How do you view the current market scenario of tipper trucks?
Coal production recorded a growth in the last two months, compared to the same period last year, which is very encouraging for tipper market. We see that the coal requirement is picking up now. The manufacturing segment is driving more demand and the coal requirement will move up in the coming months. Also in the commercial coal mining, out of 38 mines put on auction, 19 have successfully auctioned. All these together will help the mining segment to grow. In construction segment, government is investing heavily on infrastructure with around 5,700 km length of national highway projects being awarded in the past seven months as compared to some 3,000 km last year. Various expressways coming up in the country will also provide major impetus to the construction industry as of now. This year construction has already reached almost 90 per cent of last year. All these developments are fuelling the growth of tipper market in the country as these mega projects will attract huge requirement of construction equipment including tippers.
What is the production and sales scenario of tippers?
Though the industry has dropped in the heavy-duty trucks by almost 68 per cent till now, our performance is better with only 48 per cent drop during the period. We are bullish about the future and the company is expected to gain momentum going forward. In October, we have recorded 11 per cent increase in tipper sales over last year. We are on the right path and look forward for the commercial vehicle industry to bounce back as the market is recovering slowly and steadily. From a demand perspective, primarily the multi-axle trucks in 28 tonne and 35 tonne range drive the demand as the requirement is more for volume trucks.
How challenging is the market after the impact of Covid pandemic? What are your key initiatives in these tough times to beat the challenges?
The Covid pandemic and its impact were unprecedented and nobody was prepared for such a development. The Covid induced lockdown created a significant disruption in the entire automotive value chain. However, the economy is improving and the good signs of recovery in the market are visible. There is a huge infrastructure push and mining activities are also picking up. The manufacturing sector which was down for the past few months have started improving. Business houses have started adjusting themselves to sustain in the current market conditions.
We have done a lot of work on digital platform in the Covid times as we are working on the digitalised partner interactions. All those processes which needed high manual interventions are now getting digitalised. We have made structured learning programmes, and imparted training to all the front-end team members in production and in sales. It is becoming a part of the new normal now and there is more process orientation this way. We are working very closely with our channel partners and customers during these tough times. We ensure that both our channel partners and customers are in healthy position as they are effective and productive.
How do you look at the impact of the new emission norms and the Covid pandemic together on the industry?
We were ready with our products, sales, and aftermarket services with respect to the emission norms. But the Covid pandemic was unprecedented as nobody was ready to handle such a situation. On the BS-VI requirements, we were already prepared in advance. We are actually BS-VI experts in true sense because we have the experience of exporting more than one lakh Euro VI vehicles to 41 countries. We have already been doing this for the past six years. So the preparedness was already there. Had there been no Covid, this six-month period could have been the best time for us.
However, after a few months of sluggish period, the infrastructure, mining and e- commerce segments are now moving up and all these segments have started to fuel the growth of CV industry now. We have been receiving orders for tippers from infrastructure and mining segments while LCV demand is growing with orders from e- commerce space.
What are the key technology initiatives from VECV during this period?
A major step in this direction is the setting up of Uptime Centre to provide connected service to our customers. Since this August, all our trucks are connected with the Uptime Centre at Pithampur, which is an industry-first initiative. If the truck is under break- down, the Uptime Centre can take the control, diagnose and help the customer resolve the issues in the least possible time. We have used this innovative technology to support our customers. We also provide adequate training to our customers on new technologies through a programme called vehicle introduction programme (VIP). Before handing over the truck to the customer or the driver, we make sure that the driver, the owner or the fleet manager understand all the functionalities of the truck.
Do you offer used/refurbished products for customers? What are the supporting services to customers for used trucks?
We have a dedicated platform to offer pre-owned vehicle service for many years, called Eicher Sure. It is a trusted service for purchase and exchange of used trucks. Customer needs to have complete peace of mind while getting into the deal of used trucks. Through Eicher Sure, we offer complete transparency, value for money, quality, affordability, and complete peace of mind to the customer. There are customers who have used our trucks for years and want to exchange these trucks. Also, there are customers who are looking for a used truck for their business. We try and match the ones who want to sell the truck and who want to buy it. This helps the prospective driver owners who want to become a truck owner but not able to afford to buy a brand new truck because of the financial constrains.
What does the demand trend look like in the post-pandemic scenario?
Though the first half of this year has been quite challenging, the market is now improving. Last month, the heavy-duty truck market was up by 8 per cent over last year, which is encouraging. Last year itself the market was down compared to the previous year. In 2018-19 the heavy-duty market was around 219,000 trucks which came down to 141,000 last year. We see a huge pent-up demand going forward. Those who have not bought for the past two years will come back now and buy. With segments such as infrastructure, mining, ecommerce and the auto industry are picking up, I am sure that the market will bounce back and it is only a matter of time for the demand to come back.
How are you realigning your strategies in the changing market scenario?
We have been working very closely with the market as adaptability and agility are our core strengths. We are constantly realigning our strategies in line with the market conditions. As of now, our focus areas will be automating production processes and ensuring flexibility and scalability. If the market is going up we should be ready to take care of the demands that come up.