With the medium and heavy commercial vehicle (M&HCV) segment showing signs of revival, Eicher Motors expects to increase its market share with its newly launched ‘Pro’ series trucks. AK Birla, executive vice-president, sales and marketing, Volvo Eicher Commercial Vehicles (VECV), tells FE’s Malyaban Ghosh & Pranav Nambiar, that the company plans to leverage on the Volvo distribution network to begin exporting its commercial vehicles to South Africa and Thailand in the current financial year. Excerpts:
You have already launched the Pro 6000 series trucks in the Delhi and the Bangalore markets. How has the response been?
Initially we wanted to launch the trucks in all the segments and make sure that customers can experience the value of the latest technology that comes along with Pro Series trucks. The PRO series trucks are more fuel efficient and the response to the Pro 6000 series of trucks has been overwhelming. We have managed to keep the price at Rs 20-30 lakh. So far we have supplied about 175 units and we have priced it in line with the features and the value these trucks will deliver. Fleet operators can generate maximum profits from our trucks as the level of efficiency is very high.
There is a huge gap between VECV and its competitors in the commercial vehicle segment. How do you look to narrow this gap?
I would say that it is a very good opportunity for us. In the light and medium trucks we are at a significant second position and in the bus segment we have almost 15% market share. As far as the heavy duty trucks are concerned, our ambition is to achieve 15% market share. Eicher Motors’ track record shows that we have been successful in achieving our targets; otherwise it would not have been possible to increase our share in the bus segment to 15% from 6% and in the light and medium trucks segment to 32% from 26%. Fortunately, the industry is changing and is demanding new generation trucks and with improved infrastructure, operators need trucks with higher productivity.
Are there any pricing pressures?
There are two elements to it – the listed price and the realised price. If you look at the realised price, that has not gone up and continues to be a challenge. This is because as long as capacities are in excess there will be pressure to offer sops to customers. It is part of the industry but we are not offering any discounts on the Pro 6000 series trucks.
What are the reasons behind the fall in exports?
Each and every player in the market has seen a decline in exports over the last three months and that is because the exports of commercial vehicles to Bangladesh have reduced by half. This is due to the political turmoil in that country. So the overall size of the export market has shrunk. Otherwise, we have exported 5,700 trucks last year, which is our best performance till date.
What are your expectations from this joint venture in the next two years?
So far, we have managed our cash flows extremely well and we have been a debt-free company despite the downturn in the domestic market. We have invested R2,300 crore in the new product range, modernisation of the manufacturing units including a new paint shop and in various other technologies. We also have a plant for manufacturing buses and a substantial amount of funds has been invested in that as well.