New players will revolutionise market in next 5-6 years

When Mahindra Navistar entered the market two years ago, it faced a big challenge. The truck segment was dominated almost completely by Tata Motors and Ashok Leyland. However, in two years time, by offering a different product, Mahindra Navistar has managed to gain a foothold in the market setting the platform for future growth. The company?s managing director?Nalin Mehta?believes that new players and more world class trucks will revolutionize the market in the next five to six years. Mehta shares the company?s journey and his views on the market in an interview with?Debabrata Das.

There is a big downturn in the medium- and heavy commercial vehicle market, how is Mahindra Navistar tackling it?

One of the immediate impacts of the downturn was that stocks at the dealer end piled up. The bigger players could afford to give discounts to clear these stocks. But we didn?t want to go down the discount route. We stuck to our pricing policy, which is slightly higher than the competition. Yes, the downturn is a major downturn but slowly the sentiment is changing and I do think by the fourth quarter of the fiscal things will improve.

I still think in 3-4 years Mahindra Navistar will achieve sales of 50,000 in heavy commercial vehicles and 20,000 in light commercial vehicles.

The industry will keep growing at a CAGR of 8-9%, despite taking in the blips like this year.

When Mahindra Navistar began sales two years ago, the market was dominated by two players. How did you manage to get your share of the pie?

Two years ago, we started in a small way with eight dealers. But we had the advantage of setting up a world-class plant in India to offer world-class products. The products were developed in India, tuned to the Indian needs. Despite the product quality, we didn?t price our products high as we didn?t want to be the niche player.

Along the way, we strengthened our service strength. Today we have 1,000 service points, having leveraged Mahindra Automotive and Mahindra Farm Equipment?s network. Having learnt what the customer wants, we offered 48-hour service guarantees, which were initially offered on select routes and by the end of the year, it will be all over India. I think all these steps have helped us get the 2.5% market share that we have today as well as being recognised by the commercial vehicle fraternity.

The Mahindra brand has grown in the commercial vehicle segment. What did the company do to get this respect amongst customers?

We engage with transporters and drivers on a regular basis. We undertake programmes to teach transporters specifics about transporting in the steel industry, milk transportation and other such specialised transportation of goods.

In our conversations with drivers, we learnt what are the little tweaks that we can make to our trucks and make it more comfortable for them. Driver comfort is very important for the transportation industry as there is a big shortage of drivers.

How have your engagements with the customers shaped your product portfolio?

We heard from the drivers that two of the key things they want is comfort and service. So we tuned our products to give them better drivability, better braking and a more comfortable suspension. These two things, apart from the comfortable cabin, make the life of a truck driver much easier and the drive more comfortable.

We also gave them a less powerful engine, 170 brake horse power, which reduced turnaround time on certain routes, but improved fuel efficiency. They also wanted just a cowl to build the cabin according to their preference. Cowls were something we hadn?t planned before but we started offering it.

For service, we introduced a mutli-lingual 24×7 call centre. This allowed the drivers to call in directly rather than go through their fleet manager. By calling in directly, the time was reduced for their problems to be resolved. Also, we have 1,000 service points, including 200 of Mahindra Automotive?s network. We want to take it up to 1,800 adding another 180 Mahindra Automotive service points.

How are these learnings being incorporated into the future products from the Mahindra Navistar lineup?

By the end of this fiscal, we will offer readymade solutions for fleet owners in three segments ? construction, perishable product transport and mining. In the construction segment, Mahindra Navistar will offer ready-made concrete mixers. Earlier people bought the truck separately and the mixer separately and put it together. But we will offer them an integrated product.

Also with the need for cold storage increasing, we will offer refrigerated tractor trailers. While for the mining industry we will offer coal haulage tippers. All these are fully integrated solutions which customers have been asking for.