Volvo Trucks hopes to cash in on big construction sector projects

Volvo Trucks believes that things are slowly falling into place for it in India and it is a matter of time before it begins to make a mark in the country’s medium and heavy commercial vehicle segment.

At present, its market share in the M&HCV segment is minuscule — it sold 1,163 units in India in 2016-17 against a total industry volume of over 3 lakh units — but with large-sized construction projects slowly taking off, it hopes to make a mark in trucks for the construction industry.

Volvo has more than 50 per cent market share in the mining segment, which again is a small segment compared to the overall M&HCV market. Company officials in Volvo Trucks’ headquarters in Gothenburg, Sweden, feel just as buyers in the mining segment realised the value of Volvo trucks, so too would those in the construction and haulage segments.

According to Helene Mellquist, Senior Vice-President, Volvo Trucks International, India is one of the more exciting markets for Volvo and one that offers enormous scope to grow.

In the mining segment in India, Volvo was able to make a difference to the operators by the durability of the vehicles, which ensured that there was minimum downtime.

In the construction segment, with large-sized projects being bid out, operators will need bigger and more reliable trucks that are available for longer operating hours. This is when the sticker price of the vehicle will not make a difference.

Mellquist told a team of visiting Indian journalists that Volvo is looking for a couple of breakthroughs in the premium truck range in the construction segment. Then it will be able to appreciably increase its presence in the country.

According to company officials, Volvo trucks cost nearly four times as much as a competing product from any of the Indian manufacturers. The initial cost may be a deterrent, but the total cost of ownership over the lifetime of the truck will make a Volvo truck more viable, they say.

What are the signs that Volvo sees for a pick up in demand for premium trucks in India? According to Mellquist, in the case of China, the large infrastructure projects and e-commerce projects helped in the sale of premium trucks.

Likewise, in India, the Centre was paying a lot of attention to large infrastructure projects and their speedy completion.

E-commerce too was taking off in a big way. These should help in truck sales. She acknowledged that operators were going in for higher tonnage trucks, which too would help Volvo.

Also, Mellquist said the implementation of the Goods and Services Tax would finally make India a unified market, facilitating the growth of long haulage. “GST is something good. With GST, you are taking a step towards the one federation. It is important for us.”

She also welcomed the Centre’s move to jump to BS6 emission norms in vehicles by 2020 from BS4 now. Volvo was ready with BS6 vehicles and would be ideally placed to tap the opportunity.

( The writer was in Gothenburg, Sweden, recently at the invitation of VE Commercial Vehicles Ltd, a joint venture between Volvo and Eicher Motors.)