Good demand is expected in construction & CNG truck segment: Vinod Aggarwal of Volvo Eicher

Vinod Aggarwal - Managing Director and Chief Executive Officer, Volvo Eicher Commercial Vehicles Ltd, talks about the demand in the commercial vehicle segment, acquisition of the bus business of Volvo and emerging synergies and expected outlook for FY21 among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

We have seen the auto sales performance mainly in the passenger vehicle and two-wheelers segments but there is a pressure on the commercial vehicles (CV) segment. What is your outlook on it and do you think that there is an improvement in trends before the festive season?
Rightly said, the CV segment is in maximum trouble because the CV segment is directly connected with the business. But the good thing is that situation is getting better on a month-on-month basis and every month is better than the previous month. Things will get ore better during the festive season. Going forward, I hope, the CV sector will perform better.

You have acquired the bus business of Volvo in the recent past. Let us know about your outlook in the context of the bus segment particularly in FY21? What kind of signs of revival is visible and what will be the importance of the bus segment in the VCVE segment?
Integration of Volvo Bus with us will be great for our business because Volvo Bus is a very popular brand and is a generic brand for the buses in every aspect like luxury, safety or anything else. This integration of Volvo with Eicher will birth to too many synergies, like cost reduction, creation of new variants and technology in terms of manufacturing among other, because this merger will bring the complete technology of Volvo Group to us. This will be a very good thing for our company. As far as bus segment is concerned then it is a bit down at present because February to August period is a school season. Schools generally buy school bus in this period but schools didn’t purchase any bus this year as they were close. However, we expect that the school season will start once again when the schools will be opened. Future holds the potential of the buses. At the same time, the state-transport undertaking will also buy new buses because their fleets are very old by now and there is a need to replace them. We expect that the state transport undertakings and schools will buy buses from us in near future. Thus, the coming period will be a good season for buses. 

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Update us about segment-wise demand recovery and by when you expect that you will be able to reach the pre-COVID level demand? How will you end FY21 and what is the outlook for the next fiscal?
If you have seen the industry figures then the business of the first five months of this financial year was equal to one-month business. In the coming time, we have maximum expectations from infrastructure sector as the demand for construction trucks is increasing. Apart from this, demand for CNG trucks has also gone up because the fuel of the CNG trucks is a bit cheaper than diesel and it is also a good fuel. Diesel prices have gone up significantly and it has increased the cost of transporters, while CNG is cheaper for them. In addition to this, good demand is expected from the rural sector because the rural economy is doing well, monsoon has been good due to which good crop is expected. This is why; we hope that good demand will come from the infrastructure sector, CNG sector, rural economy-related demand and e-commerce sector.