M&M unveils expansion plan for CVs - The Financial Express

M&M unveils expansion plan for CVs

Mahindra Truck and Bus division (MTBD) is getting ready to cash in on the green shoots of the Indian commercial vehicle industry.

By: | Updated: March 21, 2016 12:25 PM

Mahindra Truck and Bus division (MTBD) is getting ready to cash in on the green shoots of the Indian commercial vehicle industry. With an investment of R700 core, Mahindra is expanding its portfolio to be present in every segment of the CV industry and be in the market with its full product range from 3.5 tonnes to 49 tonnes in two years time. With this round of investment, the total investment for the having a full product range will go up to Rs 2,000 crore. The company says it is moving towards the breakeven point and it will happen soon.

Mahindra is readying to enter the intermediate commercial vehicle (ICV) segment with a prototype expected in the next two to three months in the 12 tonne and 13 tonne range. The existing light commercial vehicles (LCV) is getting a huge face-lift and is going to be a virtually new platform. The company has also launched the CRDe range of engines for the 25 tonne truck, Truxo 25 CRDe which will start production in a couple of days. It will start seeding the 49 tonne truck, Traco 49, next month.

The Rs 700 crore investment plan started to roll out six months ago with bulk of the money going into product development. All the trucks will roll out from the Chakan plant line, from where it rolled out its 15,000th heavy commercial vehicle (HCV) and crossed the sales milestone of 1,25,000 LCV recently.

Rajan Wadhera, president and chief executive, truck & powertrain and head, Mahindra Research Valley, Mahindra & Mahindra, said the CV industry had seen an upturn in the last few quarters with and increase in economic activity.

With the GST coming in the hub and spoke concept will develop in the transport segment which will give a boost to the MCV  and ICV range, Wadhera said. The HCVs will operate in the around 1,000-km range, while LCVs will ply the 100-to-200 km routes and the ICVs will be operating in the 300-to-400 km range, Wadhera said.

The company has products in the 3.5 tonne to the 7.5 tone and in the 25 tonne to the 49 tonne, but there was vacuum in between these two categories which customers, the channel and the company wanted to fill this work so started work on the ICV/MCV between the 7.5 to the 14 tone range, Wadhera said.

The new products will be made at the Chakan plant with no additional cost barring the product development, Wadhera said.  A team of 100 people are working the ICV and we are close to manufacturing the prototype in two to three months, Wadhera said. It will take around two years for a commercial roll out, he said.

There is room for more players in the ICV segment as the market is expanding and you don't have to nibble on existing players’ share, Nalin Mehta, CEO and MD, MTBT, said. There is some growth in the ICV segment and double digit growth in the LCV and it is not a bad market, he said.  Growth was being driven by  a mix of new regulations, replacement demand kicking in and a positive economy, Mehta said.

Mahindra's HCV segment now had 6,000 customers with 30% repeat customers with a 2.7% market share and an 8.9% market share in the LCV range, he said. The market as started growing finally and Achhe Din are coming back with, Mehta said.

On the service front dealerships will be expanded to 80 from 66, 173 authorized service centres from the current 90, there will be 2516 roadside assistance service points and 1,322 retail spares outlets.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.