In conversation with Mr. Vinod Aggarwal, MD and CEO of VECV, on what drives the quintessential synergies between Eicher Motors and the Volvo Group, the aural motivation behind the successful partnership, and its prospering future.
Sometimes it may not take long to notice the obvious. Back in 2013 when VECV’s new flagship Eicher Pro 8000 was unveiled, I realised instantaneously that something is not usual about this truck. The mesmerising visual presence is partly to blame, with its distinct taller cabin, bolder stance, eye-catching front fascia with the ‘Eicher’ logo, and solid build of the heavy-truck, but also the mouth-watering tech specs of the entire range proved that this is quite unlike the Eicher we knew before and that the brand is embarking on a transformational departure into futurity.
Even those who may have very little knowledge of the yesteryear Indian automotive industry will distinctly remember the legacy of Eicher Motors. Credited to be the first-ever OEM to roll put indigenously manufactured tractors in the country, Eicher Motors shot up to the pinnacle of fame in 1980s with its modern and advanced LCV trucks and buses. Later, the company ventured into the medium duty trucks segment, including the high potential mid-heavy duty ‘Jumbo’ (2002) 16-tonne hauler and ‘VE Series’ (2010) heavy-duty range up to 40-tonne GVW.
Quite evidently, the 2008 signed 50:50 joint venture between Eicher Motors and AB Volvo of Sweden was a significant milepost in the former’s journey. The company, at that time, must have thought that it’s time to look beyond its forte in the light and medium duty segments, especially when the CV industry was slowly opening itself for modernism and consolidation.
As a result of the Volvo Group bringing global technology to the table and Eicher focalising its frugal engineering and local marketing, the company has marched ahead so vividly than ever before.
Today, 70 years after its origin and 10 years after the JV, the marque is a full-fledged CV maker from 4 – 55 tonne GVW categories, with a whooping market share of over 30 per cent in light and medium trucks, 5 per cent in heavy-duty and 17.1 per cent in buses. That’s a phenomenal transformation, so obvious that one can hardly miss out!
First things first
Speaking to MOTORINDIA exclusively, Mr. Vinod Aggarwal, the man at the helm of affairs at VECV, couldn’t be more pleased than the way the joint venture has unfolded in the past 10 years. “This is perhaps the finest example of a successful JV in the Indian automobile industry where we have grown from strength to strength at a CAGR of 8.3 per cent, outpacing the industry’s pace across various segments”, he said. A lot of synergies acting out in our partnership, he added, helping VECV to position as the third largest CV maker in the country, with a wide range of sophisticated products at all every market benchmarks and price points.
He said that both the partners have compelling attributes with themselves to join hands and progress together in the Indian market. Volvo Group is one among the largest players in commercial transportation globally, the proprietor of popular CV marques, which is also technologically competent and stronger in processes. Eicher Motors, on the other hand, is very strong in mass market, with a frugal mindset and lean manufacturing set-up. “For Volvo to enter the mass market business in India, it needed a strong local partner, while Eicher was in need of superior technologies and know-hows to spruce up its business in a new era”, he noted.
“Our partnership stands on a strong foundation involving three key pillars – mutual trust, respect towards each other, and a win-win approach. Right from day one, three principles remain absolutely non-negotiable, which helped us to understand each other better and create a formidable trust in a quick span of time”, Mr. Aggarwal claimed.
VECV firmly operates on professional corporate governance, with all decisions taken by consensus, thereby balancing the interests and rationally determining what serves best for both the partners, he added.
Proud accomplishments
VE Commercial Vehicles says that it has adopted several world class systems and processes from Volvo Group for new product development, quality and standardisation, efficient manufacturing, sales and aftersales, and R&D. This has helped the company to deliver excellent products and experience to its customers, which is evident in the market share gains in the last 10 years. The JV has five business verticals as colourful feathers in its cap – the three decade-old Eicher Trucks and Buses (ETB), Volvo Trucks India (Eicher being the brand’s exclusive marketeer in the domestic market), Eicher Engineering Components (EEC), and VE Powertrain (VEPT).
The MD and CEO, when asked to list out major achievements of the JV in the last decade, takes more pride in being a trusted manufacturer of Euro VI medium-duty engines for the Volvo Group than anything else. “It’s an extraordinary feat for us, a finest example for ‘Make in India’”, he exclaimed, while adding that ensuing proposition for VECV in terms of new engine development (in the backdrop of upcoming emission norms and other standardisation) and fostering capabilities for future business for the home market is immense. Eicher has been able to contribute to the cost reduction aspirations of the Volvo Group through supply of cost-effective engines and vehicles from India.
The engines manufactured by VEPT power various products of the Volvo Group, extending exports to European, Latin American and Asian markets. VECV has also adopted these engines to its own HD truck ranges for the local market meeting the BS-IV norms, while the engine technological aspects and efficiency variable have trickled down to Eicher’s entire range of vehicles, including its legacy products.
“That’s indeed the next big achievement for our JV. We have adapted a plethora of Volvo technologies into our ‘Pro’ Series products. Take, for instance, the EMS 2.0, modern suspended cabins, efficient drivelines, safety and comfort features, etc.,” Mr. Aggarwal said.
In fact, the ‘Pro’ Series is touted as next-gen truck and bus ranges, with best-in-class fuel efficiency by employing special features to save on parasitic losses on fan, compressor, and superior technologies, including fuel coaching feature for drivers to attain optimum mileage, cruise control, Intelligent Driver Information Systems, safety options, and so on. VECV is pioneering in indigenously-developed AMT technology for LCVs; India’s first 7-speed transmission for MD trucks with guaranteed 7 per cent fuel efficiency advantage was also revealed recently.
“Bringing world-class technology to the Indian market at a competitive cost has always been our vision”, Mr. Vinod Aggarwal said, while pointing out his company’s use of virtual reality for development and verification of features along with customers and drivers, along with advanced telematics solutions for CVs – ‘Eicher Live’ and Lifetime support solutions (LSS) for customer assistance post-sales.
Knowledge for Future
The Managing Director reiterates that Eicher as an institution was quite open to change, a managerial spirit largely driven from the top brass, which sped up the adaptation and improvement processes leading to total transformation. “We are in a totally different world now”, he says “that there have been tremendous shifts in the way we operate, may it be infra expansion, state-of-the-art manufacturing, dealership networks, aftersales, and so on”.
In the last 10 years, the company has greatly modernised and expanded its truck and chassis plant located in Pithampur (MP), has come up with an ultra-modern bus body manufacturing facility at Baggad (MP), and also added three facilities for manufacturing gear systems and other engineering items. Last month, VECV announced its plans to set up a new greenfield truck manufacturing plant at Bhopal, at an investment of Rs. 400 crores, aimed at an initial capacity of 40,000 trucks.
Asked how customers perceive VECV in its 10th year, Mr. Aggarwal replied that his brand’s impressive sales figures narrate the story themselves. “We have growth thrice in terms of volume, sold over 66,000 units last year, which points to the fact that buyer response to our products is immense. The JV has greatly improved our products appeal, especially in terms of better reliability, lower TCO and technology, while our customers have greatly benefited from the wide range of options in products and value for money proposition”, he observed.
So what’s in stock for future from VECV? Affirmed Mr. Aggarwal: “We now have exclusive access to all sort of knowledge and capacities to address any disruptive megatrends and market needs of the future, may it be stringent emission norms, higher productivity expectations from industries using our products, alternative fuels like LNG, electro-mobility, or connected technologies. We will pursue all such opportunities at the right time whenever the market is ready. Development of new products at VECV is a continuous, on-going process; you can see new launches every year”.
The Volvo-Eicher JV was realised with a vision to drive modernisation and technological revolution in commercial transportation in the Indian and similar developing markets. Ten years on, VECV has grown leaps and bounds as a force to reckon with in the Indian CV industry, and is all set to contribute to its burgeoning growth opportunities in the years to come.
VECV’s state-of-the-art manufacturing facilities – ‘Crowning Accomplishments’
VE Commercial Vehicles currently has three production facilities. The ETB (Eicher Trucks and Buses) plant at Pithampur is a fully integrated facility spreading across 84 acres encompassing manufacturing, product development, purchase, test track and support functions of the Eicher ‘Pro’ Series trucks. The ultra-modern facility has a capacity of 84,000 trucks, which is scalable to 100,000 trucks per annum, making it one of the leanest and productive shops in India.
The facility rolled out its first truck in 1986 and celebrated its 32 years of operations in June this year. However, the plant has received whooping expansion and comprehensive makeover in the last decade, post the Volvo-Eicher joint venture. At present, the plant rolls out the entire range of Eicher trucks from 4 to 55 tonne GVW, including the heavy-duty Pro 8000 Series flagship models, along with bus chassis. It also assembles select UD branded models meant for export to markets like Indonesia and South Africa.
As a part of the product development process, ETB has a fully equipped vehicle and engine development center with fatigue lab, complete virtual vehicle integration capability, different simulations, in-house competence for electrics and electronics integration, a complete bus structure and interior trim design capabilities.
Adjacent to the ETB plant is VE Power Train (VEPT), set up in 2013. It is now an exclusive manufacturing hub for medium-duty Euro VI powertrains catering to Volvo Group products sold in international markets. Its annual capacity stands at 50,000 engines, which can be expanded to 100,000 units per year.
VECV’s bus body building facility is in Baggad near Pithampur, to deliver buses meeting global quality and safety standards. Set up in 2013, the bus plant covers an area of over 43 acres (1,73,290 sq. m.), and houses robotic welding, robotic painting and assembly facility. The multi-model plant manufactures light, medium and heavy duty buses in diesel and CNG avatars, along with Eicher Skyline Pro Electric buses. The plant has a current installed capacity of 15,600 per annum, expandable to 19,200 per annum.
Eicher introduces Fuel Card Program in partnership with HPCL Driver Track Plus
Eicher Trucks and Buses, in association with Hindustan Petroleum Corporation Ltd., has introduced the MileEDGE fuel card to provide the best-in-class savings on fuel by the customers. The company has introduced this offering for the entire range of Eicher trucks and buses. The fuel card, launched under the HPCL Driver Track plus program offers a host of rewards for the owners and other key benefits such as driver & helper’s insurance, including hospitalization and secured cashless transactions.
Hindustan Petroleum, a PSU conferred with the ‘Navaratna’ status by the Government, boasts of a network of over 15,000 retail outlets across the country. Its Driver Track plus program is an innovative payment mechanism developed for efficient fleet management through greater fuel consumption operating costs, thereby adding valuing to business. Given its wide reach, the new Eicher MileEDGE fuel card will be available to help customers be more profitable while covering each mile and optimize the cost of operation.
The Eicher MileEDGE card echoes the philosophy of “More Miles, More Smiles” to help customers ply the most fuel-efficient Eicher Pro series of trucks and buses with additional commercial benefit on fuel purchases. Customers can get best-in-class rewards that can be redeemed against the fuel purchase or gift vouchers from Amazon or Flipkart. The fuel card enables the customers to get benefits & rewards worth 2.25% on every purchase. It also extends additional benefits for drivers and helpers with insurance up to Rs. 1 lakh, real time online MIS report and multiple redemption options.
The fuel card has been introduced on all Eicher diesel vehicles across major metros of India. It will soon be introduced in the other markets.
Said Mr. Vinod Aggarwal, MD & CEO, VE Commercial Vehicles: “Fuel is a major expense for most transporters in India, accounting for over 45% of the total operating cost in most segments. We, at Eicher Trucks & Buses, are committed towards offering best-in-class fuel efficiency and superior uptime through our advanced Pro series range of trucks and buses, constantly delivering on our promise to partner with the customers throughout the product lifecycle. The new Eicher MileEDGE Card, offering with a promise of ‘More Miles, More Smiles’, reinforces that philosophy with benefits on every fuel purchase that further help minimize expenses on diesel in the cost of operations for all Eicher vehicle owners. It also has added advantages for drivers and has multiple redemption options”.
Sharing his views, Mr. G.S.V. Prasad, Executive Director, Retail, Hindustan Petroleum Corporation Ltd., said: “HPCL always has provided innovative solutions, be it automation, new age dispensing units, customer-centric outlet formats, Sugam Toilets at retail outlets or Drive Track plus Loyalty and Payment Solution. We are happy to have tie-up with Eicher to provide the Eicher MileEDGE card on HP Drive Track Plus platform. We hope this product would definitely provide EDGE to customers patronizing our product and services.”