Pierre Jean Verge Salamon, President, Volvo Group Truck Sales, India


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Technology and growth

Interview by: Bhushan Mhapralkar

Q. How do you find the Indian commercial vehicle market?

A. The move from BS IV to BS VI. It is a very strong signal. Then, there’s the potential implementation of GST. There’s also the construction of infrastructure. If these three events are attained, I firmly believe, it will lead to a more robust transformation of the transport industry in India. One factor that is difficult for me to assess is the ‘Internet Of Things’. There’s a lot of investment; big players are coming. People are buying more and more through ecommerce. Its difficult to capture the potential. An impression is had that the ecosystem is on the verge of transformation. There’s a need for us to be pro-active; to bring solutions, and to see what the customer will require. I firmly believe that India is transforming. We need to look at the long-haul.

Q. What do you mean by long-haul?

A. Look at our mining approach, we have the most robust offer for the customer. We start from a very simple solution and go up to the most technologically advanced solutions including the I-Shift and Dynafleet telematics. We have a wide spectrum of solutions to offer. Supporting the solutions is a fantastic infrastructure. Even when operating in remote areas of India, we have made arrangements so that parts are available. Such an operation requires a lot of investment. We are ‘mining ready’ for India; we have been for years. We were present in the on-road business. For price point issue, and because of the currency exchange issue, we have not been able to capture that market. We will come back for sure. In Asia, we have had a breakthrough in China because of the eeconomy. We are looking at such a breakthrough in India too.

Q. What scenario do you foresee as you look at on road business?

A. India is a very buoyant country. Couple of years ago it was opening up to the world. Earlier it was not as connected with the world when it came to trade. Today, there’s a rising emphasis on investment, local manufacture, and more. There’s also a shift in terms of appetite for technology. The normal pattern of rise will not be followed. The country will carve out an immediate passage to the most modern. Look at Europe for instance, and it took time to change. In India, the platooning of trucks and connectivity have the potential of changing rapidly. Through our conversation with our customers we came to find out that their main concern is the driver. Not because of the cost, but because of the attrition rate. Shortage of driver is pushing our customers to opt for technology driven solutions. It is not the cost but the need to operate in an optimised environment. We expect that this will trigger technology, simplicity and an ability to get ride of the human factor.

Q. Medium and heavy truck segment has been growing. There’s a move to higher tonnage vehicles. Freight rates have risen. What does that indicate to you?

A. I see it as a sparkling signal for transformation. The one limitation is see is the customer’s ability to invest in modern, expensive and efficient solutions. The absence of an expensive and efficient solution is because to achieve optimal turnaround time, efficient utilisation level of a truck and derive a certain fuel economy has not been possible yet. The non implementation of GST means there’s stop and go between states. Lack of double lane or triple lane roads is a limiting factor. If such hindrances are dealt with, the customer will opt for a modern, expensive and efficient solution. We are very happy to see a change in the mindset in terms of engaging and contracting transport. It was short-term and assignment driven earlier. It is now starting to be ‘long’-contract driven, which ranges for over five years. This will give the customer more room to look at a sophisticated solution without impacting profitability. The life expectancy of the truck in Europe is 10 years and beyond. In India, I am given to understand that it is less. Transformation has started in India. There’s however a need to be careful and cautious.

Q. Does your premium positioning limit your ability to attract buyers?

A. When India will be able to afford expensive, elaborate and sophisticated solutions, it will make for an excellent choice. It will mean that the country is emerging at a level where the approach is more elaborate, intensive and profitable. Until now India has been compensating with cheaper local solutions. If things happen in the right way, a change will come about. It will not come at the European level. It is a mistake to take an European product, localise it a bit, and hope that it will work.

Q. For higher localisation, you would need volume. Does it not look difficult?

A. We have driven localisation and built volume viability in mining trucks. There’s a recipe; there are ways, and I think it is exactly the same (as in the mining segment). We are thus finding ways to make it work in the on road segment. Industry professionalism is rising. New players are coming in. Big retail chain stores are focusing upon India. Logistics companies are showing interest. I see it coming, but then, we need to be innovative.

Q. How’s been the response to I-Shift automated manual transmission?

A. Some 18 months ago we had a 20 per cent penetration. Today, we are at 60 per cent. We have taken a strategic decision for India that next year we will stop manufacturing manual gearbox. Emphasis will be on the I-Shift because it is the most advanced technology. It enhances fuel efficiency and has the potential of addressing the driver challenge.

Q. You are banking on I-Shift technology for on-road segment penetration. What is the reason?

A. To understand why we are banking on I-Shift technology there is a need to reflect upon the strategic worldwide direction of Volvo Trucks. “Volvo Trucks will stop selling manual gearbox on a worldwide basis.” We are getting into a journey where the machine, the system, and the ECU is here to assist and deliver expected performance to our customer. If we don’t embrace the technology quickly someone else will do it. We will lose the competitive edge. Talking about countries like China and India, old fashioned technology was being offered some years ago. The need today is for the most up-to-date technology. Especially in markets like India. The need is for the most advanced technology to be offered at an affordable cost. We are looking at providing such solutions. I firmly believe that there will be a need for such solutions. Recently I had a discussion with one of our board members in India. He is very much into the retail business as well. He wants to pursue a retail experience of delivering at the buyer’s door step. Problem is, in India there are external logistics companies that do not know where exactly the location of delivery is, and that if the driver will deliver the goods safely, and in time. There’s a risk of the customer’s buying experience taking a hit. The need today is for a well perceived experience for the customer from the computer to home. Trucks will play a major role into this. We are not pursuing the last km because of the city profile. We feel that in the massive flow, we have a big role to play. We have the system, and we have the technology. If I am able to deploy a performance monitoring system at a frugal cost, I think we have a competitive edge in India. We did it in mining with the Dynafleet solution. We have had customers walk up to us and ask if we would be offering this feature or that feature. They are ready to buy should we offer them. India is the engineering country of the world, and people are highly receptive to new technology.

Q. You mentioned about frugal cost. Isn’t India a price sensitive market?

A. Every market has price sensitive customers. The price point in India is a bit lower. But then we sold 1,222 trucks that are expensive when compared to others in the market. We have proved that it works in mining, and it is therefore that people have bought from us. I believe there is a way to educate; to explain, and to prove that it works. It is a matter of confidence and understanding the needs of the customer. It is a matter of adjusting the business model accordingly. I do not believe in cutting costs. I think instead that it is about the ‘full-time’ value proposition and whether it meets the customer expectations. There will come a time when people will look at efficiency over time rather than cost. They will look at peace of mind.

Q. How do you look at driver shortage in India as you pursue the on-road segment?

A. I have been in India for one year, and I am a bit surprised, and sad as well, to see such a thing. There are countries where access to competence and to train people is even tougher. We have been successfully correct the trajectory. We have solutions; we have modules, it is just that they have to be deployed. I see it as a work to be done by three parties; by us, our partner and our customer. We have everything that is needed to fix the wheel. There’s CSR. Our trucks are operating in remote mining areas. We have a responsibility to the society. For on-road it is a different story. We have a role to play. What worries me is that over 300,000 people in India die in road accidents every year. It is an issue that is hardly discussed. We have the responsibility to offer solutions and systems. The need is for education. It is possible to make a progress. All the players should raise their voice.

Q. The changes that you have brought about in the last one year?

A. We believe in not challenging the customer, and instead in supporting him. To make sure that our trucks are on the road. Speed of execution and customer support are the changes I think I have brought about in India. My task has also been to raise the voice of India into the organisation for the people there to realise that something big is happening. To make them realise that a huge transformation is underway and there is a need to tackle it. In Asia, all the markets are shrinking except India. There are a lot of opportunities in India, not only linked to selling of our products but also about leveraging the competence. Out of the 100,000 people in the Volvo Group, some 4000 people are at Bangalore alone. There are not many companies who would have four per cent of their people in one location. India makes a sizeable engine in the Volvo Group; in engineering, in financing, and in IT. The need is to continue to capture the potential. India is quite likely to bring new business ideas and patterns. We believe that countries like India and China are disruptive. The forces at play given their size are too big. One is looking at a different approach, different costs, different way of thinking and different speed of execution. Our an organisation like ours, this is extremely challenging. The rules are different, approaches and different, and expectations are different. The challenge is in doing things differently. For me it is a challenge to tell at Sweden that in India this will not work that way. That a different approach is needed.

Q.Do you plan to expand the dealer network?

A. Our trucks are distributed through our joint venture (Volvo Eicher Commercial Vehicles). The capability of the Eicher network is fantastic. We would use the opportunity to leverage this capability for our on-road thrust. We have great synergies for our mining operations – both in terms of Eicher as well as Volvo. We have hubs at five major locations. In cities, to support the buses, we already have a network. Distribution network, given the size of India, is not a concern for us.

Q. A big change is underway at your joint venture. How do you look at at it?

A. The joint venture has been successful. We will be celebrating eight years of it. Except Maruti Suzuki, it is the only joint venture that has lasted so long. Look at the engines produced in a Volvo environment (at Volvo Eicher Powerstrain), and I think the joint venture is extremely successful. They are also bringing in a lot of ideas; conveying customer level changes, which in-turn also translate into partner-level changes. Both these are helping us to adapt to changes. Volvo Eicher Commercial Vehicle is helping us to understand (the market) better, to grow better, and to work closely.

Q. Along with the joint venture what developments do you foresee in terms of sourcing?

A. The technology (between Eicher and Volvo platforms) is different; there are very few commonalities, and it is difficult to leverage an opportunity. The grade of the supplier industry in India is such that we are sourcing more and more components from India to Europe, USA and other parts of Asia. We continue to grow on that count. The fact that a component is used in a Volvo truck means the quality, performance and price is at the expected level.

Q. How do you look at your journey in India?

A. India is the third largest heavy-duty truck market in the world. It is already showing the potential to be the number two. There are strong local players. The profile is similar to that of China. There’s potential for the market to modernise and grow. There is a lot of dynanism. We are a part of this market for the last 15 years. The prospects for us are extremely positive. As a Group with the inclusion of Volvo Eicher Commercial Vehicles, we are selling close to 50000 trucks in India. Last year it was 46000 trucks. India is a huge market that we are participating in. It is a strategic market. Profitability is going in the right direction. It is necessary that we become more robust. Dynamic growth pattern is not the case in Asia. The case in Asia is patience. Plant the seed; put some water, let it out in the Sun; develop relations and stabilise, and it will happen. Countries like India are subject to forces that are extremely strong, and can create a huge swing.

Q. By forces, are you in some way hinting at the ability to engineer frugally, locally?

A. After a point in time, frugal has to become innovative. It can be low cost, but has to bring under it new territories. India is capable of sending a space shuttle and developing an atomic bomb. Considering such capabilities, the need is to bring in different levels to make the ‘Make in India’ proposal successful. The need is to engineer the India way, at a competitive performance set, frugally, and innovative in a way that it brings more value and more innovation to the world.

Q. Has ‘make in India’ touched you?

A. It is difficult to say if it has touched us, and how. We entered India 15 years ago. We could claim that we had the vision of ‘make in India’ then. Things are at another dimension today. The need is to put India at the right position in the global organisation. For many, ‘make in India’ seems to be about leveraging exports and seeking profitability outside India. We are in India, and we need to look at the market in India, for India and outside India. And, not from the customer perspective, but from the product perspective, from the solutions perspective, and for the development done here.

Q. Has the entry of Volvo Financial Services been successful?

A. It has been successful in easing the financing difficulties. In March, our penetration level was at 38 per cent. The presence of Volvo Financial Services gives the customer a reason to trust. It takes care of the overall profitability, which has everyone happy. Its been seven months after Volvo Financial Services entered India. The need would be to be innovative, smart and propose different products; different scenarios and different setups to help our customer. Attention would be need to be given to bring added value, and not just a cheaper interest rate. So to be attractive, it is the engineering, duration and bits like the service agreement that will make a difference. What looks like a robust and attractive finance solution today may not hold water tomorrow.

Q. What you do think about commercial vehicle regulations?

A. More clarity about regulations, about the ease of doing business will come over time. The implementation of GST will be very good. It will simplify business. GST will send a very strong signal that transformation is possible. It will be a good enabler; it will be a step towards transformation.

Samir Yajnik,President, Global Delivery and COO (Asia Pacific), Tata Technologies


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Interview by: Ashish Bhatia

CV info-tech

Q. How are Tata technologies using knowledge-based Information Technology (IT) for its clients?

A. Knowledge-based IT engineering systems automate the elements of the design process which substantially reduce anything that is repetitive engineering, into the design options that can be used throughout the process. Consider our involvement with Tata Motors for their CVs for example, and the knowledge-based IT engineering systems would help with the design of wind shield; how much swept area it should have, and if it is a legitimate rear view mirror when you place it in a concept vehicle. There are many such elements of the design process that the knowledge-based IT systems can help to get right the first time around. The concepts invariably find use in commercial vehicles, and one such example is the Tata Prima. Knowledge-based IT systems don’t just end upon attaining cycle time reductions; they travel much beyond. You could use them for attaining important goals such as light-weighting. Light-weighting is a big focus area in automobiles. We are leveraging our experience in knowledge-based IT systems to make inroads into light-weighting. The other knowledge bases that we are leveraging are in the area of hybridisation and electrification of vehicles. We are involved in the development of numerous Electric Vehicles (EVs) and hybrid vehicles across the globe. There resides a lot with us as a company in the form of systems, and in the form of people. We capture the potential, and the aspect of learning is continuous. Consider connected vehicles, and this aspect assumes importance. In terms of how the driver is driving the truck; if he is using it effectively, efficiently and most importantly if he is driving it safely. All the big data that is collected can be brought back in to use. There are a lot of ways to go about it in terms of technology options, both in terms of core engineering, drive-ability and connected vehicles, as well as in hybridisation.

Q. Is telematics a part of the work you do. How important is the integration of such a product or system in case of CVs?

A. Telematics, for us, is about off-vehicle integration. It is very relevant, and if you look at fleet operators running multiple trucks, telematics is the best option to be able to optimise components, fuel efficiency, and efficiency of the drivers. It’s a matter of Original Equipment Manufacturers (OEMs) determining a strategy. It is a matter of OEMs making their telematics product offering commercially viable. The big question is, the applications to be integrated during the development of telematics, and the time the product should be made available in the market. If the product should be piloted with some dealers or truck companies first is the prerogative of the OEM. Also, if it should be provided as a standard fitting or as an option. For Tata Technologies, the task is to provide the requisite technological back up.

Q. How difficult or easy it is to strike a balance between knowledge-based systems and frugal engineering?

A. The bottom line, I think, is in understanding the need of the customer. You may not want to apply light weight, connected or autonomous vehicles if there is no requirement for them. We have, for example, developed a concept of ‘right-weighting’, ‘right-performance’ and ‘responsible use of engineering’. These, we apply in markets as per their demands. The point is, we will build Centres of Excellence (COE), but their success lies in their application as a business model. The challenge is in building COEs that are effective and can align and understand the customer’s strategy. Our business model is all about partnering with our customers. It is about working with them to fulfil the road-maps they have planned.

Q. Could you elaborate on the concept of COEs please?

A. Over time we expect different COEs to evolve. We are looking at re-organising our engineering teams. Earlier the teams were split into programs and territories. These will now be replaced by COEs. We are building powertrain and lightweighting competences, and the COEs are distributed across regions. Powertrain, for example, is concentrated in Romania. Lightweighting COE is based at Coventry in UK. The tear-down benchmarking takes place in Pune. Considering our business model, which is about partnering with our customers, in the EV space, we are working with the Chinese. In the top-hat space we are working with Swedish and American companies. All this involves an amount of cross-fertilisation of learnings from across the globe. The frugality concepts that we have put in place have been adopted across the globe. Vice Versa, we are bringing in light weighting, hybridisation, dual-fuel systems and alternative propulsion systems to the domestic market.

Q. What is the tear-down expertise all about?

A. We are building a large shed at Pune, which would be used to tear-down products of competitors. These would be not just industrial products but will also include commercial products. With time we hope to build an extensive database, which would enable us to turn consultants to OEMs. That, we think, will be a real differentiator over time.

Q.How do you look at your partnership with Tata Motors evolving over time?

A. Our partnership with Tata Motors has come a long way. It has constantly evolved over time. We have recently signed a five-year contract with Tata Motors called ‘i-sourcing’. Earlier we used to provide Tata Motors with just a team of engineers and address problems concerning product development. Such a practice is today capable of being termed as irresponsible use of engineering. We have therefore formed teams where our engineers are now playing the role of execution partners for Tata Motors. It goes like this: Tata Motors determines the strategy and we execute it. A system called nine-blocker that we have constructed helps to carry out different tasks across body engineering, chassis systems, powertrain, and electronics with Tata Motors. This is done in the form of a work package. Teams have higher accountability and the processes are streamlined. It is quite path breaking to have 1,200 to 1,400 engineers work meticulously. This is a collaborative outsourced model where Tata Motors can keep a track of engineering hours put in on tasks, and allows for constant improvisation.

Transmission tech

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Q & A

Krishnakumar Srinivasan,
President – Asia Pacific, Vehicle Group, Eaton
Interview by: Bhargav TS

Q. How is the CV business shaping up. How would you describe Eaton’s growth?
A. Though China has slowed down, we were able to prove our strength across the APAC region. We out performed China last year, and we hope to continue to turn out a good performance. We do have joint venture plants in China and outside China. All put together we have nine plants across APAC. We normally partner with our customers on technological grounds. We are ready to partner right from the drawing board stage to the design, production and product delivery. The focus will be on how do we get business in India. Our presence in India has become sizable now. We supply transmissions to all OEMs. We have achieved good penetration in off highway equipment segments, haulage trucks and various other segments. Our focus is on making products and adapting them in the right way to gain substantial market share. We have grown substantially in India after the acquisition of the Kirloskar plants. We are working to deliver future technologies like valve actuation, cylinder deactivation, variable valve lift technologies, super chargers, and niche products in air-conditioning as well.

Q. How would you describe your growth in India?
A. We have had tremendous organic growth. Our hands are full. Expansion is on the cards in India and other countries. Inorganic growth has also been decent, and we are looking for synergies within our portfolios.

Q. What products are driving growth for you?
A. We are having a good play with the Dual Clutch Technology (DCT). As a technology, it has been there but its technological capabilities were displayed by us and a lot of engineering has gone into it. When you drive, you will feel the quality and smoothness; that is what we have delivered in the product. We are working on a number of technologies on AMT, and DCT is one of them. We have in our portfolio the ‘Ultraship Plus’ and this technology goes to all vehicle segments. We have a technology called Cylinder Deactivation (CDA) where a cylinder can be switched off as per the load. Fuel can be saved. Cutting off the cylinder induces vibration however. We are working on this technology by working with our customers right from the design stage. We are working on engine mounts. We have expert trainers in CAM operations, and roller rockers are electronically controlled to avoid frictional losses and wear. The piston operates, but no combustion takes place. This amounts to fuel saving.

Q. How do you quantify the savings from this technology?
A. We are not able to say the exact figures, but there is a sizeable amount of saving. The entire system is managed with mechanical and electronic programming and options. The cylinder is not removed; combustion is cut-off. If required, and in the case of high loads, the system bounces back. Combustion in the cylinder cut-off resumes.

Q. Are you in talks with any OEM for supplying this technology? How has been the response?
A. This technology cannot be implemented overnight. There are various validation cycles involved. We have experience in commercialising various valve-lift technologies. That exposure we hope to use to promote this technology. Also, we have to customise this technology as per the need.

Q. Is India a competitive Automated Manual Transmission (AMT) market?
A. We go platform wise. We have medium-duty six- and nine-speed platforms. Based upon the needs of the customer we can convert the platform to AMT. We have a ‘modular’ concept, which helps us in converting the platform to AMT. In China we have 12, 13 and 18 speed transmissions as well. We are able to play well in that market. There, infrastructure is supporting us well and we expect the Indian market to go the same way. There’s been good migration in vehicles. With the use of an AMT, the performance of the vehicle will improve. Good fuel efficiency is derived with few challenges. The bottom line is, on the base transmission we put XY shifter and control everything electronically and electrically. There are programmes that are able to get the right shifts and the right torque levels.
Q. What is limiting the market from moving to AMT?
A. A major impediment is cost. Our market is very cost sensitive. In the case of passenger vehicles, the feel and the comfort could be the selling points. In the case of commercial vehicles everything has to be quantified against currency. For instance, the quantification of what happens with the AMT implementation is if the driver can steer for long hours, which would help in reducing the man power. If it would add value by increasing the fuel efficiency etc. All this has to be quantified against currency to the fleet owners. Only then would AMT gain acceptance.

Q. Are you hinting at a low-cost AMT?
A. We already supply AMTs at low-cost. This is when you tally the cost against returns. From the time we started working on the concept, our cost has been going south. Cost is driven by the market. If one is not competitive, it implies that he or she will shoot himself or herself in their own leg. We work backwards on cost. We are doing a good job in the market.

Q. A shift to electric vehicles and hybrid vehicles has begun in India. What role do you foresee?
A. During the Commonwealth Games in India, Tata took up the challenge and made parallel hybrid vehicles. We partnered with Tata and supplied transmission system. These parallel hybrid vehicles continue to run in India. For parallel hybrid not much infrastructure is required, but for series hybrid and combined hybrid it is not the case. We call ourselves as a pioneer in China for all parallel hybrids. Over a period of time we got to know that the battery life becomes a major challenge. We stepped into that zone and derived three to five times higher efficiency in battery life. We were backed by the Chinese government to achieve this. The Chinese government gives good incentives for those who adapt hybrids. Until the market gets used to electric hybrids, the incentive scheme will continue. The Indian Government should also come up with such initiatives to get electric vehicles on the road.

Q. Are you associated with new generation CVs, and one that may look at alternate fuels?
A. We are ready to supply components to new generation CVs provided they are manufactured locally. A lot of Completely Knocked Down (CKD) units are coming in. They are simply plugged into and dispatched. Economies of scale is the reason. When volume picks up and manufacturing turns local we will step in.

Q. How do you rate India’s growth over other automotive markets?
A. Consider the BRICS countries, and India has a big advantage. Brazil is down in terms of currency. There are issues in Russia, especially with the end-markets. China is equally competent. Growth in China is rated at 5 per cent, which is good enough and statistically relates to 1.2 million new vehicles added per year. Unless we localise, we cannot sustain and grow the business. We will outpace the market with fairly high investment from our end.

Q. What is the localisation strategy Eaton is following in India?
A. Many of our products are localised based on the economies of scale. We continue to import, as our Cost Benefit Analysis (CBA) report instructs us to do. For instance, we have a product which is rated cheaper in Korea than in India, and if the import cost is not much, we continue to import it from Korea. Except for a few products everything is localised in transmission. Valve needs are 100 per cent localised. We have future products like valve actuation, superchargers, which are being localised.

Q. What new products is Eaton looking at introducing in India?
A. We work on various solutions for product upgradation. We are working on superchargers for customers. With them it is possible to downsize an engine. A one-litre engine can be downsized to 650cc without losing out on power. When downsizing it may not be possible to use turbochargers, and make them work, because of high exhaust temperatures. We therefore continue to develop and introduce new products for our customers that ensure promising solutions. For CVs specifically, we have CDA technology, hollow valves, super turbo combination technology, and AC lines to increase efficiency. These products are already available outside India and we are now in the phase of defining these products for India.

Q: Does downsizing also imply lightweighting?
A. Consider medium duty, six- or nine-speed transmission for instance. We have moved from cast iron to aluminium for the outer enclosure. For clutch products to reduce the inertia and weight we have coded a new design in most of our products. We continuously manoeuvre and move in different areas based on the demands of the OEMs.

Q: The government is goal posting to implement BS-VI. What is you view on it, and do you think it is achievable?
A. External pressure is up. This was the case with China for three-to-five years. They came up with a solution. Vehicle manufacturers should achieve the goal post as it is the right thing for our environment. In the case of fuel, it is difficult to say. It is difficult but do-able. Huge amount of investment is needed from the government and everybody should promise to keep up with the deadlines.

Q. The level of growth you hope to achieve in India?
A. Established in 2008, our aim was to target new areas with our technologies. I am certain that we can sustain and keep growing. The end- market is what we target. There is normally a growth of 5 per cent. Consider this: Many new products are being introduced. Given the cost-sensitive nature of the Indian market, we have to work continuously on reducing the cost. In the area of transmission we have taken out so much of cost and added several technical inputs.

Bus business

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Q & A

T. Venkatraman, Senior Vice President – Buses, Ashok Leyland Ltd.

Interview by: Bhushan Mhapralkar & Bhargav TS

Q. Ashok Leyland leads the Indian bus market. How do you plan to maintain the leadership status?

A. Bus business is tricky in India. The business curve can fluctuate wildly. Ironically, the 7.5-tonne and above segment has not reached a 50,000 count yet. It is swinging between mid-30,000 and higher-40,000 (units). Typically in another segment, it would be easy to say that there is a growth of 10-12 per cent year-on-year for three-to-four years followed by a decline. In buses this is not the case. The segment that I am in, is 7.5-tonne and above, and is also referred to as Medium-Duty Bus (MDB) and ICV. The MDB used to bring 60 per cent of the total bus business. It included players who bought chassis and built the body. The trend has reversed. Smaller vehicles – the ICV segment, has grown to 60-65 per cent. There are three reasons for the shift. One is the emergence of metros, monorails, etc. as people look at last mile connectivity. Second, with the bus code coming in, the bus operators don’t know how much to invest. They can’t experiment with the bus anymore. They have to follow a bus code. The buyer needs to come back to the manufacturer and ask for fully-built buses. Third, the bus industry is shifting towards an understanding of controlling the atmospheric pollution; of controlling the noise pollution, and the need to address the running of a vehicle. This is especially the case with State Transport Undertaking (STUs). Every STU almost, is incurring losses. They wait for the next government to announce a scheme, pay the last manufacturer and move on. They are thus constantly paying the previous transactions.

Q. How are you tackling the three challenges that you just mentioned?

A. Consider the school bus segment. It accounts for roughly 30-32 per cent. Historically there have been players who converse between the LCV and ICV segment, which is roughly the 28 to 32-seat capacity segment. Almost, all the competitors have a presence here. We decided to bring in a product which is a game changer. So we spoke to all the stake holders. We spoke to the parents; we spoke to the operators; we spoke to the school management; we spoke to students. We asked them of what they typically look for in a vehicle. Some three or four dimensions came out of it. The school bus that we launched at the Auto Expo 2016 thus has many firsts. The vehicle is non-conflicting when it comes to the operator needs. A highly competitive per seat market, the need was to seek the best balance. One cannot compromise on safety, security and hygiene, and at the same time has to match the costs. Once the platform is created, it can be extended to staff, tourist; it can also go downwards in terms of 50-, 40-, 36-, 32-seats and so on.

Q. What about the segment where buses like the Hybus are aimed at?

A. The government is talking about changing the paradigm in terms of atmospheric pollution, noise pollution among others. Last year we launched an electric vehicle, which came into the country ahead of anyone else. The ministries have not yet structured their intent. So, we decided to look at the challenge of acquisition cost. The Total Operating Cost (TCO) is about first buying a bus, operating it and then judging it. So, I can talk about theoretical TCO. This is work in progress. We looked at what would make sense for the country. Here’s a person who says that he needs a vehicle that runs on CNG or diesel. Then, he says that give me something that also meets the other side of the spectrum, which is noiseless, pollution-free, has more seats and makes for the ‘right’ city traffic application. The Hybus, with an ultra-capacitor, works such that the ultra-capacitors are charged every time the bus brakes in a city environment. In a city environment there is frequent stoppage and start. When the vehicle is running the ultra-capacitor is getting discharged. The Hybus is regenerative and ‘last the lifetime’ kind of a vehicle. There are no batteries; no thermal over-runs. There are no issues with respect to chemical reactions. It is a completely safe option. Since it is serial-based, the powering source can be a diesel or a CNG engine. A diesel engine can be replaced with a CNG engine. The Hybus is a modular product and makes a lot of sense where there is no need for a huge acquisition cost. It does not need an electrical infrastructure; it does need a pantograph, or a charging station. It also avoids a malfunction that could cause a vehicle to stall on a BRTS circuit, choking the whole network. If there’s a problem with the other part, it can shift to diesel and keep moving. With such products (the innovative school bus and the Hybus) we will engage with the government on how do we take it forward. The Hybus, for example, makes a perfect bus for Delhi; is air-conditioned and can have standees as well as those who are seated, and is noiseless.

Q. With buses looked upon as a socialist cause, they seem to be tightly controlled by permits which differ from region to region. Do you see any streamlining opportunity?

A. The State Transport Undertakings (STUs) are the backbone of the bus industry. Almost all of them are facing hard financial times. They have aged vehicles, which somewhere down the line start to breakdown. There’s a limit to how much a vehicle can be flogged. The government is under pressure to recognise this. When elections take place, it is the buses that are on the agenda; about having started these new routes and so on. The Ministry of Road Transport and Highways (MoRTH) is talking about modernisation; they are talking about a national transportation association. They are talking about structuring – depending on the metro station; the population, and upon how big the bus will be. What type of a bus will it be. Will it be a premium segment bus; will it be an AC bus, or will it be a low floor bus. Will it be an ultra low floor bus. They are trying to define everything. I expect the MoRTH norms to state the intent at least. State if the focus is on last mile connectivity. If the focus is on corridors; on licenses. The sleeper coach is currently under discussion. Every one of these are indications in the right direction. The concern for a manufacturer is that I have created a product. I am ahead of the curve, but my investments are not yielding a return. How long can a manufacturer stay motivated. The good part is, we are seeing changes in the right direction. The discussions are taking place in the right direction. The confusion is ethanol, bio-diesel, bio-gas, hydrogen, series hybrid, parallel hybrid, full-electric, and induction motor electric. There are so many combination options. Which is the right one for the country? Which is the one that will cater to the requirement? These are the challenges.

Q. Will bio-fuel alternatives succeed?

A. BRTS is an option for certain scenarios. It takes out a lot of small cars from the roads; reduces congestion, and makes an economical option. For this to happen, the quality of buses has to improve. The quality of seats, what is offered inside the bus, the feel that you get inside a bus has to improve too. There are good examples of BRTS corridors. Where land is available in abundance, and a multi-way option is available, or where you are starting from the grass route level, this is the business model available. STUs that are not able to churn this effectively, work under the PPP (Private Public Partnership) model where the government participates minimally, makes it attractive for an operator. The issue is, an operator is guaranteed profit by charging Rs.3.50 instead of Rs.3, which is the cost incurred and includes the acquisition cost. Governments are populists, and wouldn’t increase the ticketing cost. It will change however as people are willing to pay for travelling by coaches. Consider this: the law does not have a clear agenda on sleeper coaches, national permits, or route allocation. How will it play between government and private segments. The operator is scared to enter. The government is not clear of whom to keep out. Recognising these issues and sorting them will also help the common man by bringing down the cost per ticket. The need is to have a business model. The need is to begin working with an operator; with the manufacturer for the kind of buses needed. This would help to make exactly what is required. Today, a manufacturer is trying to conceptualise what may be required, or it is someone who will buy a chassis and adapt it to a commercial application.

Q. How do you look at BRTS networks being pulled down; city bus undertakings once regarded as the best struggling to survive?

A. The question is, how does an STU pay for a vehicle. STUs have to pay for the upkeep. They have to pay the salaries of their staff. So, how do they modernise themselves. Their strategy is to squeeze the so-called golden goose. Manufacturers are called, asked to quote and meet on the price. Every time there is a price meet, it comes down to the comfort offered. If the specification is unified, and every one has to offer a product meeting these, then it is an interesting challenge. There is a need to ensure that a common man feels like getting into the bus. Look at England. We have a brand there called Optare. Look at the people travelling in these buses. Most are in the upper range of 50 plus. For the elderly, this has become the most viable option because the buses are comfortable and safe. They are elderly friendly. People prefer buses over cars. I have a whole host of buses in the upper and luxury end. I can take them higher up where they contain super air-conditioners. As a market leader, the need is to look at numbers. To be in the Top five globally, I also have to look at the world market.

Q. How do you look at the inter-city coach segment in view of the growth in infrastructure?

A. This segment is 600 units strong. Look at the number of players participating in the segment. It is a nice showcase of capability. Will one be profitable after doing the investment? If there’s a player who has a product in the rest of the world, brings it to India and positions it, it is easy for him. For a new player to invest and aim to grab 10 per cent of the market it is not economically viable. However you look at the potential, and if the government redefines national permits, the market will grow. As a manufacturer, my stand is, I have a product that I can make. I have a good understanding of the market and can respond quickly. In the next few months or by the end of this year (2016), we will launch a coach. An interesting part is, manufacturers like Volvo changed the perception such that the engine would need to be overhauled after 10 lakh kms. Take a gearbox and overhaul it once in the lifetime of the vehicle. The game has changed. The coach is here to stay. We have a rear-engine vehicle but as of current, a front-engine vehicle is preferred. I want to be among the top five in the world; I have to be the number-one in the country, and I have to show that I am capable. People are yet to understand the cost of operation. Funding is a challenge, and it is necessary that the government works towards financing the operators. If the funding challenge is dealt with, the market will open up.

Q. Would the coach be made by Global TVS?

A. Yes, the new bus will be made by Global TVS. I want to ensure capacity fulfillment. I have a plant in Alwar. I have a plant in Viralimalai. Both these plants should meet the demand of north and south. The Alwar plant does 60 vehicles a day, and can be made to produce 20-22 more vehicles a day. Four to six coaches can be made. Expansion is on, and if the industry shifts by 18 to 20 per cent, or if Ashok Leyland is successful in growing the export market considerably, which it wants to, the hike in capacity will come handy.

BRTS is an option for certain scenarios. It takes out a lot of small cars from the roads; reduces congestion, and makes an economical option.

About engines

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Q & A

Anant J Talaulicar, Managing Director, Cummins Group India

Interview by: Ashish Bhatia

Q. Cummins and Tata Motors have had a long association. How do you look at the journey?

A. Cummins and Tata Motors have been partners for 23 years. The 50:50 joint venture partnership between the two companies dates back to 1993. Production at Tata Cummins started in 1995 at Jamshedpur. It still continues. We began operations with a production capacity of 60,000 engines per annum. The production has since doubled to 120,000 engines per annum. Even that was found to be insufficient, and we duplicated the capacity at the Cummins megasite at Phaltan near Satara. The campus at Phaltan houses seven factories. These include components for the entire engine. The megasite has added another 120,000 engines to the capacity, taking it to 240,000 engines per annum. Tata and Cummins, as partners, have expanded capacities to meet the demand in the country. We brought new technology into India in 2000. The same year India began moving towards cleaner engines. Initially BS I, BS II, BS III and now on the verge of BS IV. There will be pan-India implementation of BS IV in April next year. So we have partnered with them (Tata) absolutely hand-in-hand throughout the journey.

Q. You are increasing capacity at a time the industry is struggling with over capacity. Why?

A. In the financial year 2005, the Indian economy was booming. We touched 90 per cent utilisation levels by the 2011 financial year. The 2011 financial year was the peak year. We found out that we are unable to provide enough to the market. We were actually on the back foot at that time. We were fully utilised, running three shifts, seven days a week. We therefore decided to add significant capacity in India. Thereafter, contrary to our predictions, the Indian economy was throttled, courtesy the lack lustre policies of the government in power then. It is necessary to understand that trucks are capital goods. They are simply not a piece of cosmetics, which is bought. As things start to get tough in terms of the economy, it is the commercial vehicles that are impacted foremost. Interest rates and inflation went up; demand went down. This created the worst possible scenario. Fortunately with the new government, we are witnessing a revival. For the record, we have adequate exposure in diverse fields including the generator industry. We also cater to off-highway construction, mining equipment, railways and the marine segment.

Q. Do you see the market reviving itself?

A. The private sector is yet to join the growth bandwagon fully. It is still reeling under the challenge of over capacity. Green shoots are visible however and revival has started based upon government spending. A thrust on infrastructure, defence and mining has resulted in action. The commercial vehicle industry grew almost 30 per cent last year. Especially the Medium and Heavy Commercial Vehicle (M&HCV) segment. Growth so far looks sustainable. If the economy continues to grow, there will be improvement. Slowly the private sector will start joining. Capacity utilisation will go up and create room for fresh investments. GST and an investment in world-class infrastructure will put the economy on the fast track to growth. There is substantial pent-up demand. The need is to make certain that the policies are growth oriented. India makes an attractive destination for global sourcing activities. Not only can the demands of this country be catered to, one can export too. Tata Motors is also aiming in this direction. The key export markets include Africa, the Middle-East among others.

Q. How is Cummins planning to take advantage of the market reviving?

A. The government is taking a very aggressive stance towards achieving zero emission. We are planning to move towards BS VI by April 2020. As of now, we have not even reached BS IV pan-India. That will happen on April 2017. There are only four years to leap from four (BS IV) to six (BS VI). No country has set a precedence of doing something like this; of having skipped the BS V emission level. What will happen is, a BS VI diesel engine will turn into an air filter. It will start cleaning up the ambient air and that’s where Cummins is looking at playing a central role. The combustion system, pistons, piston rings, shapes of the bowl and the turbocharger will become a technology that can also clean-up. People until now would have thought that these were about adding a boost. Technology will move from simpler fixed-geometry turbochargers to waste gate turbo chargers and then to variable geometry turbochargers. On the fly, it would be possible to modify the combustion process such that the air maintains the appropriate heat. There are advanced aftertreatment systems which control Nitrogen Oxide (NOx) called Selective Catalytic Reduction (SCR) devices, and filters for particulates and hydrocarbons called Diesel Particulate Filters (DPF). Cummins has both the technologies; turbochargers and fuel systems that are much more advanced. The fuel systems as of current may be mechanical in nature. It may be possible to repair them under the shade of a tree. However, BS VI fuel system will be a high pressure electronically controlled fuel system with much higher cylinder and injection pressure to atomise the fuel so that it completely combusts in a clean manner. We expect it to significantly impact our business. We expect it to lead to a positive impact.

Q. How diverse is your portfolio?

A. From a global portfolio perspective we have engines that range from 2.8-litres to 95-litres. We are looking at bringing our smaller engines and localising them in India. We have designed and are manufacturing 2.8-litre and 3.8-litre advanced Euro-VI engines. We are looking at bringing this portfolio to India. Similarly in mining, we will be bringing in large capacity engines (60-litre) to India.

Q. How far has work come on integrating telematics?

A. Trucks with BS IV compliance level have some amount of telematics integrated. Going forward we will have advanced telematics with a higher set of features for the truck drivers and fleet operators. It will help them in optimising the cost of their operation. Today, one essentially gets online data on the engine and vehicle performance in real time. This can be used to optimise the truck operations that help to lower fuel economy and enhance safety. We as Original Equipment Manufacturers (OEMs) can also get this information in real time. All this is well within the realm of possibility.

GST and an investment in world-class infrastructure will put the economy on the fast track to growth.

Signalling change

Q & A

Ravi Pisharody,

Executive Director – Commercial Vehicles, Tata Motors

Interview by: Bhushan Mhapralkar

& Anirudh Raheja

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Q. How do you look at the FAME outlay in the wake of hybrid and electric CV proliferation?

A. The government has pushed the FAME outlay up slightly, but for a bus that costs nearly two crore rupees, it is not easy to pick up steam. Consider the financials involved in electric buses, and it does not look easy. Electric buses have a made a splash in China because of the near 100 per cent subsidy they get. It is unbelievable but true. Right now, we are not really getting tied down by that, but unless volumes build up, costs coming down is a distant dream. We are going to make 20 electric vehicles, put it all over India to create public awareness. We already have one bus running on alternate media, but that is a hybrid. It ran at different places including Delhi. It ran in the BEST (Mumbai) territory two years ago. We already have an order from MMRDA (for Bandra-Kurla Complex in Mumbai) to supply 25 buses.

Q. How is the response from transport undertakings to such vehicles?

A. To be frank, they are also looking out for directions. In Jnnurm II, BMTC (Bangalore) actually raised a demand for 25 buses, but when we shared the costs they conveyed that only 30-35 per cent of the costs were being borne by Jnnurm II scheme. So the amount that they had to shell out was still more than a crore rupees. The same may change quickly because of the pollution related problems. Especially in the hilly areas. Himachal Pradesh, I think, has placed an order for an electric bus. The volumes may be small but the idea of being futuristic is already there.

Q. You have launched the Signa range of trucks. Is it an upgrade of the LPT range?

A. We are moving into brands, which includes the Ace, Magic and the Prima. The Prima was followed by Ultra. In our main segment, we felt that the cabin needed a major uplift. The product had to be ready for the next 10 years. So rather than selling it as a 3118 and a 4923, we have decided to bring them all under a brand. The numbering like 3118 and 4923 will remain. So, if you see the cabin of the Signa, it may not be as good as the Prima, it will however equal or be better than most of the cabins available, and at a nominal cost increase. The powertrain will not change much and will be similar to what our 3118, 4018 and 4923 models carry. Additionally, it will be fitted with telematics as a standard feature.

Q. Would the Signa cannibalise the Prima?

A. Sales of the Prima LX are increasing and we are focusing a lot on tippers. Multi-axle trucks are still going slow. Exports are giving us 200 numbers. It was decided three years ago that the current cabin should be upgraded so that it looks as modern as the other new products. Many of our competitors are new but we have been in the market for six decades. The Prima’s cabin has got more weight and is much more sturdy. People might not buy Prima because of the cost of operations, and not because of the vehicle cost. The Prima will be very useful for those who want to transport heavy duty loads or cover a six-day trip into a three day trip. And, even if the Prime is successful, we cannot look away from our main range. It is necessary to acknowledge the fact that a lot of cabin sales are from the 3118. That is the segment that will move over to the Signa.

Q. There were no LCV launches in 2015 except below 3.5-tonnes. How do you look at this?

A. We launched Ultra range last year – the 812, 912 and 1012 models. We have launched the Ultra 1518 model at the Auto Expo 2016. It will be the first vehicle in the ICV range with a sleeper cab. It will be a complete walk through flat cabin with an extended load body. We will also have a narrow Ultra in the four-tonne and seven-tonne range. For the SFC 407 or LPT 407, we did not make big changes. There’s been no launch therefore. We showcased them at the last Auto Expo. The Ultra narrow truck on a four-tonne platform will be launched in FY17. We felt that a narrow cabin on a high vehicle will not look good, so we had to lower the wheelbase. The hierarchy will be Ultra, Signa and Prima. This is how the 9- to 49-tonne segments will be covered.

Q. The Ultra platform looks highly versatile. How far will it extend?

A. If you ask me, we can take the Ultra up to 25-tonne platform. We may not do that since the cabin will become too small. We are therefore looking at a B-cab design. The Prima range is already available with a B-cab design, which is typically used in a multi-axle truck. For a 25-tonne truck too we will be looking at a B-cab design. There will be a certain overlap for co-existence between the Signa and the Prima range. For deep mining applications they would certainly need the Prima.

Q. You showcased four construction trucks at Excon 2015. How do you think the industry segment is moving?

A. Last month, we grew by 20 per cent, which has come in after three years. While the M&HCV segment was growing, LCV was struggling. Now LCV is 12 per cent, M&HCV is 40 per cent and tippers are also growing. It think this quarter we will grow by 20 per cent. If we focus on the numbers, one of the developments in the last four months has been the growth in construction tippers. If you look at the M&HCV growth (which consists of tippers) till September, it hovered around 30 per cent. Tipper growth was zero. Consider the last 18 months up to October, and the tipper growth was zero. All the growth came from the cargo segment. Now, tippers have started to grow. We can also see a government effort on infrastructure and construction where road contracts are being executed, mining relaxation is gradually happening. I think that the next one year will be strong in terms of tipper sales. Like cargo, there was a pent up demand, which suddenly came in. The government is aware that the next wave of growth will come from public spending and not from private spending.

Q. When could we have Tata CVs with Automated Manual Transmission (AMT)?

A. There are two programs right now. We are currently working on an AMT for the Ultra range. I think it will be more useful in the start-stop kind of environment; in cities where short haul transportation happens. AMT may come on the Ultra platform buses first. This is because buses is where the maximum urbanisation is happening. We are also looking at automatic transmission for Xenon because of rising demand from our export markets like Thailand and Australia.

Q. Would Tata Motors also introduce start-stop technology in CVs?

A. Start-stop technology was introduced in the Tata Ace Ex. There was no demand for it. We decided to not put an extra cost when we saw that the market is not absorbing it. We pulled out. With focus on AMT, we will re-visit the start-stop technology later.

Q. With every new development at Tata Motors globally oriented, does the Signa hold export potential?

A. We are exporting close to 5000 vehicles every month, out of which 1200-1500 units are trucks. If you look at the Signa, from the outside it might look as an earlier cabin, but it has got better fit and finish. It has a new dashboard, and is more safer. We are starting with the 4923 tractor, 4018 and 3118. Once all the tractors migrate, we will stop producing the existing one. The Signa will replace the current LPS and LPT range. Then we will move to tippers and then we will move to 25 and 31-tonne multi-axle trucks. Over a 12 month period, Signa will be the mainstream range and Prima will be the upgraded range. Initially it will be the domestic market (for about 12 months). Exports will follow because the numbers here are pretty large.

Q. Do you see a future for hybrid trucks in India?

A. Not in the near future because of the higher cost of the vehicle. Such a technology will not be good enough to compensate the 10 per cent increase in (fuel) saving. Hybrid technology largely depends on regenerative braking, and in long distance vehicles, braking does not happen that often as compared to a city vehicle. Hybrid buses for city operations is the best; it has to brake at every signal. Because the bus stops often, regenerative braking is high. This could be an option for Xenon. Migration will however take time.

Q. When could we see the 40 hp version of the Magic?

A. The segment that the Magic is in has been struggling for sometime. This is where the nexus of financing default and low financing has hit the most. Financiers are not ready to give more than 70 to 80 per cent loan. Whenever a permit is involved, such things can happen. When defaults started happening, people just left the vehicles and walked away. Financiers are more cautious. Cargo still carries a positive reputation, and despite less business. In the SCV segment, I think, we have hit the bottom. Sales have started increasing. We will launch the Magic Mantra in this quarter(FY16 Q4). It will not suffer so much. It is a very good option for a school bus because it is a higher powered vehicle. Magic’s limitation today is its 16 hp engine with a top speed of 55-60 kmph. Magic Mantra will soon get a closed body version. The Magic today comes with a soft top. When it comes to carrying people in a city, students or staff, the Magic Mantra will fit the bill nicely.

Q. Is India a friendly market for the one who would like to become an entrepreneur?

A. Four years ago, it was too friendly when the financing was easy. The penalty for not paying installments on time was weak. India is still a business friendly market. As the economy improves, the loan availability will increase. If you ask me, Tata Ace was launched in 2005, and the M&HCV market saw correction in 2008, 2009 and 2010 and again in 2012, 2013 and 2014. The Ace saw the first correction after eight years. We had by then sold 1.5 million units already. In India, vehicles don’t disappear. They continue to be resold, which I think is still fairly encouraging.

Q. What about permit issues pertaining to public carriers?

A. Wherever passengers are involved, a permit is applicable. Permit is applicable even for a private bus. The situation, I think, will ease up as we move forward. A lot of state transport undertakings are willing to deploy more buses, but they don’t have the money for it. They are tying up with private partners even as they face issues like getting the requisite parking space. Bigger buses will see some revival because of the need to have better public transport. Smart cities will need public transportation. Smaller vehicles are more or less state driven. As the financing environment returns, this segment will pick up again. It is like a share taxi market. In Kerala, four-wheeler segment is more strong. It is like a taxi that is hired to go from one place to another. We sell close to 800 units every month, which is more than three-wheeler sales. We have already overtaken Piaggio. Our dialogue with the government continues to give legitimate results.

Q. The emission compliance goalpost seems to shift. How do you view it?

A. The BS IV emission compliance will be made mandatory nationwide in April 2017. Of the India permit trucks on the road hardly any is BS IV emission compliant. There’s is a lot of pressure on this. The Ministry of Road Transport & Highways (MoRTH) also took us into confidence. We also had a meeting at SIAM, and came to the conclusion that there is no sense doing BS V for two years. All the platforms have to be in production, and have to be tested. By skipping BS V we will actually save a lot of investment and time. Petroleum ministry has said that we will have the fuel by 2020. We have asked the ministry to supply fuel at least a year in advance. BS VI is a sophisticated technology and needs critical testing and validation. They are time consuming. Also, one cannot sell any fuel lesser compliant than BS VI once BS VI vehicles are out in the market. The country has to move 100 per cent to BS VI. We will start building BS VI compliant products by April 2020. We have asked for a permission to phase out products over a period of two years. The same was also done in Europe. What it means is that we have taken a huge challenge for investment, technical capabilities and testing facilities.

Q. How will that go down with customers where an SCR system could cost as much as an engine?

A. It is difficult to zero down on the costs for now, but there will be at least 25 per cent escalation. The move up to BS IV calls for a 10 per cent increase in the vehicle cost. Bigger BS IV trucks need after treatment whereas smaller ones don’t need it. For the next one year, we will see good demand for BS III vehicles till April 2017. The following year will be dull. As we will approach 2020, people will start advancing to BS IV vehicles.

Q. Will the Indian duty cycles differ from markets that have already graduated to BS VI?

A. The view that foreign companies are making BS VI in India and exporting is not right. For selling the vehicle in India, the technology cannot be copy pasted. A lot of software work is involved. It is going to be quite challenging.

Q. How are you looking at the van market that has the Winger? Would you introduce a new product?

A. A new vehicle will take time. In the case of the current Winger, we have recovered our investment. Over 7000-8000 units are selling every month. It is very popular as an Ambulance, and has overtaken the Force Traveller as an Ambulance. Traveller is selling more of 17 to 18-seater versions. They are the market leaders in that segment.

Q. Would vans play a crucial role as feeder service vehicles?

A. The customer in India still seems to prefer a semi-forward look. Van has a box-type look. The segment will not become as big as it has been in Thailand and Indonesia where you see vans transporting 6-7 people.

Q. Which alternate fuel do you think will be the most sustainable? Would it provide a better passage to BS VI?

A. Rather than ethanol, I think LNG is a good option. At the 2014 Auto Expo, we showcased a LNG powered tractor trailer. While CNG is there, for long haul trucks, we believe LNG could be a good option. Whether it gives a better route to BS VI, I cannot comment on. Diesel has not gone off completely from any country and for long distance transportation it will still be viable. When you move to BS VI, data will show that the performance of diesel as compared to that of a petrol is equal in some parameters and slightly inferior in some parameters to petrol. This is not the case with BS III diesel. As you keep going up, the question of diesel being called a bad fuel does not arise if you discuss it scientifically.

Q. Diesel vehicles are under scrutiny; are looked upon as polluting.

A. Today, new (diesel) vehicles have been banned. I think this is defeating. Delhi is already at the BS IV emission norms level. In the discussion we had with the ministry, they have accepted this. My view is that they are already working on a notification for which they are consulting a lot of people; to finalise the incentive for scrapping and other things for which they are actually looking for experts to advice them.

Q. How are the suppliers and dealers looking at the move up to BS VI?

A. It is not too much of an issue with the dealers. There will be a lot of changes at the after service. On board diagnostics, I think, will come in a phased manner. In Europe, OBD implementation was phased over two years. We are running a big transformation at the dealerships. We are encouraging them to invest into hi-tech and better reception facilities, to give a better consumer experience. With the vendors, suppliers involved with engine and after treatment like Bosch and Delphi, will have a major impact. Some enterprising vendors can actually take the lead, for which OEMs will be happy to outsource rather than try to do everything in-house. They can also sell the product to many OEMs, which would give them the chance to reinvent an engine.


If you look at the Signa, from the outside it might look as an earlier cabin, but it has got better fit and finish. It has a new dashboard, and is more safer. The Signa will replace the current LPS and LPT range.

We are running a big transformation at the dealerships. We are encouraging them to invest into hi-tech and better reception facilities, to give a better consumer experience.

Growth oriented

Q & A

Vivek Kamra,

President, JK Tyre & Industries Ltd.

Interview by: Deepanshu Taumar


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Q. How do you look at the industry growth? Commercial vehicle growth especially?

A. Commercial vehicles will continue to grow as new norms are coming into play next year. It will lead to pre-buying. Seeing the budget announcement on infrastructure, it is clear that a hike in the activity of transporting sand and cement for infrastructure development will act as a growth catalyst. Mining is the other sector whose growth is long overdue. A lot of policy issues have been dealt with; have been settled. The mining sector is also driven by the overall demand for coal and iron-ore. So, to that extent, mining has been largely subdued. In the last quarter however, we have seen some movement in resource prices. Let us see of it goes up. If it does, it will provide a big boost to the commercial vehicle industry and positively influence tyre consumption.

Q. What products for the commercial vehicle industry do you offer?

A. Our best performing tyres are the JDE. We have also introduced tyres like JUH 5, which is a ribbed tyre for the front axle. We are receiving good response. We are also working on tubeless tyres for commercial vehicles. These tyres will be made available in the coming years. We have different programs for all segments, and we will come up with many tyres with different features.

Q. Looking at commercial vehicle growth, how do you expect the OE and aftermarket to evolve?

A. Imports continue to be a challenge. The market is moving towards radial tyres in the case of commercial vehicles. As far as JK Tyre is concerned, we are banking on best-in-class manufacturing. Our Chennai plant is a best-in-class manufacturing facility. We are taking over the Kesoram tyre facility from Birla in Haridwar. The acquisition is at the final stage. At Kesoram, we would be manufacturing 60,000 tyres per month. Our current capacity stands at 200,000 per month.

Q. Is the expansion of your Chennai plant over?

A. Yes, the expansion of the Chennai plant is over. We can make 3300 Truck & Bus Radial (TBR) tyres per day for commercial vehicles. For passenger vehicles we can produce 12,000 tyres per day.

Q. Supplier to many vehicle platforms in India, how does JK Tyre find working with vehicle manufacturers?

A. We do new product development for passenger car radial tyres mainly, and have designed tyres to match the need of the car. Having designed at least three tyres for Maruti platforms to match the way the car runs, things are different when it comes to commercial vehicles. We are the leaders, and manufacture a tyre on the basis of the market requirement. We give it to the OEM, and customise it marginally based on the demand from OEMs.

Q. How does JK Tyres’ involvement in motorsport help with the development of tyres?

A. When we innovate a product we learn from it. We use this learning for future product development. Our knowledge for tyres increases. Consider the tyres used in Tata Prima T1 racing trucks, and they are specifically manufactured for the truck race. They are lighter and cannot withstand heavy load. On the contrary, the tyres we manufacture for the trucks are heavy; have a heavy tread thicknesses. They have to withstand high load and tackle different road conditions. The tyre used in a race are different as they are subjected to standard load conditions at high speeds; are subjected to high turning forces and therefore need to have high strength on edges. While negotiating sharp bends a tyre has to cushion the impact and not lose its shape. When our engineers check the tyres after the race, there’s so much they can learn from. They add new compounds. Do so many new things. The learning in tremendous.

Q. Have the tyres for the Prima T1 race truck changed for Season 3?

A. Over the last three seasons, the Prima T1 racing trucks have improved a lot. To match the change in performance, the tyre has also undergone changes. Through the three seasons we have enabled the tyre to support speeds of up to 160 kmph. At the rear we have changed the tyre marginally. We are using two different set of tyres – one for the front and another for the rear. The front tyres enable manoeuvrability, handling and quick response. The rear tyres provide grip. The front tyres are used to manage the vehicle whereas the rear tyres keep the vehicle firmly on the road. Running on a hot surface, the tyres have to withstand the heat as well as the rigorousness of the track. The tyres have evolved, and one needs to understand that there are driver expectations. The body weight has reduced and the tyre weight has gone down too. To enable the truck body to be lowered substantially, we have changed the aspect ratio of the tyre from 80 to 70. The change in the aspect ratio enables better handling on the track. We have used a different compound for the rear tyre which enables it to exert better road grip.

Q. You spoke about compounds. What factors influence the design and development of a tyre?

A. There are certain factors that go into the designing of a tyre. One is a need for the tyre to remain cool. It has to have a low rolling resistance and less friction to be able to support higher speeds. It should also have maximum grip to keep the vehicle from leaving the track. A tyre designer plays with three factors essentially – wet condition, rolling resistance and cooling. When you make tyres which have lower rolling resistance the mileage goes up. All the designers play with these factors. On the race track one or two seconds make a difference. If you give a tyre, which gives you a three seconds lead, the race driver would want to use it.

Q. What is JK Tyre’s R&D facility like?

A. We have three R&D units in Faridabad, Chennai and Udaipur each. The Udaipur unit is in Kankrolli, and called the Hari Shankar Elastomer Institute. We are also coming up with a R&D facility at Mysore with an investment of Rs. 40 crore. It is expected to be commissioned in May 2016. Exporting around 10-15 per cent of the total tyres produced, our Tornel plant in Mexico, which we acquired in 2008, has its own development centre. We do product development in India and align the tyres to their market needs. Our technology and R&D run from here. We supply to all the major markets as of now. Our main focus is on markets like the United states, South America, South-East Asia and Australia. In Europe we are very small. We would however want to focus on US first and then Europe. We would like to focus on the aftermarket in these regions. We are already supplying to some OEMs in US from the Tornel facility.

Q. Your outlook on Chinese tyres?

A. Nearly 40 per cent of the replacement tyre market has been taken over by Chinese tyres. We are not against Chinese tyres, what we are of the opinion is that there has to be some sensibility about the price at which you can produce a tyre. Good tyres do not come cheap. While there are some opportunistic companies which will last for two or three years and fall off, good tyre manufacturing companies will stay. In the US, if the import market share increases by 2 per cent one can file for import restrictions. Chinese tyres market share in India grew by 25 per cent in 2015-16. It has now grown to 40 per cent. The feeling is that the tyre manufacturers are not losing money. It may not be right to look at the issue only after the manufacturers start losing money. Authorities cannot peep into the accounts of manufacturers to see who is making profit. Companies make profit for the value they provide to their customers. They should be however concerned about fair play of business. The response one gets is not right; is not well thought out. There will be some policy restriction on Chinese tyres, and I am convinced that it may take up to six months or more. The prices at which Chinese tyres are being sold are just not real.

Q. As a leading manufacturer of tyres in India, how would you define growth at JK Tyres?

A. We will continue to grow across all segments. In the commercial vehicle segment we will grow substantially in the coming year. Last year we grew faster than the industry average. The revenue numbers may show that we have grown less than 5 per cent. The number of tyres sold will however show that we have grown more than the industry. On the exports front, except OTR tyres, the export of tyres dropped. Any drop in performance in the domestic market was due to a sharp price cut and the emergence of Chinese tyre competition. Growth has been firmly lead by passenger cars and truck tyres. We have grown substantially in both the segments. Our growth in segments like M&HCVs have been more than 25-27 per cent, which is the industry growth in new vehicles. In replacement tyres, it has been a flat year because of the influx of Chinese tyres. Bias tyres growth is dropping. Confident of sustaining growth in the coming years, we are ambitious and have been chalking out expansion plans for all our plants. We are planning further expansion with more capacities at Vikrant, Mysore, for all steel radial tyres. Investments will keep flowing in the coming year.

Q. Will the replacement market post good growth in the next one year?

A. I expect radial tyres to grow. Especially in commercial vehicles. Bias ply tyres growth will dip. A conversion is underway, slowly and steadily.

Q. How strong is your dealer network?

A. We have around 400 dealers. Next year we will be expanding our dealer network to 5000 numbers. We have 25 truck wheels. We have 150 steel wheels for cars. The number of truck wheels will go up to 40 and that of the steel wheels will go up to 300 by next year.

I expect radial tyres to grow. Especially in commercial vehicles. Bias ply tyres growth will dip. A conversion is underway, slowly and steadily.