Op­er­a­tional ef­fi­ciency, mar­ket de­mand are key driv­ers of our growth, says Nagesh Basa­van­halli, MD and CEO, Greaves Cot­ton Ltd.

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Q: What have been the growth driv­ers of Greaves Cot­ton?

Basa­van­halli: A key growth driver that we have been wit­ness­ing is stronger cus­tomer de­mand post the usual sus­pects of de­mon­eti­sa­tion and the roll-out of GST in 2017. This has led us to have a strong strate­gic fo­cus. We have laid down the roadmap for the next 5 years. It has led to a top-line growth. For bot­tom-line growth, we have been very cog­nizant of the fact that com­mod­ity in­fla­tion is on the rise. To counter it, we have been ag­gres­sive in terms of low-cost pro­duc­tion and in­no­va­tive tech­niques.

Op­er­a­tional ef­fi­ciency com­bined with the de­mand for our prod­ucts have been the key driv­ers of our growth.

Q: How do you look at the jour­ney from the diesel en­gines to a range of al­ter­na­tive fuel pow­er­trains?

Basa­van­halli: We man­u­fac­ture 1 en­gine ev­ery minute. Eight out of 10 diesel ve­hi­cles use a Greaves Cot­ton en­gine. We have sold 5 mil­lion en­gines till date. We of­fer 15 en­gine vari­ants – from 4 hp to 700 hp. We are touch­ing mil­lions of peo­ple through our pres­ence in the busi­ness of en­hanc­ing pro­duc­tiv­ity. We have a 3500 strong re­tail net­work. Our scale is what pro­vides us the cost ad­van­tage. It is what makes it pos­si­ble for us to of­fer our cus­tomers lower to­tal cost of own­er­ship. It is this value propo­si­tion that we are back­ing up with a strat­egy to build fuel ag­nos­tic pow­er­trains.

Con­sumer pref­er­ences are chang­ing. We are align­ing our busi­ness in­line with these changes. We are in­creas­ing our ca­pa­bil­ity by en­ter­ing into tech­no­log­i­cal al­liances. We have en­tered into one with Pin­na­cle En­gines for ex­am­ple. The new range of en­gines that we build is based on green tech­nol­ogy. These en­gines main­tain a power-to-per­for­mance ra­tio while de­liv­er­ing over 30% per­cent fuel econ­omy. At times, it is not pos­si­ble to in­cor­po­rate all – power, fuel ef­fi­ciency, etc. Our en­deav­our is to in­cor­po­rate them all; to give the con­sumer what he wants. Con­sumer pref­er­ences are mov­ing to­wards CNG, petrol, hy­brid and elec­tric. We are look­ing at the en­tire ecosys­tem. We are look­ing at a low cost, light­weight plat­form. Putting a bat­tery on an ex­ist­ing plat­form, which is heavy would not lead to op­ti­mi­sa­tion, and much like an elec­tric ve­hi­cle pow­ered by a coal­based en­ergy source will not make an op­ti­mal so­lu­tion. From a pow­er­train per­spec­tive, we are look­ing at light weight­ing of the body with our part­ners. By bring­ing in al­ter­na­tive pow­er­train so­lu­tions, we are pro­vid­ing end con­sumers with the de­sired value propo­si­tion.

Q: What are you do­ing to change the per­cep­tion of be­ing a three-wheeler pow­er­train provider?

Basa­van­halli: A ma­jor­ity of our cus­tomers are in the three-wheeler space. We also of­fer BS-VI mul­ti­cylin­der en­gines for four-wheel­ers.

We are talk­ing to OEMs, and once they reach a cer­tain level we will make a for­mal an­nounce­ment.

Q: What about your of­fer­ings in the hy­brid and elec­tric space?

Basa­van­halli: We have the so­lu­tions. It is nec­es­sary for us to gauge the mar­ket sen­ti­ment and get a feed­back. On the ba­sis of it, we will be able to fine-tune our strat­egy. It is nec­es­sary to work out the eco­nom­ics. Oth­ers are also cer­tain to be work­ing on this front. The need is for a sup­port­ing in­fras­truc­ture like fast charg­ing for ex­am­ple. Our an­nounce­ment of Greaves Care is a step in the di­rec­tion of cre­at­ing an in­fras­truc­ture.

Q: How strong is your af­ter-sales net­work?

Basa­van­halli: We em­barked on a con­cept of multi-brand spares 2 years ago. It took our net­work one step ahead. It gave our chan­nel part­ners the abil­ity to strike a busi­ness in an en­vi­ron­ment that is largely un­or­gan­ised. The en­vi­ron­ment to­mor­row is go­ing to be or­gan­ised, and we will have a big ad­van­tage. We are build­ing a strong multi-brand ser­vice net­work for three-wheel­ers. We have over 3500 plus spare parts and multi-brand parts part­ners. We will scale up the net­work with the help of the right part­ners.

Q: How do you work out your part­ner­ships with OEMs and al­lied part­ners?

Basa­van­halli: We are part­ner­ing with over 35 OEMs on the en­gine front. They have re­in­forced their faith in us not only for BS-IV but for BS-VI too. We will con­tinue to sup­port them; to of­fer them a value propo­si­tion that in­volves in­vest­ing in tech­nol­ogy and build­ing our ca­pa­bil­i­ties. We are bring­ing in a scale, a fi­nan­cial model, and tech­nol­ogy part­ners with the knowl­edge that the time is short. Our strat­egy is to strike the right part­ner­ship as this would help reach the mar­ket faster.

Q: How far do think EVs will come to dom­i­nate?

Basa­van­halli: EVs are pro­gress­ing. Diesel, I feel, will move away from ma­jor cities to ru­ral and semi-ru­ral ar­eas where ac­cess to diesel is eas­ier. Over the short to medium term, CNG and petrol would con­tinue. Over a pe­riod of time, hy­brid and elec­tric pow­er­trains will start to take over. If one looks at mar­kets like Europe, there are 2 mil­lion charg­ing sta­tions. Yet the per cen­t­age of ICE ver­sus elec­tric is such that the for­mer out­does the lat­ter in per cen­t­age terms. We are also mov­ing in the same di­rec­tion. The shift will not be in­stant. It will take place over a pe­riod of time, and will be in­flu­enced by in­fras­truc­ture and eco­nom­ics.

Q: What is your R&D set-up?

Basa­van­halli: At Greaves Cot­ton, we have a highly skilled team. It is well versed with dif­fer­ent tech­nolo­gies. It pro­vides us with a dis­tinct ad­van­tage. We also are work­ing closely with our part­ners.

Q: How do you look at the op­por­tu­ni­ties and chal­lenges?

Basa­van­halli: Three-wheeler de­mand is pick­ing up. The en­gine busi­ness is pick­ing up. The agri­cul­ture busi­ness that we are in, is also pick­ing up. Not just these 2, the genset busi­ness that we are in, is also grow­ing. It is clock­ing dou­ble-digit growth for us. The trend is likely to con­tinue. In the after­mar­ket busi­ness, we are also see­ing strong trac­tion. We are driv­ing sev­eral new ini­tia­tives. Each is tran­si­tion­ing to the next level. The key chal­lenge that we see is about the ecosys­tem; about our sup­pli­ers get­ting ready and set­ting up the in­fras­truc­ture to meet BS-VI, well be­fore it is to be im­ple­mented.

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