x Abu Dhabi, UAEThursday 18 January 2018

Volkswagen assembles a foothold in India

As Volkswagen invest in India, Richard Whitehead analyses whether production standards are up to the marque.

Though India lags far behind China as a hub for the manufacturing industry, Volkswagen is investing heavily in the country.
Though India lags far behind China as a hub for the manufacturing industry, Volkswagen is investing heavily in the country.

For a motoring journalist, visiting a mass production car plant is usually viewed with a degree of soporific indifference. Seeing how the Hyundai factory in Ulsan builds its cars is rarely different to watching how the same is done at Ford's Zaragoza operation. To put it bluntly: when you've seen one, you've seen them all.

Car hacks rarely look forward to these events, but they still have to be done. However, for the first time since I received tickets to go to Ferrari's Maranello township two years ago, I found I was looking forward to a plant visit when Volkswagen came calling, asking me to travel to its Chakan plant in Pune, India.

With all due respect to India, it is not a country known around the world for its manufacturing prowess. Indeed, while factors such as cheap labour, an increasingly well-educated population and international companies queuing up to invest add up to vast potential, the country is yet to make good on this industry. Infrastructure is poor, government interest is negligible and standards are generally low.

The country's arch rival, China, has made massive strides over the past decade to transform its automotive manufacturing output to the point that companies such as General Motors use "Made in China" as a selling point.

Therefore, you would be forgiven for thinking that VW might have waited longer before making a push into India, but this isn't the case. The German carmaker has invested heavily in the construction of several plants in the country and it sees a bright future for its industrial operations there.

VW's approach to carmaking is well-known, to say the least. A good example of this is how the company likes to show off its "robotic bottom" at motor shows around the world as part of a travelling display to demonstrate the nitpicking detail it devotes to testing all its components and materials.

The bottom in question involves a sizeable Perspex display in which a car seat is systematically pummelled by a piece of machinery that resembles a metallic derrière. In the factory, this is accomplished hundreds of thousands of times by product developers ahead of a new launch to replicate how a seat will be used over a car's life. If, after the end of a proscribed number of cycles, there are any buttock-shaped indentations in the padding, or wear shown in the material, the supplier is rejected.

Alongside this, a fake finger eternally pushes stereo-control buttons, and a mechanical hand grabs at the door handles. This is the level of testing that goes into each VW part.

The company, and its many subsidiaries, is famed for this attention to quality. You can assess the confidence the carmaker has in its products just by looking at the service intervals it recommends for its products - 15,000 kilometres, while other brands suggest between 5,000 and 10,000 for theirs.

As a European who is used to seeing mass-production cars coming off highly automated lines, I was intrigued by what I had previously heard about VW's Chakan operation, and not least its balance between humans and robots. Whereas the company's centrepiece Wolfsburg plant has adopted close to 100 per cent automation, its Indian operation is nowhere near close to this figure. Indeed, 35 per cent was about the highest estimate I had heard for Chakan.

When it comes to complex and high-precision vehicle manufacturing, it is natural for plant designers to side with the machines. Robots are programmed to work to the highest tolerances and are not subject to human error. They don't take lunch breaks, they don't have off days, they don't make clumsy moments and their eyesight never fails them. They do what they are told with no margin for interpretation. And if a robot develops a fault, it will be the first one to inform its operators - they are honest like that.

When you add humans to the equation, things in theory should result in a significant lowering of quality as we are an imperfect species with our instincts based on emotion, not precision.

However, while Rolf Nitzschke, Volkswagen Chakan's production director and the man who designed the plant ahead of its 2007 opening, remarks that the factory's quality levels might be lower than those it achieves in Germany, they are still not far off in the scheme of things.

"At Wolfsburg, for example, we achieve an 85 per cent quality rate, which is among the best you will find. But here, we are running at 75 per cent, and that signifies exceptionally high quality for any manufacturer," he says.

When you look at the number of components that go into each finished car, it is hard to have a 100 per cent success rate, and that is why the quality control section of a plant is critical by identifying any potential faults. And having three-quarters of all cars built perfectly the first time is quite a statistic, especially when 65 per cent of the work is finished by hand at Chakan.

The reason for Nitzschke's choice of manual labour, as opposed to robotics, is simple: the cost of labour in India makes it economically unviable to invest in the level of machinery that would be employed elsewhere. Higher European salaries, on the other hand, make machines more cost-effective over there. As a management team, you have to work with the hand you are dealt.

But humans have to be trained, and while it only takes a software standard to make a robotic production line expert in its duties, this is a continuing effort for the staff who clock off at the end of the day.

Michael Poznanski-Elsenschmidt, Volkswagen's technical director at the Chakan plant, says that he acknowledges the scarcity of highly trained local staff, and as a result the company goes to great lengths to work with the labour available.

"When we opened, we insisted that all staff had to speak English to a certain level, but we couldn't recruit enough English speakers," he says. "As a result, we had to cast the net wider and put together a programme to teach them the language while training them to do their work."

Training courses play a big part in the plant's operations, and these are done in-house, although the brightest staff are sent away on intensive exchange programmes. It is also no secret that the current management is working to blood the next generation from an indigenous source.

The VW Academy operates an impressive mechatronics programme that is designed to take promising employees and train them to the next level. What is especially important is how the course mandates five women trainees in each intake - that's something, given the nature of the heavy mechanical work, which would be unheard of in the area until recently, Nitzschke explains.

Another staggering fact about the operation is that Chakan is able to roll off its cars at a much faster rate than VW's other, more established plants. According to Poznanski-Elsenschmidt, it takes between 24 and 26 hours to construct a Polo (and its Skoda stablemates on the same platform, which are manufactured alongside VW at Chakan), whereas the time taken would be considerably longer elsewhere. "This is because the processes we have adopted are much more modern, and so we have less buffering when the line has to stop. Overall, it is a much more efficient operation."

A high proportion of components are sourced from local businesses, and most of these come from the surrounding state of Maharashtra - Pune is about a three-hour drive inland from Mumbai. VW uses the same exacting standards as the bottom tester to make sure manufacturers come up to scratch and maintain the requisite levels.

The carmaker is also proud of the way it works with these businesses to impart the quality processes that have made VW's name over the years. From simply insisting on pristine supplier premises to devising a system for the labelling of parts - both rare among Indian manufacturers - the German company has managed to ramp up productivity, efficiency and, of course, quality from within the local industry. This, in turn, will have a significant effect in the long-term for a manufacturing sector that is very much in its nascence.

It is a testament to the work that has been done that VW is now shipping off parts manufactured by third-party Indian suppliers to its plants around the world, and doing so under its own branding.

Increasingly more multinational companies are finding a home in India, not least because of the country's punitive import levies and show-stopping red tape, and VW is certainly not the only plant of its kind in the local area that has brought Western standards to Indian automotive manufacturing.

Just a short distance away, a pristine Mercedes factory stands out from the green countryside, and we know how the German premium carmaker is every bit as much a stickler for quality as Volkswagen. And it is just one of the growing number of international names that punctuate the Chakan area.

The market shouldn't care where its cars are made - and Chakan's Polos, as well as its Skodas, will shortly be sent out to other markets, including the Middle East - but it is very concerned about the quality of its purchases.

In theory, given the way that VW has designed and implemented this facility, there should be no need for a customer to examine a "made in" tag and be put off by the car's origin.

For this automotive journalist, the plant visit was a real eye-opener. It's good to see an age-old trade being done slightly differently.