2015-16 Could See Recovery Of The Indian Automotive Industry

2015-16 Could See Recovery Of The Indian Automotive Industry


The commercial vehicle sector is generally a good indicator of a country's economic progress and it isn't unknown that both of them haven't been in the best of their shapes in the past few years. Tata Motors, the largest CV maker in the country has gone through a long and dramatic downturn in this phase, but SIAM data from the past few months does show a trend reversal. In order to understand if this blip is a sign of actual recovery and to understand how Tata Motors is placed in these times, we caught up with Ravindra Pisharody, Executive Director, CV Business Unit, Tata Motors.

Ravindra Pisharody has work experience of over 30 years, andhas been serving as the Executive Director, Commercial Vehicles, Tata Motors since June 21, 2012. Prior to this, he was the Vice-President, Commercial Vehicles, Sales & Marketingsince 2007, when he joined Tata Motors. He also serves on the board of various Tata Motors group companies. Prior to joining Tata Motors, he was associated with Castrol Ltd, a subsidiary of BP, where he worked from 1999 to 2007, as the Regional Marketing Director for the regions comprising India, Middle-East, Africa and Turkey, and was subsequently based in Singapore in a global marketing role. Before Castrol, he worked with Philips India from 1981 to 1999, a subsidiary of the Dutch company and served as its Vice President of the Consumer Electronics Division. Pisharody holds a Bachelor of Technology degree in Electronics Engineering from IIT, Kharagpur and is also an alumnus of IIM, Kolkata.

ATR_Coming from a severe downturn, especially for the commercial vehicle (CV) sector, how is Tata Motors placed presently and how prepared is it for the future?

Ravi Pisharody_Going by the numbers, we've been posting in the recent months, there seems to be some signs of recovery in the medium & heavy CV (MHCV)segment, which is 16 tonne and above. This segment is always seen to be a lead indicator of upcoming trends. It was the first one to start receding nine quarters ago and for the downturn to hit the passenger vehicle segment and smaller CVs. After a decline of about two years, we can clearly see an upward trend now. Particularly in the last few months, growth has been in double digits. Going forward, with the excise duty extension, this year will not be a year of decline for MHCVs.

Do you have any numbers to share?

It'd be hard to predict the rate of growth as important markets of Jammu & Kashmir and North-East have been hit by floods. Due to the effect of these natural calamities and various other factors, it's hard to put a number to the growth right now.

On the side of the light commercial vehicles, there are still issues such as financing. Due to the ongoing downturn, many customers have defaulted on their payments, which have now made it difficult for them to avail finance for new vehicles. The loan values too have gone down to 80-85 % of vehicle cost, opposed to the 90-95 % given earlier. So, while an immediate recovery isn't around, if the MHCV segment continues to grow, a full recovery could be expected to begin from sometime in 2015-16.

Tell us about your new product strategy.

We've been following an aggressive product strategy in the past, due to which we're well positioned to benefit from the turnaround, whenever it happens. A recent and important product is the Prima LX, which offers the key features of the Prima at a much more competitive price.

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Are there new segments you're planning to enter?

We are but it may not be right for me to talk about them at this stage. What I can tell you is that we've made significant progress in the last six months in our truck range. The Prima LX, for example, was developed based on customer feedback as they liked the Prima's quality cabin, powerful powertrain and lesser turnaround time but wanted a more affordable version of it. Hence, we built the Prima LX on a 230 hp powertrain instead of the 280 hp available on the Prima. In addition, we've retained the basic features of the Prima cabin and its frame, including key safety features.

We've introduced six new tippers in the Prima LX range in the 25 to 31 tonne segment, with engines developing 230 to 280 hp. Six new additions have been made to the Prima LX tractor range as well. Going forward, we'll soon launch two new Prima multi-axle trucks, which are going to be a first for the Prima range. The MHCV industry sees about 60 % of its sales coming from multi-axle trucks, forming good potential for the two new models.

In addition, beyond trucks, we've taken some initiatives to improve the running experience for customers, including the increase in warranty from two years to four years and 400,000 km on the driveline. Such warranty offering is unheard of in the Indian CV industry and in many international markets as well. We've also increased our service intervals significantly along with some other aggregates, all of which will lead to an overall better experience for our customers.

Help us understand the technical nuances behind developing the Prima LX and the Ultra.

Within the multi-axle segment, the largest contributor is the three-axle sub-segment, where the Prima LX has been positioned. In order to keep costs low and not sacrifice upon the qualities of the Prima range, we had to develop a new engine in collaboration with Cummins through our Tata Cummins joint venture. The key requirement for this engine, called the ISB 5.9 l, was to be developed in accordance with Indian requirements, in order to make the truck competitive in the market.

The Ultra truckwill cater to the seven to nine tonne segment, of which the eight and nine tonne vehicles are already in the market and a 10 tonne variant will be launched in October 2014. Based on our benchmarking, we consider the Ultra to be the best-in-class in terms of features, technology and comfort in the country.

Tata has been actively working on modular platforms. Any new developments herein?

We have been working on modular platforms in the CV space since a long time, even before the Prima was launched. All our multi-axle trucks are on a single platform and continue to cater to various categories, highlighting the platform's flexibility. The Prima platform itself is flexible enough to accommodate engines upto 560 hp, so with 230 hp and 280 hp we're barely scratching the surface. Add to this a wide range of transmissions and options for other components and our platforms turn out to be truly flexible and modular. It is imperative to work on modular platforms in the CV space, which we have been doing and will continue to do in the future.

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There's a lot of action in the weight-reduction space these days across the automotive industry. What's new from Tata Motors on its CVs?

Lightweighting in CVs needs to be done keeping in mind the operating economics of the end customer. With increasing payloads, if the engine size keeps going up, the monetary results might not be pleasing for the customer. We try and lightweight our vehicles in various areas, including an aluminium housing used instead of iron around the gearboxes, some of which have already been converted. We also have aluminium housing for engines for some of our passenger cars, which we are looking at leveraging for CVs as well.

On the suspension front, we've replaced the bell crank suspension with bogey suspension, which is not only lighter but is stronger as well. The next step for us herein is to use more of rubber in suspension parts, which will not affect the operating capabilities such as load-carrying capacity but has the potential of reducing upto 300 kg on a heavy truck. Plastic can also be used to replace metal in fuel tanks and propeller shafts.

Are you using plastic fuel tanks currently?

Not yet, but we're working on the technology and are exploring the opportunity to implement it.

What is the company doing in the intelligent transport system and related space?

The recent announcement between us and Microlise for advanced telematics and fleet management services is a step in the same direction. What we've launched for now is just the GPS-related services, but the potential ranges right upto trucks being connected with multiple aggregates communicating with our central system.

Beyond this the government is also working on ITS in the state buses and the second lot of buses under the JNNURM scheme already have a fair amount of ITS requirements specified, all of which is being met by us. In general, ITS is an extremely broad subject and depends on the evolution of the entire ecosystem. As demands grow, we can get into partnerships like the one with Microlise and leverage the technology instead of reinventing the wheel.

Can you tell us the amount of money spent on product development this year for CVs?

The figure would sit between Rs 1,300 and Rs 1,500 cr for this year on overall product development activities.

How does the application business look for you?

We've identified a few lead applications, including coal, cement, steel, petroleum and automotive logistics, among others. These are the segments, where we work in tandem with the consigner companies.These are not the transporters, but steel and petroleum companies, for instance.Together, we study the inbound and outbound logistics and take note of the challenges faced by them and make changes to the vehicles accordingly. We also offer a fully-built range of tractor trailers for movement of goods such as steel and cement.

In terms of numbers, I can't update you of the same since we do not look at this division solely as a revenue contributor but more from an industry-mover perspective. We've earlier brought new concepts into the country such as the bulker, which is now being manufactured by different companies.We're fine with that as it has helped the overall industry to become more efficient.

What work is being done in the space of alternate fuels?

Tata Motor has showcased a range of commercial vehicles under its FuelNext theme, focused on contributing to cleaner, greener, efficient and comfortable transport solutions. Some of these include the Magic Iris Electric, a clean and eco-friendly passenger commercial vehicle with a segment first solar charger. We also showcased the Starbus Urban FE-ParallelHybrid Buses, which lower emissions, reduce running costs and improveefficiency. The front-engined, clean fuel bus also provides ease in urban transportation. The Starbus Urban 9/18 FE is an articulated bus with a single deck and two sections enabling to carry more passengers, while retaining the manoeuvrability needed in urban transportation. In addition, we have the Prima 4032.S LNG as a green alternative to diesel and is also a superior fuel compared to CNG, thus ensuring better fuel economy.

The truck racing initiative was received well. Can we expect any technical progress in its next edition?

Tata Motors received an overwhelming response at India's first truck racing event, the T1 Prima Truck Racing Championship. We will make announcements related to all aspects around our next truck racing initiative shortly.

Interview: Arpit Mahendra
Photo: TATA