In an exclusive conversation with Autocar Professional, Vinod Sahay, CEO of Mahindra Trucks and Buses division (MTBD) reveals the strategic move behind the launch of Mahindra’s latest ICV – the Furio range – and what the company’s target is for FY2019.
Finally, M&M's CV portfolio covers the entire market spectrum in India. What is the total industry volume that the new Furio range will address?
The new range makes M&M a full-range CV player as far as the goods carriage segment is concerned. We become, in a way, the only player in the industry, barring Tata Motors, which has this kind of a range.
The current TIV from last year was around 138,000 vehicles and it has been growing at a steady pace of 18,000-15,000 in the last three years. So, in 2015, it was 100,000 and then grew to 140,000 and in 2018, it is likely to grow further. Out of the total goods carrier range, almost 30 percent comprises the ICV industry.
The new ICV platform thus far covers right from 6.2 tonne to 16.2 tonne, where the 6.25-tonne category still comes under the LCV range. This not only covers full ICVs but also gets into a part of the LCV market which we did not have earlier.
How versatile is the new platform? What is the scope on this platform, beyond what you have showcased?
As it is built on a modular concept, its bandwidth in terms of GVW goes from 6.2 tonnes to 16.2 tonnes. There are going to be five engine options across various GVW points in our portfolio, three transmission options and three types of cabins. So overall, there are going to be 21 products coming out of this product and that is not only the cargo range. Of these 21 products, we plan to introduce seven in BS IV because April 1 becomes a very short window for BS IV and hence, the rest of the products will be directly introduced as BS-VI models.
Seven out of the 21 products will be introduced between now and somewhere around April 2019. Of these seven, four have been introduced recently and belong to the 11-, 12-, 13- and 14-tonne category. We will have 15- and 16-tonners coming in around Q4 FY2019 and the 7.5 tonner in April or May next year. The rest of the 14 products would be directly introduced in the BS-VI avatar.
So by the first or second quarter of FY2020, which is April 2020 onwards, we should be eventually unveiling the entire Furio range. In terms of engines, it goes right from 80hp to 180hp within the five engine options with four diesel and one CNG. We have transmissions that go up from 200 Nm to 850 Nm torque. The whole platform is versatile but modular and have co-created it with Pininfarina, which is one of the unique features built into the truck.
Have you also factored in electrification of any or all these vehicles?
That idea has not been built into the current project investments. The only talk for electrification is that we want to take the bus route because we believe that providing the ecosystem for EVs across highways is still a faraway concept for India. I think it will happen over a period of time because electrification is not about just making an EV but also about creating the whole infrastructure for charging, battery disposal and even for swapping of the batteries.
In the CV range, we are going through the electrification route. First through the small CV, then PVs, and subsequently the long-haul goods vehicle range.
Can you throw some light on the plans for passenger carriers and how it is going to pan out?
This platform is fully dedicated to the Furio range of goods carriers. The whole powertrain that will be carried forward is some of the exhaustive work, which we would like to extend. But beyond that, it is a totally independent programme on which we are working. We will talk about it more once we are closer to the launch, which will happen by the next year end.
How long have you been working on it and what is the spectrum of specifications, in terms of length or seating capacity?
I cannot divulge all the details and it is too early to talk about it right now. The passenger carrier does not come out of this platform; it gets an altogether independent platform because gone are the days when people used to build buses on truck chassis. So, the powertrain will be the only thing that remains common between the two. Even then, the powertrain will have to be re-tuned for application in passenger carriers. Barring that, the platform is totally independent of the Furio platform.
How is Mahindra Truck & Bus faring in India? Which are the segments where you are relatively strong and where do you feel you need to still cover some ground?
Looking at the entire CV segment, we are clearly the No. 2 player after Tata Motors with a 25 percent market share. Where Tata holds a 45 percent market share, Ashok Leyland stands at the third spot with 15 percent share of the overall market.
We have an LCV range as well; even though we operate in only a part of that category with a maximum capacity vehicle of 6.2T, the segment does go until 7.5T. We are already the No. 3 brand after Tata Motors and Volvo Eicher, with a 10 percent market share. Now, with more products in the pipeline on the Furio platform, which would be between 6.5T and 7.5T capacity, we intend to further strengthen our position in the LCV category.
Some market observers believe Mahindra’s market share growth in the HCV segment is coming at the cost of heavy discounting. What is your opinion on that?
In Q4 FY2018, we had announced our results and for the first time in the history of Mahindra Truck & Bus Division, we achieved a financial turnaround and were profitable at the EBIDTA level. In fact, we used to sell our trucks at around 5-7 percent discount over the market standards in terms of the net price realisation. But today, our Blazo is being sold at par or even at a 2-3 percent premium over the market leader. So, for us, it is a very profitable sale and we are rather suffering from the fact that other industry leaders are reacting now to prevent a drop in their market share by offering heavy discounts on their products.
Definitely, customers have started to appreciate the value around modern trucks, which offer a good power-to-weight ratio, reliability as well as fuel efficiency.
The fact is that our growth in volume and market share has been equally backed by a substantial increase in our net realisation. Our discounts are amongst the lowest in the industry and we also follow a fixed-discounting practice. We are the only player in the industry who doesn't deviate from that discount.
When do you expect Mahindra Truck & Bus to be in the black?
Since we are in a silent period right now, I can only reiterate that we became profitable at the EBIDTA level in Q4 of FY2018, and now for FY2019, we have set a target to make Mahindra Truck & Bus positive at the EBIDTA level for the whole year.
Also read: Mahindra Truck & Bus reveals crucial ICV range named Furio