Frugal engineering

SARAVANANQ & A
N Saravanan, Senior Vice President – Product
Development, Ashok Leyland Ltd.
Interview by: Bhushan Mhapralkar & Bhargav TS

Q. From a technology point of view, how would you describe the CV roadmap to the future?
A. One aspect is clean air and green vehicles. The second aspect is safety. A classic example when you speak about a green vehicle is a hybrid vehicle. The one that we have developed is a serial hybrid and uses ultra-capacitors instead of Lithium-ion batteries. Ultra-capacitors have the ability to charge and discharge faster. This technology would work well with frequent start-stop usage such as in a city bus. The diesel engine can be replaced with a CNG or a LNG engine. The ultra-capacitors help the engine to operate in the most efficient way. In various test installations we saw a significant improvement in the city cycle. About Euro VI, and we have a truck that we would want to help develop a technology not at European costs but the one that would make it the right product for the Indian market. To highlight safety, we could look at the school bus we have developed. It looks at small things like the lower height first step for easy and safe ingress of pupils. Meeting roll over is not mandatory for a school bus. School bus accidents are mostly caused by a blind spot. In our school bus, we have ensured that the driver has superior visibility on the co-driver side. We have put a collision warning system. We utilised technology to come up with an anti-bacterial seat fabric. Understanding customer perspective is important.

Q. At Ashok Leyland how do you look at frugal engineering?
A. By frugal engineering, most think of it as cheap. I look at frugal engineering as amalgamating more value to the customer than the cost. A good example is, when we developed the school bus we decided to give it a lower step height. To me it means good frugal engineering. Even the seats of the school bus could be a good example. They look nice and are done in a simple manner. They are made without wasting material and contain anti-bacterial fabric. I look at it as as good frugal engineering example. In every bus or truck it is not about one big frugal engineering but small bits – a lot of small ideas that define frugal engineering. It is not about doing it cheap, but about doing it better. The SCR system on the Euro 6 truck is from our sister company Albonair, which already supplies parts and systems to others. We focused on how the system could be more robust, and offer the right feature set. The right dosing system for India rather than offering what is being widely supplied. Such frugal engineering would be about cutting the cost of the entire system. The antibacterial application in the school bus is more of innovation than frugal engineering, but hints at frugal engineering.

“I look at frugal engineering as amalgamating more value to the customer than the cost.”

Q. As a bus market leader, what new technologies do you think will play out in buses?
A. With so much emphasis on pollution, and on smart cities, I see intra-city buses moving towards partia zero emissions or zero emissions. I see a move towards hybrid and electric buses. Demand for diesel vehicles will continue to be there as the move up to BS VI takes place. Everyone is jumping on the electric hybrid bandwagon because of the FAME outlay. There are other technologies that are promising too. Technologies like hydraulic hybrid where hydraulics is used to store the energy. It may not be subsidised, but is relatively cheaper. With the need for hybridelectrics going up, we will see innovation playing a part. Efforts will be made to get the cost down in terms of process technologies and localisation. There are other hybrid technologies to look at like the flywheel hybrid technology. A high-speed flywheel stores energy. Multiple things are going on. Once volumes build up, many technologies will come into play.

Q. What role could India play in the area of new technologies?
A. Look at hybrid technologies, and it is difficult to say what is Indian and what is not. Lot of work is collaborative. For example, if I had to buy Lithium-ion batteries, I would look at China. Nobody makes cells in India, they make it in China. They are a mass produced commodity. Innovation comes in such that how do I make these cells operate in the most efficient manner. The key therefore lies in the battery management system. It is my bigger value addition. As the demand increases a lot of IPR will be seen to be controlled by the Indian OEMs. We may buy a motor from UK, the motor controls are with us. The way the motor works, is controlled and the way it links with the engine makes a bigger IPR than the motor. A lot is already happening in India.

Q. Back to buses, and what technologies do you see coming into the inter-city segment?
A. This market will continue to grow steadily. We are also looking at entering this market in the near future. Its a tough market, but in the next twelve to eighteen months you will see us there.

Q. How has the response been to the Neptune engine?
A. We launched the six-cylinder Neptune engine with 360 hp. The market did not move towards higher powered engines. We are therefore supplying this engine to some of our defence vehicles and marine applications. By the time the market moves to BS VI, a segment of the market will move towards higher horsepower motors. Work will start on Neptune N6 for Euro 6 compliant vehicles. The N4 version will be seen on tractors and tippers in the next six to eight months.

Q. What challenges do you foresee as the industry moves to BS VI?
A. There will be significant challenges. When you look at reduction required from the NOx reduction perspective, which is 1/8th of what it is now, and from the particulate matter perspective, which would be a 50 per cent reduction, the challenges are significant. The output of the tail pipe will be cleaner than the input. If Delhi runs these CVs, the air will be purified; that is the level of purification required. BS VI will also spring significant challenges in terms of service. The way the customer uses the vehicle, the way the engine behaves over time, and the way the aggregates work. Challenge is not just technology, it is also about validation. For validation, we need fuel by 2018 if the market were to move up to BS VI by 2020. The validation run will have to be for at least a million kilometers if not for 10 million kilometers.

Q. With product lifecycle shrinking, how are companies like Ashok Leyland tackling the challenge?
A. What used be typically a waterfall product development cycle due to concept design; due to detailed design, mockup followed by some sort of production schedule, is today about doing it in less time. The investment in Dassault Systemes platform was done to do a lot of it virtually. To do digital modelling and cascading through to production. Suppliers are also involved. Lot of things are going virtual – virtual modelling and virtual validation for example. Also concurrent engineering, internally as well as externally. All these (processes) help to do things faster.

Q. How much of your engineering efforts would be diverted towards hybrid from IC engines?
A. The market is going to be 99 per cent diesel engine oriented. And, even though its one per cent (hybrid), we are spending a lot of effort towards hybrid and other technologies. The effort that goes for this one per cent is 30 per cent. We are putting such an effort is because we believe a significant volume coming from these technologies (hybrid, electric, etc.) in the future.

Q. Does the defence part of the business make for a highly innovative effort?
A. We are involved in the vehicles. Vehicles carrying troops, missiles or guns. We don’t see a big challenge in terms of technology. When we get into more advanced weapons system it is a different ball game. Right now, it is about vehicles, and that is our forte. Talking about vehicle applications, we may have some technology partnerships. In fact, there are cases where we have done something with the partner, and the partner is so happy that he is exporting it back.

Q. How quickly is the electronic content in vehicles rising?
A. I think the electronic content in vehicles is rapidly increasing. Look at the hybrid bus; it is working with an engine, motor, generator and a battery pack. How to make these things to communicate. Go to Euro VI, and the whole brain is there. Its getting more and more complex. Electronics is going to be essential to have a fine control over important functions; to control emission levels. In hybrid vehicles, electronics play an important role in imparting seamless switching over functions. We are seeing rising emphasis on telematics, diagnostics and prognostics. Being able to say what fail mode is coming up. Electronics may be a silent thing in the background, it will however play a critical role. In the Euro VI mode, the engines will be electronic. Presence of telematics and diagnostics will go up. At the inline pump level of BS III, the electronic content may be zero. Over environmental conditions, the challenges with rising electronics will be to make the technician understand; to make the customer understand. Any failure cannot be seen but will make the vehicle fail. We are starting a training process for our dealers starting with the BS IV itself.

Trendline
Everyone is jumping on the electric hybrid bandwagon because of the FAME outlay. There are other technologies that are promising too.

The positive effect

Harrie-SchippersQ & A
Harrie Schippers, President, DAF Trucks NV
Interview by: Gianenrico Griffini

Q. How was the year that went by for DAF Trucks?
A. The year 2015 was a year of growth. With a growing 2015 heavy duty market share in Europe, we are on track towards our mid-term objective of 20 per cent. And also outside Europe where we will further expand our presence with focus on demanding markets with modern emission standards..

Q. Does the reduction in diesel price hold a key to growth?
A. Customers are benefitting from the low diesel price, and interest rates are low. That makes it attractive to invest in new Euro 6 trucks, with 5 per cent better fuel economy, proven reliability and higher resale values. All customers I spoke with recently have already completely switched to Euro 6 or are in the process of doing so. That is good for all parties as well as for the environment. All incentives that we can come up with in Europe that help people replace older trucks with newer trucks, have the biggest impact for the environment.

Q. How has DAF benefitted from the growing market?
A. DAF has benefited from the larger market. Over 30 per cent more orders were received by DAF last year for the CF and XF models compared to 2014, the highest number since 2007. To meet the high demand, production in Eindhoven (Netherlands) was increased in just four months by 50 per cent. Production has never risen so quickly, and it is a great achievement therefore. In the last three months of the year, a total of 11,500 trucks were produced in Eindhoven, which is a new quarterly record. We produced almost 41.000 CF and XF trucks last year and around 9,700 LF vehicles.

Q. To what extent has your market share in Europe risen?
A. European market share in the over 16-tonne class rose from 13.8 per cent in 2014 to 14.6 per cent last year. Our market share grew in almost all main markets in Europe. We grew more than one per cent in the United Kingdom and Czech Republic; one per cent in Spain, and we gained almost a full per cent in the Netherlands and Poland. Very important is the progress realised in Germany, where our market share grew to 10.8 per cent. Germany is by far Europe’s largest truck market and we need further growth there in order to achieve our objective of 20 per cent heavy duty share in Europe in the mid-term. The CF and XF were successful and contributed to the rise in market share. Both these truck became an additional 5 per cent fuel efficient thanks to engine innovations and new technologies such as predictive cruise control, predictive shifting and eco mode. New silent versions allow transport operators to continue distribution in areas where noise restrictions apply. Helping our customers to achieve the highest yield per kilometer, totally in line with the philosophy of DAF Transport Efficiency, our trucks currently are the most fuel efficient ever. They are also of the highest quality ever.

Q. What about emissions and the costs involved?
A. What we try to explain in Brussels is that we as an industry don’t need legislation to reduce CO2 emission. It is directly linked to fuel consumption. We simply deliver the lowest fuel consumption automatically because our customers ask for it. On top of that, more and more people in Brussels start to understand that it is very complex to make general legislation, and also because every truck is different. The Vecto tool to be introduced in 2018 gets a lot of attention now and the way we are going to declare CO2 emission on a comparable, auditable and verifiable basis will further strengthen market forces and make all manufacturers run even harder. The industry will invest enormously in future to make trucks even more fuel efficient and cleaner. Nevertheless, it is good to question whether we should spend so much efforts and cost on reducing CO2 emission from trucks. All future technologies needed to take the next step will cost our customers in the region of Euro 300 to save one tonne of CO2, whereas on the free market you can still buy emission rights for only Euro 6 per tonne. There’s a need to think about that.

“In line with the philosophy of DAF Transport Efficiency, our trucks currently are the most fuel efficient ever, and also of the highest quality ever.”

Q. Beyond Europe, what are the markets where you are marking your presence?
A. Last year, DAF entered the Malaysian and Colombian markets. In Taiwan, our partner Formosa opened a new assembly plant to double production capacity. With a market share of 17.8 per cent DAF is the largest European truck brand in Taiwan. In Brazil, the plant in Ponta Grossa will soon ramp up production. Although the economy is in a severe recession and competitors are reducing their production, we are working on further growth. It is difficult to forecast sales in Russia. The Ruble is very weak and that makes European trucks very expensive in Russia.

Q. How do you look at the DAF footprint as of current?
A. One has to be realistic. First and foremost, we apply a stepby- step approach and aim for sustainable growth. You cannot enter all marketplaces and be successful in all of them in one go. For DAF, good markets are the markets with a professional transportation system and modern emission standards. We closely monitor developments in China and India but we all know that there is no focus yet on total costs of operation like for instance in Brazil, South Africa, New Zealand, Australia and Taiwan. Truck prices in China and India vary from Euro 30 to Euro 40,000. We closely follow the developments there.

Q. How do you look at 2016?
A. This year, the recovery of world economy is expected to continue cautiously. Growth of the European economy is expected to be almost 2 per cent. Despite the unrest in the Middle East, oil prices remain at a low level. With the economic recovery, transport volumes are likely to remain at a good level, with a slight growth in the truck market as a result. For 2016, it is anticipated that the European market for heavy trucks will be between 260 and 290,000 units. The year 2016 could be the best market since 2008. And yes, the market is at a sustainable level, at or even above what under normal economic situations would be a replacement market. However, I don’t have a crystal ball, and it depends very much on how the economy develops.

Q. Will good growth come from
rigid and tractor segment?
A. Despite how the market
fares, our ambition is to grow in
both the tractor and the rigid
segment. In tractors we enjoy
a very strong position indeed.
In the last quarter of last year,
our growth in the rigid segment
was stronger. I always say that
the first 2.5 m of tractors and
rigids are same, and 80 per cent
of the value is there. In markets
where we are the market leader,
our market share in rigids is
higher than in tractors. Many
new markets, like Poland, Czech
Republic and Hungary are real
tractor markets. Tractors are used
for international transportation,
in which competition is the
most severe. I’m proud that DAF
performs best here. We have
many programmes in place to
further grow in rigids and we
are making good progress. But
when we are at 20 per cent
market share in Europe on the
mid-term, we will still be stronger
in tractors. Our objective for this
year is to carve out a 16 per cent
share in the heavy-truck class.

Q. Is the capacity expansion continuing in 2016?
A. We are having a large number of investment projects running in 2016. These include the construction of the new cab paint shop in Westerlo (Netherlands) involving an amount of Euro 100 million. In addition, tens of millions will be invested in Eindhoven for the production of new gear wheels; in a new large press in the sheet metal components plant, and in a new production line for cylinder blocks and cylinder heads. All these major investments illustrate confidence in the future of our factories in Eindhoven and Westerlo. All these investments are done to be ready for the future. I have strong confidence in the future, thanks to the best and most efficient trucks we have come to offer, that we have developed, manufactured and marketed. The trucks have been developed manufactured and marketed by over 8,000 dedicated DAF employees, and by over 1,000 dealers in Europe and across other markets.

Q. As a Paccar Group entreprise, what synergies are you looking forward to? There’s also the Kenworth and Peterbilt brands?
A. I will not be able to give you an example. Think about electronics and driver assistance systems. Sharing a cab is difficult as legislations differ across continents. Driveline synergies are possible only up to a certain level. You are aleady aware that 40 per cent of the Kenworth and Peterbilt trucks in North America are running with the Paccar MX engine, developed by DAF in Eindhoven. We have just launched the MX-11 engine in the US, and I expect this to become as successful as it is in Europe.

Trendline
For DAF, good markets are the markets with a professional transportation system and modern emission standards.

Growth and alternate fuels

MikaelBenjeQ & A
Mikael Benje, Managing Director, Commercial Operations,
Scania Commercial Vehicles India Pvt. Ltd.

Interview by: Anirudh Raheja

Q. How do you look at the Indian market now that you have moved from Indonesia to India?
A. Anders Grundstormer, Ex MD may be moving back to Sweden, he has however set the stage for Scania. He has set high standards. Taking over from Anders, I will be responsible for the business unit as we call it. We will be participating in the journey of renewable fuels with more thrust on reaching different states. We already have people all across the the country. They are in dialogue with different states regarding what should they focus on; what can they introduce, and can implement to their part for the environment. We will then try to understand as a company what we could offer before implementing different projects. Once we are done with that, we would have a clear roadmap for the country with respect to demands from different states, and move forward quickly. One of our important milestones is the start of green bus in Nagpur in August 2014. Our 55 buses are already plying on the roads of Nagpur. We wanted to show that buses can run on waste which might be a household waste, agricultural waste or sludge. We have done that.

Q. How does India fare in terms of a CV market rather than just a bus or a truck market?
A. The demand for quality products in India is picking up pace. We currently hold 35 per cent market share in the premium commercial vehicle space. We have already sold close to 220 Metrolink buses in India. We aim to take the number up to 400 buses this year. Market potential therefore is not a problem. We have delivered buses in Kerela, Karnataka, Tamil Nadu, Andhra Pradesh, Maharastra, Gujarat, Rajasthan, Punjab and Delhi NCR. We are also in talks with Lucknow, Mumbai, Pune and Bangalore for such buses. I am of the opinion that incentives can also prove to be a driving force for implementation of such buses running on (different) alternative fuels. For the truck segment we are working predominantly in the mining segment. We are now seeing a growth of up to 700-750 units. We also see a lot of potential in the on road segment as well. We will be targeting this segment of roughly 100 units. So overall, we are already targeting a potential of 1100 units this year.

Q. What is the current operational capacity of Narsapura plant? And how many people are employed at the plant?
A. The installed capacity of our Narsapura (near Bangalore) plant is 1000 buses. We are currently operating at 40 per cent of our capacity. Last year we rolled out 280 buses , this year we will be rolling out 400 buses. As far as the demand is concerned, we are fully ready to address it. We will not need to put much effort even if we think of doubling the capacity from our current capacity. If we decide to produce 2500 buses and 5000 trucks annually by the year 2020. Close to 850 people are already working at our bus factory, which I think is quite a quick growth. We aim to increase this number to 1,200 employees as the demand goes up.

“The demand for quality products in India is picking up pace”

Q. Scania buses are 70 per cent localished. Scania trucks are 40 per cent localised. What are the plans to reach 100 per cent localisation?
A. I think 100 per cent localisation will never be possible in India as we are not planning to develop engines here in India and would continue to import them. We are looking at some export markets that would want to buy products from India that are localised. In such a case, we will need to reduce the costs. I think, we have an year ahead of us, to really get down and increase the localisation of different materials in Scania products developed in India. I think this can go up to 45-50 per cent for the truck segment where as for the buses, we have not done so much on the chassis. We already have 80 per cent localisation in the body, which we can take to 100 per cent. We only need to find the right suppliers to match up to the Scania’s quality standards, which is a big problem. In the truck segment we have localized rims, tyres, mirrors, panels in the cabs; we have also localised axles since these are metal things. For an engine, you can break down and localise some parts of it. The engine can be built locally. All this will however take time. In the bus segment, I really see a scope to increase localisation in the bus body.

Q. OEMs are leveraging their Indian operations to source components and products for their locations the world over. What plans does Scania have?
A. I feel that we need to work on a broader perspective. India is country where there is shortage of electricity already. Whatever electricity is produced, the major chunk of it comes from burning coal. When it comes to biofuels we have always regarded ourselves a partner to India and our endeavour is to provide sustainable transport solutions. We are the only one who already has different fuel alternatives which can be implemented in different cities to reduce the emission levels. For Scania to export out of India, the prime target markets will be Asia, the Middle East and Africa . Countries like Turkey and Indonesia. However, as indicated above, we have to sort out things in the local market first. And I don’t think 2016 will be a year for exports therefore. I think, the year 2017-18 could see Scania exporting out of India. We have to be realistic. We are already running around on different projects. My priority will be to work on them, get them sorted before newer things can be thought of.

Q. What is it that you are looking at sorting out before you think of new developments like exports?
A. I think we are doing well in terms of body but we need to work more upon localisation of the chassis. If we are able to do that, we will be able to cut down costs drastically. We should also not underestimate the cost of logistics. To take a bus from our Narsapura plant to any state will involve much cost but to send it to Turkey will undertake huge logistic charges. So we need to figure out how much its costs before we can think about exports.

Q. There is a talk of GST and BS V emissions. What do you think about the two?
A. I think it is a good move by the government to introduce BS VI earlier than the set time line. There has to be a more collaborative effort which brings together policy makers and the private sector. We are already planning to introduce more green buses that can accelerate the pace of sustainable transportation in India. In the case of GST, the overall commercial vehicle sector will benefit a lot from its implementation. It will be beneficial for us in the on road segment where localisation is still at the level of 25 per cent. We have to pay an import duty of nearly 40 per cent, which is a huge burden and takes a toll on the overall cost of the truck. India is a price sensitive market and we have to address the expectations of our customers.

Trendline
When it comes to biofuels we have always regarded ourselves a partner to India and our endeavour is to provide sustainable transport solutions.

Global approach

Cummins-pic-1

Q & A

Kartik Ramanan, General Manager – Global Bus Engine Business, Cummins Inc.

Interview by: Anirudh Raheja

Global approach

How does a variation in technology implementation take place at Cummins?

We do ‘fit for market’. Many years ago, we used to develop the technology in US, and then roll it out in other areas. But this approach does not help us any longer. What we have consciously done in the last few years is to enhance our understanding of the markets, which is why we have organised our bus business, which we did not have earlier. Today we have a complete team which looks after our bus business globally. We have people in India, China, US and Europe as well. There may be things that we do like stop-start technology where we cannot just take it off the European shelf and apply in India. So we may take it to the application engineering level in India and see what the constraints are. What constraints are particularly there for the Indian market and adapt it accordingly. But that is just one part. The other part is, we do products exclusively for India. In fact, we often bring it back to the advanced markets. We have already started; we are already running in that direction. If a product made in US can be used in India, why not a product made in India find use in US. One has to adapt.

So, will India be a potential start-stop technology hub and market?

Typically, we have a launch in one area and we always look to leverage the technology in other parts of the world. India is one area where we are actively looking at stop-start technology. Traffic in India is a major problem in various cities. There are still a few things from which we have to weave our way through. Transmissions for example. As to how it (start-stop tech) can mesh up with correct transmissions. Whether stop-start versus manual or stop-start versus automatic; it will take sometime for us to get through.

Many parts of India are moving to Euro 4. How do you look at the implementation of stringent emission norms?

The issue is more about execution, than about capability. I think capability is there. It is difficult for me to say how it will go through but the jump from Euro V to Euro VI is significant. And moving from Euro IV to Euro VI will be a bigger leap. As far as execution is concerned, it will be in two levels. First of the two will be the infrastructure. Infrastructure needs to be ready. The second of the two will include the markets. Markets need to be ready to accept the kind of jump that will be needed. It is a huge jump in terms of initial costs, and it will come down to a decision, that will it be worthwhile putting the economy or market in jeopardy or in peril? If you don’t have buyers, then the new technology is of no use. In my opinion, there will be practical limitations for the implementation of Euro 5, but from the support stand-point we will support it.

There are three injectors working instead of six in start-stop technology. Doesn’t the pressure on injectors increase?

It is true that we have three injectors instead of six in start-stop technology. We are however also looking at a technology which can give infinite start-stops. In a market like India where traffic is a huge problem, it can be a kind of hybrid. Currently we have an SCR solution and EGR solutions as well. But SCR has a better life-cycle for the better (life) part of the engine. So, it all boils down to the initial costs involved.

What role does India play in terms of new product development at Cummins?

What we are working on is power density and making the engines more compact. Moving on from six cylinder to four cylinder engines will happen, but we need to be more careful. In Europe, we have already done that from 9-litre to 7-litre engines, and now from 7-litre to 4.5-litre gradually. There are some duty cycles which can support that trend. A potentially plain area can take that kind of technology easily, but for a hilly terrain, a six cylinder engine has its own benefits. There are specific challenges in India, Return On Investment (ROI) specifically. I think there is a lot of technology that you can put into India, but diversification in geographical conditions alter the approach to a big extent.

VRV Sriprasad, Managing Director, Volvo Buses India

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Article by: Bhushan Mhapralkar

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.

 

Trendline

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

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Article by: Gianenrico Griffini

Marc Llistosella, President & CEO, MFTBC, and Head, Daimler Trucks Asia

Interview by: Gianenrico Griffini

Higher horsepower

 

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.

 

Empowering Transporters

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Article by: Rajesh Rajgor

Interview by : Rajesh Rajgor

Q & A , Nalin Mehta, MD and CEO, Mahindra Truck and Bus Limited.

Empowering Transporters

Q. Away from building and selling commercial vehicles, what have the seven MPOWER programmes and two Mentor summits delivered?

A. There was an impression that the young generation is not excited about venturing into the transport industry. The amount of hard work and dedication shown by young transporters at the MPOWER Programme, which we conduct with IIM (Ahmedabad), tells a different story. How excited they were was more than visible when we challenged them with the MPOWER War Room. They were told to implement what they learned during the course. Close to 26 case studies were short-listed in the first MPOWER War Room. It did not take long to realise that the young transporters are eager to venture into the transportation industry, They want to however break away from the trodden path; drive in more professionalism. The Mentor programme thus was the outcome of the learnings from the MPOWER youth programme. The veterans felt that their prodigies carried a false impression of having learnt it all. While they understood that one of the gains that will surface from the Mentors’ Summit will be networking but the extent of that networking surprised us. They (veteran and his prodigy) may not be competing in every area, and through these programmes they have learnt how to collaborate. This is something that we think has been delivered.

Q. How has such an endeavour reflected on the sale of your commercial vehicles?

A. We are new in a marketplace that contains brands that have been there for 30-40 years. The whole business is about relationship and trust. It is necessary to understand that every activity should not be linked and converted into sales. If you see these things and then judge whether we have gained or not; the gains are bigger than what you see on the ground. The gain is not just in terms of people, we have touched; we have created a relationship. Many transporters for instance won’t even give us a hearing. They are big in their own ways and have large fleets. The relationship that has been developed assures that we are heard. It also helps towards building mutual trust. This reduces the resistance, and increases their propensity to look at our brand. Our trucks and buses are a little ahead of its time. By creating a mindset for the future, we are creating a place for ourselves. So to measure the success of our programme in terms of sales is not right. When it comes to the market share, we have a very good amount of it. There are only two OEMs who have grown in market share. Last month (June 2015) we recorded a 3.3 per cent market share in HCV and about 9 per cent market share in LCV segment. We sold about 1100 LCVs and HCVs.

 

Q. How would the announcement to invest Rs. 500 crore relate to performance in terms of sales?

A. One part of the investment will be towards the expansion of our current product range and to enter into Intermediate Commercial Vehicles (ICVs). Second part will go into a new range of LCVs, and in the design of new cabin and a new chassis. Third part will go into the upgrading of the current product range. A BS IV vehicle has to be engineered; new variants of the existing products are to be brought out. There’s also a 49-tonne (tractor-trailer) that will come. We are also doing a 8×4 tipper. We are also doing a rig version for the tube well drilling industry. As you may have found out, we are continuously investing money. It will take us three years to bring the ICV. So I see MTBL (Mahindra Truck and Bus Ltd.) to be a significant player in the next three years.

 

Q. Are you still using Navistar engines for your trucks?

A. Yes, the engine is from Navistar. As you are aware, we had a joint venture with Navistar. We have a perpetual technology agreement and we pay royalty to them. Any further developments we do in the engine is our own, and they can take it from us at a price. The engine is very fuel efficient. Even more fuel efficient versions will keep coming as fuel efficiency is a never ending game. Right now our engines are as good or even better than the class leading products. Everyone claims that their engines are class leading. We are saying it on the basis of the share we are gaining. It is a proof that we are moving in the right direction. Our cabin is the best in the industry. Our chassis and aggregates are the strongest. Many of our trucks have gone past three lakh kilometres and the robustness is still the same. We have got feedback that even after using for four years the cabin is as intact as it was when new. The common-rail engine we have, we will offer in our 40 and 25-tonne vehicle. The wet liner technology does not mean the complete engine has to be pulled down to overhaul. We have individual heads for every cylinder. Every bit need not be taken apart. Apart from a modern engine, our cabins are also modern. They have been crash tested, and as of today there is no need to add more safety elements to it. The cabins are already 10 years ahead of their time. We have followed norms that are still not mandatory in our country. It can therefore travel to any developed country right now.

 

Q. Does the engine perform in terms of regulations?
A. The engine is already BS III emission compliant. It will take minor (after treatment) work to upgrade it to BS IV.

 

Q. How do you look at driver shortage. Are you planning any empowering programme for them?

A. The transport excellence awards that we present include an award for drivers. We gave one driver a truck and made him the owner. We gave one truck to the first women driver, Yogita Raghuwanshi. Each year we award drivers. There references are provided by fleet operators. This is our way of encouraging drivers; by motivating them to become a truck owner. The first driver whom we gave this award has already bought another truck. We are also conducting Mahindra Saarthi Abhiyan where we give scholarships to the daughters of truck drivers who strived to educate their daughters beyond tenth standard. We see it as recognising the efforts of the driver. The girl can opt for any course she may like. We give Rs.10,000 as scholarship. We would have dispersed one-crore rupees last year. Even this year we will conduct the Mahindra Saarthi Abhiyan.

 

Q. How big is the MTBL dealership network?

A. In the last three years we have set up close to 63 facilities. In addition, we have close to 53 authorised service stations, which also act as expert local workshops. We have trained 1400 local mechanics, which are connected through our call center. They also act as our road side assistance (RSA) points. So if a truck has met with an accident, the operator calls our call center. The call center in turn calls the nearest RSA point. It reaches the location of breakdown and conducts the repairs. Our call center is multi-lingual, and manned by engineers. The prime service center at Pune is where the call center is. The call center thus doubles up as a service center. So, when the driver calls, it is easier to figure out if a ASC (Authorised Service center) or a RSA should be pressed into
the job.