Volvo Trucks has set a clear agenda for the Indian market and wants to foray into newer segments in this region. The company has also clearly indicated that the recently introduced Goods and Services Tax (GST) will not hamper their growth plans. “The slowdown is temporary and we are in India with a long-term vision,” saidHelene Mellquist, senior vice- president, Volvo Trucks International in an interview in Gothenburg, Sweden, the home of Volvo Trucks. Excerpts:
How do you see the potential for commercial vehicle sales in India post GDP growth slowdown and demonetisation?
Market activity in June and July was slow since customers were not sure about impact of these developments. In the long term, we believe that GST will stimulate increased demand in road construction as well as transportation. We have already seen that the average distances covered by trucks in India have increased which means higher utilisation and greater demand for quality and performance. GST has [the] potential to revolutionise the transport industry and progressive customers will explore our total offering to stay ahead of competition.
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What kind of newer opportunities do you see in the Indian market?
For us, India is a market that holds much future potential as the country’s macroeconomic fundamentals remain strong and progressive, creating demand for the transport industry. Furthermore, the implementation of GST and the current government’s significant investment into upgrading roads and infrastructure will create opportunities in long-haul transport and for Volvo Trucks.
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How different is the Indian market for Volvo compared with other global markets?
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We have been in India for nearly 20 years and we have significant presence in certain segments such as mining where we have approximately 60% market share. 10X4 and 8X4 FMX rigids are our most popular product[s]. Like anywhere else in the world, in India Volvo Trucks compete in the premium segment with an offering that maximises productivity for our customers. As the Indian market matures, customers and haulage operators care more about the total cost of a commercial vehicle over its entire life cycle rather than the sticker price. With this change in mindset, many realise that investing in a Volvo Truck is a good choice as we provide some of the best TCO (total cost of ownership) through superior fuel economy, re-sale value and good aftermarket services.
Your plans for Indian construction sector?
We have established a team with our partner VECV, dedicated to exploring new segments like construction. We have already taken some orders in these new segments which also includes construction customers. To grow our business further, we will continue to leverage our good brand image in mining, TCO leadership and good aftermarket services that maximise uptime for our customers.
The Indian market is a price-conscious market. How easy or challenging is it for Volvo?
We are a premium brand and price our products accordingly. Our customers are progressively becoming more concerned with cost per kilometre or per hour than initial price, representing an evolution in mindset. We believe as more haulage operators shift in attitude towards more TCO awareness, there will be many opportunities to grow our business.
(The writer was in Sweden at the invitation of Volvo Trucks India, VE Commercial Vehicles Ltd.)