Volvo Eicher Commercial Vehicles (VECV) clocked strong sales in April. With hopes of a strong monsoon that will push boost rural demand, VECV is now hoping for a faster ride in FY17.

Speaking to  Bloomberg TV India, VE Commercial Vehicles CEO Vinod Aggarwal says the company has launched three new trucks in the last three months. It will continue to launch more variants and models in the FY17 to increase its market share, which has been rising in all the segments, he said.

How much of sales revenue come from the domestic market and what is the export component at this point in time?

Of the total revenue, 10-15 per cent comes from exports and the rest from domestic market. We are largely dependent on the domestic market. But, going forward, we will continue to improve exports.

This year’s monsoon is expected to be above normal. What is your outlook in terms of demand from rural India?

A normal monsoon is definitely going to be very good for the auto sector because it will spur rural income. And, if there is a positive sentiment in the rural markets, I think that is good for the truck market as well, especially for the smaller and medium truck segment. Heavy-duty trucks are dependent on a lot of other factors. But, for smaller trucks, a lot of positivity comes from the good monsoon or prosperity in rural markets. We are looking forward to good traction based on that. 

How are you contemplating the rural demand? Can you quantify that in terms of sales growth? What is the volume growth that you are expecting in FY17?

For the rural market, the demand comes for the transportation of their produce from the rural areas to the urban mandis or urban areas. And if the crops are good, then, of course there will be more requirement of movement.

And, if there is more prosperity, people will buy more trucks. They will replace their old fleet. If the monsoon is good, it will also spur growth in the entire economy. If the rural incomes are good, they will spend more. If they spend more, there will be more demand for all the consumer items. And, if there is more demand, there will be more movement of goods. 

Certainly, many of our industries are looking for a revival in demand. But, when we talk about commercial vehicles in particular, there is stiff competition. Demand has been muted. In this current environment, how much do you think you will be able to improve market share in the commercial vehicles sphere in FY17?

As far as VECV is concerned, we have been consistently improving our market share in all the segments. If you look at light and medium duty trucks —5-15 tonne trucks — our current share is 35 per cent. And, if you recall the year when we started the joint venture, we were at just 26 per cent.

Year after year, consistently we have improved and have taken our market share to 35 per cent now. And, if you look at the bus segment, we were at 6 per cent in 2008 when we started the joint venture. Now, we are 15 per cent plus.

If you look at heavy-duty trucks, we were at 1 per cent when we started operations. Our market share is now at 6 per cent.  

Typically, we see a lot of launches in a year by commercial vehicle manufacturers. What about your own launch pipeline?

If you look at the last three months, we have had three new launches. In fact, this month, in the first week, we have launched 37-tonne gross vehicle weight PRO 6037 truck. And around the same time, we have also launched PRO 1110XP.

And then we launched PRO 1049, which is a 4.9 tonne truck. Going forward, we will continue to launch more variantsand more models in the FY17.

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