Chal­lenges and op­por­tu­ni­ties

Commercial Vehicle - - INTERVIEW -

Q. How do you plan to keep the ex­cite­ment go­ing at Mahin­dra Trucks and Buses?

A. The team at Mahin­dra Trucks and Buses Limited (MTBL) has done a good job. The ex­pec­ta­tions from the Blazo have been met. By and large, wher­ever the Blazo sold in BSIII ver­sion, the prom­ises made by the com­pany have been ful­filled. In this in­dus­try, at the end of the day, it is the prod­uct, tech­nol­ogy and the core of­fer­ings that make a dif­fer­ence. Be­yond a point, if the core is not de­liv­er­ing, there may not be much to do. A CV is not a life­style prod­uct. It has to be a prof­itable busi­ness for its buyer. With Blazo BSIV, we strongly be­lieve that the delta, which we used to have ear­lier, has risen fur­ther. The mi­gra­tion to BSIV has brought about a gen­er­a­tion change in CVs. It may not be the first time that a new emis­sion norm has come into ex­is­tence, BSIV emis­sion norms have set a new par­a­digm nev­er­the­less. The en­gine re­mained me­chan­i­cal through BSI, BSII and BSIII mi­gra­tion. With BSIV mi­gra­tion, there’s not a sin­gle me­chan­i­cal en­gine in use. It will be a world of elec­tron­ics here­after. With the move to BSIV, it is not just the elec­tronic en­gine, but also the ex­haust af­ter treat­ment. There is an amount of af­ter treat­ment re­quired in EGR and SCR. It in­creases the back pres­sure. Back pres­sure will only in­crease fur­ther with the move to BSVI emis­sion norms. A six-litre en­gine of an ear­lier era will no longer pro­duce the same amount of power and torque. Ef­fi­ciency, power de­liv­ery and torque will change. Co­in­cid­ing with the im­ple­men­ta­tion of GST al­most, the mi­gra­tion to BSIV has sig­naled that a truck is go­ing to be a far more ef­fi­cient as­set than it was ear­lier.

If it used to travel 90,000 to one-lakh kilo­me­ters per year, it will now travel one and a half lakh kilo­me­ters. We have come to think that what was prob­a­bly our weak­ness is now our strength. If our 7.2-litre en­gine makes us fu­ture-ready, we are quite ex­cited. We are at a very good po­si­tion right now, and will be tak­ing the same en­gine to BSVI. Oth­ers may have to seek a new en­gine to meet BSVI emis­sion norms. We are in a po­si­tion to go for­ward in a much stronger way. Af­ter ex­ten­sive tri­als we have come to con­clude that our mileage guar­an­tee stands, and in a big­ger way than it did in the case of BSIII.

Q. What was the rea­son be­hind se­lect­ing SCR tech­nol­ogy?

A. We de­cided to move ahead with SCR tech­nol­ogy be­cause it does not have any neg­a­tive im­pact on the en­gine. EGR is good for a range of prod­ucts where the power to weight ra­tio is high. In LCVs, where the power to weight ra­tio is up­wards of 10, EGR is a good tech­nol­ogy. In heav­ier CVs, where 49-tonne is pulled by a 230 hp en­gine, the power to weight ra­tio is just about four. Add the pos­si­bil­ity of over­load­ing, and EGR as a tech­nol­ogy is just not suf­fi­cient. Upon adopt­ing SCR tech­nol­ogy, we have made an ef­fort to be fu­ture-ready. We have cho­sen air­less SCR, which is a ne­ces­sity to meet BSVI emis­sion norms. Air­less SCR is costlier for the man­u­fac­turer, but is cheaper for an op­er­a­tor. Air­less SCR con­sumes less AdBlue. Our truck will thus con­sume 10 to 15 per cent less AdBlue. Only one fil­ter needs to be changed af­ter ev­ery 60,000 kms, and it costs Rs.1200. The four year SCR cost for our truck will be Rs.7300. Fre­quency of fil­ter change in air-as­sisted SCR is high. The costs in­volved are in the re­gion of Rs.60,000 to Rs.70,000 over a span of four years. Our ad­van­tage in Blazo BSIV is even big­ger than it was in the BSIII guise. We are stress­ing upon com­mu­ni­cat­ing the ad­van­tage a Blazo of­fers, and it is go­ing to be a slow and steady process. Un­like in­dus­try lead­ers, we do not have the abil­ity to put thou­sands of trucks in one go. For a chal­lenger brand like us, we ex­pect peo­ple to con­duct a care­ful eval­u­a­tion.

Q. What are your plans to fill up the gap be­tween the LCVs and M&HCVs?

A. We have re­freshed the cabin of our LCVs dur­ing the last two-to-three months. We have also ex­tended ‘Fuel Smart’ tech­nol­ogy to our LCV range. It has two modes un­like the three modes the sys­tem in the Blazo has. The light goods ve­hi­cle range gets ‘mileage guar­an­tee’, which will be ex­tended to light pas­sen­ger ve­hi­cles. To ad­dress the gap be­tween six and 25-tonne, we are work­ing on a new plat­form that will spring up ICVs and MCVs. We plan to launch the next set of ve­hi­cles, es­pe­cially in the nine to 16-tonne range in the next twelve months. The node of high­est vol­umes in ICVs keeps shift­ing. Five years ago, it was in the 10.5-tonne range, to­day it is in the re­gion of 13.5to 14.1-tonne. We see vol­umes in three seg­ments go­ing for­ward. Th­ese would be trac­tor-trail­ers and heavy rigid trucks; trucks in the 13- to 16-tonne bracket, and 3.5- to 4-tonne seg­ment. We will soon com­plete the miss­ing link.

Q. What plans do you have to tap the grow­ing bus seg­ments?

A. We have been in­vest­ing in buses, and have a range from 15-seater to 40-seater. In this fi­nan­cial year, Mahin­dra will launch the LPO range with 30-, 40- and 45-seat con­fig­u­ra­tion. ICV plat­forms’ abil­ity to come up with pas­sen­ger ve­hi­cles will be ex­plored in the sec­ond phase. We have in­tro­duced air sus­pen­sion in our LCV range. The LPO range will com­ple­ment the ex­ist­ing range of lighter pas­sen­ger ve­hi­cles made at Za­heer­abad.

Q. How would MTBL travel along the line of change in tech­nol­ogy?

A. The chal­lenge to move up to BSVI in two and half years has been taken. Al­ter­nate fu­els, es­pe­cially elec­tric­ity, will call for sup­port­ing ecosys­tem. Our elec­tric CVs will carry a lot of knowl­edge ac­quired by Mahin­dra Elec­tric, a group en­tity. We will work jointly with them. We are work­ing on bus projects. Heavy elec­tric CVs call for huge in­vest­ment. With elec­tric propul­sion con­cen­trat­ing around lighter, ur­ban ve­hi­cles, we, as a group, do not see much chal­lenge. We may not be ready to sell a ve­hi­cle in the mar­ket, tech­nol­ogy-wise we will not be found want­ing. Talk­ing about cabin tech­nol­ogy, the one that we of­fer is crash test cer­ti­fied. Termed the best, and the most mod­ern, the cabin is also well equipped. It mea­sures 2.4 m com­pared to the cab­ins oth­ers of­fer, which mea­sure 2.2 m. AC is op­tional, and new e-com­merce com­pa­nies are opting for it. Ac­cep­tance among or­gan­ised play­ers is ris­ing since an AC cabin im­proves as­set util­i­sa­tion. DigiSense is a con­nected ve­hi­cles ini­tia­tive that pro­vides the abil­ity to talk to the driver, op­er­a­tor and the op­er­a­tor’s cus­tomer. A wealth of in­for­ma­tion is ob­tained. A cus­tomer op­er­at­ing oil tankers for Bharat Pe­tro­leum for in­stance can mon­i­tor his or her truck be­yond the in­ter­est of the oil com­pany to mon­i­tor its ar­rival and de­par­ture at its ter­mi­nal. An elec­tron­i­cally gov­erned en­gine en­ables the ‘box’ to com­mu­ni­cate with the en­gine ECU. CAN-data can be trans­ferred, and used for re­mote di­ag­no­sis and prog­no­sis. Data could be used to pro­vide bet­ter ser­vice, and to carry out pre­ven­tive main­te­nance. Adding huge value for us, and en­hanc­ing our abil­ity to de­sign a bet­ter truck, the dash­board of our truck could dis­play CAN-data as well. Driv­ing in­for­ma­tion could be di­vulged apart from fuel ef­fi­ciency. When the driver stops, he can use the ‘box’ to find out a bet­ter route. Apart from geo-fenc­ing, as and when the reg­u­la­tion de­mands, driver pro­duc­tiv­ity man­age­ment or driver util­i­sa­tion could be in­cor­po­rated. If a reg­u­la­tion to drive eight hours is im­ple­mented, the ‘box’ can be pro­grammed to talk to the driver. This will call for the ‘box’ to be Wi-Fi and Blue­tooth en­abled. In­for­ma­tion re­gard­ing trailer cou­pling and tyre pres­sure could be had as well. The pos­si­bil­i­ties are end­less, and up to the imag­i­na­tion of OEM. The driver and op­er­a­tor should mi­grate to such a plat­form.

Q. How close are we to truly con­nected CVs?

A. We are not far from truly con­nected CVs. It is the cost that has to be jus­ti­fied. Reg­u­la­tory push makes it eas­ier, but the chal­lenge lies with the op­er­a­tor get­ting the price from the con­sumer. What goes into a CV, some­one has to pay for it. A con­signor’s abil­ity to pay for a safer truck has to be there. Con­sid­er­ing the need for a ma­ture ecosys­tem, our op­er­at­ing eco­nomics in BSIV is not in­fe­rior to BSIII.

Q. What growth op­por­tu­ni­ties do you see?

A. For a chal­lenger brand like us, ev­ery­thing is an op­por­tu­nity. We com­mand a five per cent mar­ket share. In heavy com­mer­cial ve­hi­cles we are the num­ber four player. We are see­ing good trac­tion in some of the seg­ments like the 37-tonne seg­ment, and the 49-tonne seg­ment. In th­ese seg­ments our po­si­tion is bet­ter than the in­dus­try av­er­age of five per cent. There are pock­ets where we have reached a mar­ket share of 15 to 20 per cent. The shift to BSIV has in­creased our com­pet­i­tive­ness. We see a big op­por­tu­nity in truck body code. Over 65 per cent of what we sell are fully-built ve­hi­cles. The sale of BSVI CVs is ex­pected to be­gin from De­cem­ber 2019 it­self. This gives rise to two is­sues – ROI and the abil­ity to op­er­ate BSIV CVs. With BSVI at the doorstep, mi­gra­tion to larger en­gines will be faster. En­gine back pres­sure will rise. We will stick to our cur­rent en­gine and air­less SCR with some ad­di­tional bits thrown in

to meet BSVI emis­sion norms. In LCVs, we will have a mix of EGR and SCR. The power to weight ra­tio will help to de­cide.

Q. As com­pe­ti­tion gets fierce, and ways of work­ing change, what group syn­er­gies would you look at?

A. Syn­er­gies for us come out of var­i­ous things. They are about tech­nol­ogy mostly. Digisense is a re­sult of syn­ergy. Com­mon-rail diesel en­gine is an­other ex­am­ple. There’s much syn­ergy at the sup­plier end. With­out syn­er­gies we would not have been as cost com­pet­i­tive. With the en­tire auto busi­ness in­dulging in com­mon sourc­ing, the chances of deal­ing with the same ven­dors in­crease. Syn­er­gies at the back-end and front-end pro­vide an ad­van­tage. Front-end syn­er­gies in­volve deal­ers. About 25 per cent of the deal­ers are com­mon to our farm or auto busi­nesses. The fa­cil­i­ties are in­de­pen­dent but the owner is the same. He gets the ad­van­tage of a com­mon back-end, and we get the ad­van­tage of fa­mil­iar­ity. In ser­vice, we are ex­plor­ing syn­er­gies where smaller, lighter and heav­ier com­mer­cial ve­hi­cles share the same ser­vice cen­ter. It saves over­heads for the dealer, and we are able to have a bet­ter reach. We have syn­er­gies with our fi­nance arm, Mahin­dra Fi­nance, which has a share of 30-35 per cent. We seek syn­ergy with Mahin­dra Re­search Val­ley for de­vel­op­ment of tech­nol­ogy.

Q. Would a new en­gine be de­vel­oped for ICVs?

A. Some of the cur­rent en­gines will be up­graded. We will also make new en­gines out of our port­fo­lio of en­gines.

Q. How do you plan to keep the sup­pli­ers and deal­ers mo­ti­vated?

A. We be­lieve that what ap­plies to our em­ploy­ees, also ap­plies to our part­ners. Sat­is­fac­tion nec­es­sar­ily does not come from money, it comes from the level of en­gage­ment. We have scored high in the J D Power sur­vey de­spite hav­ing come out of red just yet. We have scored much ahead of the Tatas and Ley­lands of the world. The big­gest rea­son for this is the way we treat our chan­nel part­ners; treat their prob­lems as ours. If you speak to our chan­nel part­ners, they will talk about the con­fi­dence we have given them. We make an hon­est at­tempt to solve their prob­lems. Our part­ners have been with us through the worst times. Most will to­day in­di­cate that the light is vis­i­ble at the end of the tun­nel. Most of them are rar­ing to go. I wouldn’t say that it is a job done. The process is con­stant. Play­ers like us can’t take things for granted. We can’t rest on the as­sump­tion that our deal­ers are mak­ing good money. Most of them are not. Most of them have just about turned prof­itable, or have bro­ken even. They have some way to go to re­cover their past in­vest­ment. We op­er­ate with a thumb rule of full hon­esty. We tell our part­ners that let us solve your prob­lems to­gether. We don’t com­mit that we can solve them 100 per cent as part of it is within our con­trol and part is not. Some things are out of our con­trol be­cause of the way things are hap­pen­ing in the in­dus­try right now., which leaves very lit­tle re­ten­tion to most of our deal­ers’ kitty. We are ex­pand­ing our dealer net­work on a need ba­sis largely. Due to our in­no­va­tive ap­proach to over­come ser­vice chal­lenges, we have achieved good re­sults. The ser­vice guar­an­tee, for ex­am­ple, we of­fer on the Mum­bai-Delhi cor­ri­dor. No other player has been able to give such a guar­an­tee. We are stress­ing on tech­nol­ogy and low cost in­no­va­tion to solve some of our prob­lems. We do not ask deal­ers to in­vest be­yond what is re­quired. We tell them to keep room for scal­ing-up the op­er­a­tion when the need arises. In some ar­eas, sin­gle digit ex­pan­sion could hap­pen to fill up the net­work gaps in this and the next fis­cal. We are look­ing to ex­pand the ser­vice guar­an­tee to other Golden Quadri­lat­eral cor­ri­dors. For the other cor­ri­dors, and the east-west cor­ri­dor, our com­mit­ment of 48 hours re­mains. We have 11 parts plazas. At the end of this year, we are look­ing at cross­ing 80.

Q.What are your ex­port plans?

A. Un­der the Auto and Farm sec­tor at Mahin­dra, we have iden­ti­fied two ma­jor ge­ogra­phies – South Africa and South Asia. We have a group-level team look­ing af­ter th­ese. We sup­port them. In the two ge­ogra­phies, dis­trib­u­tors have been ap­pointed. Our fo­cus right now is on the do­mes­tic mar­ket.

Q. What is your fore­cast for the CV mar­ket?

A. In terms of the quar­ters, it is very chal­leng­ing given the cur­rent sit­u­a­tion. A re­port men­tions that In­dia will be the fastest grow­ing econ­omy till 2025. If the econ­omy grows, com­mer­cial ve­hi­cles will also grow. There are in­ter­me­di­ate chal­lenges. GST is a two-way sword when it comes to com­mer­cial ve­hi­cles. It will in­crease the ef­fi­ciency of ex­ist­ing fleet. It will also add to over ca­pac­ity in some sec­tors. It will there­fore take three to four months be­fore the or­der is set. Op­er­a­tors will also eval­u­ate. If the truck were to run 7,000 km a month, it would now run 10,000 km. The op­er­a­tor will eval­u­ate fleet util­i­sa­tion. He will eval­u­ate how many new trucks are re­quired. Most are re-cal­cu­lat­ing as the ear­lier thumb rules are no longer ef­fec­tive. There could be a mo­men­tary chal­lenge over twoto-three months. The un­for­tu­nate bit is, it gets cou­pled with the lean sea­son. There is a like­li­hood of short term stress. In the medium and long-term there is no need to worry. The BSVI mi­gra­tion will haunt the in­dus­try next.

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