We will focus on the Southeast Asian Market for export purposes: Vinod Aggarwal, Volvo Eicher

Vinod Aggarwal, Managing Director and Chief Executive Officer, Volvo Eicher Commercial Vehicles Ltd, talks about the newly set-up plant in Bhopal, demand in the commercial vehicle segment, export market and expected growth among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: You have established the eighth manufacturing plant in Bhopal. Please provide details about it, like its capacity, investments made on it and what kind of output is expected from the plant?

A: The new plant that we have set-up in Bhopal is the 8th plant as you have said in Madhya Pradesh, by the way, overall, it is our 10th plant in the VECV segment. We will make 4-11 tonnes vehicle here of Pro 2000 series. As you know that we have launched a new Pro 2000 series and it is a very modern truck and we have introduced two new cabins and two new engines, 2-litre and 3-litre engines. It has a lot of potentials not only for the domestic market but also for the export market. It has a capacity of 40,000 on a two-shift basis. Apart from this, as you know that we have a capacity of 90,000 trucks in our Pitampura plant and we will make medium-duty and heavy-duty trucks there, as we have Pro 3000 series, 6000 series and 8000 series. Combining both the plants, our production capacity will go up to 1.30 lakh. With this, the future requirement that will come to our company or the growth requirements of the company will be met well. And, the Bhopal plant is a state-of-the-art modern plant and is based on industry 4.0 practices and has the latest manufacturing technology, which will help us in increasing our productivity.

Q: What is the incremental market share that you will gain after you start operations in this plant and what are the new markets that you are targeting and how many of the vehicles will go for export?

A: We have a very focused approach towards the market share. We have a market share of around 32% in the light and medium-duty trucks our market and 8% in the heavy-duty trucks and around 25% in the buses. So, overall, we will continuously increase our market share gradually through a step-by-step approach. Due to this plant, we will not have any problem in our capacity as a huge capacity is available with us. This will help us to participate well in the market. As far as the export market is concerned, then the potential of this plant will help us in exporting to the Southeast Asian markets, like Indonesia and Malaysia, where such trucks are required. It is a very big market for the same and we already export there and now, our potential will increase further there. Besides, we will also make left-hand drive vehicles here due to which we will be able to export in the Middle-East as well. We will also export the vehicles in the African market, like South Africa where we already export. Going forward, our export potential is huge because these trucks will compete with Japanese trucks and are very modern trucks.

Q: Everyone is waiting for the scrappage policy. What are you listening and when do you expect it will be implemented and what will it mean for you? The commercial vehicle segment is underperforming yet and has not been able to return in terms of growth that is expected. What do you have to say on that and by when will we see the market and industry growth?

A: First of all, if we will talk about the growth then I feel that the worst period for the commercial vehicle industry is behind us. So, now onwards, you will just see growth because people have a regained the confidence on the economy and replacement has started. So, going forward, more and more replacement will be seen. Apart from this, the investment that the government is making on infrastructure has increased the demand for tippers and construction trucks. Apart from this, they are also in huge demand in the e-commerce segment. In the case of alternate fuel, there is a good demand for CNG fuel. The mining sector is doing well. So, many segments are doing well. Basically, and fundamentally, the replacements which were not made in the last 2-3 years will be replaced now due to which a good growth will be seen in the market. Besides, last year, our market was quiet down while it was at its peak in 2018-19, if a small commercial vehicle is removed. Last year, the market was at just 40% and in the first half of this year, the market has been quite bad but you will see a growth in the balance four months because trucks have grown in the month of October and November but buses are down because the schools have not opened yet but I expect that replacement demand will be seen here as well. 

See Zee Business Live TV Streaming Below: