interview / anirudh bhuwalka
anirudh bhuwalka / Interview
add value to the customer. What is the outlook for this year? A Ramasubramanian: If you look at the HCV segment in which we operate, it is down 45 percent on a year to year basis. That decline has now slowed to 30 percent in the last three months. So, there is recovery on the back of a stabilising economy. But, even if we have a great second half, I would expect that we will still end this year, slightly in the negative. The recovery may be slightly impact by the weak monsoon.
While overall tractor sales may be down, there is still a good niche for specialised applications like fuel tankers.
Considering the huge potential in the mining segment, we are focussing more on tippers. We offer fully-built products in this segment. Beyond the products already in our portfolio, there is potential to enter the sub 25-tonne market, at some time in the future. Rajesh Mangal: We will also have to look at the haulage segment with the 31 tonne 8x2 truck that we had showcased during the 2008 Auto Expo. This will help us target the road construction segment, For the moment, buses are off the radar for AMW.
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in which we have no significant presence currently. At the moment, there are no thoughts on entering the 8x4 tipper segment. The deep mining market is as yet very niche and demands very powerful engines and other aggregates. What is the latest update on the Pug mini-truck and the bus project? Bhuwalka: We are working on the Pug and should come out with it sometime soon. The mini-truck market is very crowded and competitive, so we need to get our strategy right. It must also be remembered that the Pug is based on a Chinese platform. And in China, the fuel of choice is petrol. Therefore, we need to put some work on getting the Pug to be compatible with diesel. On the other
hand, the bus project has been deferred for the time being. We would first want to stabilise our truck business. How would you respond to speculation on AMW seeking to enter into a strategic partnership with a foreign CV maker? Bhuwalka: A company like ours will eventually have to look at a strategic partnership. Clearly, if we want to become a full breadth player, it will take time, resources and bandwidth. As such, sooner or later, there, will be a partner. It is too early to elaborate on matters like who will hold the controlling stake or other such operating parameters. But otherwise, is AMW self-sufficient when it comes to technology? Bhuwalka: We follow the North American model of sourcing the best aggregates and putting together the truck. There is ample assurance of such aggregates being available to meet future needs too. So, there is no need for us to reinvent the wheel. We will only get into the manufacture of things, like tipper bodies, which
Bhuwalka: But on an overall basis, I must add that the broad trends are positive. The real estate sector is starting to show the first signs of picking up on the back of retail sector growth. Low cost housing should further boost demand for cement. The road sector looks promising too on account of intent from the government. Similarly, the outlook for steel is positive for the next two quarters. And mining, though down in the monsoons, clearly has long term potential. What measures can government and industry take to revive the CV industry? Bhuwalka: The cash for clunkers idea
The Pug will come out ‘soon’. AMW is working on tweaking the Chinese ‘petrol’ platform to a diesel.
to stimulate demand is a brilliant idea from both an environmental and demand standpoint. Secondly, there must be stringent enforcement of overloading norms. Thirdly, finance should become easier. Many financers are still shy of lending. Merely creating a special fund for them will not be enough. The government must actually assure them of support during difficult times. Finally, if infrastructure receives due atThe 2518 6x4 tipper has good potential thanks to India’s rapidly growing mining sector.
tention, demand will automatically come. Mangal: Continuing from what Mr. Bhuwalka said, I would say that there is yet no clarity on the implementation schedule of various infrastructure projects. Secondly, even the special purpose finance vehicle for NBFCs is as yet only on paper. Without any concrete moves at either end, demand creation will be very hard. Even innovations from the manufacturer’s side like leasing trucks will also be difficult. Somebody has to hold the truck for 3-4 years and guarantee recovery of money through the life of the truck! Ramasubramanian: The best long way to revive the industry is to modernise it and make it profitable for the fleet operator to own and run trucks. The industry is populated by single truck owners. However, efforts to consolidate and corporatise the industry have been resisted. Secondly, the government must build better roads and avoid periodic harassment of trucks through time and cost barriers such as tolls, octrois and taxes. If these two changes are effected, fleet operators will be in a position to buy higher end trucks that promise lower cost per tonne kilometre figures. Truck makers will then be in a position to shift focus from volumes to profitability. ■ october 2009 / Commercial Vehicle / 137