JSW Greentech Eyes LCV Entry in 3-4 Years as Distribution Network Takes Shape: Sumit Mittal

JSW Greentech plans to enter the light commercial vehicle (LCV) segment in the next three to four years, with the company’s entry timeline closely linked to the development of its distribution network, according to Sumit Mittal, CEO, JSW Greentech. 

The company, which on Tuesday launched its commercial mobility brand Ampstar, is positioning itself as a full-stack commercial mobility player spanning electric buses and trucks. However, unlike the higher tonnage segments it is targeting initially, JSW Greentech sees the LCV market as being driven as much by distribution strength as by the product itself.

“Once our distribution network is there, then we launch our LCV because LCV is not really a product game, it is a distribution game. Three to four years is what we are saying [for the launch] but in JSW it is always a possibility to do it faster than what you always assumed,” he said.

Why JSW is Starting with HCVs

JSW Greentech’s decision to focus first on heavy commercial vehicles (HCVs) is deliberate, with the company seeing the segment as an opportunity to establish its engineering credentials and build customer acceptance before expanding into the more mature LCV market.

“We wanted to go there to establish in the mind of the customer that this is a company which understands engineering, which understands complex engineering,” Mittal said.

He pointed to the challenge faced by companies that move up from lower segments, where customers can continue to associate the brand with its earlier products.

“We have seen in the past that people who have migrated from lower segment to higher segment, they are always a challenge in terms of creating that perception in the mind of the customer that they always relate them with lower category segments. So, we wanted to be in the top of the category,” he said.

There is also a strategic rationale behind targeting HCVs from an energy-import perspective. “Second is, from an impact perspective, this is the segment which has the highest impact on import of oil, right? So, we are aligning to the government or the national interest,” he said.

The company also sees greater room for differentiation in HCVs than in LCVs. “From a margin perspective, the LCV is now commoditised. Everybody has the same product. There is very thin margin in that, ...and there is very little scope of improvement or creativity. Whereas, HCV is a fairly new segment,” he adds. 

With electric HCVs still an emerging category, Mittal believes the relatively nascent market gives JSW Greentech an opportunity to establish itself alongside other players rather than entering an already mature and highly commoditised market.

Product First, Distribution Next

For JSW Greentech, the initial priority is therefore to establish the product and build confidence among customers before committing to a broader distribution footprint. “We wanted to first set up a product market, customer acceptance and once we have done that, gradually we will build our distribution network,” Mittal said.

The company’s strategy consequently places product-market fit and customer acceptance ahead of rapid network expansion. Once that foundation is established, JSW Greentech intends to build out its distribution capabilities, which will eventually provide the platform for its entry into LCVs, Mittal said.