Interview with Mr. Rajesh Khanna, COO, RACE Innovations Pvt. Ltd.
How do you see the Indian Commercial Vehicle Market?
The Indian commercial vehicles (CV) market fell by 2.02% to 793,150 units during the FY 2012-13 compared with 809,499 units in the FY 2011-12. Indeed the CV Markets is expected to witness a slow but steady growth compared to global markets which is already been witnessed in the post economic downturn period where the CV industry posted an impressive growth of 36 percent in FY 2010-11 and 32 per cent in FY 2011-12. The current gloomy scenario is only short lived and we expect the CV industry to be back on its track post indian parliamentary elections.
In any developing country the CV industry trend has always been linked to the country’s industrial activities inturn the GDP. With economic revival, increasing public & private spending allocation on infrastructure and higher penetration of financing facilities is likely to support the CV market in the years to come.
Currently traditional Manufacturers have been under pressure on lowering volumes, increased competition from technically advanced global players. This effect in turn as created a ripple effect on OEM’s to reduce their margins drastically to secure their market share in the price sensitive market place. These abnormal discounts impacts the resale value of their trucks and inturn their inability to increase their prices in future. Rather I would recommend OEM’s to look at improvising the Total Cost of Ownership (TCO) rather than the Initial purchase price.
I personally recommend OEM’s to bench mark international standards (rather local competitors), packaged with a good finance or lease option where the Total Cost of Operations (TCO) are reduced to half (Lower cost of service, longer service duration), with twice the performance, higher reliability & durability in comparison to the current operating vehicles which can earn higher profit margins for the operator.
Please brief on RACE Services?
Now the RACE Services is pretty much known to most of the Indian and international CV industry, for example if I state RACE INTELLECT they can immediately connect to the Market Research , customer survey, Vendor evaluation, strategic custom consulting , syndicate research deliverables and so on..
Similarly if we talk about RACE TECHNIC, where this would offer services like product research, application and interface engineering, Proto development, homologation, manufacturing support services..
The most interesting and appreciated product is the RACE CONNECT program which offers a comprehensive support to international clients in terms of technical, engineering, market know-how and assistance on product adaptation (localization) capabilities, financial support services , statutory & government related establishment support, enabling the global automotive clients to connect with the Indian counterparts and establishing their foot print in the indian market at a quicker pace.
Another shot in the arm product for us is the BOM (Build Operate & Maintain) where we execute & implement projects with assured top & bottom line targets. One such classic implementation was setting of a integral multibrand 2S (Service & Spares) facility called “MOTOR ZONE”.
Can you explain us the unique features of “RACE CONNECT” Program?
Any international company who want to create a foot print in India, normally start their process through the respective Trade embassies or Trade association which can largely support them on certain legal aspects but for the real time business impact customers are approaching RACE .
In most of the dealership model we see lack of focus on marketing efforts, creation of customer awareness due lack of commercial viability during the initial phase of market entry, in turn impacts on desired results.
The next avenue being the Direct entry by the company or through a Joint venture, in both the cases the cost and the time to establish the market will take close to 4-5 years whereas in RACE CONNECT we estimate it to create similar foot print at 50% of the time , 50% of the cost & at a least risk exposure.
Under RACE CONNECT Program we offer a complete dynamics of Indian market & business nuances in a platter for our international clients to know their band width, so that they are well prepared for the battle.
Please brief on the background of consultants & external associates?
Our team of consultants includes industry veterans who have been carefully chosen from Commercial Vehicle background with immense experience in implementing, handholding & achieving the desired client requirements which is backed by a young and dynamic work force with functional & change management expertise. This has added a lot of strength to RACE in formulating customer specific solutions in a shorter time compared to its competitors.
On the other hand our external associates are well nurtured on the offerings of RACE which will enable them to explore new geographic regions and identify potential areas where RACE can offer similar services as in India.
What are the long term plans for RACE?
RACE would like to be recognized as the most trusted and preferred strategic consulting and project implementation firm among OEM’s, Transporters, Body Builders, industries, Statutory & regulatory bodies globally.
It is conferred that the current Indian Commercial Vehicle Industry Research & Development Expenditure is estimated at a value of INR 100 billion (1.60 billion USD) per annum where RACE would expect to tap a considerable share approx 500 million INR (8.0 million USD). This is quite a possible target in 2 years time frame with the required infrastructure in place at RACE riding well on the strong network & Connect built with the industry participants .We are planning to strengthen our work force to 100 no’s by end of Y 2014
We are also set to expand in other regions such as North America, Africa, China, United Kingdom & Brazil where there is a lot of potential for similar solutions. Currently we are operating through an associate model in those regions, on later date we set to see similar targets & established offices.
What are the advantages of RACE CONNECT as compared to other entry options?
Cost Effective strategy to experience the Indian market.
Short time to market.
Most efficient methods to build relationship in new markets.
Authentic market information at low costs.
Can mitigate on changing business scenario.
Ensure geographic presence to customers and markets.
Engineering product application to suit markets.
Build sourcing, network, after market strategy.