PMI Electro Mobility races ahead in e-buses
For a coach builder, the transformation to becoming a full-fledged manufacturer of electric buses is a saga of perseverance. It is now keen on taking the story forward to making electric trucks with Beiqi Foton
Satish Kumar Jain remembers the day only too well.
“This was 2005 and there were thousands of Tata CNG buses at India Gate. The first thing that crossed my mind was….why can’t we do something like this on our own?” recalls the Managing Director of PMI Electro Mobility Solutions.
Today, his company has emerged the lead player in the electric bus segment. According to Vahan data for 2021-22 on electric bus registrations, PMI Electro Mobility has 397 units to its name followed by Tata Motors, Olectra Greentech, JBM Auto and Ashok Leyland.
The company is now gearing up to begin a critical second growth phase with Beiqi Foton Motor of China which will see electric commercial vehicles roll out of a new plant at Chakan near Pune in early 2024.
By all indicators, PMI Electro Mobility is on a roll but it is not as if the journey has been a cakewalk, On the contrary, it has been fraught with challenges even while Jain goes back to that day at India Gate when these buses were ready to join the Delhi Transport Corporation Fleet.
PMI then built bus coaches for various OEMs — something that it continues to do today — and has since emerged as a bus maker too, albeit in the electric space. He is candid enough to admit that government policies on electric mobility have been a huge booster for companies like PMI Electro Mobility…else“these big boys” would not have allowed it to enter the market.
“There was no cash to burn at my end and this move into the electric space has given a massive boost to us. Finance was a challenge and it was a tough journey…we are now stabilising,” says Jain. The company rolls out its electric buses from a plant in Dharuhera, Haryana, and the monthly numbers are around 300 units.
The buses are supplied to the Uttar Pradesh Transport Corporation and have traversed challenging stretches to Leh and Kargil without a fuss. There have been absolutely no complaints from the time the company driver steers the bus out of the Dharuhera plant en route to Lucknow for readying the journey of ferrying passengers to Himachal Pradesh and elsewhere.
Jain is clearly pleased with the success script but would rather play it down insisting that there is still some way to go. From his point of view, the story has only begun and “the next step is to grow which could pose its own set of challenges”.
As he puts it, there are a host of uncertainties one needs to factor in like another round of Covid, geopolitical tensions (the reference is to the Ukraine war which just does not seem to be ending), supply chain disruptions etc.
What gives Jain even more satisfaction is the fact that PMI Electro Mobility continues to make coaches for various OEMS…it is a testimony to decades of working together and the faith that has been built along the way.
“We are not a large entity and it was really difficult for us to come to this stage,” he says. Banks were not exactly enthusiastic about extending loans and ancillary suppliers, likewise, did not jump for joy when it came to PMI Electro Mobility simply because of its relatively small order book.
“It was hard for us to break into this space and localisation posed tremendous challenges. Fortunately, I have a good team and we have reached this stage while overcoming a host of obstacles in terms of getting material, people and products,” admits Jain.
He then gestures towards the CEO of PMI Electro Mobility, Sandeep Bhardwaj, who is seated at the other end of the table and drives home the point that it was thanks to professionals like him that the transformation exercise in manufacturing truly got going. Likewise, continues Jain, the corporate affairs function got a big leg up thanks to its head, Manvi, who is also part of the discussion.
“We are working on new products and want to go completely electric in terms of commercial vehicles and passenger buses. Over the next 2-3 years, our buses should be the best in their class and this verdict should come from the market,” he says.
Even today, the best piece of news is that all the buses which are produced at Dharuhera have had zero complaints. “There is absolutely no option but to get things right the first time,” says Jain. This record is particularly impressive considering that over 90 percent of the 800-odd workforce comprises freshers who are actually drawing their first-time salaries from PMI Electro Mobility.
“We have not taken experienced people from industry and believe that what is happening now in the plant is a great contribution to the country’s skill development programme,” he adds. The company is going all out to train them and these youngsters are reciprocating the trust reposed in them and doing a great job.
“It is a matter of great pride for us and it is thanks to the processes, team spirit, training and direction. Everything has been clearly articulated and all credit goes to Sandeep who is driving this change,” says Jain. As he puts it, the youngsters are raring to go and even while there were mistakes committed initially, they were quick to learn from this experience and have had them remedied.
“I am a positive person and negativity is not in my dictionary…mistakes will happen but that is only natural since everyone is only human,” he explains. In fact, mistakes are important from “the viewpoint of learning”. By the end of the day, if the productivity indicator shows that mistakes account for 10 percent and achievements the balance 90 percent, then “you have to decide which is more important”.
Bharadwaj chips in to add that PMI Electro Mobility is now being recognised quite seriously by industry especially over the last few months when its electric bus numbers have been growing steadily. “Today, we have the right product and strategy and now need to keep our lead intact over competition. It is important to invest constantly, keep vendors busy and maintain our quality.”
Bus operators are pleased with the product and Bharadwaj says matter-of-factly that “we are comfortably ahead in terms of product and engineering”. This is thanks to the rigorous processes the bus goes through in testing with the quality team also giving “double the assurance that nothing will happen”.
The brand is gaining traction in Uttar Pradesh and the team fondly recalls how the Chief Minister travelled in the bus and loved the experience while comparing it to a Mercedes-Benz model! Jain, who has literally been marinated in the transport bus industry, points out that nearly 85 percent of buses are built on truck chassis (except for Volvo and Scania) which means limited comfort to passengers.
It is here that PMI Electro Mobility is striving to be a differentiator with its monocoque design. “We are confident that we will make a mark. UP is the beginning of the journey while Madhya Pradesh could be next on the line with Mumbai also a possibility. Kerala is one of our first orders down south,” says Jain.
Despite this impressive climb to the top, he says there are a lot of challenges ahead. Even while over 300 buses are produced every month, vendor support continues to be work-in-progress since the PMI brand is still small compared to the more established players. It is in this backdrop that Jain chooses to be circumspect about the road ahead especially when the world has turned topsy-turvy with the war and greater fragility in the supply chain.
He then speaks of the overall transformation exercise which was quite a struggle especially when it had to be carried out in a tight timeframe starting October 2020 when he came on board. The pandemic had disrupted growth and the following year would see the deadly Delta wave ravage the landscape.
Yet, the show had to go on and the Haryana government “helped us out” by facilitating vaccinations for all the employees. Terming Jain “an Aston Martin man”, Bharadwaj says his boss is extremely impatient and also has an elephantine memory to boot. “Eventually, the drive comes from the top and looking at his style of working simply means everyone had to keep pace too and this has helped in rebooting the entire system,” he continues.
Right though 2020 and ’21, the leadership team steered clear of zoom meetings and insisted that everyone be present physically at the plant. It did wonders for team morale and once the double vaccinations were also carried out, people felt a lot more secure and went all out to put their best foot forward.
Jain credits his dedicated team “who are passionate and can fight well while working day and night”. There were times the temperature reached frighteningly low levels during Haryana’s harsh winters but this was of little consequence to the employees who worked “day and night” to achieve their targets. “It is this passion that made all the difference,” he says.
Bharadwaj then adds that while Jain is the promoter, he has made it “amply clear in meetings” that he is only the MD but not the owner. On the contrary, PMI belongs to the 800-odd workforce who are truly its owners and custodians. “It is because of their sweat and blood that has made the product a reality. I am sitting in air-conditioned comfort while they are sweating and toiling on the shop floor. Yes, they are the owners by the end of the day,” concurs Jain.
Manvi, who has been listening intently to this conversation, says the remarkable thing about her boss is that he can keep going through the day without getting tired. According to her, Jain is always ready to help out irrespective of the nature of the task and whether it is big or small. “His energy levels keep all of us motivated too,” says Manvi.
Jain, who is clearly embarrassed by this praise, simply insists that he is responsible for the people working at PMI. “If I fail, the system will collapse. I need to look after them and ensure their health and welfare.”
The conversation veers around to Foton which is PMI Electro Mobility’s partner in Chakan with a 30 percent stake. The Chinese automaker had announced its India entry a lot earlier while earmarking big investments. However, not much progress was made and the company did not instal plants and equipment since the management had its reservations about the Indian commercial vehicle market which was facing huge headwinds.
“There was no confidence within the management that they would succeed in India. When we entered the picture and showcased the potential of electric buses produced at our Dharuhera facility, they were really surprised. More so since we handled this with a small team and in a competitive market,” says Jain.
Construction work at the Chakan plant will start soon and the partners are keen on electric trucks as an important growth engine for the future while the light category will not be a priority. Even though this segment is booming thanks to the e-commerce spurt, it is way too competitive and Foton PMI would rather be the first mover in new truck segments.
“The plant will take a year to be ready and we hope to roll out vehicles by the beginning of 2024. Dharuhera will continue with buses,” affirms the MD who adds that the company is in a happy place now with banks who are more amenable to lending.
“We don't think financing will be a problem since there are results to show on the ground. When you have a good balance sheet, there is more confidence within the lending ecosystem,” he says.
Whilst on the subject of Foton, Bharadwaj says the experience with the team has been “outstanding” for the electric bus journey and their wealth of knowledge is truly staggering. “In my view, the company is light years ahead in terms of battery vehicle technology. They are also into fuel cells and in the Beijing Winter Olympics, they used hydrogen commercial vehicles which are on sale already,” he adds.
Manvi says the best part about the relationship is that it is on an even keel where Foton is “as pleased” with the bonding with PMI Electro Mobility which has grown stronger over the years. “There was a time when we were treated as a small distributor but, today in a short span, they recognise us as partners who have gained in stature,” she adds.
This was apparent in late-2019 when, during a visit to Beijing, Foton’s chairman had personally come to the airport to escort Jain. This was quite remarkable because he is otherwise “impossible to meet”. There was a lavish dinner with all the government officials present “which is a very big thing in Beijing”.
Manvi recalls how the Foton team honoured the PMI group at a huge ceremony where they cemented the relationship. “We have an exclusive agreement with them for 12 years which literally means that we are the only partners they will do business with,” she says.
The idea is to focus on all fuel options right from electric, CNG and even hydrogen in the coming years. After their initial setbacks in India, Manvi says the Foton team is now truly excited about the road ahead. “One of their senior leaders actually told us to tell them what we want us to do. It shows their commitment and trust.”
Jain also puts the relationship between the partners in perspective. Foton had spent a lot of money already in India — for 3-4 years — “and the result was zero”. With PMI, they haven't spent a single penny and their brand is already visible in India on the electric buses. “They have a range of options and we are exploring them…it is our intent to be the largest CV player,” he says.
According to Manvi, when it comes to processes, Foton is very rigid and detailed… “they verify information from 3-4 sources but once they trust you and sign a pact, they will stand by you whatever happens”. As she puts it, “they have their entire legal machinery which will take months” to pore through agreements but once everything is in place and they are convinced, “they stand by you”.
From Bharadwaj’s point of view, it eventually boils down to mutual trust at every step of the relationship. “We are very transparent with them when it comes to what we are doing, the mistakes committed… we seek their help in corrections whenever needed,” he says.
The Chakan template will see a three-phase expansion plan where 33 acres will be used initially while phase 2 could go up to 50 acres. If the script goes according to plan, a vendor park will be part of the third phase which will cover the 104 acres. Dharuhera will continue to be the base for buses but plans could change depending on demand. If the western region ends up being the biggest market, the buses could well be made at Chakan too.
Even while PMI has evolved to being an electric bus maker with electric trucks due to follow in the JV with Foton, Jain says the company will remain committed to its core expertise in coach building. “I will not forget my olden days. We have done a solar bus for Indigo at Delhi airport as part of the customisation effort and this is our expertise. We will never give up our rapport with OEMs because that is our craft and these are our inherent skills,” he explains.
In his view, the electric movement is irreversible especially when diesel prices are going through the roof and electric becomes a far more viable option from the viewpoint of operating costs. “Electric, CNG and hydrogen will be the drivers for the future. We will definitely end up being a global hub for Foton,” says Jain.
Is the Chinese association a matter of concern especially during these times when political tensions are running high? Never mind that companies like MG Motor (whose ownership is Chinese) and BYD are operating in the country in addition to the fact that the auto supply chain will collapse without Chinese parts.
“Foton has its own values and PMI has established itself as a 100 percent Indian company. People may call us a Chinese company but we tell them what we are about. Let the show go on…we are excited and hopeful about the future,” says Jain.
The feature was first published in Autocar Professional's April 1, 2022 issue.
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