Mahindra Truck and Bus To Invest Rs 600 Crore For Gaining Grip In ICV Segment

Mahindra Truck and Bus Division (MTBD), formerly called Mahindra Navistar, is a commercial vehicle manufacturer formed in 2005. Its CEO Designate Vinod Sahay, while responding to BW Businessworld on email, affirms that Mahindra’s commercial vehicle (CV) division will be its future growth engine wherein it will be pumping in Rs 600 crore for a wider presence in the Intermediate Commercial Vehicle (ICV) segment. Edited excerpts:

How important is the CV division for Mahindra and Mahindra? How big is the company betting on it?

Our CV division is a relatively new business which is gaining traction with every passing day and promises to be an important growth engine for Mahindra and Mahindra (M&M). This division has a direct linkage to the growth of the economy. With India’s GDP expected to achieve a peak growth rate of 7.8 per cent by FY 2020 thanks to the rising per capita consumption, growth in infrastructure and mining sectors, the outlook for CV business is very positive. MTBD, with its vast range of modern HCV and light trucks and buses, is well placed to leverage on this buoyancy and contribute to M&M’s growth.

What kind of product lines is the company working on to enhance its presence in this segment especially in the HCV space?

As far as HCVs are concerned, we already have the full range from 25 to 49 T. From time to time, we are adding variants as per the changing market needs. Parallelly, we are in the process of firming up our brand new ICV range and also refreshing the existing LCVs.

How will your products be anything different from your peers?

We are able to offer a strong proposition due to our category best BS IV Engine, ‘FUELSMART’ switches to help truck drivers toggle between higher power and better fuel economy depending on road and load conditions, SMART SCR Technology that is simple, efficient, low on maintenance and future ready.

How are your key strategies that will give you an edge over well-entrenched players like Ashok Leyland, Tata Motors, Eicher, etc.?

In order to impart (our) customers a 360 degree satisfaction, we have even guaranteed uptime (breakdown repair in 48 hours or Rs 1,000 penalty a day), service reach (service reach within 2 hours on Mumbai-Service Corridor or Rs 500 penalty per hour) and Parts availability (ready availability of 150 spares from our ‘Parts Plazas’ or they are given free). Our confidence in the performance and superiority of our products is such that we have extended the same mileage guarantee to our LCV load vehicles also.

Is M&M’s sharp focus on the CV arm largely due to its PV segment getting impacted by competition and other factors?

Competition is intense in all segments (including utility vehicles). And as explained above, given the strong credentials of Indian economy and a promising future, MTB will play a vital role as a growth engine for M&M.

What kind of investments is MTBL making over the next few years to ramp up its operations?

The periodic investments for technological advancements and portfolio ramp up is an ongoing and focused exercise for the Truck & Bus business. The details of the same are classified. We have already announced and are in process of execution of Rs. 600 crore investments towards expansion of our range in ICV segment.

What is your current market share in the domestic CV market? Also, what are your current annual sales and long term projections?

Our market share in the HCV segment is around 5 per cent and we look to double the same by 2020. Our current annual sales are more than 14,000 units per year and we expect to more than double those numbers by FY 2020.

Which are the key markets where you are currently shipping out products and going forward which are the prospective markets going forward?

Currently, we are shipping out our products to Nepal, Sri Lanka and Bangladesh, which are basically right hand drive markets. We have also started developing business in African markets.

Lastly, what is your vision for the company and where do you want to see the company by 2020?

Our long-term vision is to become the most trusted CV brand in India. And the chosen route to make this happen is by imparting 360 degree guaranteed experience to our customers. As regards 2020, as mentioned earlier, the mission is to double the volumes and market share from current level.