Vinod Aggarwal, MD & CEO, VE Commercial Vehicles says as far as trucks are concerned, recession is over

There is minimal connection between high fuel prices and truck sales. CV industry reflects the state of the economy—now that the economy is doing better, CV sales are rising.

By:March 20, 2021 8:26 AM

In the primarily CNG Delhi market, VE Commercial Vehicles has a market share of more than 50% (in the 4.9-tonne to 16-tonne light & medium duty trucks category). A major reason is that VECV has gotten a head-start as far as introducing CNG as a fuel in trucks is concerned. Today, most of its models—from Pro 2049 to Pro 2059, and from Pro 2075 to even the Pro 2114XP—have a CNG option. Vinod Aggarwal, MD & CEO, VECV, says CNG trucks are getting popular (VECV sells 800-odd units of CNG trucks every month). In an interview with FE’s Vikram Chaudhary, he adds that the usage of telematics in commercial vehicles (CVs) is rising, and as far as trucks are concerned, the recession is over. Excerpts:

VECV made telematics a standard feature in its trucks. Are operators/owners opening up to the idea of a ‘connected truck’?

Advantages of a connected truck include track & trace (remotely access the route, places where the truck halted, how long the halt was, etc), vehicle-centric services (fuel-efficiency data, detection of fuel pilferage, etc), driver performance, and uptime services. We recently opened India’s first uptime centre at Pithampur in Madhya Pradesh. It provides 24×7 service support and remote diagnostics to operators, as well as predictive maintenance data and diagnostic-related advice. Data points can even tell us how a vehicle is likely to perform in the future.
Previously, in the truck market, customers looked at just the initial cost. But we have been convincing them to focus on the total cost of ownership (TCO), which can be hugely reduced by a connected truck.

In which all ways can the TCO be reduced?

On the dashboard we have real-time driving-related information. When the driver is driving poorly, there is a prompt on the dashboard that tells him how he can drive in a way that leads to higher fuel efficiency. If he’s driving properly, there is a thumbs up. At the end of the trip he gets a summary for how long he drove the vehicle in the sweet spot. Our trucks also have cruise control. All these features lead to better fuel efficiency.
With diesel prices shooting up, about 50% of the TCO of a truck could be just the fuel. Good driving habits also lead to tyres running longer (and on a 16-tyre truck the cost of tyres can be close to 15% of the TCO).
So, at the end of the day, better driving habits can significantly reduce the TCO, and better driving habits can be achieved by employing telematics.
All our trucks are not only connected, we also offer operators two years of subscription, worth Rs 10,000, for free.

Will the turnaround in the CV segment take a little longer because of high diesel prices?

There is minimal connection between high fuel prices and truck sales. CV industry reflects the state of the economy—now that the economy is doing better, CV sales are rising.
In addition, Indian economy is a lot driven by agriculture, and last year kharif output was good and this year ragi output is expected to be very good and that will drive demand by putting money in the hands of people in the rural economy; there will be more consumption of FMCG goods and consumer durables, and for moving everything a truck is needed.
I must add that for the last over two years the CV industry was in a recession, and now it is out of recession, and for at least the next two years the CV industry is expected to fare very well.

Do you see some early green shoots in the bus segment?

There is a strong possibility of schools coming back to normal functioning and this may lead to demand for new buses. With vaccination happening, people are getting more confident and travelling intercity. While many offices will start hybrid working, a lot others will have people working in office and that will lead to demand for new buses from moving staff. As tourism returns to normal, intercity coaches’ demand will go up. We are already seeing increased fleet utilisation of our Volvo intercity coaches—six months ago it was 15-20%, currently it has risen to about 40%.
Then there is huge replacement that is going to happen from state transport undertakings; the government has allocated Rs 18,000 crore for renewal of public transportation.

The sales data for February bodes well for trucks…

Yes, as far as trucks are concerned, the recession is over. In February, some of the sub-segments have reached their previous peaks, especially tippers and medium duty trucks; CNG trucks at a new high, and haulage demand is increasing. In March we expect very good sales numbers; last month there was a growth of about 30% in heavy duty trucks and 60% in light and medium duty trucks.

Has VECV had a head-start in CNG trucks?

Earlier, CNG was available only in some parts of the country, such as Delhi NCR, and now there are CNG filling stations at many other places. For example, on the Delhi-Mumbai highway you can drive a CNG truck all through. Today, VECV offers the widest range of CNG trucks.
The government will also add more LNG fuel stations. LNG and CNG engines are the same, only the storage of the fuel is different. CNG trucks also lead to lower TCO—while the fuel itself is priced far lower than diesel, in CNG/LNG trucks there is no need to add AdBlue (diesel exhaust fluid that helps diesel engines meet BS6 emission norms).

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