JOST, the No.1 supplier of fifth-wheel couplings for the tractor-trailer industry, is on a bull run in the Indian market. The Indian subsidiary, headed by Mr. G.S. Pradeep, Managing Director, JOST India Autocomponent Pvt. Ltd., has tripled its sales figures from 2013, a remarkable achievement considering the appalling state of the truck and tractor-trailer market in recent times. As expected from a market leader, JOST India has continued to develop new products to suit the local requirements and has perfectly positioned itself to dominate the market in the foreseeable future. Mr. Pradeep talks about his company’s plans and what it should be doing to realise its full potential.
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Business in 2014
We did very good business in 2014. Although the tractor-trailer industry figures did not go through the roof, sales were a lot better than in 2013. We exported a good number of fifth-wheel couplings to our sister company in China. Our axle/suspension business took off very well due to the product success, and we have crossed our budgeted figures. Our main highlight has been achieving a sales figure thrice that of 2013.
Major plans for 2015
As indicated to you during our earlier interactions, we already have a capacity which the Indian tractor-trailer market would need for the next 4 to 5 years. In terms of product launches, we will be targeting the tipper and ODC segments. As a focused initiative, we will be more aggressive in the aftermarket and promote use of JOST original spares. More emphasis would be laid on sales of niche products like towing hitches, towing eyes, twist locks, hubodometers, etc. From the company point of view we will be focusing more on employee welfare and CSR measures.
Expectations from CV industry in 2015
The good signs of growth we saw in 2014 are mainly due to the good amount of optimism generated with the formation of a single party majority government at the Centre. Narendra Modi, with his pro-manufacturing initiatives and support, has dispelled a lot of pessimism. His ‘Make in India’ campaign has re-kindled hopes of an investment-friendly atmosphere in India for MNCs like us.
We at JOST India are targeting at over 95% localisation of all the products we make. With the proposed implementation of GST, there should be a uniform tax regime across the country. This would eliminate price disparities arising out of taxation. Having said that, for the feel good factor to be sustainable it should be backed up by policies which are implemented without delays, as well as announcement/commencement of big infrastructure projects like highways, bridges and other government-funded projects. Creation of 100 smart cities by the BJP Government is a right step in this direction. So, to sum it up, we have all the ingredients for the commercial vehicle industry in India to be buoyant about.
Industry policies & developments expected in 2015
• Implementation of the Trailer Code so that homologation of trailer design could be done independently, paving the way for registration of truck-tractor and trailer separately.
• Construction of more express highways linking major cities and roads and linking smaller cities and villages.
• Creation of more Industrial zones near smaller towns and villages where skilled workforce can be easily trained and employed. This would create a win-win situation for the cost-sensitive manufacturing sector and the population at large looking for employment.
Medium- to long-term outlook
The CV segment has been on a perennial yo-yo cycle without clear backing of policies or projects so far. As highlighted in an earlier point, the CV segment majorly depends on infrastructure projects in the country apart from policies like implementation of GST. Although movement of goods in the private sector does contribute significantly to the industry, public spending forms a pivotal role. If the trend in 2014 continues further, I would make a healthy prognosis of 12-15% YOY growth in the next 3-5 years.
Look at the demography of our country needing basic amenities! Continuous construction activities for the next 10 years would still not be sufficient to put India on the world map among countries like China which has done phenomenally well. China has grown exponentially in the last 10 years, which was mainly due to the political will which we need to emulate. So to summarize, I would say the opportunities are plenty and it is action time.