ACGL

Automobile Corporation of Goa Limited is the manufacturer of Sheet Metal Components, Assemblies
and Bus Coaches. It has got two main plants:

Plant I - Main Plant Honda – Sattari – Goa. Facilities for manufacture of bus bodies added in 2008 -
including a state of the art Paint shop.

Plant
- Bhuimpal , Sattari – Goa. Setup in 1988.Manufactures Bus Bodies.
II

Since 1982, ACGL has been a major supplier of pressings and assemblies to Tata Motors' Pune
factory. The buses which ACGL manufactures belong to three categories:
1. LCV (Lower carriage vehicle)
2. MCV (Medium carriage vehicle)-School buses
3. High tech-X Volvo (Espano)

Presently they are supplying a major order to Middle east with left hand drive.

Manufacturing process:
The MS frames for the body are outsourced from local vendors based on the order quantity. This
arrives at the shell line where they are further assembled by arc welding process. The floor for the
skeleton is then then made, after which the FRP sheets for front, back and sides are fitted in. Finally
the roof is fixed. The floor material may be either plywood or FRP depending upon customer’s
requirements. Side panelling by sheet metal, other skirt panelling around tyres, engine and gear
box, making of dents for other electrical fittings are carried over in phases in each of the respective
zones of the shell line.

Then the partly assembled body is moved to the paint shop. This is considered as the bottle neck
activity in the entire manufacturing process as it consumes more time. Spray painting is generally
involved until the customer specifies higher end painting.

Then the painted body enters the trim line where the electrical works are carried out. After wiring is
done, the frames for windows are fitted in. The light fixtures, other door and window accessories are
also assembled in the trim line. Then the entire body is dropped on the chassis and necessary
welding and fitting process are carried on. Then the final seats and other interiors are fixed in the
final line.

Then the product moves to the testing phase where the quality inspector clears all quality defects
and sends the vehicle for despatch.

Decision making process:

Procurement: The body frames are outsourced from local welding companies. The FRP sheets comes
from their other division of sheet metal and pressing. All other inventories for minor items are
procured accordingly by the purchase department depending upon the order inflow. Special
requirement of A/C provisions, sound systems are also procured on case to case basis. For painting,
they have regular tie-ups with major suppliers since this is a continuous requirement. Other seating
and relevant accessories are also outsourced and planned so that they arrive at appropriate time for
assembling.

Pricing of products / services:

The pricing generally depends on the specifications of the customers and the volume of the order.
And servicing of the buses is usually covered together with the chassis supplier under warranty.

Recruitment
For labours, generally they have contract labour, who are paid on item rate basis. Therefore when
the order inflow is low, the amount of labour is automatically adjusted. However, for specialised
welding and fittings, they have permanent teams also. Workers are engaged in 2 shifts of 8 hours
each.
The staff recruitment is usually done by lateral interviews and they hire people for the workshop
operations and the design centre and other administrative activities.

General marketing strategy

Most of the orders are from Tata directly. They supply the chassis and ACGL has to only do the body
building work and they are paid for the same. But some private cleints pitch in for turnkey contracts,
wherein, ACGL themselves undertake procurement of chassis from Tata or Ashok Leyland
predominantly and they do the body building works.

The marketing division mainly focuses on such turnkey projects where they can bank on margins for
the chassis also. Such one-time customers can be priced accordingly. The Goa port is an added
advantage to them so that they can ship the assembled buses to the Middle East where there is
huge requirement for transporting labour. Till now, 80% of the revenues used to come from exports.
The major clients are in the Middle East, including Saudi Arabia. Because of the recession, the
revenues last year had come down to Rs 233 Crores from 330 Crores.This has compelled the
company to relook at the strategy of dependence on exports. Now the company is eyeing on the
domestic market.