But VECV seems to have a completely different game plan. The company wants to leverage on the strong brand equity of Eicher and has drawn plans to make Eicher a premium mass market brand of trucks and buses, not just in the Indian domestic market but in other emerging global markets as well. It is not just an intent but is already reflecting in the numbers. In July Eicher’s exports were up 114 per cent, and the company become the fastest growing Indian CV manufacturer-exporter.
To know more about VECV, particularly on Eicher Trucks and Buses, I met Mr. Somnath Bhattacharjee, President, Volvo Trucks and Executive Vice President, VECV.
He says: “In the last one year, we have made extremely good progress in all areas of business. We have upgraded some of the existing products and are working on new platforms, and all this will start seeing results by 2010”.
VECV’s portfolio of commercial vehicles includes two product brands with absolutely different market positions, yet complementing segment synergies. Eicher Trucks and Buses have a wide offering in the mass market, 5T-40T range while Volvo Trucks command a strong presence in the premium, high performance, heavy duty segments from 25T-49T. With a formidable presence in the existing light and medium-duty segments, VECV’s main focus is on increasing market share for its heavy duty products. Thus, its investments in design, development, manufacturing, systems, distribution and services are largely oriented towards creating a stronger position in the heavy duty market.
Semi low-floor bus
VECV is aggressively working on expanding the Eicher Truck and Bus range. Mr. Bhattacharjee says: “We are currently working on many new platforms which will get launched progressively from early 2010. The first major introduction will be a semi low-floor rear engine bus for city application with 650mm step height. This product completely complies with the needs of urban transportation. The product development and piloting has been done, and we are now getting ready for the serial production and commercial launch. This is an important product for us and the commercial launch will be in early 2010”.
Bus has always been an important segment for Eicher. The brand enjoys leadership position with close to 15 per cent marketshare in the light and medium duty buses. In the HCV bus segment, the company currently offers a 20.15 chassis mostly for STUs and institutional purposes. The introduction of semi low-floor rear engine city bus will further strengthen the bus portfolio of Eicher.
“Thanks to the boost to urban infrastructure and transportation, the specifications of city buses are changing rapidly. Since the market is going through a major shift, we are aligning our products and services to future market requirements”, adds Mr. Bhattacharjee.
Tipper and heavy trucks
Eicher has had a lot of success in the tipper segment with the introduction of the Terra 16 range a few years back. The next major introduction in this segment will be a 6X4 multi-axle tipper, which is the fastest growing product in the tipper segment.
“We will be launching a 6X4 multi axle tipper early 2010. This will be the first product to come out of the joint venture initiative between Eicher and Volvo. The product is currently under piloting stage and will start commercial production by early 2010”, says Mr. Bhattacharjee.
In the heavy truck segment, apart from tippers, Eicher offers 20.16 (4X2) truck, 30.25 (6X2) multi-axle truck and 35.31 (8X2) multi-axle truck. Eicher currently has 2 per cent marketshare in the heavy duty truck segment. “With the kind of product development programs we have, by 2015 we plan to achieve a marketshare 15%. We are working on programs to address all product segments”, says Mr. Bhattacharjee. In the tractor trailer segment Eicher currently offers a Mega 40.40 which comes fitted with Cummins engine.
All these new product introductions will clearly strengthen Eicher’s product portfolio.
Eicher has traditionally been a strong player in the light and medium duty segment. The company has recently launched E2 plus which is a much superior product in terms of operating economics, driver comfort, ergonomics and aesthetics, resulting in improving productivity. In the product development program it is focussing on all these areas.
In the light and medium duty vehicles – passenger segment, Eicher has created two product brands – Skyline and Starline. The company has significantly improved its market share in the school and staff transportation segment with a 20 per cent plus marketshare in the school bus segment alone.
Sales & service
An important area which VECV has been working on is in strengthening the Eicher sales and service network, which the company wants to raise it to best-in-class standards. “We are working on improving customer experience at the dealerships. We want to get closer to our customers and ensure that they are able to get their products serviced much easier and faster in best-in-class. We have launched several new initiatives to get closer to our customer in terms of improving customer value proposition and supporting vehicle uptime. Our dealer operating standards will have to match the best-in-class standards. We are improving the quality of our distribution centres so that we provide best-in-class service and uniform customer experience”, Mr. Bhattacharjee adds.
VECV has set an ambitious export target. By 2015, 17 per cent of the total business will come from expo
rts, says Mr. Bhattacharjee. Eicher will be a premium mass market brand, not just in the Indian domestic market but will also be driving modernisation in commercial transportation in other developing markets. This is the vision we have set for the Eicher brand. Volvo’s widespread distribution network will facilitate the export of these products to identified countries and will help VECV bolster its presence in more than 26 countries to where it currently exports.
“So far we have had good success in the light and medium duty segment, both passenger and cargo, in emerging markets like South Asia, West Asia and Africa. Volvo has a large global footprint and we want to derive synergies from the Volvo network to expand our distribution network for Eicher truck and buses. We will have rapid access to global distribution network of Volvo which should help propel ourselves in the export market. Our product development programs are very specific to geographies in which they operate. We have already homologated our products in more than 10 countries to their requirements and will continue to customise our products to suit local market requirements”, Mr. Bhattacharjee adds.
Brand positioning
If you look at the Indian commercial vehicle market, it can be divided into three broad categories. On top is the premium European segment which constitutes one per cent of the total CV market. Next is the European trucks manufactured in India and Japanese brands which constitute about three per cent of the total market, and the balance 96 per cent is in the mass market.
Mr. Bhattacharjee says: “The Eicher brand is positioned as a premium mass market brand with best in class profitability, product performance, uptime and distribution. With constant changes in legal demand, like emission norms and safety standards even the mass market products need to be manufactured with certain level of technology and standards. Further, with better road infrastructure there will be an increasing demand for more powerful and efficient trucks. All these will help in improving the specifications and performance of trucks sold in the Indian market. As a result, the middle segment, which is currently 3%, is expected to grow to 13% by 2015”.
According to him, one of the significant decisions taken at VECV is creating a separate quality management office which reports to MD’s office directly and this person who heads quality management has come from Nissan Diesel. “We are also working on Eicher engines and aggregates to meet the next level of legal demand, which is Euro 4 and Euro 5. With the new product developments taking shape, by 2010, the effect of all these efforts will be strongly felt”, he adds.
