Even though the automotive sector has been grappling with poor sales growth, the commercial vehicle manufacturers have not lost their hope. Albeit, they have already realized that the current slowdown is a temporary phase and focusing more on R&D activities in India.
At present commercial vehicle segment in India is facing rough weather mainly due to economic slowdown. Various reports suggest that sales of medium and heavy commercial vehicles which is the main mode of transportation for the industrial sectors like mining and infrastructure–have declined for the last few months. According to ICRA, M&HCVs volumes will remain weak in the near-term as underlying demand indicators continue to post a subdued picture. Surplus capacity in the trucking system and currently weak transporter viability suggest that recovery in the M&HCV demand is likely to be gradual. While ICRA expects the GDP growth to gradually improve in 2013-14 and potential for further interest rate cuts, pick up in capex cycle and infrastructure development would be critical to sustain the demand for commercial vehicles over the medium-term. The scenario would start improving gradually from 2013-14 as positive impact of some of the recent policy initiatives and low -base effect may help M&HCV sales to recover.
The report also notes that overall, pick -up in cargo volumes and improvement in freight rates would be the key indicators to gauge early signs of improvement. So far, such a trend remains elusive. “We expect M&HCV sales to fall by 23% in 2012-13 followed by relatively modest 4-6% volume growth in 2013-14 on back of low-base and expectations of improvement in economic environment,” the report notes. The M&HCV bus segment which in general is not influenced by industrial environment would manage a growth of 12% in volumes. The segment will also start seeing benefits of the budgetary allocation towards JNNURM with specific plan to add 10,000 buses. In ICRA’s view, the proposed order will be spread over the next two years and contribute significantly (8%) to M&HCV bus sales in each of the next two years.
Steps in the right direction
A closer look tells us that there are companies which convert the downturn into an opportunity to race ahead. The strategy is different for different companies. Some launch new product, others add value to existing products or concentrate more on R&D etc. In the last few months, despite slowdown, commercial vehicles segment have also witnessed few interesting developments. Let’s take a look what the prominent players have done in the recent past.
Take the example of Eicher. It has unveiled its entire new range of future generation trucks and buses at an impressive product reveal function in Pithampur in December 2013. It unveiled 11 new products (both trucks and buses) covering the entire 5 to 49 tonne gross vehicle weight range. While continuing to address the large sized value segment, the new range also marks the entry of Eicher brand into the emerging premium segment that requires higher power and torque combination as well as a greater degree of refinement and sophistication. The all new product range has been named the “Eicher Pro’’series. Adopting the most professional and holistic approach to modernise the Indian trucking industry, the new brand philosophy is to “Go Pro”; that is to give Indian trucking a truly professional offering which will lead to higher productivity, profitability and prosperity for the customer.
Eicher’s new Pro series trucks and buses promise to deliver best-in-class fuel efficiency, higher loading capacity, superior uptime and overall vehicle life time profitability. With a completely new Pegasus-based front styling across the product family, the new range of vehicles are a quantum leap in each and every aspect, from exterior design to engine technology to cabin features. The new heavy duty range of trucks revealed recently will be powered by new generation engines adapted from Volvo Group technology with power capacity of 180-280 hp with high fuel efficiency, reliability and long life.
In a special message Olof Persson, President and Chief Executive Officer, Volvo Group said, “The trucks launched are the embodiment of our joint efforts over the last five years. The vital combination of the Volvo Group’s world class technology and the frugal cost expertise and management of Eicher has created a range that will set new standards amongst customers with high demands on profitability, flexibility and driver effectiveness.” The joint venture between Volvo & Eicher has definitely provided momentum to the commercial vehicle segment of India. Said Siddhartha Lal, Managing Director & CEO, Eicher Motors Ltd, “The Volvo Group and Eicher Motors came together five years ago with a vision to modernize the Indian commercial vehicle industry; and we are here today to present the most professional, holistic and progressive approach to Indian trucking .” He also added that their philosophy of “Go Pro” implies that their customers can truly work with and rely on a professional partner. “Eicher’s products, service and attitude are truly professional, and this enables our customers to become more productive, profitable and prosperous in their work and life,” said Lal.
It seems that Volvo is quite optimistic about the joint venture. Said, Joachim Rosenberg, Executive Vice President, Volvo Group Trucks Sales & Marketing and JVs, Asia Pacific, “Today Eicher is considered as the 5th brand in the competitive portfolio of Volvo Group brands. With rapid strides of infrastructure and road development there will be more demand for value added trucks. “With the improvement in infrastructure and road network in India, there is a requirement of more effective transport chains.
Asia-Pacific an emerging market
In late 2013, Volvo had launched the Quester heavy duty truck in Thailand manufactured by its group company, UD Trucks (formerly Nissan Diesel) of Japan. It is important to mention here that Quester has been earmarked as an important part of Volvo’s growth strategy for trucks in emerging markets. No doubt India is one of the markets. According to company sources, the technical platform that builds Quester will be leveraged in Thailand, China and India. It is this technology which also forms the basis for Eicher’s Pro 8000 series (25-49 tonnes). One of the key growth engines for Volvo’s Asia-Pacific strategy will be UD Trucks which worked extensively for over five years on Quester. This vehicle will be used for several applications, from long-haulage and distribution to construction and mining. With Quester, Volvo aspires to create a new benchmark that has the best mix of Japanese craftsmanship (UD Trucks), its own strength in global technology, and cost efficiency through local manufacturing and sourcing. Quester’s initial markets will be Thailand (where it was launched in end-August), Indonesia and Malaysia followed by China and India. It has been positioned as a modern and affordable vehicle designed to serve a wide range of applications with good mileage.
The alliance with Eicher, VE Commercial Vehicles (VECV), will also play a crucial role at the back-end operations for Quester. It is believed that the India joint venture has now begun making new 5- and 8-litre engines for Quester. This could be the beginning of a larger story for VECV as the truck heads out to other Asia-Pacific markets, including China. Since the time Volvo and Eicher decided to join hands five years ago, the roadmap was perfectly clear: to combine the strengths of technology and processes with the Indian partner’s skills of frugal engineering. This led to the creation of a manufacturing powerhouse in Pithampur where both the trucks and engines will be a critical part of the global strategy. This fits in with Volvo’s plan to give top priority to its truck business in Asia-Pacific. The company’s biggest operation in this region is in Japan where it has nearly 140 company-owned dealerships. The Eicher joint venture is another critical vertical, both for India and ASEAN (the engines are also exported to Europe).
Similarly, Hinduja flagship firm Ashok Layland is to launch up to 18 different types of trucks this year under its new brand for commercial vehicles, ‘Captain’. The company, which recently unveiled the tipper model Captain 2523, priced `24 lakh upwards, is increasing the prices of the existing small trucks by up to `30,000. It has invested about `600-700 crore in the development of the new range of medium and heavy commercial vehicles under the Captain range, endorsed by Indian cricket captain Mahindra Singh Dhoni. According to company sources, it has planned to launch a total of 18 different types of trucks for different applications under the captain range. These trucks will be rolled out from its Pant agar plant. The company has developed this range on its own, apart from some help from an Italian firm for cabin design and a UK firm for structural engineering, at an investment of `600-700 crore. Besides the domestic market, the company plans to export the Captain range of trucks to Middle East, Latin America, Africa and South East Asian countries as completely built units. The company’s aim will be to add value to its end customer and grow profitably with them, he added.
No wonder, Tata Motors, also showcased six new high powered construction vehicles from its ConsTruck range of Commercial Vehicles at the EXCON 2013. The new displays from the Tata Motors ConsTruck range include – Tata Prima 3138.K – a powerful vehicle ideal for heavy duty mining application, Tata LPK 3118 8X2 Haulage tipper – has been specially designed for long-haul surface transport applications and has a sleeper cabin for added comfort for the driver, Tata LPK 3723 10×4 – a 10 Cum RMC (Ready Mix Concrete) body – the only vehicle to qualify in the segment of 10 Cum Transit mixer application. From the Tata Prima LX range – it had showcased new tippers in the 25 tonne to 31 tonne segment, with engine capacities in the 230 hp to 280 hp power range- Tata Prima LX 2523.K – for mining and construction application, Tata Prima LX 3123.K – for construction application and surface transport, Tata Prima LX 2528.K – for heavy duty mining and construction application. Engineered to address the need for higher productivity and profitability of the construction industry, the new Tata ConsTruck range of vehicles is designed and built specifically to offer the lowest TCO (Total Cost of Ownership). The range offers – better KMPL (Kilometer Per Litre), best vehicle uptime, highest resale value, best-in-class warranty and lowest maintenance cost. According to a company official, “At Tata Motors, we see a specific requirement coming in from the construction industry, for higher tonnage surface transport, as well as for higher capacity mixers. The new vehicles from Tata Motors ConsTruck range, is a result of the company working closely with customers with a futuristic approach, for better profit advantage, in a challenging and competitive transport environment. At Tata Motors, we strive to enhance customer experience by offering unmatched benefits of a Tata Truck- best lifecycle cost, longer service runs and enhanced levels of driver comfort, resulting in best-in-class profitability and lowest payback period for operators.” The new vehicles showcased are backed by a Standard Warranty of 4 years / 4 lakhs kms / 4000 hrs, supported by Tata Motors’ extensive dealership & service network of over 1600 touch points. On the highways of India, there is a Tata Motors’ touchpoint every 50 kms. Tata Motors has also Increased Service Intervals for its vehicle aggregates.
Daimler India Commercial Vehicles (DICV) is also quite optimistic about Asian market. DICV, the 100 per cent wholly-owned subsidiary of the world’s leading truck manufacturer Daimler AG, announced the debut of the DICV manufactured FUSO FI (medium-duty) truck at the Tokyo Motor Show held recently.
The two commercial vehicle subsidiaries MFTBC and DICV are bundling their Asia business under the umbrella of Daimler Trucks Asia with a view to reaching their joint target of 290,000 units of the FUSO and BharatBenz brands until the year 2020. To this end it also announced an investment of € 300 million between 2014 & 2018 to boost the production and sales network of Daimler Trucks in Asia. This is over and above the existing / already planned investments. On this development, a top company official said, “With this investment, we will expand our existing production and assembly network in order to prepare ourselves for the demand in Asia and Africa.
Auto Expo 2014
The truck market is also going to witness few interesting things in terms of new launch, product development etc in the forthcoming Auto Expo 2014 to be held in Greater Noida. For instance, Global commercial vehicles and engines manufacturer Scania will participate in the show and will also make key announcements. Besides, it will launch market leading services and products, tailored to suit customers’ needs and demands in India. Among the vehicles displayed in the exhibition are heavy haulage truck with a top of the line V8 engine, Scania R 500 6×4. Apart from this a Scania P 410 8×4 tipper and a Scania G 410 tractor both acknowledged for their superior productivity and outstanding operating economy were also displayed. In addition to this, Scania´s reputed 13.7 metre 49 seater luxury intercity coach – the Scania Metrolink –was also on display.
Scania stand showcased
Scania R 500 6×4 features the first ever V8 engine on the Indian roads, offering a high, low-speed torque rating, essential for super over-dimensional cargo (ODC) transport. The Scania V8 engines advance into the future with excellent driveability, impressive operating economy and sheer driving pleasure. These trucks are built to deliver the goods under the toughest conditions.
It is fitted with a completely new 20 cum U-shaped rock body developed by one of the world’s leading producer of high strength steel, SSAB. The complete tipper is significantly lower in weight than current offerings on the market, and with the increased load carrying capacity the customer gets a higher productivity and better total operating economy.
Scania G 410 6×2 is the most recent addition to Scania’s on road range in India, and with superior uptime, fuel economy and driver comfort, it is set to completely redefine haulage operations. The tractor is equipped with Scania Opticruise, which is an automated gear changing system for manual gearboxes. The system always chooses the most suitable gear in each situation, resulting in lower fuel consumption and improved drivability.
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