Scania Commercial Vehicles India (P) Ltd. has had an interesting track record in the country and is looking to take its business to the next level with the newly introduced New Truck Generation. In this interview, Petr Novotny, Managing Director, Scania Commercial Vehicles India, reveals to N. Balasubramanian the company’s long-term strategy, its focus on innovation, and how its customer-centric approach has notched up a good brand image
Scania India has launched a new truck range, the NTG, after a very long time. How has the market responded to the new product and what are your expectations from the launch?
The Indian mining, construction and infrastructure segment has been continuously evolving. Since its inception, Scania India has proactively launched products to match the future requirements of these segments. Having said that, NTG (New Truck Generation), which is a completely new product range, has been our biggest launch globally and in India for more than a decade. It has played a major role in making Scania a market leader in Europe and since its global launch just a few years back, it has won many awards including the ‘2017 International Truck of the Year Award’ after its first launch in Europe. It has achieved 100% in all European press tests.
NTG has also won the prestigious ‘Green Truck of the Year Award’ consecutively for 2018 and 2019 in Germany and Italy. Recently, Scania’s New Truck Generation was voted ‘Truck of the Year Latin America’ for 2020. The selection was made by a jury of 15 commercial vehicle editors and specialist journalists from Brazil, Argentina, Chile and Peru. The range that was recently launched in India is not just hardware; it has a multitude of smart solutions meticulously designed considering the Indian customer’s business profitability in mind. Our objective is to ensure that our customers receive the best in global technology to enhance their productivity, uptime and safety.
We are also happy to share that our customers have been very receptive to the launch and are quick to realise the added value. In this regard, we have been able to achieve threefold gains that include diversifying in the related segments, widening our customer base, and penetrating our existing customers. Furthermore, we would like to restate that Scania was the first manufacturer to supply Euro VI engines back in 2011. We have readymade technology that has been tried and tested successfully over the years. NTG will enable us to transit through this changeover from BS IV to BS VI in a rather seamless manner.
Could you take us through what went into the development of the NTG range in terms of market study, customer feedback, test runs, etc.? Was there any specific strategy behind the timing of the launch considering the challenging market conditions at present?
Developed after 10 years of hard work with investments of more than USD 2 billion, 12 million test kilometres, and the work of several thousand scientists, designers, technicians, computer programmers, engineers, and production specialists, the New Truck Generation is the biggest and the most important product launch for Scania in more than a decade. From the mining operations’ perspective, the trucks have been tailor-made to increase revenue, reduce total cost of ownership as well as ease the risk-related operations drastically.
Furthermore, the heavy tipper has been extensively tested and tailored for the Indian mining conditions. With a higher capacity of 18%, uptime up to 5%, and higher durability as well as safety standards, with the NTG range we are assured on success not only in India but in all the global mining and construction markets. The best-in-class product technology is complemented by service plans to fit the customer’s operational needs like site optimisation, uptime improvement, repairs, and proactive maintenance to offer end-to-end solutions. We can say with full conviction that our product and solutions make perfect sense in the current market conditions of stiff tender competition, narrow margins, stricter safety norms and driver or technician attrition.
What are Scania’s plans for EXCON? Given the fact you have a new range to showcase, what are your expectations from the show?
EXCON is a great platform for the CV industry to connect and engage with customers in the construction and mining segment, both of which are core to Scania’s business operations. We will use this opportunity to talk about our recent product launch, namely, the New Truck Generation, showcase our products and solutions, and interact with customers. We have been consistently reaching out to customers with our pan-India event, Sampark. EXCON will also be driven with the same objective. We will be participating jointly with our partners, Larsen and Toubro, and are confident that by leveraging our strong partnership we will be able to create high business impact during EXCON.
At EXCON, we will be displaying the NTG heavy tipper, along with a suite of solutions and the industrial engine range. We anticipate a lot of interest for our tipper and engine offerings in the construction segment. We are also expecting keen interest from dumper customers who see a lot of value in heavy tipper due to its inherent advantages. Moreover, many of our current customers have become aware of technology applications for enhancing the productivity of their daily operations and hence we also look forward to a lot of interest in the connected services’ zone.
How many vehicles have you sold in the construction and mining segment and also on the on-road long-haul segment until now? We understand that Larsen and Toubro handles your off-road tipper sales and therefore would appreciate if you could give us the number of Scania tippers running in India at present. Also, would you cease to sell your erstwhile construction and mining tippers now that the NTG range has been launched?
The success of our own business is directly linked to the quality we deliver to our customers and how well their businesses perform. With the same working methods and quality standards, production can be allocated flexibly between Europe and Latin America to achieve optimal capacity utilisation. This is possible thanks to a flexible, global production structure as well as a global product range and employees with a high level of core competency. Scania CV India (P) Ltd. has established a regional production centre in India for catering to India-specific requirements in 2013. At this moment, we would not like to disclose any numbers.
However, we are happy to let you know that we have sold a significant number of products with highest quality coming from Indian RPC. Also, we are proud to say that the Indian assembly line is on par with global quality and skills levels. Our hallmark in India has been energy-efficient operations and we have been honoured with the ‘Digital Manufacturing and Green Manufacturing Award 2018’. Our truck manufacturing is a flexible line on which we can produce multiple products on the same line and hence the transition from PGR – the previous range – to the new truck range has been without any challenge.
What are your plans for the on-road segment? Can we expect some new launches from Scania there too?
Globally we have proven expertise in 36 truck applications across industries ranging from retail to petrochemical to waste handling. At Scania, our effort is to deliver tailor-made solutions to our customers efficiently to increase productivity, uptime, and fuel efficiency. Scania is well-equipped to offer all our knowledge, expertise and experience for our Indian customers. We will continue to expand our footprint in existing markets while looking for possible investment opportunities to diversify in other segments. For India, we are continuously scanning the market for new segments and avenues for sustainable partnerships with Indian customers. We look forward to testing the market for haulage segments. While the rest of the country is working towards adopting BS VI emissions in a few months, Scania has been ready since 2011. We have been producing Euro VI since 2011 in Europe and using that expertise, we are ready for BS VI engines in India.
How many dealerships and service facilities or touch points do you have across the country at present? If the count is less than 10, kindly name the locations.
Based on the vehicle population and customer needs, Scania and Larsen and Toubro have arranged network points, on-road support, parts centre and parts warehouse at strategic locations nationally. Scania independently has network facilities at 11 locations and is further complemented by Larsen and Toubro’s network facilities at key locations. Earlier this year, Scania launched a central parts’ warehouse in Nagpur. Located at the zero mile centre of India, Scania’s state-of-the-art warehouse is spread across 30,000 sq. feet with over 8,500 stock keeping units (SKUs) and caters to Scania’s off-road, on-road, and engine products.
This strategic move brings us closer to our largest distribution partner, Larsen and Toubro, and vastly builds on synergies while improving the operational efficiency, reducing the order processing time for our customers across India, thereby resulting in better turnaround time and better availability of spare parts. This would help the customers achieve better total operational efficiency (TOE), furthering the Scania philosophy of ensuring customer delight.
Over the foreseeable future, what will Scania’s plans be in terms of investments, focus areas, new product introductions, supplier development, and network expansion? What position would you ideally aim for in India, say by 2025?
India is a very important market for us. We have now entered a new page in our history in India by entering the mining and construction segment with our new offering. Moreover, we have significant services’ portfolio within the mining sector. Taking our commitment to India forward, we have drawn up a five-year strategic plan for the company where we have charted out a definite statement, including our vision and mission:
• To be a leading contributor to customer profitability by value selling,
• To be a leader in transport solutions by pioneering the shift in sustainable space.
• To live the Scania way by staying premium throughout.
Our key strategies to achieving the targets revolve around:
• Volume and profitability strategy – expand in existing segments.
• Growth strategy – invest in future markets and new segments.
• Building a scalable and competent top organisation.
In 2019 and for 2020, we will continue to expand our footprint in existing segments while exploring possible investment opportunities to diversify. We are looking at capitalising on the current industry trends while contributing heavily to the market. With our extensive experience in offering transportation solutions for the mining industry, we are looking at providing more innovations to optimise operations in India. As a forward-looking company, we are also continuously exploring new segments and the possibility of testing the market for haulage segments. From an industry perspective, we are confident that the growth will come when we secure these values and our portfolio fits perfectly well with the customer needs of uptime, fuel efficiency, safety, and service.