Asia MotorWorks spells out business strategy

Asia MotorWorks (AMW), the latest entrant in the commercial vehicle arena, is very clear about its strategy. “We want to first establish the product before going in for volumes or market share,” Anirudh Bhuwalka, promoter and director, told Autocar Professional.

AMW has its work cut out. Domestic heavyweights Tata Motors and Ashok Leyland are not going to give up volumes and market share to any new player. Tatas to date sold close to 1.3 lakh commercial vehicles (April-September 2006) while Ashok Leyland sales hit more than 44,000 vehicles (April-October 2006). Then, there is competition from Volvo, DaimlerChrysler and MAN (which will debut in a joint venture with Tata Motors). “Our 4923 TR tractor is the only vehicle with the highest legal payload capacity. And while DaimlerChrysler and Volvo operate in niche markets, we are present in a broader segment,” Bhuwalka said.

At present, AMW offers two products, the 4923 TR tractor and 2523 TP tipper, priced between Rs 23 and Rs 28 lakh. The 4923 TR is targeted at a wide range of applications from cross-country to long haul operations, while the 2523 TP will find its audience with mining and construction companies. As part of its global truck series, AMW has a range of tractors, tippers and rigid trucks with capacities of 25-49 tonnes in the pipeline. In the next three months, AMW will also launch its 4018 TR which are now being tested and will compete with established players like Tata Motors and Ashok Leyland.

Bhuwalka added that there would be a paradigm shift in India’s trucking industry based on three major factors. The first is the development of national highways, especially through the Golden Quadrilateral project and the NSEW corridors. The enactment and enforcement of legislation on the overloading of trucks also means that there is a huge gap created for high tonnage trucks. Lastly, the growth in India’s economy on the back of expanding mining and construction industries drives the need for more trucks. “The trucking industry operates on a hub and spoke model, and we are in the hub offering our heavy commercial vehicles,” he said.

The two models are produced at AMW’s 300-acre plant in Bhuj, Gujarat where the annual production capacity is 10,000 vehicles a year that can be scaled up on demand. The localisation rate stands at 95 percent as AMW sources local components from 62 vendors. Notable suppliers include global leaders like Cummins, Valeo, Meritor, Dana Spicer and ZF.

On the retailing side, AMW said it now has 14 up and running dealers across the country. Over the next 12 months, this figure will go up to 151 dealers, according to Bhuwalka. Earlier, AMW had said it was in the process of setting up 30 main dealers and 450 sub-dealers nationwide. “We are selling 125 trucks a month at present and want to be a long term player. We have a strong product in a strong and growing market,” he added.