Social distancing may raise bus demand: VE Commercial Vehicles

In an interview with Vikram Chaudhary from FE, Vinod Aggarwal adds that due to social distancing norms, sales of buses might pick up gradually. He further says that a connected truck is already here, and it’s more advanced than a connected car, and that VECV will introduce telematics as a standard feature in most of its models.

By:Updated: Jun 15, 2020 10:31 AM

With 34 years of experience in the Indian commercial vehicle (CV) sector, Vinod Aggarwal is probably 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 there is a lot of pent-up which may translate into sales. In an interview with FE’s Vikram Chaudhary, he adds that due to social distancing norms, sales of buses might pick up gradually. He also adds that a connected truck is already here, and it’s more advanced than a connected car, and that VECV will introduce telematics as a standard feature in most of its models.

Is the bus segment impacted more than trucks due to Covid-19?

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. Also, because the tourism has stopped (it’s the summer vacation period), the tourist bus segment has also taken a hit. However, I believe that, due to social distancing norms even within buses—these will run at 50% of their normal capacity—there may be some increase in demand over the next 1-2 years. Schools are also likely to open later this year.

What gives you confidence that demand will return soon?

Last year was a lean period for the CV industry—alongside overall slowdown in the economy and the NBFC liquidity stress issues, changes to axle load norms were a major factor in falling CV sales. We expected CV sales to pick up in March this year—due to the BS4 to BS6 shift operators were looking to buy vehicles in March, expecting heavy discounts. But then the lockdown happened. So I think there is a lot of pent-up demand.

Do you think the government’s stimulus package will help the sector?

The government has improved money supply; liquidity has been given in the hands of banks with a direction that they should lend to MSMEs and other small businessmen. The stimulus is directed towards improving the supply side, rather than the demand side. We have to wait and watch what impact it will have on the sector.

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. Earlier we were offering telematics as an optional feature, but now we will introduce these features as standard in most of our models; we can also give subscription free for, let’s say, the first year. In trucks, 45-50% of the total running cost is fuel cost. If you are not driving properly—pressing the clutch too often or accelerating too hard—a lot of fuel is consumed. In our trucks, there is real time guidance to the driver on the dashboard that can help save a lot of fuel. Using telematics, we can also provide relevant information to fleet operators so that they can improve their operations and reduce total cost of ownership.

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