend

Large sized Government Shipyards Mid sized Private Shipyards

Small private shipyards

SA

Alcock Ashdown ABG Shipyard , L&T Shipyard Mazgaon Dock Bharati Shipyard Chowgule & Co Goa Shipyard

SL ID

20 Private sector units

Public sector shipyards that include Hindustan

Shipyard and Cochin Shipyard, primarily build merchant class ships

3 naval shipyards under the purview of the Indias

ministry of defence are Goa Shipyard, Mazgaon Dock and Garden Reach Ship builders & Engineers
Shipyard and Chowgule & Co are leading the private sector space

3 mid-sized shipyards - ABG Shipyard, Bharati

There are around 20 odd small shipyards which

build smaller barges, tugs, patrol & fishing ships

Almost all the shipyards are also engaged in the

ship repairing activity

ES

Production Trends in Liquid Fuel and Naphtha

(Units in 000 tonnes)

Source: Planning Commission

SA

PL

SL ID

ES

Diesel subsidy issue

Diesel is the most extensively used fuel in DG sets used for stationery power application; an application where engines are used predominantly Diesel is cheaper when compared to other liquid fuels like LDO, Naphtha and FO In India Diesel is sold at a subsidised price, however, diesel prices are expected to be deregulated in a phased manner in the medium to long term The first hike of 8% took place in June 11, clearly indicating government intent to phase out subsidy on diesel
This impact was some what offset as the government eliminated the 5% customs duty on crude oil, which brought down the customs duty on diesel from 7.5% to 2.5% Moreover, the excise duty on the production of diesel was also reduced from Rs.4.6 per litre to Rs.2 per litre

SA

This phasing of subsidy is likely to impact usage of HSD based DG sets The domestic production of diesel in 2010-11 was 77.8 million tonnes while that of FO was 18.7 mt, indicating that fuel availability is not an issue Despite all odds against the pricing side, Diesel is likely to continue to be a favored fuel option for DG sets as it has edge over other fuels in terms of ease of handling and relatively low emission levels In all likely hood Diesel is headed towards a dual pricing regime as the concerns have been raised on diesel used in transportation getting subsidy and the same could be the case in point for diesel being used in diesel gensets government offices, banks, mobile phone towers

PL

SL ID

ES

Trend in Fuel price

Monthly International Prices of Indian Basket of Crude Oil ($ per barrel)

Source: Petroleum Planning and Analysis Cell

SA

PL

SL ID

ES

Geographical presence of OEMs

Escorts ACE1

Cranes Cranes

Mumbai, Maharashtra Companies Products Greaves Cotton Transit mixer Godrej Forklift trucks Josts Engg. Forklift trucks Cranes Voltas Forklift trucks Dharwad, Karnataka Companies Products Cranes Telcon Backhoe loaders Wheel loaders

SL ID E PL

Ahmedabad, Gujarat Companies Products Shree conmix Transit mixer

ES
Companies Schwing Stetter Caterpillar Komatsu

Companies

Faridabad, Haryana Products

Ballabgarh, Haryana Companies Products Backhoe loaders JCB SSL Wheel loaders

Greater Noida, Uttar Pradesh Companies Products Terex Backhoe loaders

Kolkata, West Bengal Companies Products Tractor India Cranes Ltd. Forklift trucks Chennai Products Transit mixer

Thiruvallur, Tamil Nadu Companies Products

Backhoe loaders Wheel loaders Graders Graders

SA

Bangalore, Karnataka Companies Products Larsen & Backhoe loaders Toubro Volvo Wheel loaders Ingersoll rand SSL3 2 BEML Graders Cranes Indital Forklift trucks

Construction Equipment Material Handling Equipment

ACE : Action Construction Equipment BEML : Bharat Earth Movers Ltd. SSL : Skid Steer Loaders

Overall Sales : Diesel vs. Gas engines

CAT

Volume

SA

Volume X,XXX units

PL

E
Value INR XXX crs

SL ID

ES
Value

Overall Sales : By Capacity

CAT

Volume

SA

Volume X,XXX units

PL

E
Value INR XXX crs

SL ID

ES
Value

Overall Sales : By segment

CAT

Volume

SA

Volume X,XXX units

PL

SL ID

ES

Diesel engines : By Capacity

CAT

Volume

SA

Volume X,XXX units

PL

E
Value INR XX0 crs

SL ID

ES
Value