Siddhartha Lal, managing director, VE Commercial Vehicles

Siddhartha Lal, managing director, VE Commercial Vehicles

Autocar Pro News DeskBy Autocar Pro News Desk calendar 19 Aug 2013 Views icon2272 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Siddhartha Lal, managing director, VE Commercial Vehicles

On which segments in the bus business do you plan to increase your focus?
Generally, we are in all segments of buses but our focus is in premium mass rather than full premium. There’s always a push up but it’s still making sure that you are catering exactly to the volume market. We never wanted to be out of the volume market and get into niches.

Perception-wise, you say you are No. 2 in the market. How long do you think it may take for that to translate into numbers?
It will. Frankly, in our reviews and in our entire thinking, that’s never a point of becoming number two. It’s always about growing faster than the industry and that’s important to us. Are we more profitable now? Which we are. We have crossed the profitability of all our big competitors. And, I would say that the third thing is to achieve a real critical mass in the heavy duty market. We believe that the real critical mass is 10 percent. Once you cross 10 percent in heavy duty, you are a serious long-term player. Till then, there’s always a struggle. Even now, we are working hard but it’s sweat and blood behind every truck we sell today. But after 10 percent, we believe and hope then we have scale which helps to bring costs down in partnership with suppliers. The visibility and resale value will improve. The customers will see more vehicles on road. That positive cycle, we believe, happens at 10 percent. That’s our holy grail. In India, 10 percent currently means 1,000 trucks a month but soon it should be 1,500 a month. So, that’s not very far in our horizon.

Profitability is more important than volume. What has helped you achieve and sustain the profitability?
We continue to invest tremendously. We did not cut down a rupee of investment during the last one and a half years. What has really helped us is our overall strategy. Among all CV firms, we are the most capital efficient. We have not over invested in huge plants. We like productive plants. So, we will squeeze more and more out of Pithampur than create a plant number two or three. I believe we have been able to cross others because not that we are producing more in terms of scale but we have a better structure in terms of how we concentrate our resources in lesser locations. And our focus on issues which, we believe, are important from a future profitability angle such as aftermarket. The aftermarket to us is number one because it is the key driver for customer satisfaction and potentially for profitability in the future. Most global firms make large chunk of their profits from aftermarket. SUMANTRA BAROOAH

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