Pragmatic and optimistic
Q. What is your view on India’s people transportation scenario?
A. Buses have less capital outlay when compared to Metro and Mono-rail. Doing business with the government involves a lot of processes. There are the accompanying challenges. Looking beyond, both the modes of transport – public and private have so much scope for improvement. We are ready to meet the challenge. Speaking about public transportation, there is a need to modernise it. Public transport needs commitment and has to be labeled as a societal thing. It will affect the economy. While we sharply believe in the India story, it has been documented that people have left their vehicles and taken to public transport because of Volvo buses. In a span of four to five years we have come to have a presence in 30 cities.
Q. What is your outlook of the Indian market?
A. Both, private and public fleet transportation has to happen. They are independent, and we can’t simply say that let those who are travelling from Bangalore to Hyderabad have good coaches, and those travelling in the cities can suffer. No. that should not be the case. And it is therefore that there is ample scope for improvement and modernisation. This will be borne by new buses, and therefore the need for new buses. In terms of an outlook, I would say that we run a business. We are therefore pragmatic. When we sense that there is some triggering of the economy, we see the need for people to travel more. We align ourselves, and are ready to meet the demand that comes up. Personally, if you ask me, I am eternally optimistic. It is therefore, that we have invested so much. I would be happy to double, triple and quadruple capacity.
Q. So, you have invested the entire Rs. 400 crore in India already, starting 2011?
A. We have not said specifically that we are going to put Rs.400 crore in a certain timeline. We have started investing from 2011, and that is again a journey which is on going. So far, the number that we have given is, in this last four years, around Rs.400 crore or a bit more has already been invested. We continue to invest, and not draw a line. We are not drawing a line, and saying that its done with.
Q. Are you pinning your hope on 100 smart cities. Will they provide a drive for growth in buses?
A. It is a very good initiative. If you look the world over, when a city is termed as a smart city, there’s no smart city that has not included ‘smart’ public transportation, and has made it an integral part of the definition for a smart city. We are certain that the policy makers of our country have factored that, and that transportation is integral to the definition of a smart city. We are also anxious to hear from the government about what they outline a smart city to be like. There will be substantial part of public transportation in making that city smart. There’s a big opportunity.
Q. When do you see the market for heavier buses picking up?
A. It should have picked up three years back. So, we are waiting. We need to mix pragmatism with optimism. There is no reason why we should not start picking up. We need one small trigger. The smart city perhaps. In the next budget if they clearly say that this is the definition of the smart city, and smart city means public transportation, we will have emission and noise control; we will protect the environment, and will make it a very nice place, then the need will be to look at what kind of buses are needed. The first priority would be to avoid private transportation. Then we will look at various modes of transportation, and then decide upon the kind of buses that will be needed. We have been a part of such endeavours, and are a part and parcel of many smart city programmes in other parts of the world. We are ready, and whenever the government decides, we are ready.
Q. What is the feedback on UD buses that have gone on trial with the Bangalore city transport undertaking?
A. We continue to expect orders. Our job is to keep expecting orders from all those that we deal with. So far, the trial has been successful, and we have received a positive feedback. It may be vey early to speak because the life of a bus is one-million kms. The buses clocking 1000 km may make it too early to speak about them. We will continue with the processes. Two vehicles (UD buses) are undergoing trial with BMTC in Bangalore.
Q. When do you plan to ship buses to Europe?
A. We will begin shipping buses to Europe very soon.
Q. You are offering UD buses, and have begun exporting Volvo buses to Europe. How are you managing such synergies at the manufacturing level? How flexible is the line?
A. As long as we gear up all our capabilities to meet the high end then we don’t need to talk about flexibility meeting something at the lower end. Only when we have a low-end thing then stretching it to deliver something at the high-end is a problem, and where we have to speak about flexibility. Here we have designed, trained and equipped ourselves on the production line to be globally on par. The export oriented buses and those for domestic consumption follow each other on the assembly line. We do not have a parallel line.
Q. What interiors do the export buses possess? What kind of orders have you got?
A. The buses for export are customised. They are customised based on the specifications. In their development process we involved customers. It is not a surprise for them therefore. They have seen the build of the vehicle. They have seen the protos. Customers themselves have suggested. As far as orders are concerned, only because the customers ordered we made the bus. We have an order, which is why we made the export statement. It is not just that we have made a bus and want to export it is why we announced the export of buses to Europe. The segment that these buses will go to is spread across Europe. Possibly not Eastern Europe. The entire European marketing team is working on this as far as I know. So, its not confined to any specific country. The annual number of 5000 is a big number. The segment operates in the 100 to 300 kmph range.
Q. Who would be the competitors for the Europe bound bus?
Daimler, Iveco, and a lot of local European homegrown brands.
Q. Is the Europe bound bus a multi-axle design? Would they look different from the Volvo buses in India?
A. It is a single-axle design, and will look like the Volvo buses in India. We need to understand that we are on par with Europe in many things. There is no need to think that they are something different. The fit, finish and reliability are important.
Q. What was the feedback you received from the potential customers who came to see the bus?
A. We had some very good customers and stakeholders who are involved with the bus industry, who gave us feedback. We benefitted across various areas. And it is not that we have not taken an Indian customer to the factory and asked for his feedback. We will benefit from his feedback. Every new person has a perspective. If he is genuine, he gives us feedback, which is always useful.
Q. How localised is this bus?
A. The bus body is 100 per cent localised. The driveline is imported because it is a Euro 6 design.
Q. Are you looking at regions beyond Europe?
A. We are already into SAARC countries; into South Asia and South Africa. As and when we look at an opportunity we may want to reach out to a new market. There is a need to understand that markets differ, and there is therefore a need to develop and invest for specific market needs.
Q. What improvement have you seen in the Indian supplier base?
A. Our supplier base, I think, is grossly underestimated. The minute Suzuki came into this country, the auto supplier base started increasing. Today, we have almost all the global manufacturers making vehicles in India and exporting it to Europe, US, etc. Many suppliers in the auto space are common to supplying car and CV components. Some of the suppliers are doing more business with global companies outside of India rather than in India. For example, Bharat Forge, TVS Group, etc. TVS Group company, Sundaram Fasteners was the first Indian company to get ISO 9000 certification. They are the first company to have secured a 100 per cent supplier status with General Motors for radiator caps. Any GM vehicle made anywhere in the world will feature a Sundaram Fastener radiator cap. This radiator cap was made in India, and at Chennai. As a country we can be proud of our supplier base.
Q. Which other city transport undertaking apart from BMTC that you are dealing with?
A. 30 cities are using Volvo city buses. We recently delivered around 100 buses to Kerala. In Kerala, they connect every town and city.
We are also anxious to hear from the government about what they outline a smart city to be like.
Marc Llistosella, President & CEO, MFTBC, and Head, Daimler Trucks Asia
Interview by: Gianenrico Griffini
Q. Last year you spoke about scaling up production every month. Did you achieve the expected result?
A. To be very honest, we failed to achieve our set targets. We expected to do better as the market forecast was promising. The markets however went up by just 12 per cent. For a market like Europe, this might be good. But, since it was dropping more than 45 per cent in the years before, it required to bounce back with growth hovering around 60 to 70 per cent to return to where you started. The market was in our favour in 2010-11 for 9-tonne plus vehicles at 280,000 units. In 2014 it went down to 171,000 units. There was deterioration of 1,10,000 units, which is equivalent to 35 per cent when compared with 2011 figures. The net price that we had in December 2010 is what we have today. So the overall impact is not limited to volumes, but is also in pricing. The nominal pricing includes inflation too. Our competitors are technically selling trucks at a price, which is 20 per cent lower than what it was in 2011. This is something that we had never imagined. In heavy-duty vehicles, we have an average discount of 20 per cent. In medium-duty vehicles, we have a discount of 12 to 14 per cent, which exceeds the discount plan that we had planned. We had never expected this kind of continuous discount levels. At the other end, we grew in the first quarter. This was confirmed in April through 63 per cent BharatBenz sales. This is roughly 12.5 per cent, which is a good performance. But the market is not letting us live easy. There’s not a single day when there’s tailwind. For three years, we have only got headwind, and it’s been a fight for survival. We wish that there is a normal market like in 2010-11. It’s high time that we talk about 8 to 9 per cent market share and immediately touch the 20 per cent mark. I was always clear that I needed the best quality here, but it is now so competitive that our trucks are bought by Hino, dismantled and tested. We were earlier targeting Tata Motors and Ashok Leyland, but now these trucks will compete with Scania and Volvo as well. That is a little bit more than what we had ever hoped for.
Q. What do you expect at the end of this year?
A. I would say that we should stay with our 60 per cent, but I expect more. I think the market will stabilise at a level of 190,000-200,000 units, which is still far away from what this market can actually achieve. I hope that the current government will tackle the obstacles, which are blocking the market from flourishing. GST must be brought in, transportation must be eased, investments in infrastructure must be accelerated. It is not the time for talking now, it is time for action. In just five years, China revamped its highway system, which is phenomenal. If China can do it then we should also think on similar lines quickly. Though we are the second largest democracy in the world, there’s still a long way to go. When Gujarat can do it, every other state can. There are some states in India, which are pretty close to some African countries, and there are some other states, which can compete with Asian neighbours. India can, if it has the will power.
Q. With a new 430 hp truck, are you targeting only the mining side, or also an escalation of the engine power in India which generally prefers low power trucks?
A. We are promoting a balanced upgrade of horsepower. If you notice, some of the 30-tonne vehicles have an engine capacity of 180 hp. The torque does not exceed 600Nm. This is risky; fuel consumption will be totally inferior, speed and turn around time will be affected. So we have to bring in a balanced form, which fits in India but does not slow down the traffic. We need to speed up the transportation of goods. Over 30 to 40 per cent of the agricultural production is rotting on the road, which in turn is hurting the economy. So I am not a friend of upgrading the horsepower only. For mining and special transportation it makes sense, for full roads to go from north to the south, it makes sense. Since this is now Daimler trucks Asia, Fuso as people know, is a light duty product company. Many people are not even aware that we have a heavy duty range. The heavy duty trucks we are selling in Japan are top notch. So, what do we have for Africa, for GCC, the Middle East, from South East Asia? We have nothing. This is the truck (the Thunderbolt). There, this truck will not compete in the Indian environment; it will compete in an European environment. It will compete at 360 hp; at 400 hp. The South African ask us, your engines are small; we need 500 hp. We tell them, no, that is not required. As long as I can provide 2,100 Nm of torque, you have to give me an evidence that you really need 2,300 Nm torque. The ratio for exports will be at least 70 per cent.
Q. What markets are you targeting from India?
A. We will be targeting every country except South America. For Africa, we will start directly from Kenya. We are reorganising a lot of things; we are leveraging power. I think we are a super power in innovation. You want to be in every market with a tailored concept, and India is a solution for that. We want to rise to the next level of connectivity, which is important for a lot of markets. For India it will be far more important than many things because the youth is here. The people are growing up off Apps. People are not used to what we are used to; they just over jump. In India we will see a lot of surprise in terms of technology. People will not wait. They copy what we did. They will shift faster to the next generation than we can imagine.
Q. How much have you expanded your dealer network?
A. We have 82 points of sales and close to 75 or 76 are 3S dealers. We are doing something that we call as ‘undone’ system. Here a big watch is running backwards. The production guys know exactly that we need to do this in this much time. In service, we have standardised maintenance things. Certain maintenance things. We have a big watch at the service station so that the mechanics are under pressure. This will allows to keep the things transparent. In finance we are excellent. The team is excellent. They have a market share in financing in more than 40 per cent. The customers are appreciating it. The customer has appreciated our insurance schemes. Our schemes are massively copied by our competitors even without thinking if their trucks are ready for this.
Q. What about the bus sector? Will you offer the entire bus range? Some of your buses are based on Fuso?
A. The buses are based on the medium-duty chassis and powertrain, which means Fuso based products. This includes school bus, staff bus, which will mainly be for India. We will be distributing chassis to the whole world, and this will be done under the Mercedes-Benz brand.
Q. Will it follow the same route of the BharatBenz trucks for the export market and will you sell those buses in Africa?
A. Yes, massively. But, there (in export markets) it will be less complete; it will be more chassis business. Here (in India) it will be less Fuso, and more Mercedes-Benz.
Q. How big is the bus market in India? What about the coach segment?
A. The bus market, which I see is 44,000. But, the bus market, which is 8-9 tonne, is 34,000 units. The latter is a more relevant market for us. It is certainly of interest for me. Few years ago it was close to 40,000 units. It will go up to 60,000 units as India has a huge potential for buses. There was an incident last year regarding a coach bus, which deteriorated the trust in the segment. So if we need to build this product out of India we need to rebuild the trust of the Indian customer. There is a growing demand for comfortable travel in India. Our buses will also be for export market, which may not include Europe, but indeed Taiwan and Saudi Arabia.
Q. What is the most important segment in the bus segment for you?
A. It has to be a school bus. In that segment, the security has a different factor for people to use it.
Q. They say there is a huge potential in the Indian market. What are your thoughts?
A. In the mid-term, yes. But in the long-term, this market has a potential of at least 450,000-500,000 trucks. The density of trucks is extremely low. China has 1.4 billion people, 900,000 trucks, whereas in India it is 200,000 trucks. So, even if we double up, it will still be half of where China is already. So the potential is really enormous.
Truck and bus tyre manufacturer Continental India inaugurated their first retail concept store Sat Kartar tyres at Faridabad transport nagar, for heavy commercial vehicle tyres. Spread over 108 sq.m area, the store located off Mathura highway is expected to cater to both truck and bus customers. Looking to offer need based products in the future, Continental India is expected to launch more stores on the lines. The company is claimed to have more than 1400 dealers with a sales and service footprint in more than 100 locations pan India.
Frost & Sullivan announced the launch of Sustainability 4.0 Awards. The awards acknowledge companies for their work in sustainability requirements, across value chains. The seventh edition of the erstwhile Green Manufacturing Excellence awards will be held on May 27, 2016 at Hyatt Regency, Mumbai. This year applications for nominations are open to companies across manufacturing, logistics, hotels, IT and ITES, KPO, BPO, banking, financial services, Insurance, construction, telecommunications and healthcare in India, and the Gulf Cooperation Council, the deadline for which is December 15, 2015.The assessment framework has four major parameters -purpose, planet, partnership and people, with a total of 13 measurement criteria under each parameter. The objective is to help participating enterprises determine their standing, in comparison to other similar organisations. Expressed Nitin Kalothia, Director, Manufacturing and Process Consulting, Frost & Sullivan, “Companies are focusing on incubating novel initiatives to inculcate sustainable development for their entire value chain, beyond manufacturing and environmental sustainability.” He concluded, adding that Frost & Sullivan will continue to support and recognise such efforts.
To know more about Sustainability 4.0 Awards and its methodology, please log on to –http://www.frost.com/sustainability.To participate in this awards banquet or to know more about the summit, please send an e-mail to Anita C, Corporate Communications, at email@example.com / or write to us at firstname.lastname@example.org with your full name, company name, title, telephone number, company e-mail address, company website, city, state, and country.
In an effort to carve out a larger pie of the small commercial vehicle market, Mahindra has launched the Supro Maxitruck and a Supro van.
A market leader in pick-up trucks, with sales amounting to 1,30,000 units on an average every year, and for the last three years, Mahindra has launched a small commercial vehicle platform called the Supro. Out of the platform has sprang a mini-truck and a people-carrier version. The mini-truck is called the Supro Maxitruck, and the people-carrier is called the Supro van. The result of an investment of Rs.120 crore according to Pravin Shah, President & Chief Executive (Automotive), Mahindra & Mahindra, the Supro is an all-new commercial vehicle platform. In either form, the highlight of the design is a pronounced snout with clear lens lamps and a vertical slat grille. A closer look reveals that this snout is more pronounced than that of the Maxximo. The body coloured bumper incorporates fog lamp enclosures, which contribute towards a stylish, albeit unusual looking front. Not quite like those semi-forward control trucks of the yesteryear, but distinct for certain.
Aiming at two different customer segments altogether, the Supro Maxitruck and van, according to Shah, offer a superior value proposition. Addressing the commercial vehicle segment between 800 kg and 3.5-tonne, the Supro will not replace the Maxximo. Instead, the two will co-exist; the Supro eyeing to fill the gap between the 800 kg payload Maxximo and the 3.5-tonne Bolero and Genio pick-ups. Opined Vivek Nayer, Chief Marketing Officer (Automotive), Mahindra & Mahindra, that we will target the market leader Tata Ace by providing a product that cuts above the rest. What Nayer failed to indicate perhaps is that the Supro Maxitruck gets close to the Ace Mega and within some distance of the SuperAce rather than find a place besides the Ace. A mere look at the vehicle will make it clear, and from the expanse of the cargo deck especially, that this one’s bigger than the (16 hp) Ace. Both in terms of its engineering capabilities as well as the amount of payload it promises to carry. A look at the specs will make it more clear. If the Supro Maxitruck looks like it has a considerable rear overhang, its cargo deck measures 2500 mm in length, and is 360 mm longer than that of the Ace and Ace Mega. If the Ace Mega steps into the pick-up category according to the SIAM classification, the Supro Maxitruck should have no difficulty getting there either. With the advent of the Supro Maxitruck, the pick-up segment leaders, Mahindra Bolero and Genio may have just got yet another competitor, and from the same stable!
Quick, efficient and comfortable
Invading the pick-up category, the Supro Maxitruck is powered by a 45 hp, 909cc BS II and BS IV emission compliant direct-injection diesel engine. Coupled to a five-speed manual gearbox, the engine is longitudinally placed with the drive going to the rear wheels through a live axle. The ability of the mini-truck to clock 95 kmph top speed should make it quicker. It should also display an ability to turn around faster. With a payload capacity of 1000 kg, the Supro Maxitruck, according to Shah, was developed by 43 engineers, and gives a mileage of 22.4 kmpl. Modern engines are more efficient no doubt; the one that powers the Supro also feels refined. Getting into the cabin is not much of a climb despite the vehicle featuring 13-inch dia. wheels. Get behind the wheel, and the view ahead is uninterrupted, courtesy a large windshield. The dash, from the look of it, is functional and straightforward. It is a part of the interior scheme that is done in a shade of beige. The carpet, done in a shade of light grey, is prone to picking up specks of dust. Given the hardy life this mini-truck will be subjected to, the carpet, in the light grey shade, may not make a good choice after all. Look up, and the instrument dial with a large speedo at the centre falls in view. Intruding into the dial is an LCD readout with a sliver surround that may not work to the taste of everyone. The silver surround extends to the warning lamps in the console, and is not the most convincing bit of this interior for certain. On either side of the speedo dial, are a fuel gauge and a temperature gauge.
The highlight of the modern looking cabin is the centre console with the HVAC controls. It does not take long to notice the air-con button as part of a ‘proper’ HVAC arrangement. A segment first it is, no doubt. Also, a segment first is the electric power steering of the Supro. Available as standard on all the variants, in the Maxitruck as well as the van, except the basic trim, these two features are set to elevate the small commercial vehicle competition to a new level. Ergonomically well engineered, the snout clears an amount of space inside. There’s good amount of legroom. Shift into first gear, and the mini-truck moves away smartly. The clutch is light. The first two gears, it is evident, are tall and engineered to provide a good ability to pull. They are not as much about speed, as they are about the combination to ferry cargo quickly, efficiently and comfortably.
Feeling more agile than the Maxximo or the Ace, the Supro Maxitruck, with a 2050 mm wheelbase, gathers good speed in the third and fourth gear. It smartly moves up to speeds in the region of 60 kmph, hinting at an ability to turnaround faster. Indicative of the changing requirements of a small commercial vehicle buyer, and with an ability to offer a desirable combination of load carrying capacity and speed, the ride over less than ideal surfaces is made comfortable by the independent, MacPherson strut front suspension. Over some of the roads of Mumbai with cracked concrete blocks, and sections paved with paver blocks that have irregularly caved in, the Supro provided a composed and stable drive. The rear suspension of the Supro is made up of leaf springs.
The air-con cools the cabin in a short time. It does tend to exert some load on the engine. It will be necessary to see therefore, if the operator would use the air-con or try to derive more fuel saving at the cost of comfort. At a time when the temperatures are rising, the air-con may work to the advantage of the operator; help him to stay fresh and mobile. For an efficient operation, he may chose to use it selectively of course. Another feature, the electric power steering, aids to manoeuvre through narrow lanes and tight spots. It proves to be of help in the city when negotiating narrow alleys and while backing up into narrow load areas. The 4.7 m turning radius also works to the advantage. The Supro provides Mahindra with more fire power indeed. It is capable of helping the company to carve out a bigger pie of the small commercial vehicle market.
Carving out a bigger pie
Mahindra, with the Supro, Alfa (three-wheeler), Maxximo and Jeeto, has a wide range of small commercial vehicles to offer. The market, currently stagnant on the back of excess capacity, dull SME manufacturing environment and funding difficulties, is set to revive sooner than later. It is expected to follow the medium and heavy commercial vehicle market, which has been steadily growing for the last one year. In terms of exports, the Supro, according to Shah, will provide an opportunity to explore RHD markets in the SAARC region and South Africa.
The Supro has work cut out for itself. Shah may touch upon an amount of synergy in terms of development and components sharing in the area of small commercial vehicles, the Supro, as a Maxitruck (priced upwards of Rs.4.25 lakhs ex-showroom Thane for the BS III version) and as a van (priced upwards of Rs.4.38 lakh ex-showroom Thane for the BS III version), signal a significant change. The two are set to take the competition to the next level.
Capable of carrying eight people, the Supro van should make a strong competitor for the soon to be launched 40 hp version of the Tata Magic. The current Magic, at 16 hp, is no match. An ideal candidate for use as a family van, or as a stage carriage in the commercial vehicle domain, the Supro van, according to Nayer, aims at the need to fill up the gap between minivans and utility vehicles. If the Magic is claimed to have almost eliminated the six-seater diesel three-wheeler competition, the Supro van, it is safe to assume, will find itself in a segment that has a strong potential for growth, and even at the cost of three-wheelers. It is no secret, that there is an amount of social agenda attached to stage carriers. They have to be allotted a route permit unlike a truck, which can be bought and put to work. With the permit regime differing from state to state, the Supro van, with an ability to accommodate eight people across three rows of seats, and in an air-conditioned environment, has the potential to change the way people commute today in cities as well as between cities and smaller towns.
If the electric power steering would help to manoeuvre on narrow roads and through tight spots, the Supro van, having a 1950 mm wheelbase, which is shorter than that of the Maxitruck by 100 mm, may offer an opportunity to earn more incase of a stage carriage. It could also offer a more premium ride, with premium fares. With a sliding door on either side providing access to the second and third row, according to Nayer, the Supro van is comprehensive, stylish and comfortable. He also mentioned, that it offers a higher earning potential. If the rising shoulder-line, which travels to merge with the tail lamps, provides some respite from the slab sides of the van, a large tail gate at the rear opens at the floor level to facilitate easier loading. The five-seater version, with two rows of seats, makes a good amount of space available for storage at the rear. If the Supro panel van will be introduced could not be ascertained. In its current form, the Supro van, with a gross vehicle weight of 1890 kg for the eight-seater, and 1653 kg for the five-seater, is set to trigger a change. Apart from an electric power steering and air-conditioning, the van features a double load sensing pressure valve from Bosch for superior braking performance. It features child lock and ELR seat belts too.