Eicher Trucks and Buses, a part of VE Commercial Vehicles Ltd (VECV) has unveiled India’s first BS-VI compliant commercial vehicle with the launch of its Pro 2000 series. Eicher, with a strong presence in the light and medium truck segment commanding a 33 per cent market share, says it is well placed to commercially launch BS-VI compliant vehicles in the third or fourth quarter of the current fiscal, in time to meet the April 2020 deadline. Vishal Mathur, senior vice president, Sales & Marketing, VE Commercial Vehicles, speaks to M C Vaijayanthi on the company’s plans. Excerpts:
You have unveiled a new LMD and a BS-VI compliant one too. What is your outlook in terms of market share and growth?
From 2008 onwards, we have grown in market share in all segments including LMD (light to medium duty), buses, etc... we have been growing consistently. Last year has been challenging in terms of commercial discounts. We had decided not to participate much in higher discounting and kept an upper limit for ourselves. With that, we had to lose market share in some of the segments.
That was a clear approach we had chosen... that we will not get into the discounting war. We are comfortable that we will get back that market share by virtue of good products and after-market support.
Inventories at the dealer level has been an industry issue, but your company says it has no such problems. How have you managed this?
We have the right mix of inventory. Not zero, but a right mix, and we have not pushed the stock to dealers. We are keeping a healthy inventory, so that is manageable, and we have a clear strategy to keep the inventory in control. We will be migrating to BS-VI with the right balance.
How have you been preparing for this transition to BS-VI?
We are in a better situation because we have been supplying Volvo for some time. We have got a good feel for manufacturing as well as the after-market... How to handle BS-VI products in the market. That experience has been useful for us and since the technology is available, we are working towards making BS-VI products available well in time.
What about other variants?
The migration is going to be easy for all the segments since we have been supplying for Volvo’s heavy load trucks. We are already the first to be manufacturing BS-VI compliant CNG trucks.
How do you see the CV market adopting CNG-powered vehicles?
Northern India, Delhi-NCR are the markets where CNG is preferred. In Delhi, there is a green tax on those who are not using CNG as fuel. The government is giving more support to CNG pump openings.
Pumps are also opening on the highways servicing Chandigarh, Agra, parts of Uttar Pradesh, and Rajasthan. The demand for CNG trucks is going to go up consistently. We are present strongly in the CNG trucks and buses range and we hope to rise further.
How did the market trend last year and what us your outlook for the current year?
The LMD segment has grown very well... LMD industry had a growth of 25 per cent, which was unprecedented. The first two months of this year has also opened better than last year. We hope LMD will be on track to do well this year too.
Was the impact of low credit availability seen across geographies?
The NBFC credit crisis brought some trouble to some parts of the country. It was not specific to any geography per se. Customers who did not have a good credit record definitely had difficulty in getting finance in some pockets. However, this financing support should be available as liquidity is improving now. Financing, per se, shouldn’t deter the industry from the growth path. Sales shouldn’t get affected because of that is my opinion.
What changes do you see in customer preference?
Customer preferences are shifting towards modern and smart trucks, which are also giving drivers a comfortable ride. That is the very purpose of getting advanced and modern trucking for our customers in India.
We give the product, technology in such a way that the customer sees more value for money, and gets high vehicle lifetime profitability. Cost of fuel is approximately 57 per cent of the total cost of ownership for vehicles in this segment. If you are able to save 5 to 7 per cent of fuel cost, then imagine the kind of money the customer would be saving over a period of four to five years.