Targets expansion into new segments with customised solutions
Volvo Trucks has been the outright leader in the premium category, dominating the deep mining space and continuously expanding into niche construction and infrastructure segments. The company has successfully fended off whatever competition that has come its way and at the same time strengthened its relationship with customers and ensured its trucks deliver the best productivity and profitability.
With FY18 throwing up a number of challenges for the CV segment, including the BS-III ban and GST implementation, we find out the views of Mr. Dinakar B, Senior Vice President – Sales, Marketing and Aftermarket, Volvo Trucks India, as to how things panned out for his company and how the current financial year is expected to unfold.
Excerpts:
How was FY18 for Volvo Trucks India and what were the major highlights of your performance during the year?
Fiscal FY18 was a most happening year for us. We have retained our leadership position in the premium trucks space (>400 HP trucks) and further strengthened customer retention and relationship. Leveraging the Volvo global technology expertise, we were the first to introduce the Volvo Trucks BS-IV product range right from April 2017.
In the previous fiscal, while retaining our strong position in Mining we have also expanded our presence to niche Construction and Infra segments as well where higher utilisation and productivity of the fleet at optimum cost is gaining importance. We have introduced customised and growing range of Volvo Trucks solutions for the Construction segment and showcased these solutions at EXCON 2017 where we had extremely positive response from customers. With an objective to enhance the efficiency and productivity in logistics space, post the implementation of GST, we are focusing on introducing the technologically advanced Volvo Trucks long haul solutions. Going forward, we will continue to focus on ensuring lifetime profitability for our customers through segment-specific most advanced products as well as tailored support services.
What impact did the BS-III ban and GST implementation have on your company?
BS-III emission norms vehicle ban had not impacted our operations significantly as our strong customer relationships enabled us to come out of limited inventories. Leveraging our strong global technological leadership, we were the first in premium trucks to be BS-IV ready right from April 2017.
We are positive on the long-term benefits of the GST roll-out. It took some time for the industry to normalise post the implementation of GST. However demand for higher capacity trucks, especially 31T and above, has been robust with the consolidation of loads and warehouses happening post GST.
What would you attribute the CV sector’s robust growth to? Please list out top three growth drivers.
The CV industry registered a significant growth in FY18, especially with a very good momentum in M&HCV sales in the last two quarters. The Government’s continued focus and spend on the Infrastructure segment, especially roads, improving overall economic activity and the benefits of GST kicking in like turnaround time reduced to the tune of around 15% is auguring well for higher capacity trucks. Also the stricter implementation of overloading ban in some of the States, coupled with some of the end customers specifying the technical specification requirement of trucks for transportation, is contributing to replacement fleet demand. The medium and heavy duty trucks sales growth is expected to continue in the next fiscal as well with increased infrastructure spending, ban on overloading of trucks getting stricter, improved mining output, a greater focus on enhancing logistics efficiencies further to implementation of GST, etc.
How do you see the current year unfolding? What do you think would drive growth this year, both for the market and for your company? What are your plans/targets for the year?
We are extremely positive on the India’s economic growth story and it will remain strong with the Government’s impetus, especially on the Infrastructure, Roads & Construction segments. Execution of the schemes and projects like BharatMala, dedicated freight corridors, river linking project, increasing demand for coal from the thermal power sector, etc., would drive demand for heavy-duty trucks and the potential is clearly emerging for high performance trucks in some of the niche segments.
We will continue focusing on sustaining our strong leadership position in the premium trucks segment space by expanding into new segments with customised solutions and hence establish the Volvo Trucks brand in the relevant construction and long haul businesses.