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MOTORINDIA
l
September 2012
11
three-five years.
Players such as Volvo-Eicher
have revamped their product port-
folio with a firm view to gaining
market share in the MHCV seg-
ment. Moreover, India has been
chosen as the global hub for Volvo’s
5 and 8l engines – a move that not
only strengthens India’s global rel-
evance for the company, but also
positively impacts Volvo-Eicher’s
competitiveness within India. MAN
has brought out a new LITE range
of trucks for rated load applications,
while BharatBenz will launch 16
trucks over the next 1.5 years.
Leading Indian players are under
attack not only from a product but
also from a service perspective. New
networks are being rolled out with
considerable speed. BharatBenz,
for example, has rolled out about
70 dealers in the first phase with
a strong focus on southern India
where it intends to challenge Ashok
Leyland’s dominance. Mahindra
Navistar has set up state-of-the-art
dealerships across the country and
invests in service innovations such
as 24x7 hotlines, a 48-hour response
guarantee to get trucks back on the
road, extended warranties and the
like.
With a market contraction and
a lot of new capacity being added
in the market, margin pressure is
likely. Companies will resort to
discounts to achieve market shares.
Even today, discounts in the indus-
try are reported to be in the range of
Rs. 60,000 per truck.
Financial pressures will not re-
main limited to OEMs. With large
new investments and volume pres-
sures coming their way, dealers may
find their viabilities challenged as
well.
The winners in this complex and
challenging environment will be
companies that combine strong cost
focus, superior execution capabil-
ity and relentless focus on customer
needs. Cost and superior execution
are vital to protect margins in an
environment in which escalating
input costs and investments as well
Roland Berger
Strategy Consultants
Figure 1
Established companies such as
Tata Motors and Ashok Leyland
react with product offensives
of their own. While Tata Mo-
tors announced investment of
about Rs. 2,000 crores, Ashok
Leyland will invest about Rs.
800 crores.
auto industry