Q & A
Head – Sales & Marketing, Value Trucks, Mining Business, VE Commercial Vehicles Ltd.
Interview by: Ashish Bhatia
Q. How has the Pro 6000 tipper series evolved in line with the BSIV norms enforcement?
A. The Pithampur plant has been exporting EuroIV and EuroV engines to Volvo Trucks and other (Volvo Group) brands since four years now. In terms of technology, Eicher engines were upgraded to comply with BSIV emission norms much before the respective norms came into effect. In the case of Pro 6000 and Pro 8000 series tippers, we are using Selective Catalytic Reduction (SCR) technology to meet BSIV emission norms. At VE Commercial Vehicles (Eicher), we have already sold 100 units catering to different applications and across segments.
Q. Was it just the inclusion of SCR technology that made the trucks BSIV emission norms compliant?
A. We adopted globally proven SCR technology to meet the BSIV emission norms. SCR technology is one of the most advanced and fuel-efficient technologies that can reduce diesel engine emissions (PM and NOx to near zero levels). In the SCR system, the exhaust gases are treated outside the engine and in the exhaust system. This paves the way for the engine to run in an optimised manner, and leads to enhanced reliability and significant improvement in fuel efficiency as compared to a BSIII engine. The SCR after-treatment works such that a liquid-reducing agent is injected through a special catalyst into the exhaust stream of a diesel engine. The reducing source is usually automotive grade urea, also known as AdBlue or AUS32. AdBlue (urea) sets off a chemical reaction that converts nitrogen oxide into nitrogen, water and tiny amount of carbon dioxide (CO2), which is later expelled through the vehicle tailpipe.
Q. Have the prices risen due to the upgrade to BSIV emission norms?
A. Compliance to BSIV emission norms means the exhaust gas emitted by the vehicle should adhere to the specified limit (3.5 g/kWh) as per the Central Motor Vehicle Rules. To comply with the norms, certain design and technology changes to the engine, fuel injection system, catalyst, filters, sensors, etc., were necessary, and have been done. We are looking at a five to 10 per cent price increase across the Pro 6000 and Pro 8000 series tippers.
Q. Was there any inventory impact due to the transition to BSIV emission standards?
A. It is not unusual or abnormal to be left with an inventory at a certain point in time. There will always be some inventory in the channel. It is a regular phenomenon – to have three weeks to a month worth of inventory. We were left with around 2,000 units. It will be easy for us to export at least 50 per cent of our inventory and convert the remaining to BSIV standards.
Q. How have you leveraged the synergies with Volvo Group as you export engines?
A. Pro s eries is designed and developed with the Volvo Group processes and technology. It also seeks synergies with Eicher’s frugal engineering abilities and local expertise. The VEDX5 and VEDX8 engines have been designed and developed in collaboration with the Volvo Group, and use the latest Engine Management System (EMS) and after-treatment system.
Q. In terms of customer support, what preparations did you do as part of the move to BSIV?
A. At Eicher, we are constantly increasing and upgrading our service network. In our dealer development program, we create awareness as well as ensure necessary steps are undertaken to increase competency levels may it be the move up to BSIV emission norms or for any other service requirement.
Q. How useful are the customers finding the Eicher Live fleet management solution?
A. The ‘Eicher Live’ fleet management solution offers class leading features with uptime management as one of the core services. It plays a crucial role in providing proactive uptime support to the customer. The uptime services in turn enable the service team to proactively schedule and plan repair and maintenance activities. The truck is thus optimised for higher revenue generation. The proactive services enable us to identify faults generated by the vehicle and schedule preventive maintenance. This leads to fewer unplanned stops. The service team is also better prepared to attend to the customer needs. In an unlikely event of breakdown assistance, the service team is well prepared. Availability of specific diagnostics information (fault codes) enables it to arrange for the right parts, tools and the right technicians to minimise downtime. The dynamic service reminders in case of mining trucks ensure a change in vehicle utilisation in-line with the customer needs.
Q. How was the performance of Pro 6000 and Pro 8000 series in FY2016-17? What is your expectation for growth in the current fiscal?
A. With Pro series tippers, in the mining segment, we increased our market share to 21 per cent in FY2016-17. Growth has been phenomenal till date, and in-line with the robust performance of the tipper segment. The Eicher market share stands at five per cent across different tonnage, power range and segments (applications). Our market share varies between 10 per cent to 12 per cent. The tipper segment drove heavy commercial vehicle sale last fiscal. The Total Industry Volume (TIV) grew by 27 per cent on account of construction, quarry, infrastructure and core sector projects such as road, ports, irrigation, railways and smart cities. However, demand on mining side was little subdued due to lower off-take of coal coupled with skewed demand for cement. In mining trucks segment, we have increased our market share to 21 per cent in FY2016-17. Eicher achieved a growth of 12.5 percent in volume terms, at more than 58,000 units against 52,000 units during the last financial year. The industry, in comparison, grew four per cent. Over the short-term, we see some challenges, and mainly due to pre-buying and customer postponing the decision to purchase due to the need for clarity of taxation upon GST implementation. Over the long term, demand is expected to pick up on account of the on-going infrastructure development initiatives, stricter enforcement of regulatory norms especially related to vehicle length for certain applications and the overloading ban. We expect to witness a growth of eight to 10 per cent. With wide range of tippers (from 16- to 31-tonnes), and tailor made offerings for various segments (applications), we are well placed to tap the rising potential in the construction and mining (tippers) industry. With the massive infrastructural push announced by the government for the financial year 2017-18, and the highest ever budget allocation of four-trillion across infrastructure sectors announced in the union budget, we expect the tipper market to touch 65,000 numbers in FY2017-18. We will continue to strengthen our position in the heavy-duty truck market,
Q. What are the export volumes like for the Pro 6000 and Pro 8000 series tippers?
A. Our exports volumes have improved over time. In FY2016-17, we recorded the highest ever export volumes at over 8000 units as compared to the export of 6512 units in the last fiscal. We command a strong presence in South Asia, and in some countries in Africa and the Middle East. We plan to leverage the distribution network of Volvo Group in Africa, the Middle East, South East Asia and in Latin America to drive exports. The new products that are being revealed now will also be adapted for export markets.
The tipper segment drove heavy commercial vehicle sale last fiscal. The Total Industry Volume (TIV) grew by 27 per cent.