A major market share eyed by Volvo and Eicher group

The Indian auto market has witnessed several global auto makers and after the high profile passenger car market, it is the truck segment which has been in the lime light. Now it has been reported that it is now over three years since the Volvo group and Eicher Motors came together to create VE Commercial Vehicles and according to its Chief Executive Officer, Vinod Aggarwal, the best is yet to come.
He said that, “It has been a wonderful joint venture and the trust between the partners has been the high point of this journey. We now want to do a lot more in terms of products and synergies.” The strength lies in the business processes of Volvo and its profound knowledge of reliability issues and after-sales. Eicher is learning these aspects and implementing them in its daily working schedules at the Pithampur plant. It was said that in addition, there is a full-time person from UD Trucks of Japan working on quality management who is driving change within the organisation. Incidentally, Volvo group owns the UD Trucks (formerly Nissan Diesel). “Our results speak for themselves in terms of margins which have almost doubled to nine per cent. In my view, processes are more important because you learn to carry out your business a lot better. We would like to have better efficiencies in productivity, marketing practices and so on,” Aggarwal said.
As the report further said that, VE Commercial Vehicles is now implementing an engine project to cater to Volvo's needs in Europe. These are Euro 6 engines which will be made here and tested in Europe. They can also be adapted for India's Euro 3 and 4 emission norms. From the Pithampur plant the company plans to produce 5,500 trucks each month through 2012. The optimum capacity here is 7,500 units which could be less than three years away if the present growth momentum continues. The focus will be on heavy duty trucks (over 15 tones capacity), where VE Commercial Vehicles has a market share of barely 3.5 per cent. It was mentioned that clearly, it is not an easy market to operate with strong players like Tata Motors and Ashok Leyland as well as competition coming in from the likes of Daimler and Scandia. “Results will take time because it is a business proposition, and not a status symbol, for the customer. He looks for reliability, fuel efficiency, comfort, turnaround and maintenance costs,” Aggarwal said.
Eicher is also planning to grow its brand presence in buses where it has a relatively strong presence in the light and medium segments. Plans are under way to ramp up its business of intercity coaches and low-floor city buses. It was reported that once Volvo's four global brands (Volvo, Renault, Mack and UD Trucks) eventually enter the Indian market; they will operate in tandem with Eicher's own range. Thus far, the Swedish company's presence is largely confined to tippers assembled at its Hoskote plant near Bangalore. According to the business model, sales and distribution of all Volvo truck brands (and not buses) in India will operate through the joint venture which means manufacturing can be done anywhere.Automobile News