'AMW’s new truck cabin is styled in Italy and will be introduced soon.'

A Ramasubramanian, president of AMW Motors, speaks to Kiran Bajad on the Indian M&HCV market, new products and the company's growth strategy.  

How you perceive the recovery in the Medium and Heavy Commercial vehicles (M&HCV) segment in India over the past 10 months?
The growth has come in the tractor-trailer and haulage segment, which are market sentiment-driven and there is also fleet replacement underway. There is no growth or a slight de-growth in the past few months in the construction and mining segment, especially in tippers. We haven’t seen a revival in that area.

What has happened is that the government has opened up coal mines, sanctioned Rs 200,000 crore worth of projects but the money has not started flowing in. Generally, it takes about 4-6 months for money to start being disbursed. We believe the second half of this financial year (2015-16) will be much better.

From AMW’s perspective, how you see the market as regards truck demand? We are very strong in the construction and mining segment and once that sector starts reviving, we should see significant growth. The tractor-trailer segment, being smaller, will not give a major boost to numbers.

Yes, we are not significantly present in the haulage segment and have just started. Also, this segment has been badly hit by discounts and we do not want to play the discounting game. We have introduced products like the 3116 and 3118 in the haulage segment and also in the 25T haulage segment and they are very successful in terms of total cost of ownership, fuel efficiency is better, and maintenance cost is lower. Overall, customers are happy but this is not a lifestyle product and is driven by discounts. We are also mulling the idea of introducing 16T haulage. 

We see our presence in the haulage segment growing slowly and it will take us some time for us to catch up with players like Tata Motors and Ashok Leyland.

Our M&HCV range starts from 16T to 49T. We have tippers in 16T, 25T, 31T and 37T; 40T and 49T tractors are already present in our product portfolio. We plan to introduce a 16T haulage and we are currently working on it.

There has been smart growth in the 37-tonne segment. Does AMW have a presence there?
Basically there is a tendency with operators, who have load available, to have the largest possible truck on the road so that the operational cost comes down. Long hauls are not economical at current rates to operate smaller trucks, so fleet operators prefer higher-tonnage trucks.

We have just started in the 37T segment and are piloting some products which will take between 3-6 months (to be launched). We were the first to bring the prototype in the segment but were slow because we were concentrating in developing our off-highway and tipping market products. We have the 37T haulage in place and will launch it in another six months.

Do you think the entry of foreign players in the M&HCV market has impacted AMW?
Right now we don’t have any impact. These are players who are also finding their feet and this segment is quite tough and not easy to manage. Let’s wait and watch. We are ready to meet any competition. We have finished development of our new cabin, which will come on the entire range, and are going to introduce before this year end.

How will this new cab will be different than the existing ones?

This is a completely new and fully indigenously developed and designed one by us with styling carried out in Italy and tooling made in Taiwan. Basically, it is an indigenous and a most modern cab. This cabin will replace the earlier cabins which we produce in China.  

AMW always had the best cabin in the industry; we were the first to introduce air-conditioning, a fully built cabin, hydraulic tilt and 100 percent of our vehicles had this cabin. Similarly in haulage, we started doing cabs as well as cowl because customers prefer cowl and we came up with the solution.

How do you see overall growth in the M&HCV segment in India panning out in the near term?

Deloitte has predicted 9 percent CAGR for the next 10 months whereas the rest of the world the best growth rate is something around 4 percent. If that is anywhere true, then we will have a very good run and I tend to agree. The segment will grow no doubt and a lot of growth will come out of the construction and mining industry where it is depend on how much money are spend on infrastructure, mining and power plants. This is entirely in the hands of government. The new government is very positive but finally it depends on the investment that will be put on the ground. 

Finally, what is AMW Motors’ growth strategy in the current market?
We are still not a very significant player in the M&HCV segment and our current market share is about 4 percent. However, we are there in a very significant manner and we should record significant numbers in the next 2-3 years. We should reach anywhere between 10-15 percent.  

Our strategy is very simple: we want to expand in the haulage market and strengthen our position in our existing segments. We do not want to lose market share and want to strengthen and ensure that we gain in haulage. Any which way you see things, we have to sell more trucks – that is very clear.