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Last Updated : Mar 02, 2016 01:58 PM IST | Source: CNBC-TV18

See huge growth potential from heavy duty trucks: Eicher Motors

The growth in the CV segment came in from road construction sector and going forward see a huge growth potential for the heavy duty trucks, said Vinod Aggarwal, CEO -VE Commercial Vehicles, Eicher Motors.

Vinod Aggarwal, CEO -VE Commercial Vehicles, Eicher Motors talking about the February sales and outlook going forward said commercial vehicle (CV) segment will continue to drive the growth for them especially with the Budget focusing on infra push.

The growth in the CV segment came in from road construction sector, said Aggarwal. However, going forward he sees a huge growth potential from the heavy duty trucks as well as buses.

The company posted a hike of 5.1 percent in market share of heavy duty trucks and sold more than 1000 buses in February.

Eicher Motors maintained its strong sales growth. It has registered a 63 percent year-on-year growth in Royal Enfield sales at 49,156 units, majorly led by models with engine capacity upto 350cc. Commercial vehicle sales increased 57.2 percent year-on-year to 5,032 units in month gone by.

Bus segment is seeing an uptick in demand from the school segment and there also likelihood of further uptick when the states undergo fleet change.

Below is the verbatim transcript of Vinod Aggarwal’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.

Sonia: Another good month for the company. 57 percent sales growth and for the year as a whole you have done about 35 percent. Is this a sustainable trend you think?

A: Going forward the commercial vehicle industry is expected to continue to do well because there is lot of focus on infrastructure in this new Budget as well. If you see the growth pattern in the commercial vehicle (CV) industry last two months we have seen growth coming from the infrastructure trucks. There is lot of demand getting generated from road construction sector and we have seen growth in the tippers which are the construction trucks of 44 percent in the month of February, overall industry I am saying. Going forward I would say this infrastructure is going to lead the CV story.

Q: What is your own market share as far as the construction trucks are concerned and has it increased in the heavy truck segment?

A: Heavy trucks we have done very well, in fact in heavy trucks if you look at our growth, in the month of February in heavy trucks have been 60 percent. Within that we have grown in all the segments including construction trucks. Our overall market share in heavy trucks for the first time has crossed 5 percent. We are at 5.1 percent in the month of February and that is led by the all these segments including the construction trucks.

Q: In the bus segment also your market share as risen quite a bit from about 10 percent to 14 percent the last time I checked. How have buses done in this month and where are you getting the fresh orders from? Have you seen a higher boost to market share?

A: Buses in fact our market share in the month of February has been 16 percent. We have grown by whopping 78 percent in buses. Last month we sold 1,000 plus buses and this demand of course is now coming from all segments led by school segments because this school season is starting and going forward you will get more and more orders from school.

Other than that State Transport Undertakings (STUs) this year 2016 you will see lot more demands coming from State Transport Undertakings because they are renewing their fleet which they have not done in last two to three years.

Q: From the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme do you guys get any orders from their?

A: AMRUT scheme, still on and off some orders are there but we should see more because we have seen that there is allocation of around close to Rs 50,000 crore under AMRUT scheme for next five years. Now how much they allocate for buses in renewal we will have to wait and watch.

Q: The trend as per my understating has improved across the board whether it is heavy trucks, whether it is buses. Even in light commercial vehicles for some of your peers we have seen two to three months of good growth. Tell me in the CV business as a whole in the quarter gone by you saw a 40 percent revenue growth and your are now on a base of around Rs 20,000 crore from this base how much do you think the CV business can grow over the next say 6 to 12 months?

A: If we specifically talk about the Volvo Eicher we have huge growth potential that will come from heavy duty trucks only because that is one segment where we are still smaller. We are just having say 5 percent market share in a very large market. Going forward we will continue to get more and more numbers from heavy duty trucks.

Other than that we have more potential coming from buses as well. light and medium duty trucks where we already have around 34 percent market share there even though we will continue to grow but then the overall numbers wise like the contribution to our topline that will not be much coming from light and medium duty. The growth will come from heavy duty and buses.

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First Published on Mar 2, 2016 10:55 am
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