Witnessing a strong rebound on account of the push for infrastructure projects, the commercial vehicles industry has even come to terms with GST implementation and BS-IV norms.
By Mitalee Kurdekar
We’ve seen some of our customers now covering an average of two lakh kilometers in a year.
Things are certainly looking up for the commercial vehicles (CV) industry in India. Despite experiencing constant ups and downs ever since it achieved peak levels in 2011-12, the industry has been following a healthy growth trajectory in recent times, buoyed by the Government’s push for infrastructure projects. In addition, the CV industry has witnessed signs of disruption, some of which were of a global nature like the advent of digitalisation, launches of efficient models to support customer preferences and the inclusion of value-added services. Besides this, there were India-specific disruptions like the advent of GST and demonetisation. However, the aftereffects of these changes have mitigated and are possibly turning into opportunities, today. Further, regulations like stricter emission control norms are definitely playing their part in streamlining products as well as the industry, preparing it for a future where introductions such as electric vehicles will be yet another game changer.
“The market is in very good shape. We are seeing are a strong rebound right now, from the uncertainty regarding the transitions to BS-IV and to the post-GST landscape, and of course other influences like demonetisation that temporarily caused some distortions,” says Erich Nesselhauf, MD & CEO, DICV.
The CV industry seems to be on a roll with an excellent growth trajectory. In fact, it is expected to touch its peak this year and, as a whole, is expected to witness a double digit growth in numbers, especially given the Government push on infrastructure.
“There are positive sentiments in the economy and we are witnessing good growth in FMCG and consumer durables sectors, and healthy rural activity, further fuelling this growth. Further, adjoining markets in the Indian subcontinent are also opening up a good opportunity for the CV OEMs,” suggests Vinod Aggarwal, MD & CEO, VE Commercial Vehicles.
GST has brought with it many benefits, most of all the new world of borderless pan-Indian transportation.
CV makers are certainly posting good numbers. For instance, in the last financial year, Mahindra Trucks & Buses grew by 41% riding the industry upswing and an established ‘Guaranteed Experience’ customer promise. “With recent Government investments in infrastructure projects like Bharatmala, economic corridors, inter-corridor, feeder routes, border roads, expressways and expansion of national highways as well as coastal roads, Pradhan Mantri Gram Sadak Yojana, an unprecedented growth in the CV sector is expected in the coming years. Scrappage policy for old trucks and Government support to the cause of a clean environment would certainly trigger growth for the industry in the near term,” believes Vinod Sahay, CEO, Mahindra Trucks & Buses Division.
“With increased focus and spending on the infrastructure segment, the CV industry has picked up speed and is all set to transform in the next few years. New regulations such as BS-VI and GST will enable India to be at par with its European counterparts,” points out Aggarwal.
With big budgets being channelled towards massive improvements in infrastructure, not only is that sector being fuelled, but more equipment – specifically tipper trucks – are consequently needed. “A lot of growth has been happening for us in this segment,” states Nesselhauf.
New regulations such as BS-VI and GST will enable India to be at par with its European counterparts.
On the other hand, there have been the manifold benefits that came with GST, most of all the new world of borderless pan-Indian transportation. “Long-haulage trucks don’t lose one or two days at state borders anymore; they can run a lot more. We’ve seen some of our customers now covering an average of two lakh kilometers in a year – more than double what they did before. And the hub-and-spoke model is getting more and more traction. All of this requires modern, fuel-efficient trucks with higher uptime, which is exactly the core of BharatBenz,” Nesselhauf adds.
In fact, GST has given rise to a new transport model, boosting the CV industry’s growth due to the realignment of distribution networks. “In effect, features such as KMPL, higher payload, high-speed, comfortable cabin and breakdown-free trucks are getting valued more. GST has smoothened the process, rationalised rates, removed border posts and, as reported recently by CRISIL, trucks are already plying 25 kms more per day. We are expecting the same to increase or to cross 100 kms per day in the coming years. Hence, GST has significantly impacted and driven demand for CVs in the e-commerce segment, resulting in efficient trucking and, in fact, leading to higher demand for smart and modern trucks,” confesses Sahay.
Insiders feel that the industry is expected to remain bullish for the next couple of years, driven by factors like strong replacement demand due to restrictions on overloading of trucks, further accelerated by the announcement of the scrappage policy, and successful migration from BS-III to BS-IV norms. Aggarwal proclaims that customers are now fully used to BS-IV technology trucks, whether these are with SCR technology or EGR technology engines.
Government support to the cause of a clean environment would trigger growth for the industry.
Speaking of customers, there has been a major evolution in their outlook too. As Nesselhauf notes, “We see a change in customer mind-set, a clear shift from the famous cost-conscious buying pattern to customers making smart, value-oriented buying decisions. This is, of course, good for a manufacturer like us; we’ve been highlighting our Total Cost of Ownership advantage since we entered the market in 2012 with our BharatBenz brand. More and more customers today are doing the math regarding which brand and product gives them the best value over the product lifecycle.”
And that is not the only change. The arrival of electric vehicles is the next big thing. Electrification is clearly the future. The country is currently on the brink of a new era in transportation. In 2013, the Government introduced the National Electric Mobility Mission Plan 2020 as the first step to transition to complete electric mobility. With complete Government backing, OEMs have no choice but to plan the move to electric variants. And they are doing so too. OEMs are increasing their investments in order to develop new products and technology to push an all-electric fleet by 2030. Along with the supporting policy framework, electric vehicles are also bound to have a positive impact on the country’s entire ecosystem.
“Though it is in the evolutionary stage, the industry is responsive to electric needs and moving rapidly towards electrification. We, at VECV, are pushing and striving to achieve this every day. With our zero emission smart electric bus – Skyline Pro E – for the Indian electric bus market on our leading bus platform, Skyline Pro, we are making our contribution towards sustainable urban transport. The Skyline Pro E integrates KPIT Technologies’ indigenously developed electrification technology, REVOLO. The system is modular and designed for Indian conditions, and is the most advanced in safety, comfort and efficiency. The bus covers a range of 177 kms on a single charge with AC, and allows 36% regeneration leading to less than 0.8 electricity units/km,” claims Aggarwal.
DICV enjoys the advantage of being a part of Daimler Trucks’ worldwide organisation, with access to the entire know-how and technology pool of one of the world’s leading CV manufacturers with a global reach. Daimler Trucks has multiple electric vehicle projects across segments, brands and markets – the FUSO eCanter as the first series-production electric vehicle, the Mercedes-Benz eActros, or the Freightliner eCascadia.
“Thus, when the market is truly ready at some point, we will be in a position to move very rapidly in India as well. Right now, however, there are still too many open questions about how the existing infrastructure can be upgraded to support a large-scale transition to electric vehicles. Our point is that the best thing for people and the environment, which could immediately be implemented, is a large-scale replacement of the many old and polluting commercial vehicles on Indian roads with modern, clean and efficient trucks and buses,” states Nesselhauf.
Advanced telematics seems to be a popular value addition, with most industry players now offering it with their vehicles.
On the other hand, new-age technology is already making way for new-age CVs in India. The country, unfortunately, has one of the highest casualty rates in road traffic, making it especially dangerous for truck drivers in traditional cowl vehicles, which often lack even the most basic safety features. To tackle this, OEMs have stepped up their game.
“BharatBenz has set the benchmark in many safety-related aspects like crash-tested steel cabins, Anti-lock Braking Systems even before they became mandatory, better brake performance, and even small things like daytime running lights on our HDT range. Our latest innovation has been our Driver State Monitoring System, which can help to prevent typically serious accidents resulting from fatigue or inattentiveness,” says Nesselhauf.
Similarly, Tata Motors has deployed advanced driver assistance systems such as driver health monitoring, lane departure warning, collision mitigation system, telematics and improved vehicle designs to contribute substantially to improved road safety. “Our commercial vehicles are currently provided with the mandatory as well as other safety features such as ABS (Anti-lock Braking System), Rear Underrun Protection Device (RUPD), Side Underrun Protection Device (SUPD), Front Underrun Protection Device (FUPD), driver & co-driver side mirrors, wide angle mirrors, close proximity mirrors, Speed Limiting Device/Function (SLD/SLF) etc.,” supplies a Tata Motors spokesperson. As a matter of fact, Tata Motors claims to be the first OEM in the country to deploy Electronic Stability Control (ESC) for the range of PRIMA and SIGNA trucks.
OEMs are increasing their investments in order to develop new products and technology to push an all-electric fleet by 2030.
Eicher, on their part, has introduced CNG variants of Pro 1049, 1059 and 3014, which are aimed to capture the pick-up customers in the green corridor of the Delhi-NCR region. The brand new CNG range is powered by fuel efficient state-of-the-art E483 4 Cyl 2 V CNG engine in 1000 series; and E494 4 Cyl engine with Volvo Group EMS 3.0 technology powering the Pro 3014 CNG Truck. The development is also in line with the Clean Fuel Corridor being created by the government across the Northern belt. In another development, Eicher’s new Pro 6041 is India’s first 41 tonnage rigid haulage truck and offers a payload advantage of 3.5 tonne over a 37 tonnage truck. The vehicle is powered by a VEDX8 engine, which is the biggest and the most fuel efficient engine available in the category.
Mahindra’s BLAZO range of HCVs was launched with the advanced CRDe engine offering multi- mode features – Turbo, Heavy and Light. “The driver can choose the mode as per the load and road conditions for superior mileage and unmatched performance. The FuelSmart engine is one-of-its-kind in its frugal fuel consumption. It maintains high fuel economy despite its high performance, as it features both a mechanical injection system with a Bosch rotary pump as well as a high-pressure 1800 bar common-rail fuel injection system. BLAZO was subjected to extensive field trials, which instilled the confidence of delivering more mileage than the competition,” emphasises Sahay.
On the subject of advanced telematics, which seems to be a popular value addition as far as customers are concerned, most industry players are on the same page. Tata FleetMan includes features like real-time fleet tracking, SMS and email alerts, geo-fencing and remote unit management, all designed to address the pressing need of fleet owners. Today, close to 60,000 vehicles have been deployed with this system across India and abroad.
“Another critical feature of the FleetMan is trip management, where one can assign a specific trip to any vehicle within the fleet with start and end locations, specify the load carried and the estimated time of arrival at the destination,” says the company spokesperson. Also, Tata Motors has launched this as a standard fitment in the entire range of PRIMA vehicles along with three years complimentary service.
Eicher Live is Eicher’s advanced telematics system, which enables proactive maintenance of the truck. “The Eicher Live service gives the owner and our aftermarket teams a thorough view of vehicle performance, utilisation and uptime. Further, the uptime services enable service teams to proactively schedule and plan for the repairs and maintenance activities on the vehicle. In this way, the truck spends more time generating revenues. In the event of a breakdown, the service team is well prepared with the right parts & tools, and the right technician, to address the repairs and minimise the downtime,” Aggarwal stresses.
Overall, the CV industry in India has shaped up rather well. With technology improvements and policy support, it is definitely looking at a good run in the near future.