Volvo Trucks India optimistic of positive growth with the revival in mining activity and growth in the infrastructure sector

 Volvo Trucks held Fuel Watch 2014 competition at a coal mining site in Managuru, near Kothagudem in Telangana recently to educate drivers and fleet operators on good driving practices to improve fuel efficiency. The winning driver achieved a significant 18 per cent higher fuel efficiency compared to the driver with lowest fuel efficiency in the competition. On the sidelines of the award announcement event in Hyderabad, Vinod Aggarwal, CEO, VECV and A S Ramarao, Sr. VP Sales, Marketing & Aftermarket, Volvo Trucks spoke to Subhajit Roy and discussed on the industry trends and company’s roadmap. Excerpts from the interview.

In recent scenario, how do you look at the demand of trucks in India compared to global trends?
Mr Aggarwal: The demand will improve with the economy becoming better. If we look at the industry figures the heavy duty trucks market has already started growing for the last two months. On the other hand, demand from light duty and medium duty trucks is still going towards the bottom. However, we will see growth within the next six months.

Mr Ramarao: With the new government in place we are quite excited. I think with the opening up of the economy, the infrastructure and mining sectors will get a big boost. We are already experiencing positive signals from our customers. We see good opportunity coming for Volvo trucks and similar products around the corner.

Are you witnessing similar optimism even in your order booking?
Mr Ramarao: Yes, we are. This year, between January and May, Volvo Trucks has grown by more than 30 per cent. With stable government in place we believe decision making would be faster. It should help in terms of working on the long-term challenges like meeting power deficit and major infrastructure development. All these will give us a great opportunity.

What is your expectation?
Mr Aggarwal: It is all related to the economy how the economy grows. In the current outlook, the economy is expected to witness 5.5 per cent to 6 per cent GDP growth in 2014 -15. However next year we should see real impacts of all the steps that the new government is going to take.

What is the volume you target this year?
Mr Aggarwal: We see volumes getting better this year as many mining and infrastructure projects are expected to be operational again increasing the demand for specialised trucks.

Mr Ramarao: We already have delivered more than 300 units in last five months i.e. between January and May. And, with the current optimism, we expect a substantial growth during the current fiscal.

When do you see the 1,000 sales mark crossing again?
Mr Aggarwal: Let’s hope it should happen in two years time.

In India, you have an assembly capacity of 2,000 units. By when you expect to reach your full capacity and go to the next level i.e. manufacturing?
Mr Ramarao: It all depends on how quickly it goes, it is difficult to predict. We have the capacity to assemble 2,000 units in single shift operation. We can easily deliver more than 5,000 units with 3-shift operation. So I don’t think we need any further capacity addition. We just need the right environment to sell more trucks. Today, customers are definitely looking for high performance trucks – they don’t look at the initial purchase price they look at the overall lifecycle value.

Do you have any expansion plan in pipeline?
Mr Aggarwal: Volvo Trucks has one plant here in Bangalore with a capacity of assembling 2,000 units. As of now we do not have any plan for expanding capacity further.

Mr Ramarao, with a conducive environment in place, what kind of sales strategy you have?
Mr Ramarao: Our sales strategy has always been clear. We have a direct sales approach – our trucks are sold by our own people. We don’t work through independent dealers for Volvo Trucks in India – we run our own dealerships. We are placed very close to our customers and we put the products in place understanding their needs.

Indian industry is dominated by low cost trucks how do you fare in this regard?
Mr Aggarwal: We are in premium trucks segment through Volvo Trucks. In low cost segment, we participate with the mass market Eicher brand. We are one of the strong players with light-, heavy- and medium-duty trucks with a market share of 31.5 per cent.

What are the features offer Volvo trucks precision with stability?
Mr Ramarao: Volvo trucks come with state-of-the-art features. The new product platform that has been launched globally come with path breaking technology. Apart from driver’s comfort Volvo trucks come with some unique features like air suspension for construction applications and new dynamic steering. These innovative features give Volvo trucks precision and stability.

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“Fuel efficiency and vehicle productivity are critical aspects of truck mining operations. We are the undisputed leader in this market, thanks to our world-class technology and our focus on the combined performance of man and machine together”

Philippe Divry, Sr. Vice President AB Volvo and VECV Board member
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Fuel Watch

Volvo Trucks Fuel Watch competition is part of Volvo Trucks efforts to educate drivers, fleet managers, customers and other stakeholders on the importance of the good driving practices to improve fuel efficiency, reduce cost and increase profitability. The competition highlights the importance of good, safe driving practices and promotes thorough understanding of the latest technologies of high performance tippers, to achieve the best man and machine performance.

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The Winners
R Satyanarayana from BGR Mining & Infra Pvt. Ltd. was adjudged the winner. J Sampath Raju from SV Engineering Constructions was adjudged the 1st Runner-up and Sudharshan Dhal from Montecarlo Ltd. was adjudged the 2nd Runner-up.