MAN Trucks gears up to take one thing at a time

The MAN Trucks India plant in Pithampur near Indore rolls out at least 9,000 heavy vehicles every year, which is little to write home about in a market dominated by the likes of Tata Motors and Ashok Leyland.

While the production part of business is still work-in-progress, the company will, however, be pleased with its report card on workers’ health, which ranks high in the overall MAN global map. Employees at Pithampur seldom take leave simply because they don’t fall ill very often. And this, according to its plant heads, is thanks to the high levels of hygiene all around, especially on critical areas such as drinking water.

This may seem a trivial detail for a manufacturing business model, where sales numbers are all-important. But from MAN Trucks India’s point of view, it is still something to be proud of. After all, the strength of any entity lies in its people, and what better proof of this than showcasing a healthy workforce, which keeps the show going.

In a way, this advertisement of cleanliness is equally true for MAN’s home, Indore, which is truly spick-and-span. There is no garbage piled up on the streets quite unlike other metros. Indore is perhaps the cleanest city in the country right now and MAN, likewise, could consider itself a worthy resident in reflecting this trait within its premises.

On the business side, the company exports nearly 40 per cent of its output to Africa, ASEAN and Central Asia, which means that barely over 5,000 vehicles are sold in India annually. These are small numbers, which seem even more minuscule given that MAN has been around for a decade now. Yet, the Indian arm of the German truck maker sees no reason to press the panic button, and believes that the journey has just begun.

One critical trigger, in the form of the Goods and Services Tax, has already been set in motion, and is already playing a big role in boosting operational efficiencies. This is not specific to MAN alone, but all other commercial vehicle makers whose trucks and buses are reporting higher roads speed thanks to the elimination of physical barriers such as checkpoints and octroi that were serious obstacles to reckon with.

With better turnaround time, companies such as MAN will now have reasons to feel more optimistic about business prospects. It intends to hone its focus in the 16-49 tonne space that is sought after by fleet operators for long hauls. “Unlike customers of cars and two-wheelers, the truck buyer’s top priority is to keep his business viable,” says a MAN official. “Eventually, he will opt for a vehicle that will guarantee him the best in terms of mileage and durability.”

This is where the company intends to pull out all the stops to ensure that its trucks meet the needs of the operator even though this is in a niche space where volumes could be slow in coming. Yet, it is important to keep the end user content in terms of assuring after-sales support and timely service, which the company is focusing on.

MAN, therefore, would like to build on this base even while the market is growing intensely competitive with the likes of VE Commercial Vehicles (the joint venture of Volvo and Eicher Motors) and Daimler India Commercial Vehicles stepping on the gas. The big two, Tata Motors and Ashok Leyland, are also going flat out, which means that MAN will have a lot of catching up to do as a marginal player in contrast.

Given that it has been around since 2006 when it first formed a joint venture with Force Motors before deciding to go on its own five years later, one would be right in inferring that the company has achieved little in terms of market share. After all, the likes of Bharat-Benz at least made their aggression and intent well known in an essentially two-horse race (Tatas and Leyland).

Yet, this is not something that MAN is unduly worried about given that it has no intent to be part of this sprint in the first place. The top priority is to get its India business plan in order, which includes a viable export model. This is already happening in right earnest and it is conceivable to assume that the global business component will touch 50 per cent in the coming years with more countries being added to the list across Africa, ASEAN and the CIS regions.

It is also reasonable to assume in this context that India will be the pivot for MAN’s emerging markets strategy, especially when there is a competent ancillary supplier base already in place that assures the best mix of costs and quality. In addition, as safety and emissions norms become far more stringent in India, MAN will hope that operators will make a beeline for its range.

“Keep in mind that this is a business where word-of-mouth plays a big role,” says a company official. It also puts in context why the company recently organised a marathon drive with five trucks in the 40-49 tonne range traversing across the country’s diverse landscape for a month before converging in on the Pithampur facility 10 days ago.

The other positives going for India, at least in the midterm, are a renewed focus on infrastructure, which will see better road connectivity across its landscape. This will typically boost opportunities for transport of heavy cargo, where the likes of MAN will try and make the most of them.

The only issue here is that change will take time in coming, and it would be unrealistic to expect the kind of frenzied activity in infrastructure seen in China. As an industry observer says, it would be unrealistic to expect something similar in India whose democratic structure is quite unlike a totalitarian regime that means change takes time. “There will be delays but the results will eventually appear,” he says.

This journey will need oodles of patience and MAN seems content to play the waiting game. After all, this is a B2B business where the arena is quite different from a B2C play like cars. As one of its officials remarks, the key is to take one thing at a time while focusing on brand-building among its user base. To that extent, it is a journey and not a destination.

Incidentally, another interesting takeaway from this visit was that the company’s name, MAN, is pronounced by stressing on each letter separately and and not passing it off as an acronym as is commonly done. Though this takes time getting used to, company officials make sure you remember this rule through gentle reminders and persuasions. After all, this is part of the brand-building effort!

The writer was in Indore at the invitation of MAN Trucks India