Volvo-Eicher upbeat even as BS VI deadline looms large

Mention BS VI to Vinod Aggarwal and he breaks into a huge smile.

“We have six years of experience in manufacturing Euro 6 engines and exporting them to Volvo group,” says the Managing Director of VECV. The joint venture between Volvo and Eicher Motors has its manufacturing operations based in Pithampur, Madhya Pradesh.

It is this headstart that gives Aggarwal the confidence that his company is well set to take on the challenge of the BS VI, or Bharat Stage VI emission norms that come into effect from April 1, 2020.

“We have also had a lot of learning from the Volvo group and what sort of experiences they have had with their customers on Euro 6 engines,” continues Aggarwal. As he stresses, Euro 6 is a “very complicated technology” as it involves a lot of aftermarket-related learning.

Rich experience

“We have the experience of manufacturing, aftermarket, etc and have incorporated all these into our manufacturing, processes and design of BS VI engines,” says Aggarwal. It is this base that he believes will put VECV in “a relatively better position” to deal with BS VI vis-a-vis competition.

There are, of course, modifications to be done in the Indian context since this is effectively about specific solutions for each market. Hence, manufacturers need to develop the entire after-treatment system that is relevant to the specific country they operate in. Duty cycles differ across the world and it is, therefore, critical to design the appropriate fuel injection system particular to a certain region.

“You cannot pick up the same system of after-treatment or fuel injection that is relevant in Europe. Here in India, driving and road conditions are different and you need to have these engines adapted to our needs,” says Aggarwal.

VECV also has the “widest range” of diesel engines (2, 3, 4, 5 and 8 litres) as well as two CNG engines. This effectively means that there are seven basic engine platforms for BS VI, which will be fitted in all its trucks in India ranging from four to 55 tonnes.

The biggest advantage for VECV is that it is a critical component of the Volvo group globally, which means that there is comfortable access to some of the best brains within. For instance, Volvo has had an alliance in China with Dongfeng Motors for nearly five years now and there is always the possibility of synergies with VECV.

Next Monday will see China stepping into its own China VI emission norms where the first phase (China VI-a emission standard) will involve heavy trucks. While Aggarwal did not make any reference to this subject, observers say it is only logical to assume that there are “potentially huge synergies” between Dongfeng Commercial Vehicles and VECV, the Volvo joint ventures in China and India respectively.

Consequently, there could be some action happening in the entire Asia-Pacific region. It is in this context that the recently launched Pro 2000 series by Eicher becomes part of the global script. “These trucks have huge export potential and we have started leveraging Volvo markets worldwide,” says Aggarwal.

Since this range can compete with the well established Japanese brands under the UD Trucks brand, Eicher is confident of a bigger play in ASEAN (especially Indonesia, Malaysia and Thailand) as well as South Africa.

Back home, the market is not in great shape but Aggarwal is quite upbeat about better days ahead. “We cannot do business if we are not optimistic, we always need to be positive. Road construction activity is poised to pick up in a big way and this will be a huge boost for trucks,” he explains.

Cyclical industry

According to the VECV chief, the auto industry is cyclical with its share of ups and downs. “Right now, it is a drop but I am not overly concerned. Of course, things are not so great but it is not as if all all is lost,” he says.

Once the economy begins firing on all cylinders in due course of time, there will then be a great need for movement of cement, coal, steel and consumer products. “This will mean demand for new trucks which are more efficient,” says Aggarwal.

From his point of view, the introduction of GST has done away with physical barriers like octroi which have helped in faster movement on the roads. This, in turn, will eventually make old and slower trucks obsolete.

For now, in the short-term, there will be some brisk pre-buying of BS IV trucks which could kick off in September and go on till December.

The Supreme Court has mandated that no BS IV registration can be done from April 1, 2020, which means that all the stocks at dealers and plants will have to be sold and registered by March 31.

In parallel, manufacturers will also be busy phasing out the BS IV range gradually while preparing to to usher in the more expensive BS VI vehicles. “We will have to do a very fine balance in phasing out BS IV and bringing in BS VI,” says Aggarwal.

He is also hopeful that there will be no issues on availability of BS VI fuel since trucks operate across every nook and corner of the country.

After all, BS IV fuel will not work with BS VI trucks and people will not buy the BS VI range if the right fuel is not available from April 1.

“Just imagine what will happen in the process? It will impact freight rates since there will be fewer BS VI trucks and they will rise steeply . Movement of trucks will also be affected,” cautions Aggarwal.

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