Eicher-Volvo bets on commercial vehicles with four new products

(chinatrucks.com, Feb.09, 2010)VE Commercial Vehicles (VECV), the joint venture promoted by Eicher Motors and Volvo, has lined up four new product launches this year as it prepares to take advantage of the surge in commercial vehicle market.

On the horizon are a 6x4 tipper and a semi low floor city bus under the Eicher brand, besides a new tipper and tractor trailer under the Volvo brand.

The JV's plans to pump in Rs 500 crore by 2012 remain on track. This investment would be used to ramp up production beyond the 4,000 units per month capacity available at Pithampur at present, enlarge the components and engineering solutions business and capture significant market share in heavy duty trucks and city buses.

Siddhartha Lal, MD & CEO told DNA Money the company has set itself ambitious market share targets by 2015.

"We are looking at a 15% share in the heavy-duty truck segment against only 2% now; 30% in light and medium duty from 27% now and 20-25% in city buses. We also want to retain our 70% share in the high value CKD truck market with the Volvo brand."

Lal said the overall CV sector sales have improved drastically because the rolling population of primary-usage CVs came down last year after most transporters stopped buying trucks. Rolling population, according to industry estimates, stands a 3.5 million trucks and buses in the above 5-tonne category.

"This has to be replenished. We see an encouraging buying trend here…t here is a strong sentiment. Transporters are saying 'Is saal hum kharidenge'."

To a question on whether VECV had been asked by Volvo for permission to manufacture and export trucks other than the Volvo brand trucks from its Pithampur facility (on payment of a fee), Lal replied in negative.

"VECV has the right to manufacture all Volvo group trucks in future. But exports will be only under Eicher brand for trucks and buses. Volvo group trucks are already being produced and exported from Pithampur." He acknowledged that the company was sitting on a "huge" chunk of cash but said no acquisitions were on the horizon just yet.

Views:0