Manatec, the most renowned name when it comes to Indian garage equipment manufacturers, has charted out a new unique business model for the truck and bus space. Focusing on upgrading the heavy commercial vehicle alignment centres across the country, Manatec is betting big on its new products and solutions for the domestic market, while on the export front its sales have more than doubled last year. We find out more about company plans and market expectations from Mr. Kalaiichelvan Mananathan, Managing Director, Manatec Electronics Pvt. Ltd.
Excerpts:
Business in 2014
We hope to finish this year with a growth of nearly 10 per cent YoY in the domestic market. However our exports have been good and we should close with a 55 per cent growth. The Indian automotive industry is yet to show a significant turnaround, though green shoots are seen. Under these circumstances I am happy with the growth we have shown this year.
Major plans for 2015
We are planning launches in the workshop tools segment. Since our current capacity utilization is only around 50 per cent, we are not planning any expansions at the moment. We are building presence in different markets to segment our market share resulting in increased capacity utilization. However, on new initiatives, we have introduced offerings on turnkey solutions for bus/truck alignment centers. This solution is available in the form of either consultancy or franchisee. We have built a robust business model for customers to run an alignment centre successfully for commercial vehicles and hope to help investors who are willing to start such centers in their places.
Expectations from CV industry in 2015
The optimism in the industry is already reflected in the sales growth of passenger cars at around 3.5 per cent Y-o-Y up to December. However, commercial vehicles show a negative growth at -5.65 per cent. This, I think is only a temporary phenomenon. The overall investor confidence in the Indian market is growing and this should spur investments on one hand and demand on the other. The current year will be good for both passenger car and CV segments. For us, any growth in the automotive market should drive the aftermarket growth and, in that sense, we expect a good year ahead.
Industry policies & developments expected
• Extending excise duty cut for the automotive industry could have been good. I understand the economy cannot run on stimulus alone. Having said that, if the Government is able to offer some relief in indirect taxes, it could prove a major boost for investments & consumerism.
• Our SEZs are not doing well, mainly because of the Minimum Alternate Tax (MAT) which needs a relook. In my view, total income-tax exemption needs to be given for a limited time-frame to induce genuine exporters to set up shop in SEZs. The Government has muster courage in introducing path-breaking policies to encourage exports, which, in my opinion, is a great opportunity in India often overlooked.
• Road safety is a major concern today. Growth in automobiles is higher than that in infrastructure. Statistics on fatal accidents are alarming if you see the trend. We need to introduce vehicle testing centres across India to inspect a vehicle’s roadworthiness. Inspections, including brake testing, side slip testing, head lamp testing, suspension testing, emission testing and wheel alignment testing are done in a typical test lane. This is similar to the established concepts like MOT in Europe.
I understand MORTH has already initiated work in this direction and some 40 test lanes are being planned now. This is a welcome step. If a vehicle’s roadworthiness is ascertained, it will certainly reduce accidents and enhance safety. Of course, infrastructure needs to be developed as well in tandem.
Medium- to long-term outlook
Going by the past records, the CV segment has been doing really well in India, except for the last and current year. I only see this as a temporary phenomenon, and expect a turnaround in 2015. I hope to see at least 10 per cent growth in the coming year.
