Better prepared in passenger vehicle space this season:SML Isuzu

Strong demand for medium and heavy-weight vehicles have boosted the sales of SML Isuzu in Q4 FY16, says Gopal Bansal, company's whole time Director. It operates into two segments — cargo and passenger vehicles. The cargo sales for the company has seen a decline over the years, 7,000 units to 3,400 in Q4 FY16, adds Bansal. The company has already started taking steps to improve cargo sales, like introduction of sub 5 tonne category vehicle, 19-feet cargo and CNG trucks due to the ongoing issue in Delhi-NCR region. Bansal adds that the company is better prepared this season in the passenger vehicle segment. It has also increased the production of the in-house manufactured buses that have better demands over the other models, he says. The company hopes to meet the demands of its customers in the bus space, Bansal adds.Below is the verbatim transcript of Gopal Bansal’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18. Latha: If I looked at your January-December- November numbers they were averaging more like 850 vehicles, whereas February- March –April are averaging about 1,200 -1,500 vehicles, has demand really picked up on the ground? A: One is the demand has really picked up, as you would have seen the industry data, clearly indicates that from second half demand has picked up in most of these segments. Medium and heavy commercial vehicle have been doing good for quite some time. As far as our company is concerned we have two categories of vehicles one is cargo the other is passenger category. In the cargos segment our sales have been declining over many years. After reaching a peak of 7,000-8,000 we had reached a low of 3,500 in FY14. From there on we had taken some steps to improve our cargo sales like introduction of sub 5 tonne category vehicle, 19 feet cargo then CNG trucks. In Delhi, NCR the diesel trucks are not getting registered. So, we were the first to come out with CNG trucks which we are selling in NCR regions. So, as a result our cargo sales have started improving. As far as passenger vehicle is concerned, this season we are better prepared than earlier year. Of course last six months, second half of last fiscal we had issues in relation to bus body code and our market share started falling. However, now industry is at par and as I said we were better prepared for the season in terms of all the models. Our inhouse manufactured buses which have a better demand good demand we have increased our production. There were some bottlenecks in production which we have removed so that production has gone up. So, availability of vehicles we could meet the demand of the customers as far as buses are concerned. So, both in cargo and buses the growth has happened in April. Sonia: Can you tell me a little more detail about the passenger commercial vehicle (CV) segment? What kind of market share do you enjoy now compared to 20 percent that you enjoyed earlier and have you seen any fresh orders come in from the government with respect to the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme? A: As far as market share is concerned I have already said that we had dropped market share especially in the last quarter which we are trying to recover during this quarter in this fiscal year. As far as government demand is concerned Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme we are participating in the tenders, but the scheme has also slowed down and the name has changed. There are issues between states and centres. It has to be in the participation scheme. Funding has to be done by centres and some by the state government, so there are issues. Even our earlier sold buses we are not able to recover our money so there are issues in that. However, besides that we are doing good. Sonia: Can you give us a run rate I mean this month you have done about 1,400 units. What kind of an average do you see over the next three months? A: It is very difficult to say, as of now because this kind of number we were not expecting ourselves, so this is beyond our expectations. We have to go forward and see how we do. However, I can say sentiment is good. The hope to do well as going forward, we expect good monsoon, the consumption demand to pick up and other economy factors, interest rates are down, monsoon as I said, replacement demand is getting better; stalled infrastructure projects are getting on line. New orders are being placed so all these factors augur well for the demand of commercial vehicle. My personal view, I mean it is not company view that the forecast by CRISIL and ICRA and Society of Indian Automobile Manufacturers (SIAM) of 10-12 percent, in my personal opinion and looking at the mood of the market is very conservative for the year. Latha: What is the conservative view? A: 10-12 percent they are projecting. I said that personally appeals to me conservative. I feel the growth will be higher than that. Sonia: You did mention that you are increasing your production of the inhouse manufactured buses what is it now and how much will you increase it to? A: Currently we have reached a level of 300-350 and we are raising it to between 500 and 600.