CV in­dus­try fu­ture

A panel dis­cus­sion on the CV in­dus­try fu­ture at the be­gin­ning of Apollo CV Awards 2018 saw the lead­ers of the in­dus­try ex­press their thoughts.

Commercial Vehicle - - WHAT'S INSIDE - Story by: Bhushan Mhapralkar

A panel dis­cus­sion on the CV in­dus­try fu­ture at the be­gin­ning of Apollo CV Awards 2018 saw the lead­ers of the in­dus­try ex­press their thoughts.

An ex­pres­sion by Girish Wagh, Head – Com­mer­cial Ve­hi­cles, Tata Mo­tors Ltd., about the ef­fects of GST and the be­havioural changes seen at the fleet op­er­a­tor level set the tone for the panel dis­cus­sion. “Post the sec­ond quar­ter of FY2017-18, fun­da­men­tal rea­sons” men­tioned Girish, “led to de­mand for CVs go­ing up.” Leave for some early ap­pre­hen­sions of how the in­dus­try will pan out, trans­porters re­acted pos­i­tively. Busi­ness has been good post the stock­ing and de-stock­ing hic­cup, averred Wagh. Stat­ing that there were some head­winds af­ter GST im­ple­men­ta­tion, Shyam Maller, Ex­ec­u­tive Vice Pres­i­dent - Sales, Mar­ket­ing & Aftermarket (Light & Medium Duty Trucks, Buses), VE Com­mer­cial Ve­hi­cles, re­marked that fleet own­ers, parts dis­trib­u­tors and re­tail­ers felt the pain. “Ve­hi­cle deal­ers who were caught off guard in terms of ad­di­tional work­ing cap­i­tal also felt the pain,” he men­tioned. Trig­ger­ing a mas­sive change at the lo­gis­tics and C&F level, GST is trans­form­ing the way goods are car­ried, an­nounced Maller. Opin­ing that rapid growth in in­fras­truc­ture is also help­ing the in­dus­try trans­form, Maller said, “Thirty-seven tonne trucks have been the star per­form­ers this year. Growth is set to un­veil it­self in the con­struc­tion truck space. The happy days of 2011 and 2012 are back.”

Pointng at the start of uncer­tain­ties in 2008, Erich Nes­sel­hauf, MD & CEO, Daim­ler In­dia Com­mer­cial Ve­hi­cles, at­trib­uted the re­turn of strong de­mand to the back­log. Stat­ing that buy­ers be­came ner­vous af­ter the roll-out of BSIV roll­out, Erich men­tioned that it took some time for them to un­der­stand BSIV tech­nol­ogy. “Ac­cep­tance im­proved rapidly there­after,” he re­marked. Ex­press­ing that an ear­lier com­mu­ni­ca­tion from the gov­ern­ment about GST or its rates would have helped, Nes­sel­hauf said that the fear was of a de­cline in truck util­i­sa­tion. The mag­ni­tude of de­mand due to the back­log was how­ever of such mag­ni­tude that it pushed truck util­i­sa­tion to 200,000 km per year from the ear­lier level of 80,000 km per year. Claim­ing that in­ter­na­tional fleets are en­ter­ing In­dia, Nes­sel­hauf averred, “The de­mand may be much big­ger than util­i­sa­tion. We have re­ceived huge or­ders from in­ter­na­tional fleets that are en­ter­ing In­dia. They are highly pro­fes­sional in na­ture.” Ex­press­ing that those in the

busi­ness are in­vest­ing as per gov­ern­ment poli­cies, Vinod Sa­hay, CEO, Mahin­dra Trucks and Buses, ex­pressed that a good per cen­t­age of CVs in the fu­ture will be made up of al­ter­nate fu­els and elec­tric­ity. “At least for a cou­ple of more years, a large part of heavy CVs will com­prise of diesel. BSVI is a good and clean tech­nol­ogy,” said Sa­hay.

Elec­tric and other tech­nolo­gies

Of the opin­ion that buses will go to­wards elec­tri­fi­ca­tion, and would be leg­is­la­tion and cus­tomer driven, Sa­hay averred that there will be a mix when one con­sid­ers small CVs, in­ter and in­tra-city CVs. Stress­ing on elec­tric ve­hi­cle tran­si­tion ac­com­pa­nied by tech­nol­ogy ac­cep­tance, ecosys­tem adop­tion and suc­cess­ful com­mer­cial adop­tion of tech­nol­ogy, Sa­hay re­marked, “Diesel will be a fuel of choice in the fore­see­able fu­ture for in­ter-city and high­way trucks.” Suresh Chet­ti­yar, Busi­ness Head, Volvo Buses South Asia, men­tioned that a dif­fer­ent game will evolve for buses. “An im­por­tant part of the tech­nol­ogy roadmap is evolv­ing in the form of BSVI and elec­tro­mo­bil­ity. It is nec­es­sary to watch how it goes back into the pub­lic life,” he said. Em­pha­sis­ing on reg­u­la­tory driven pro­cesses, Chet­ti­yar averred, “Cost will be driven up by tech­nol­ogy roadmap, which in-turn will drive per­for­mance on the road. Per­for­mance will come from the way peo­ple will travel or how goods will move. It will also in­volve safety and en­ergy ef­fi­ciency. The need is to al­low a de­vel­op­ing ecosys­tem to have the right stan­dard­i­s­a­tion and scale to of­fer value in terms of cost.” Of the opin­ion that tech­nol­ogy is not a lim­it­ing fac­tor, Chet­ti­yar re­marked, “It may be good to be op­ti­misic or leapfrog by crunch­ing tech­nol­ogy that took longer to de­velop in ad­vanced mar­kets. It would not bode well how­ever to over­look the cur­rent ecosys­tem, and if there is space for in­vest­ment, or if the op­er­a­tors know how to bring ef­fi­cien­cies in op­er­a­tions.”

Stat­ing that it will not make a dif­fer­ence by putting 1000 ve­hi­cles with new tech­nol­ogy on the road, Suresh averred, “The need would be to get old ve­hi­cles out.” Terming elec­tric mo­bil­ity as far stretched, So­ma­sun­daram S, Head – Sales, MAN Trucks In­dia Pvt. Ltd., said that the CV in­dus­try is al­ready leapfrog­ging from BSIV to BSVI in the short­est time ever for such a leap to take place in the world. “The need is to look at the prod­uct life­cy­cle. The BSIV life­cy­cle will be shorter. With the cost of op­er­a­tion im­por­tant, a ten­dency to ac­cept and quickly tackle any dis­rup­tion that comes in the way is ris­ing,” men­tioned So­ma­sun­daram. Terming BSVI as the most chal­leng­ing, he re­marked, “The roadmap on elec­tri­fi­ca­tion will de­pend on how the mar­ket ac­cepts it, or if the right ecosys­tem is avail­able. Even coun­tries that pi­o­neered a move to elec­tric mo­bil­ity are find­ing it dif­fi­cult to get the right ecosys­tem.” Of the opin­ion that ecosys­tem takes time to de­velop,

and will have to be eco­nom­i­cal to work in In­dia, So­ma­sun­daram ex­plained, “Sim­ply en­forc­ing it will not work.” He drew at­ten­tion to BSVI tech­nol­ogy and how the next three years will be spent do­ing it. “Diesel is go­ing to have a longer life than is an­tic­i­pated. For elec­tri­fi­ca­tion, the avail­abil­ity of elec­tric­ity has to be looked into. What hap­pens when the en­tire ecosys­tem, shifts to elec­tric­ity will also need to be seen,” he said.

Meet­ing the thresh­old

Of a clear view that tech­nol­ogy has to meet cer­tain thresh­olds, Girish Wagh men­tioned that tech­nol­ogy should make busi­ness sense. He averred, “The move to BSVI should make busi­ness sense to a cus­tomer. It is nec­es­sary for the OEM to be able to meet the gov­ern­ment man­date. We need to en­sure that the BSVI prod­uct we of­fer makes com­mer­cial sense to the cus­tomer apart from mak­ing busi­ness sense to us. We can­not de­velop ev­ery tech­nol­ogy even though we keep track and pur­sue ad­vanced de­vel­op­ments in var­i­ous ar­eas. In the area of elec­tri­fi­ca­tion, the tech­nol­ogy should make eco­nomic sense to the cus­tomer. Con­sider the re­cent elec­tric-bus ten­ders, the eco­nomic sense to the cus­tomer is cur­rently linked to FAME Phase-one in­cen­tive.” Ex­press­ing that bat­tery prices and those of the other as­so­ci­ated bits are com­ing down, Wagh said, “We will cross that thresh­old one day for the cus­tomer. It will ad­dress the cus­tomer busi­ness part. For OEMs, the need is to have vol­umes be­cause of the lack of back­ward in­te­gra­tion.” Re­veal­ing that the gov­ern­ment is look­ing at how back­ward in­te­gra­tion can be achieved as far as elec­tric mo­bil­ity is con­cerned, Wagh men­tioned, “Range and cost are a chal­lenge. The two have an in­verse re­la­tion­ship, and buses will be the first to see elec­tric pen­e­tra­tion.” Com­ment­ing that it will hap­pen with the sup­port of in­cen­tives, Wagh opined, “In­tracity trans­porta­tion would be the next to see elec­tric pen­e­tra­tion. In­tra-city goods trans­porta­tion, if it will make busi­ness sense, will see elec­tric pen­e­tra­tion as well,“he said.

Ex­press­ing that In­dia has more en­gi­neers than any­where else in the world, Erich men­tioned that it is they who will of­fer elec­tro-mo­bil­ity tech­nol­ogy. High­light­ing a need to change the mind­set, Erich averred, “We have to in­vest in elec­tri­fi­ca­tion, and now.” Stress­ing on the need to have a mas­ter­plan in place, Nes­sel­hauf ex­pressed that In­dia is be­hind Europe in elec­tro-mo­bil­ity. “I say this,” he ex­plained, “is be­cause elec­tric trucks are al­ready be­ing sold in Europe and the United States.” “The gap is far more when it comes to hav­ing charg­ing sta­tions, and it does not help to talk about elec­tric­ity from the tank to the engine, but about what en­ergy will best serve the need. We have to think of how to pro­duce en­ergy. It is ex­tremely bad if we were to pro­duce elec­tric­ity from Lig­nite. The BSVI engine would be much cleaner than to have an elec­tric ve­hi­cle that gets elec­tric­ity from burn­ing Lig­nite,“re­marked Erich. Of the opin­ion that there is a need to align the in­cred­i­ble peo­ple (en­gi­neers) that In­dia has, to en­gi­neer a mas­ter plan for elec­tri­fi­ca­tion, Nes­sel­hauf said, “The need is to un­leash the ca­pa­bil­ity; to un­leash the po­ten­tial. By do­ing this, there will be no need to de­pend on China. China is keen to be a fron­trun­ner in elec­tri­fi­ca­tion, and is sub­si­dis­ing it. If elec­tric­ity would be the an­swer, diesel CVs will be found in the fu­ture. There will be scope for al­ter­nate fu­els too.” Ex­plain­ing that one should not think that a cer­tain tech­nol­ogy will last for long, Erich men­tioned, “The need would be get the cash back (ROI) be­fore its too late.”

Reg­u­la­tions and safety

Ex­press­ing that there are big­ger con­cerns than just what fuel will power a CV, Vinod Sa­hay re­marked. “Reg­u­la­tions that look at other ar­eas like im­prov­ing safety need to be de­bated upon. Call­ing upon the need to align the CV in­dus­try and the gov­ern­ment, Sa­hay said, “It is im­por­tant to catch up with the rest of the world on the as­pect of safety as well.” Stat­ing that a large num­ber of trucks do not have an OE cabin, Sa­hay ex­pressed that a big part of the multi-axle trucks have to take the leap to fully­built safety cab­ins. He in­formed that ac­ci­dents are hap­pen­ing be­cause of a lot of un­trained driv­ers are driv­ing trucks. “There is a short­age of CV driv­ers in In­dia. We (OEMs) are open­ing driver train­ing schools, but there are no stu­dents,” said Sa­hay. Not at­tract­ing enough tal­ent, the prob­lem with driver pro­fes­sion is a prob­lem of the so­ci­ety. It is a prob­lem that the coun­try is ig­nor­ing. Stress­ing on the need to in­tro­duce driver be­hav­iour reg­u­la­tions in In­dia, and which are found in Europe, Sa­hay opined that there is a need to work jointly. Point­ing at scrappge pol­icy, and how the coun­try would ben­e­fit, and not

just the OEMs, Sa­hay said, “There is no point in hav­ing pol­lut­ing CVs out on the road than to in­tro­duce BSVI emis­sion norms.”

The ris­ing re­li­a­bil­ity to CVs re­quir­ing them to visit the work­shop once or twice a year is herald­ing a big change. Ex­press­ing that there is a need to look be­yond emis­sions to sup­port mod­ern CVs, Sa­hay said that do­ing so will be in the in­ter­est of the larger econ­omy. De­scrib­ing bus body code as a scam as it has not got im­ple­mented, Maller said, “We do not know when the truck code will come out.” Stat­ing that BSVI CVs with bod­ies that do not pre­scribe to a cer­tain stip­u­lated stan­dard would be a po­ten­tial bomb on the road, Maller averred, “Some horific ac­ci­dents in­volv­ing buses has led to a rise in con­scious­ness about safety.” Re­sponded So­ma­sun­daram S, “Util­i­sa­tion of CVs is go­ing up, and a shift to­wards higher ton­nage is on. This will lead to the in­clu­sion of bet­ter tech­nolgy. The next two-three years will see the need emerge for ve­hi­cles that sup­port higher util­i­sa­tion. Bet­ter net­work reach will be nec­es­sary, and the CV in­dus­try will con­tinue to evolve.” Suresh ex­pressed, “The po­ten­tial when it comes to buses is enor­mous. Mo­bil­ity needs are go­ing up since we are low per mass of peo­ple.” Stated Sa­hay, “The ra­tio tilt to­wards goods CV does not jus­tify the de­mog­ra­phy we leave in, and pro­vides room for bus growth to sur­pass those of trucks. Stress­ing upon adop­tion of bet­ter tech­nol­ogy, Sa­hay said that util­i­sa­tion is go­ing up con­sid­er­ably for op­er­a­tors to be more com­pet­i­tive. The al­lo­ca­tion in re­cent bud­get to­wards ru­ral econ­omy will prove to be a big en­abler for CVs, he opined. A rise in the ru­ral in­come and af­ford­abil­ity will drive medium to long-term de­mand, re­marked Sa­hay.

Con­nec­tiv­ity and in­fras­truc­ture

Ex­press­ing that con­nec­tiv­ity is grow­ing, Erich Nes­sel­hauf men­tioned that safety has to be pushed up, and bet­ter up­time has to be achieved. “Evo­lu­tion in CVs will be very fast, and will be com­pa­ra­ble to the evo­lu­tion in mo­bile phones,” he stated. In­form­ing that CV op­er­a­tor de­mographics are chang­ing, Maller opined that bulk buy­ing has gone up, and is trig­gered by an end cus­tomer look­ing to deal with fewer lo­gis­tics part­ners. This, he men­tioned, would lead to safer, com­pany built trucks with higher pay­load. Laud­ing gov­ern­ment’s ef­fort to curb over­load­ing, Maller said, “Ris­ing in­fras­truc­ture will shift the fo­cus to­wards larger trucks.” “The funny rule of a trac­tor mar­ried to a trailer should go,” Maller an­nounced. Un­der­lin­ing three forces that are driv­ing the CV in­dus­try — reg­u­la­tions, TCO and to­tal op­er­at­ing rev­enue, Wagh con­cluded, “To­tal op­er­at­ing rev­enue will boost ac­tive safety and com­fort, he con­cluded. The panel dis­cus­sion was mod­er­ated by V G Ra­makr­ish­nan, Man­ag­ing Direc­tor, Avan­teum Ad­vi­sors.

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⇧ (L to R): Suresh Chet­ti­yar, Busi­ness Head, Volvo Buses South Asia, Vinod Sa­hay, CEO, Mahin­dra Trucks and Buses, Erich Nes­sel­hauf, MD & CEO, Daim­ler In­dia Com­mer­cial Ve­hi­cles, V G Ra­makr­ish­nan, Man­ag­ing Direc­tor, Avan­teum Ad­vi­sors, Girish Wagh, Head –...

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