Vinod Aggarwal: ‘I think the CV market turnaround will happen around September.’

Eicher Trucks today unveiled India's first BS VI-compliant truck in Mumbai. Vinod Aggarwal, the MD and CEO of Volvo Eicher Commercial Vehicles, talks to Sumantra B Barooah about the latest addition to the company's truck portfolio, investment plans and the CV market outlook.  

What is the strategy behind the new Pro 2000 series? How did you come about it? What is the overall performance and what is the outlook for the overall segment?
The entire thought behind this series of trucks is in line with our vision of driving modernisation in the commercial transportation. This is the finest example of a highly modern truck. If you look at the cabin and the features, you will notice that it has the best of comfort and the best of reliability, best of safety and hence there is maximum productivity for our customers to ensure the maximisation of profits for the customers. That is the thought behind this new development.

For the LMD (light and medium duty) segment, the medium-term outlook is good. However, it is not as good as the industry growth has slowed down considerably. The factors that led to this are the NBFC crisis that is going on in the country and the effect of the revised axle load norms. As it is, the entire economy is also down. In Q4, the growth was 5.8 percent. However, we expect that there will be some steps that will be taken to solve the liquidity crisis, which would boost the economy and the demand.

A proper scrapping policy should be introduced for over 15-year-old trucks, which would also tackle the entire issue of pollution. We are the first company in India to unveil a BS VI truck, which is also BS VI-ready. It will go on sale as soon as the fuel is available and the customer demand also comes up. Right now, the truck is available as a BS IV version.

When do you think we can expect the overall turnaround in the CV segment?
I think the turnaround will happen around the month of September 2019. It would be the pre-buying impact of BS VI.

Do you plan to expand the Eicher portfolio to the pick-up truck category also because that is a huge chunk of the commercial vehicle segment?
The two new ones are 1.8 metres and 2 metres long and would open a whole new sales avenue. This would lead to an overall impact on the business of the customer and at the same time also improve the manoeuvrability of the trucks because their turning radius is less and they can enter narrow lanes. So it could definitely get into some of those applications.

Vinod Aggarwal, seen here with Vishal Mathur, senior VP (Sales & Marketing), LMD Trucks, VE Commercial Vehicles.

The biggest advantage that we had while developing the BS VI engine was the fact that we were already developing Euro 6 engines for the past six years. All the experience that we garnered through this actually helped us while manufacturing the BS VI engine and in its aftersales.

What is VECV's current market share in the M&HCV segment and the LCV segment?
First of all, if you consider the volume, we grew by 11 percent last year. In FY2019, our volume was 73,000 units. Market share-wise, we are at 5 percent in heavy duty trucks, 29 percent in light and medium duty trucks, and 16 percent in buses. We are now exporting about 10,000 units. We are not running after market share at this point in time because there is a lot of disruption in the market in terms of pricing and we don’t believe in giving out heavy discounts.

How much was the fresh investment for this new project?
In this project we have developed two new cabins and two new engines. The Bhopal plant will cater to these trucks and hence we are investing Rs 400 crore in the plant. Over and above that, we have also invested in the new product development, which is another Rs 400 crore.

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