Well set to garner bigger HCV marketshare
An exclusive report from MOTORINDIA
Mahindra Navistar Automotive Ltd. (MNAL), part of the $15.4 billion Mahindra Group, is switching gears to establish itself as a leading player in the Indian HCV market. The JV company, which brought together Mahindra’s brand power and Navistar’s technical prowess, seems to have got the right mix – the right products for the Indian market which have been very well received, a world-class manufacturing plant at Chakan which is definitely one of its kind, service points throughout the length and breadth of the country, innovative initiatives to bond with the trucking industry – and a lot more.
It has certainly done all the necessary background work, and if things go as per MNAL’s plans, the company is all set to capture a good share of the growing HCV market in the country, coupled with its steady growth in the LCV segment. Mr. Nalin Mehta, Managing Director, MNAL, takes us through the journey so far at the company and the big plans ahead.
“Mahindra Navistar has emerged as the new and viable alternative for the Indian trucking customers who have been experiencing status quo and inertia in a duopolistic market. As a challenger brand, Mahindra Navistar’s strategic intent is to challenge this status quo by not only trying harder but also trying out-of-the-box measures which can be summed up by the brand philosophy of ‘OK IS NO LONGER OK’. Our target is to reach an annual mark of 50,000 HCV trucks in 3-4 years”, said Mr. Mehta.
MNAL trucks are 100 per cent indigenised with Navistar bringing in its engineering expertise and technical know-how. Recently, at the Mid-American Truck Show (MATS) in North America, a Mahindra Navistar truck occupied the limelight in the Navistar pavilion, highlighting the US major’s commitment towards its Indian venture. Navistar’s contribution to the JV comes in vital areas such as product design and validation techniques. The products were first showcased at the Auto Expo 2010 and since start of production in June 2010, a total of 5398 HCV trucks have rolled out from its Chakan facility.
From having just eight dealers and 200 service points in October 2010, the company emphatically declared itself as a full-range player with pan-India presence with 48 dealers and 800 service points in December 2011. MNAL also has 29 mobile workshops, five spare parts stocking points, including a centre warehouse in Pune and seven fast response centres across the country. The company has NOW which is a 24×7 toll-free helpline service with technically-qualified engineers attending to the drivers’ queries. The call centre is multi-lingual and is equipped with personnel who speak English, Hindi and south Indian languages.
Despite the domination of the Indian HCV market by just two players for decades and the challenges posed by the market, MNAL is bullish on its prospects. The company considers its product as the most important USP. MNAL products have been well tuned to the Indian conditions and being a part of the mass-market, the entire range has performed outstandingly well. Another telling aspect, the state-of-the-art Chakan plant, with its high level of automation and quality standards, promises to roll-out more top-notch trucks in the coming years.
Unique dealerships
MNAL dealerships are unique, starting from looks to the kind of facilities provided for drivers. The dealerships can be compared to any modern car dealership and take care of the basic requirements and amenities of the drivers. The company offers a 48-hour uptime guarantee through its 1,001 service points across India and boasts of a remarkable 97 per cent performance in successfully putting the truck back on road within 48 hours of complaint.
The company has been keenly studying the Indian commercial vehicle market and with the rise of the hub and spoke model, statistics point out that the LCV segment is growing rapidly. With infrastructure development being hastened and better quality products hitting the market, the HCV segment also continues to grow steadily. The MCV segment is yet to catch the attention of the MNAL crew who are waiting for an opportune time to enter the segment.
MNAL’s product range covers vehicles from four and a half tonnes to seven and a half tonnes and the HCV range – MN25 truck, MN31 truck and MN40 tractor-trailer. The company also offers a 35-tonne tractor-trailer for car-carrier application and the MN25 tipper. The models come in many variants including long-wheel base variant, cab version, cowl-chassis version, single-sleeper variant, double-sleeper variant, day-cab variant, night-cab variant and larger fuel-tank variant. MNAL trucks are beginning to attract more demand in the market with the MN40 tractor-trailer, which was recently launched, and the MN31 doing very well.
The company is also working on fully-built solutions and in a year’s time, it will offer a series of integrated solutions such as MN25 (6×4) Transit mixer, MN25 Refrigerated van, MN31 Bulker, MN31 Haulage Tipper and MN25 HD Tipper. MNAL showcased some of its integrated solutions at this year’s Auto Expo. The fully-built applications will be done in Chakan with a tie-up, however, key aspects such as design, quality and control will be handled by MNAL.
In what was a surprise move, MNAL announced the launch of the cowl-chassis version of its trucks in December last year. According to Mr. Mehta, “Our ramp-up was slower than expected, because many customers did not consider us as we did not offer a cowl version. They liked everything in the trucks but still wanted only the cowl. After we introduced the cowl, they were more interested in our products and then we could explain to them about the advantages of the cab. We tried to raise the standard of the market but we had to bring the cowl.”
New 170hp MAXXFORCE engines
Mahindra Navistar trucks are powered by 210 hp and 260 hp MAXXFORCE engines. The trucks give better turnaround time for customers but sometimes the trucks are on road only for 10 to 12 per cent of time. Addressing the demands of the market, the company has recently launched a 170 hp engine.
While the 210 hp engine gives better turnaround time and is reasonably fuel efficient, the 170 hp engine is tuned for better fuel efficiency, because for a trucks which runs for 10 per cent of time, turnaround time makes little sense. Mahindra Navistar trucks come with a 4-year unlimited-mileage warranty which gives a four-year warranty for the entire truck, other than the wear parts, irrespective of the number of kilometres covered. The unlimited-mileage warranty is a move to encourage drivers and fleet operators to keep the truck running for maximum time.
Export market
The export market offers good opportunities for MNAL with South Africa being an obvious first choice for the company. The cabin has been received very well in the South African market where both Navistar and Mahindra already have a well-established network. The SAARC market is another potential export option for MNAL products.
Several major transporters like DARCL, Kaushik Logistics, Three Star Shipping, Siri Tecon, AT Transport, Chaudhary Transport, Pink Logistics, Namakkal Transport Corporations (NTC), Janata Roadways and Siddhi Vinayak Logistics are all proud owners of MNAL trucks. The product performance and customer satisfaction are evident in their repeat orders, usually three times the size of the first order. Incidentally, a recent TNS customer satisfaction survey picked MNAL as No.1 in LCV trucks & buses segment and Joint No.1 in HCV multi-axle trucks segment.
MNAL trucks are approved and financed by leading finance companies. While 35 per cent of the financing is done by Mahindra Finance, the other companies involved are HDFC, ICICI, Magma, SFL, Kotak Mahindra and Shriram Transport Finance.
The Mahindra Navistar Transport Excellence Awards, an initiative to laud the heroes of the transport community, was a definite in the industry. The very first edition of the event in 2011 attracted close to 1,000 entries and was a huge success for both MNAL and the transport community as a whole. The Outperformers’ League (OPL) formed by MNAL is a forum where transport-related issues such as GST are discussed. The forum has been a big hit among fleet operators, drivers and other industry professionals alike.
MNAL has tied up with the Ex-servicemen Association for driver training. MNAL conducts four-day programmes to train the army drivers in civilian driving which covers aspects such as road rules and efficient driving. Over 900 drivers have been trained till date and have also been rewarded with a visit to the company’s Chakan plant.
MNAL is also looking to make an entry into the longer bus segment. The company is a leader in the school bus segment and is keen on extending its success to other bus segments as well. “We will definitely enter the bus segment. We will take some time for that as we are consolidating the HCV project now. We will first work on the integrated solutions and also launch the 49-tonner before the bus venture”, added Mr. Mehta. Currently MNAL buses are made at the company’s Zahirabad plant.
Since MCV trucks and long buses have a common basic driveline, MNAL is eyeing the possibility of bringing out both the platforms at the same time, which would prove efficient in many ways. Globally, Navistar has formed a partnership with a Brazilian company called Neobus to focus on the inter-city bus segment, though Mahindra will rely on its own expertise for the imminent bus project.
LCV segment
MNAL’s LCV business also continues to perform extremely well. The company, with a 12 per cent market share in the segment, had sold over 11,000 LCVs last financial year and targets reaching the 20,000 mark in the next two to three years. Interestingly, close to 70 per cent of the sales came from the south region and as a consequence, the company’s focus is now on improving its presence in other regions across India.
In LCV cargo carriers, the MNAL Load King and the DI 3200 vehicle attract good demand. In the school bus segment, MNAL’s 15-seater and 25-seater buses have been very successful. Last year, the company introduced two new products – a 32-seater and a 40-seater. MNAL has proved itself as a pioneer in the school bus segment because of its efforts to produce tailor-made school-buses catering to the requirements of school children. India is increasing its focus on trauma care which has propelled demand for ambulances. With the ambulance market expected to be close to 6,000 units in FY 12-13, MNAL is looking to leverage on the huge demand in the segment.
MNAL has everything in place to expand its presence in the HCV segment. With the cowl version, a new engine, pan-India service network and many other focused initiatives, the company is firm in its resolve of attaining its targets. At the current rate of its operations, the annual sales target of 50,000 trucks is well within reach. This would definitely be a mark of outperformance in the Indian CV market.