“We will be leveraging the digital world to connect the customer with mechanics, parts distributors and frontline service team, thus enabling him to have the required information at site to sort out the service issues – rather than taking the vehicle to a sophisticated workshop,” points out Mr. Anuj Kathuria, President, Global Trucks, Ashok Leyland, highlighting the new digital platform and apps initiatives for providing next level service support in addressing the future markets.
Here are his views on the changes taking place in the truck industry and how Ashok Leyland is ready for the same.
GST impact
We see a market shift towards long haul heavy vehicles on one side and light trucks for distribution on the other side happening; and the midsize trucks demand gradually going down. Rigid trucks in the heavy class are still popular compared to tractor trailers as they are easier to operate, have better manoeuvrability, require no special license and drivers being readily available for the class. Safety was an issue when the trailers were predominantly getting done in the unorganised sector with jackknifing being a common instance. However with the trailers now coming into the organised sector, such safety issues will be taken care of in the time ahead. Customers keep coming to us for rigid trucks 31 & 37 ton and if available even beyond it but then have to settle for trailers of 40 and 49 ton to meet their needs. With restriction on overload, the 49 ton segment should see a brisk pickup in the time ahead; and also the demand for the same will be driven by the infra projects taking off in a big way. Now that July 1 date has been set for GST implementation, the next important question would be as to how soon it will settle down. The expectation is that by October to November during this year, it should happen; and soon to follow the same will be the scrappage policy that is likely to propel the replacement market. Yes, the domain would indeed be facing these radical reforms in quick succession with BS-IV heralding the start on April 1, 2017.
AC Cabin
We are already offering the AC cabin in models Guru, Partner, Captain and Boss. For the AC cabin to become a reality across the segments, the specs for the same have to be clearly spelt out – like for example the temperature drop against time frame for all ranges. We are offering AC based on full-fledged HVAC unit and whether the same will be implemented by all the domain players is going to be the moot point – especially with the cabin building getting extensively done in the unorganised sector. Also the safety, reliability and warranty issues need to be addressed without ambiguities. We have the technology ready and only need to ramp up the operations to meet the demand across all models. But then ramping up cannot be done without getting the specifics and timeline for implementation as it involves upfront investment which will be a cost to the company.
Ground realities & technology role
With all the environmental and safety regulations, technology absorption and changes thereof, costs will invariably get added upon the acquisition price. We generally tend to focus more on the acquisition cost, important alright but is only a fraction of the TCO – less than 10% of the operational costs over the product life cycle. From our side, we are continuously working towards reducing the operational costs thro’ fuel efficiency, increasing reliability to reduce maintenance costs, providing smart financial packages for reducing the interest burden, etc. Moving over to the next level of emission standards invariably reduces the fuel efficiency but then with lighter trucks enhancing the payload capacity and powerful trucks and better infrastructure ensuring faster turnaround time, customer invariably gets a better return on the investments. Also we are providing driver training to ensure that the truck is driven in the right way to increase overall productivity and have so far trained over 8.2 lakh drivers; and this is an ongoing exercise and we are also now offering free insurance of Rs. 5 lakhs to drivers and the company taking charge of the premium payments.
As regards technology impact and other disruptive measures, the following indicated are likely to unfold in the time ahead. Firstly with GST kicking in, tax net will become stronger and whatever advantages the unorganised sector have will go away. Secondly product offerings by OEMs like the FBV will be preferred because of superior quality aspects. Thirdly as the OEMs will work under the CMV compliance, they cannot be challenged and interpretation left to the RTOs or any individual. Finally the FBV will come with a comprehensive warranty, viz., including for superstructure and cabin. All of the above will ensure peace of mind for the customers and am sure they would not be mind the incremental cost implications in the direct procurement of FBV from OEM.
As regards AMT, radialisation, telematics, communication/connectivity between aggregates, etc., we have all the technologies readily available at our end; and already offering many of these like tubeless radials in some of the models where they cater to correct load conditions. All of these come at a cost and at the end of the day the customer will have to decide whether these additional features and inputs will contribute to his business growth; and this means introduction will be based more on the commercial decisions of market. We are in fact introducing many of the changes proactively from our end like increasing the service intervals for the scheduled maintenance, unitised bearing for hubs to eliminate greasing and flexible service thro’ mobile workshops to reduce the service expenses. We are focussing on having as many touch points as possible but want each of it to be profitable and withstand even during downturn times resulting due to the cyclical nature of this industry. Summarising, we want to take the service support to customer’s worksite rather than the other way around and leverage the digital technology to address the future service needs and demands.
BS-IV implications & readiness
“Ashok Leyland has been making BS-IV vehicles since 2010 and has sufficient capability and capacity to make BS-IV vehicles. Till date, we have sold about 50,000 BS-IV vehicles to customers who have access to BS-IV fuel,” asserts Mr. Vinod K. Dasari, MD and CEO, Ashok Leyland Ltd. We present below his viewpoints shortly after the Supreme Court verdict on March 29, 2017.
Contrary to the various reports in the media about Ashok Leyland having to take a huge write-off of BS-III inventories, the company clarifies that in-fact the impact will be minimal. However, since BS-IV Commercial Vehicles cannot run properly on BS-III fuel – and such fuel is not available nationwide – our customers continued to buy BS-III vehicles. Given the current demand, majority of the vehicles in the pipeline have already been sold. Some more will be sold in the next couple of days where we have customer orders. Of the little inventory that we expect to remain beyond this, we will export them to other markets where we have significant presence and still operate on BS-III norms. Finally, for any other vehicles still leftover, the Company confirms that it will be able to easily upgrade them to BS-IV at minimal cost. Our products are in good demand and we will not be offering any price discounts.