VECV strategises to sustain leadership in dynamic LMD segment 

by Kiran Bajad 02 Apr 2018


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VE Commercial Vehicles, which holds sway over the light and medium duty truck market in India, is plotting an aggressive new product strategy to keep competition at bay, says Kiran Bajad

In today’s ultra-competitive marketplace, any company which has a leadership position in any category or product line has to strategise the growth path ahead to both protect its turf as well as outsmart the competition.

In India’s commercial vehicle sector, VE Commercial Vehicles (VECV) has been a strong player in the light and medium duty (LMD) trucks segment. This is partially due to its legacy of over three decades, when the company first entered the light truck market with Mitsubishi in the mid-1980s with the 6T truck, followed by expansion in higher tonnages of 9, 12, 13 and 15-tonne trucks.

eicher-launches-new-variants-for-the-e-commerce-industry-at-e-commerce-expo-in-bangalore

L-R: Vishal Mathur, senior VP (LMD Trucks and Buses), and Shyam Maller, EVP (LMD Trucks and Buses), VECV, launch the new variants for the e-commerce industry. 

Three decades later, having built a strong foundation, the company today has an expansive product portfolio, wider network, taking leadership in the LMD segments. Along the way, what has changed is that the company partnered with Swedish truck and bus maker Volvo in 2008. This partnership was an attempt to take on the competition in India which has not only seen fierce rivalry among home-grown players but several overseas players too. Now, banking on Volvo’s global proven technology, VECV is plotting an aggressive growth strategy to not just hold on its leadership in the LMD segment but also expand its geographical reach and market share. Today, VECV is the fifth-ranked brand in the Volvo Group’s global portfolio.

In a bid to sustain its leadership in the competitive market, the company is working on several fronts including upgrading to two BS IV platforms to trucks in the LMD segment, a new family of engine development and getting ready for the BS VI emission norm in 2020. The focus is also on further increasing fuel efficiency by notching its product development to move up the band and expanding into new geographies.

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The Pro 1110 XP, which is claimed to be ideal for zonal and national distribution duties, comes with a payload of 6.3T and 20-foot body.

The LMD (5-15T) segment has two subcategories – the bigger one is the 12-15T category with 42 percent share and 5T with 30-35 percent volumes of the total segment. VECV today caters to the LMD category with two distinct platforms – Pro 1000 (4.9-14T with the E483 3.3-litre, 2-valve engine) and Pro 3000 (12-16T with the E494 3.8-litre engine with 4-valve engine) range. The Pro 1000 comprises mass-market products while Pro 3000 is about slightly premium offerings.

Market dynamics

The Indian cargo and logistics market dynamics are changing rapidly due to fast-growing cities, the emergence of the hub-and-spoke model and stricter enforcement of rated load. As a result, the LMD segment, which is up to 15T, is now slowly moving towards 16T as customers aim to transport higher payloads. LMD trucks are predominantly used to transport fruits and vegetables, FMCG and courier.

eicher-pro-1114xp

VECV pitches the Pro 1114XP as an ideal local long-distance distribution truck that carries 9.9-tonne payload and has a 22-foot-long desk body.

Speaking to Autocar Professional, Shyam Maller, executive vice-president, Light & Medium Duty Trucks and Buses, VE Commercial Vehicles, says, “With the authorities stringently penalising overloading, customers want higher rated payload trucks. In our Pro 3000 range, we are offering a sleeper cab vehicle, a four-cylinder engine which gives better fuel efficiency and higher payload than a legacy 16T truck which comes with six cylinders, resulting in a more unladen weight of the vehicle.”

For example, in a 16T legacy truck, a customer can carry a 9T payload while VECV offers a 10.2T payload with 20, 24 and 31-foot bodies, thus offering a significant advantage to the customer who looks to adds profitability by carrying a more rated load. The company is also working on offering more contemporary features, reducing the maintenance cost of its trucks and offering a higher oil drain interval to keep the truck running more on the road.

eicher-pro-1049

Pro 1049 is the smallest truck with a payload of 2.7 tonnes and preferred for  last-mile delivery

With fuel accounting for 60 percent of the operating cost of a truck, no M&HCV can be successful unless it is fuel efficient, reliable and durable, essential parameters for truck ownership. VECV claims it has the highest payload in the segment compared to the competition in India.

Today, VECV has a robust 40 percent market share in the 12-15T segments, leading the market with Tata Motors. To draw buyers, the company tries to offer every possible configuration and variant and has a wide portfolio with over 250-300 variants across different payloads and configurations thus ensuring it has a product for every 500kg and application of the market.  

Though VECV is one of the major players in the LMD segment, Tata Motors is equally aggressive with its extensive product offensive. Ashok Leyland was not a big player in the segment but with products like the Boss and Guru, the company is eyeing greater play in the segment. Daimler India Commercial Vehicles is another player which has entered the segment. Mahindra & Mahindra is likely to enter the segment by introducing a completely new range of products early next year, making it difficult for the incumbent players to protect market share.   

“Clearly, the competition in the LMD segment is growing with Tata Motors, Ashok Leyland and BharatBenz eyeing this segment, and Mahindra & Mahindra has announced its entry in the segment early this year. We have to protect our market share, therefore, we are working on bringing greater innovation, new products with more feature,” says Maller.

Also, by virtue of its leadership in the segment with greater demand for its products, the company enjoys 4-5 percent premium at the retail level, this is attributed to mileage, durability, reliability, proven performance, higher resale value and easy availability of parts.  Despite being the market leader in the 12-15T segment, VECV still not has equal presence in all the markets across the country; this prompted it to address its geographical spread in few states in India. Therefore, the immediate focus is to retain market share where the company is already well positioned, address the market share in the emerging markets in the country and get into new geographies to further strengthen its position in the LMD market.

Targeting E-commerce

Focusing on new and emerging industries, VECV is aggressively targeting LMD sales into the fast-growing e-commerce industry in the country. At the Eicher Pro-Biz Expo – Smart Solutions for E-commerce Business Expo in Bangalore (November 22-23), it displayed a range of light and medium duty trucks that cater to the e-commerce industry. They include five new variants in the Pro 1000 and Pro 3000 series range – Pro 1110, Pro 1110XP, Pro 1110XP, Pro 3012/3014 and Pro 3015.

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Pro 3015 comes with 10T payload and 24-foot load long desk body.  

The company brought together customers and key stakeholders in the e-commerce and logistics industries to provide them with a first-hand experience of Eicher’s smart solutions like Aftermarket Lifetime Support System, telematics, and high-end technology, among other features for their transportation requirements. These vehicles are specifically designed keeping in view the specific needs of the sector from long haul to short haul and last-mile delivery.

The new variants offer a 24-foot-long cargo body, higher volume space index with best-in-class payload and fuel efficiency. Delivering high power and torque, the trucks also offer a cost-effective run with the longest service interval of 50,000km.

“The e-commerce industry in India is growing at an exponential rate of 50 percent every year. Leveraging our established strength in the LMD space, we have widened our offerings to cater to the specific demands of the high potential e-commerce market. Eicher now offers the widest and strongest range in the Light and Medium Duty (LMD) segment with products ranging from 4.9T to 16T GVW, out of which we have displayed 13 vehicles today. We believe ours is the most compelling proposition for this segment of the industry,” concludes a confident Maller.

(This article was originally featured in the 15 January 2018 issue of Autocar Professional)

Tags: VECV

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