Eicher Trucks and Buses, a division of Volvo Eicher Commercial Vehicles (VECV), is making a strategic move into the small commercial vehicle (SCV) segment, with the global unveiling of the first product at the Bharat Mobility Global Expo 2024.
The company's foray into this segment comes at a time when the overall small commercial vehicle segment is experiencing a relative slowdown due to a high base in the previous fiscal.
Vinod Aggarwal, MD and CEO of VE Commercial Vehicles Limited told Autocar Professional that if one looks at the commercial vehicle industry, the 2-3.5-tonne GVW segment boasts a significant market size with about 3.5 lakh annual unit sales, and continues to grow. "In fact, out of the overall small commercial vehicle segment, this is the only sub-segment that is still growing," Aggarwal noted. "Therefore, it is a very big market that cannot be ignored if one wants to become a full-range player," he added.
Small commercial vehicles ranging between 2 and 3.5-tonne segment corners a significant volume of around 47%, industry data suggests.
A report by rating agency ICRA, released in November last year, reported flattish wholesale dispatches of 140,991 units in Q2 FY2024 on a YoY basis in the LCV segment, primarily due to the high base effect and slowdown in e-commerce demand along with some cannibalisation from electric three-wheelers. For FY2024, the segment is expected to witness a marginal growth of 0-2% with the base effect catching up, as against a contraction of 5% reported in H1 FY2024.
Eicher’s SCV vehicle is scheduled for customer trials in April 2024, with a commercial rollout expected in the first quarter of 2025. The company will be introducing the electric variant first, progressively moving towards clean CNG and diesel variants. The product has been designed and developed in India and will be manufactured at the state-of-the-art facility in Bhopal, the company spokesperson stated. He also mentioned that since the vehicle's design and cabin have been developed from scratch specifically for this product, it is differentiated from competitors.
VE Commercial Vehicles Limited (VECV) is a joint venture between the Volvo Group and Eicher Motors Limited. Having been in operation for 15 years, the company produces and sells the complete range of Eicher-branded trucks and buses in 40 countries, including Volvo Buses India, and has exclusive distribution of Volvo Trucks in India, besides engine manufacturing and exports for Volvo Group, and Eicher’s non-automotive engines and component business.
In the light-duty trucks segment (3.5–5 tonnes), Eicher had a market share of 21.2% in FY23. Likewise, in the light and medium-duty trucks segment (5–18.5 tonnes), the company cornered 31.5% of the market. In the heavy-duty trucks segment (more than 18.5 tonnes), Eicher and Volvo together had close to 8.3% of the market share. Similarly, in the bus segment, Eicher and Volvo's combined market share stood at 24.1% of the total industry volumes in FY23.
Furthermore, commenting on the logistical challenges arising out of the conflict in the Red Sea, the top executive highlighted that the development has had a mixed impact on the automotive businesses, with some of the customers facing delays, although this is not a major concern overall.