Nalin Mehta, MD & CEO, Mahindra Truck & Bus Division, speaks to Amit Panday on the plan to rev up the commercial vehicle business, new platforms and growth initiatives.
The investment of Rs 700 crore, announced on August 27, will help M&M develop new intermediate commercial vehicles (ICVs) and subsequently step into a new territory in the next two years. How many product platforms are under development currently and how many new models will these platforms give birth to?
Fundamentally there will be three chassis, so there will be three platforms. The ICV range that we plan to develop will be across the 8-16 tonne (8, 9, 10, 11, 12, 13, 14 and 16 tonnes) categories, so you can imagine the number of models it will give birth to. Within this range, there will be cargo versions and tipper versions; so the number of models will be very high.
The chassis would be common between some of these models, such as between the 12T and 13T models. These are significant markets – each one of them – and there are different applications where our customers prefer these kinds of products. We will participate in the full range of segments.
Also read: M&M to invest Rs 700 crore in new product platforms
An all-new powertrain, which is currently under development, will see sharing between the upcoming ICVs and tractors. Can you provide some details?
There is an engine platform that is being developed currently. With various injection pressures and fuel maps, you can derive different kind of characteristics from essentially the same engine. It gives us huge synergy that the basic platform of this engine – a 3.5-litre powerplant – has good use when it comes to multiple automotive applications.
We will have our truck driving cycle appropriately mapped, right injection pressures to achieve appropriate emissions because the norms (emission) are also different. But almost 95 percent of the engine would be common. This gives us huge amount of synergy so that we can service better and also offer improved support to our customers. We can even invest money to upgrade in a more economical and proactive manner.
Our ability (and affordability) of improving the product goes up, and our bargaining authority with the suppliers goes up. So there is 360-degree benefit whether you see the front end (services at the dealership) or the back end (through development costs) or even the suppliers’ end.
This strategy is most useful and Mahindra Group has this unique advantage where we are participating in almost automotive segments. This gives us good strength.
How many new engine platforms are under development for the upcoming products that will debut under the ICV category?
We have made very good investments in the engines already. We have a separate entity for engine development (Mahindra Heavy Engines – MHEPL established in 2007), which even makes 7.2 litre (in-line six-cylinder) diesel powerplants for heavy commercial vehicles (HCVs). Using the same architecture (of the 7.2-litre diesel engine), we are working on a 4.8-litre engine for some of the upcoming (ICV) applications.
There will be the 3.5-litre (diesel) engine which will be useful too. In addition, we have an existing range of the 3.2 litre engine (3191cc diesel used in Mahindra’s Tourister school buses), which is a direct injection engine that also goes into our LCV range. So the aggregate strategy (of the engine families) is such that it spawns not only the variants for the truck business but the whole of auto and farm sector business.
So these three engines (4.8L, 3.5L and 3.2L) will power the ICVs under development?
Yes, absolutely correct.
When will the 12-13 tonne prototype that you said will be ready in another three months go into commercial production?
The journey from the engineering prototypes to handing over the products to the customers is typically two or two-and-a-half years. So the actual tooled-up product along with manufacturing capacity and all the certifications in place from the engineering prototype, I would say, is two to two-and-a-half years away.
Do you also foresee passenger carriers using the upcoming platforms?
Like we said, the engine is as good for a tractor as it is for a cargo truck. What prevents us from using the same development to get a good driving cycle for a passenger vehicle? So similarly for the chassis, suspensions, brakes and other developments will be useful for any passenger vehicle(s) we may want to develop in the future.
M&M is a late entrant in the ICV (8T to 16T) segment but it could also seen as blessing in disguise because you have had time to study existing models in the market and their shortcomings.
Two to three players have been dominating this market for a long time. We believe that customers deserve wider choices. Secondly, in an expanding market, there is room for more players in this segment. Thirdly, since we are investing now, we are obviously able to use the latest technology across the paint shop, body shop and other areas as compared to somebody who may have set up the plant earlier.
Further, we are able to get adequate feedback from our customers to know the latest market requirements. Therefore, we are able to build in our new product strategies some more futuristic elements.
While the Rs 700 crore investment is purely for ICV products, it will also help the company refresh its top-end LCVs in terms of higher GVW such as 7 tonnes and 8 tonnes. Can you elaborate on this?
A typical commercial vehicle consists of a driveline, a chassis and a cabin – these are the three big-ticket items in a CV product. Now what happens is when making a cabin for an ICV, we are also making a shorter version of the same cabin for an LCV. So we are able to refresh the LCV, and able to do so completely with improvements in the driveline and chassis. This helps us offer a significantly better LCV as compared to the older variant, and therefore enables us able to leverage the investments.
Has the company already started investing the Rs 700 crore in product development?
Yes, we are already working on these new platforms for the past six-seven months, and we are close to an engineering prototype now.
In any product development cycle, the bulk of the investment is done in the first two years. So logically, the bulk of the said investments will be made in 2015, 2016 and also in the early months of 2017. After that, the investments will be made on product validation and then the commercial launch.
Tata Motors has aggressive plans to boost its CV exports in the near future. What about Mahindra?
We are already exporting our LCVs to neighbouring countries. The products are all protected to the left-hand drives. There are a number of India-like markets that we will explore over time.
What is M&M’s plan to ramp up its domestic sales network this year?
We will ramp up our current network of 66 dealerships to 80 by end of this fiscal. From the current 53 authorised service centres, we will go to 170; roadside assistance points will increase from 2,200 to 2,500; and the spares network will grow from 1,300 outlets to 2,000 outlets – all by March 2016.
Don’t forget that we will start preparing for the ICV network and we will go further upcountry. Our network expansion from now to next three years would be a continuous process.