Story by : Jeffry Jacob and Dr. Wilfried Aulbur
Technology plays an important role by ensuring productivity, higher uptime and efficiency. It is contributing to lower TCO.
The Commercial Vehicle (CV) industry is heavily influenced by the development of the transportation industry, including changing logistics business models, the world over. The industry is always adapting to increasing competition, new mobility concepts, and transparent fleet management; forcing existing OEMs to modify their business models to compete more effectively. Technology plays an important role in such an environment, helping to clock higher uptime, up productivity and efficiency while leading to lower Total Cost of Operation (TCO). As per the Roland Berger 2025 study we believe four mega trends – Efficient, Green, Connected and Safe – will shape the CV industry and define the road map for the next few years. Technology plays a critical and integral role in translating ‘Efficient’ into lower TCO, better fuel economy, vehicle platooning, higher uptime, optimum fleet management, etc. ‘Green’ subsequently translates into meeting stricter emission standards, increasing after-treatment applications, improved aerodynamics, alternative fuels, noise reduction, light weighting, etc. ‘Connected’ translates into remote diagnostics, performance analysis, telematics, etc. ‘Safe’ translates into accident free transportation, driver assistance systems, pedestrian safety, intelligent traffic warning, autonomous driving, inter-vehicle communication, etc.
Regulators globally are becoming stringent. They are coming to play an important role in promoting the use of technology, mainly through legislative mandates such as fuel standards, emission and safety norms. At the same time, fleet operators and logistics companies are keen to leverage technology as future drivers of profitability. OEMs, at the other end, are viewing new technology areas as a potential to boost their profit pools. Several technological features such as emergency braking assistant, intelligent cruise control, brake assist and hill-holder for distance control; backup camera for parking; electronic stability control and lane monitor for directional stability are being adopted in varying degrees by CV customers globally. We can, in the medium term, expect to see further development and adoption of technologies such as blind spot warning, blind spot monitor, night-view assistant, active lane assistant and parctronic. More advanced features such as lane-change assistant, stop and go assistant, active lane-keeping assistant, manoeuvring assistant and backup assistant are expected to be available in the long term.
The EU has mandated, that from 2015, all new trucks must be equipped with lane departure warning system, and from 2018, they should be equipped with advanced emergency braking systems. The focus beyond Euro VI emission norms will be on greater fuel efficiency as a major lever to reduce TCO. This is of particular importance not only in reducing the cost of operations and helping to keep the environment cleaner, but also to help reduce sovereign dependence on imported crude for most developed and emerging economies.
Eyeing future requirements
Several global OEMs have already started incorporating advanced technologies. Many have developed concept vehicles keeping in view the future customer requirements such as efficiency, reduced environmental impact, driver comfort and safety, and improved perception of transport. For example, tyres with low emission noise and better engine casings. MAN Concept S (drag co-efficient of 0.3) with modified semi-trailer achieves 25 per cent fuel consumption reduction in comparison to conventionally equipped 40-tonne long-haul trucks. Leading manufacturers such as Daimler, MAN, Volvo and Iveco are continuously focusing on next generation technologies. Daimler, for example, is actively pursuing development of the third generation Active Braking Assist (ABA3). ABA3 will be able to bring a truck or a coach to standstill if necessary when faced with stationary obstacles, thereby avoiding over half of all rear-end collisions involving heavy commercial vehicles. Further developments in ‘Lane Assist’ systems are being worked upon. These, in addition to giving visible and audible warnings when a truck is about to leave its lane, will also actively keep the truck in its lane and steer the truck in case of a dangerous situation.
Technological innovations from passenger vehicles are finding their way into commercial vehicles. Entering into series production on the Mercedes-Benz S-Class in 1995, Electronic Stability Program (ESP), within a few years found its way into commercial vehicles albeit in a more complex form, and configured to suit a wide range of variants with different wheelbases, axle configurations, bodies and load conditions. ESP has now been successfully applied for 20 years; has firmly established itself as a standard equipment. Another example is the emergency braking assist, which is found on cars, vans, trucks, buses and coaches alike.
Technology in the Indian context
CV is an important part of the Indian economic growth engine, and an indicator of the GDP growth. Currently subdued, green shoots are already visible. Their growth trajectory will resume sooner than later. In such a scenario, technological advancements will be a key to the future growth of CVs in India as well. An average truck sold in India costs far less for an equivalent specification as compared to a truck sold in Europe. It carries the same weight, and in some cases, more. Its exposure to tough terrain conditions means it has to be durable too. This is possible only through innovation. Innovation in product or process design would ensure that its function is satisfactorily fulfilled. In addition to the technological influences of the West, Indian manufacturers would need to leverage technology effectively to reduce overall cost of ownership and meet stringent price points demanded by the operators, at the same time satisfying all functional and regulatory aspects.
In the case of regulatory aspects, the main focus will be emissions and safety. ABS has been made mandatory by the Government of India for commercial vehicles. This is expected to lower India’s high road accident and casualty rate. It is amongst the highest globally. Commercial vehicles are also expected to be fitted with speed limiters to prevent drivers from speeding beyond 80 kmph. The government has announced its firm intent to encourage sales of electric and hybrid vehicles in India under FAME (Faster Adoption of Manufacturing of Electric and Hybrid vehicles in India) through incentives for both battery operated and hybrid models. Incentives range between Rs. 17,000 to Rs. 1.87 lakh for LCVs, and Rs. 34 lakh to Rs. 64 lakh for buses. In a country like India where sourcing qualified drivers is a Herculean task, technology will ensure better driving comfort, less driving stress and a safe experience. Systems such as Advanced Driver Assistance System (ADAS) will further reduce overall cost for fleet operators by ensuring accident-free transportation and minimising downtime due to driver error.
Technologies like advanced fleet management systems, adaptive cruise control, telematics, etc., will get more pervasive in India. They are currently available and used widely in other parts of the world, and have already proven themselves in the area of fuel savings and to reduce the cost of operations. Truck connectivity implies a multitude of solutions and potential profit pools for Indian OEMs, setting the ground for enhanced services and new business models. Some of the key areas of connectivity include vehicle management (remote diagnostics, maintenance planning, remote function download, breakdown call, vehicle protection), load monitoring (temperature management, load detection), driver management (driver entertainment, emergency call, performance analysis), operations/logistics management (order management, trip records, smart navigation) and time/legal management (time recording, tacho management).
According to a recent Roland Berger study in India, M&HCV fleet owners are increasingly accepting telematics solutions, while looking at them through the lens of productivity, efficiency and cost savings. Telematics has so far had a low adoption rate in India. Reasons include price sensitivity, infrastructure deficiencies (data network, connectivity of local authorities and business partners) and fleet ownership patterns (huge proportion of small fleets with low degree of professionalism). The development towards larger and more professionalised fleets, logistics providers have started favouring telematics services. Customers are also increasingly demanding telematics from their logistics providers. As a result OEMs are also focusing on investing significantly in such areas.
Technology a key to road safety
Technology is the key to increasing road safety in India which has one of the highest road fatalities globally. Currently there is no widespread application of driver assistance programmes in India that will make driving safe for both, the driver as well as other vehicles on the road. Technology will play a key role in the development of CV market in India and will be driven through lasting tangible benefits to OEMs, suppliers as well as fleet operators in terms of lower cost of operations and better safety. The enforcement of ABS and revised Bus Code will enhance safety while also leading to challenges such as price increase. Features related to safety, telematics, etc., are expected to be driven more due to competitive pressures than due to regulatory norms. OEMs have a key role to play in the adoption of technology by customers through tailored solutions. They have the task of providing customers with a convincing TCO business case and adopting a syndicated approach to address current infrastructural deficiencies in the market.
Current day trucks are miles ahead of what was available a couple of decades ago. They are beginning to rival passenger cars in terms of innovation. While changes in technology upgradation are critical in countries like India, they have to be driven in a clearly defined manner. It may be driven by legislation in areas such as emissions and safety, or through customer pull in terms of higher reliability and value-added features. Technology can be applied across the entire value chain. It can impact all the stakeholders, including aftermarket participants through better maintenance, fault diagnosis and easier diagnosis in case of vehicle repairs. By the next decade trucks will be a lot cleaner, efficient, connected and safer. Europe will most likely lead this wave, but emerging countries like India, with one of the largest truck parcs, will not be left behind. It cannot afford to stay back..
Jeffry Jacob is Principal at Roland Berger Strategy Consultants (India), and Dr. Wilfried Aulbur is Managing Partner & CEO (India), and Chairman – Middle East & Africa and Head Automotive Asia at Roland Berger Strategy Consultants.