Customers are placing product life cycle cost over sticker price'

Deepak Agarwal,
Head Sales Construction and Infra,
Volvo Trucks India,
VE Commercial Vehicles Ltd.

Deepak Agarwal, Head Sales, Construction and Infra, Volvo Trucks India, VE Commercial Vehicles Ltd, explains how Volvo Truck is leading the way through product, marketing and after-sales innovation in a crowded commercial vehicles market

In what ways is the massive spending on infrastructure impacting the sale of commercial vehicles?

We are positive about the opportunities emerging from government initiatives like Smart Cities and Make in India. With such mega infrastructure projects, there will be lot of construction activity involved which will open up new avenues for commercial vehicles. Also the government investment in such projects will boost the segment. The government is promoting and facilitating faster building of roads and demanding quick completion of irrigation projects.

Road construction has seen continuous growth in recent years with a series of proactive policies and process changes. The length of the projects awarded and constructed increased at a compounded annual growth rate of over 45% from 2013-14 to 2017-18. We are seeing a significant increase in pace of road construction YoY. From 5 Kms per day 6 years before, we have reached around 27 Kms/day now and are targeting 45 Kms/day. The project duration for big road projects are getting shorter and contractors are being encouraged to ensure timely or early completion of projects through provision of incentives. This has definitely boosted the tipper requirement in the market with construction being a major driver for overall tipper requirement. 55% YoY growth of tipper segment in FY 18-19 is a testament to this. There is also an increased demand for higher capacity and higher horsepower tippers owing to changing needs in project execution which will open up new avenues for Volvo Trucks.

How do you differentiate your product in such a crowded marketplace?

Our product offering is by and large dictated by the application, operating conditions, and we keep an eye towards maximizing overall profitability for our customers. We offerproducts for road construction, Irrigation and quarrying applications. In construction, our range of solutions include 8×4 tipper trucks and tractors for tip-trailers applications with body capacities ranging from 19.5 Cu.M to 45 Cu.M. The models we offer in construction are FM 380 8×4 tipper, FMX 460 8×4 tipper and FM 420 6×4 Tractor for tip-trailer application.

Technical Pointers that set us apart from the other players in the construction business are :

19. Large capacity body (23 Cu.m box, 19.5 Cu.m Rock and 45 Cu.m tip trailer in Volvo) compared to conventional 6×4 (14-16 Cu.m) and 8×4 trucks (16-18 cum) resulting in higher productivity. This is achieved due to highest technical GVW in a Volvo 8×4 - 51-53 tonnes. - better productivity.
20. Powerful and fuel efficient engine and matching driveline. ( 380 to 460 hp in Volvo tipper , conventional market offers 180-280 hp range, max torque and power at low
    rpm ) -higher gradeability -  better productivity, fuel efficiency (cost/Cu.M or cost per tonne)  and suitability for  toughest applications.
21. I-Shift transmission for heavy duty applications (no conventional player offers Automated Manual Transmission ) - fuel efficiency , driver comfort and low maintenance.
22. Strong and Rugged components - durability and reliability.
23. Best in class cabins-FM and FMX- Safety and driver comfort.
24. Other features like Volvo Engine Brakes, electrical parking brake, air suspended seats,ABS etc.

What challenges do you see in access to finance for your buyers and what are you doing to facilitate the access?

We have noted a decline in access of finance due to liquidity concerns in the market that have seriously impacted the flow of funds to NBFCs. This is already reflecting in the market sentiment with an increase in the rate by financiers and some tightening in financing norm. Nevertheless, we are working very closely with all our key financiers as well as our captive arm Volvo financial service to support our customers.

Do you see areas in after sales that are in need of a rethink or overhaul?

Customer expectations on after-sales service keep getting higher and manufacturers need to evolve and innovate to catch up with them. Customers ,nowadays, especially in construction and mining prefer service-at- doorstep .When service centers are far from operating sites, sending the vehicles to service centers results in loss of productivity.

Our business model in Volvo Trucks is quite unique as we provide after-market services directly from the company. We do not have many dealers doing this for us. We provide direct services across 200+ locations in India through site based workshops. This is what differentiates us from the rest. We understand the importance of delivering fast and efficient service at the customer's doorstep. Our technicians are deployed at customer's sites who ensure that our trucks never stop!

Another aspect of our aftermarket is the high skill levels of our technicians. We foster a learning environment in the team through various initiatives and competitions that result in enhancing the skill levels for our service team. Equipped with the right training and tools, our aftermarket team has delivered some outstanding results for customers, like ensuring 7000 hrs of operations in a year and availability of >95% at the remotest of locations in India.

Telematics solutions like Dynafleet Online from Volvo Trucks are becoming increasingly popular as they help in efficient fleet management. Dynafleet enables you to constantly get up-to-date information about the trucks and drivers in real-time, so that decisions for better control of the fleet can be taken quickly and efficiently. With Dynafleet, you can see in real time the current location of your vehicles and vehicles' performance data that is critical to have control on your fleet. In addition, Dynafleet shows you the areas of improvement to support profitability in the long run.

Volvo Trucks are becoming more and more intelligent. With the help of IoT, we are working on technologies where trucks can communicate with nearest workshop on their own for predictive maintenance resulting in higher uptime.

Is there anything you would like to tell potential buyers (contractors/ developers/ building material suppliers) about why buying from your company is a good idea?

For any contractor to complete a project on time, overall planning of project becomes very crucial. He needs machines which are reliable and can operate in toughest condition without breakdown. Support mechanism for the project in terms of equipment and site maintenance also plays a critical role.

Volvo Trucks provide a significant advantage with most reliable trucks in the segment proven in toughest condition and by providing doorstep service. We provide service agreements with uptime guarantee to customer so that customers can focus on their core transport operation with
out worrying about equipment maintenance.

Like anywhere else in the world, in India Volvo Trucks competes in the premium European segment with an offering that maximizes 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 mind-set, many realize that investing in a Volvo Truck is a good choice as we provide the best TCO (total cost of ownership) through superior fuel economy, higher productivity, better re-sale value and good aftermarket services.

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