AMW Motors was one of the first challengers in the erstwhile duopolistic truck market in the country. Having started with the mining segment, the company has gone on to become a full-range player when it launched its on-road haulage vehicles. With positive signs in the CV segment, AMW hopes to be able to bounce back with a special focus on modernization and technology upgradation, backed by its robust manufacturing set-up and growing aftersales operations. Mr. R.N. Rao, Director-Marketing, AMW Motors Ltd., shares his views on his expectations from, and plans for 2015.
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Business in 2014
Improved sentiment in economic outlook immediately after the new Government took over helped to an extent in bringing some momentum in the market, but this needs to be sustained. As all of us in the industry are painfully aware that the last few years have been tough. The Government announcement of withdrawal of excise duty concessions in the New Year is bound to have an adverse impact. However, as far as the last two years go, AMW utilized the period to make our operations more efficient and flexible, and we have become leaner and more resilient. Our product offerings have become even more specialized, while we have also increased volumes in the general haulage segment. We have done all this with valuable reductions in costs. Our customers have seen that AMW has been a very valuable partner in difficult times. All players in the industry saw significantly lower volumes, and we are no exception.
Major plans for 2015
AMW believes that customers should get the best of operating efficiencies and a high return on investment. In line with this philosophy, in addition to our standard range, we have designed, engineered and manufactured vehicles to suit specific and specialized usage and created a niche for ourselves. Our capability to be flexible and adapt to diverse applications have stood us in good stead. We have adequate capacity to meet demand for the next couple of years. We will focus on modernization and technology upgradation in our manufacturing and expansion and added expertise in our aftermarket operations.
We expect the New Year to bring better cheer to operators as well as manufacturers and see better offtake for our haulage range, especially tractor trailers. The optimism for mining and especially coal, power and steel sectors will benefit us as we have some of the best product offerings in these segments. We also expect the steps taken by us during the last two years to strengthen our profitability. We are prepared for rapid ramp-up of production and see much better days ahead.
Expectations from CV industry in 2015
We believe we need to watch what the Government does to push policy initiatives and bring in greater speed in implementation of projects, especially in the core and infrastructure segments. The industry is hoping for lower interest rates and a stable fiscal environment. While we are very optimistic about the long-term prospects, we believe that the next year will see low double-digit rates of growth.
Industry policies & developments expected
We expect demand will pick up at a more predictable pace in 2015 as industry starts gaining from the economic measures and growth starts accelerating.
The revival in mining activity, infrastructure development and quicker allocation of road and highway projects will enable industry to get back to faster growth rates.
We expect core sectors like mining, power, construction, roads and highway projects to gain momentum, and if the availability and cost of finance become easier, the commercial vehicles industry can benefit considerably.
A comprehensive policy on road-worthiness and phasing out of old vehicles, with incentives to buyers for the same, will help modernize the trucking industry and result in savings of substantial amounts as gains in productivity will be significant
Medium- to long-term outlook
The Indian market will continue to show strong growth in the medium to long term as the thrust on infrastructure gains momentum. Specialized application vehicles will have greater importance as technological sophistication in industry gains traction. The automotive and auto components sector will be amongst the leaders in the “Make in India” campaign and increasingly compete in global markets.
Stricter quality, emission and safety standards will bring in more sophisticated power train technology. This is also true of other technological developments as Indian customers are experiencing technologically more sophisticated products. Total Cost of Ownership will become even more important as competition grows and more and more fleet operators (as against owner drivers or single truck owners) enter the business. Reliability, aftermarket preparedness and maintenance become imperative.
We see the CV industry achieve double-digit growth rates in the near term, and, subject to the usual cyclicality, we see bright prospects in the long term.