Q3 and Q4 growth will help support more CV sales: VE Commercial Vehicles

Aggarwal says that in the first eight months of this financial year, only about 4,000 buses have been sold; compare that to more than 40,000 last year.

By:December 19, 2020 10:16 AM


With 34 years of experience in the Indian commercial vehicle (CV) sector, Vinod Aggarwal is possibly the best person in the country to talk about CVs, especially during such times when the sector is going through a lean phase. Aggarwal, the MD & CEO of VE Commercial Vehicles—a JV company between AB Volvo of Sweden and Eicher Motors—feels that with economic activity picking up speed especially in Q3 and hopefully in Q4, it will help support more CV sales. However, the bus segment may take far longer to recover, he says in an interview with FE’s Vikram Chaudhary.

CV registrations tend to follow GDP growth. With GDP growth still negative, does it mean CV sales may not see positive growth for quite some time?

It is expected that Q3 and Q4 of this year will see positive growth, and that’s a good sign for CV sales. Anyway, month-on-month there is growth, so the recovery is happening.

There is a renewed focus on manufacturing, as well as infrastructure spending by the government. How much can these two areas help support CV sales?

This helps a lot. For example, you need trucks to build the roads and highways—for construction tippers are needed, and for transporting raw material such as cement and steel and concrete trucks are needed. In fact, within the CV industry, the drop in sales of tippers was the minimum over the last few months. However, even as the movement of trucks has improved, replacement buying is still slow as sentiments are down.

Will the bus segment take quite some time to recover?

February to July traditionally is the period when schools buy a lot of buses. This year, because of the lockdown, schools are closed, so very little buying has happened. The second major buying segment is intercity coaches—but with travel between cities still lesser than usual and people using private vehicles for the same, sales are low. The third major segment is use of buses by companies for transportation of their employees, such as IT companies, but because you work from home most IT companies have delayed their buses purchase.
In fact, in the first eight months of this financial year only about 4,000 buses have been sold; compare that to more than 40,000 last year.

Are transporters opening up to the idea of CNG trucks?

In fact, the migration happening from diesel to CNG is also driving demand to an extent. For example, earlier CNG as a fuel was available only in some parts of the country, such as Delhi NCR, 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.

Do you think buying patterns in the truck segment will change due to Covid-19?

Only due to Covid-19 there won’t be any impact on buying patterns, but one thing that has been happening is the increasing use of telematics in trucks. Operators expect lower total cost of ownership, and we at VECV have taken many steps towards that. For example, we didn’t just launch the BS6 range of trucks, we also launched a BS6 solution—the EUTECH6. It combines our Euro 6 expertise (we’ve been exporting Euro 6 engines for over six years) with a reliable engine technology and fuel-efficient driveline. We also have the Uptime Centre that offers service support to operators and drivers—the centre offers remote diagnostics, predictive diagnostics and specialised field support to our vehicles. All this is possible only if trucks are connected.

So is a connected truck the next trend after a connected car?

A connected truck is already here, and it’s more advanced than a connected car. Trucks are for business use, for which productivity and timeliness are very important. These can only be ensured if a truck is connected; it also reduces total cost of ownership. Telematics is now a standard feature in our trucks.

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