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| Edited By: Shahkar Abidi |Source: DNA |Updated: Mar 23, 2018, 02:40 AM IST
Ravindra Pisharody, executive director (commercial vehicles) at Tata Motors, is excited about the company's foray into Hydrogen-run bus segment. An alumnus of IIT Kharagpur and IIM Calcutta, Pisharody speaks with Shahkar Abidi about the competition, future technologies and challenges faced by the industry, among others.
The effect of demonetization has eased, but things are not as normal as they used to be earlier. The sales figures in January remain good and as always, there is some pre-buying in February-March.
The situation in the past 4-5 years has been very unsteady. Now the question is whether we should really be chasing the market share at any cost? A lot of capacity expansion of CV industry in India took place during the 2009-12 period. Also, the three German companies set up shop in India then. Further, Ashok Leyland inaugurated their Pantnagar facility around 2013. They expanded the capacity and got tax benefits. So, suddenly we had a situation in 2013 where the capacity is 200,000 or 300,000 but the demand was 140,000. While the market dived by half, capacity doubled. On the other side, we completed the capacity expansion of Lucknow plant in 2007-09 and actually benefited from that. We suffered by deferring the investment as the market recovered after 2009. The competition got desperate and tried to get some volumes going. The soft commodity pricing during that period helped and it became a buyers' market. To give you more perspective, we should not forget the buzz which was there in 2012-13. It was around this time that Bharat-Benz went on record to say that its brands will show to Indian companies what trucking business is all about, but none of that happened. The last two years is not about these companies anymore. Their numbers have stagnated while some Indian JVs no longer exist. Coming back to Ashok Leyland, there are some factors that went strategically in their favour. We have analysed from their publicly available balance-sheet that the excise duty they pay as a percentage of their truck capacity is 5% while we are paying 9-10%. Good for them, as that is not by chance but by their conscious decision to invest in the plant. We got similar benefit with Ace and Magic for many years. But in an unsteady market, we need to look at segment separately as total CV market, whether it is 45% or 47%, has no meaning. We believe we have very important role to play as an industry leader. If we go for the market share at any cost, then the situation will get worse and we will drag the industry further down. Still, despite the unsteady market, we are protecting 55-56% market share. Hence, to sum up, I would like to say that we don't need to chase the market share at any cost.
Buses form just 10% of the total CV business in India and just 1% of the total registered vehicles, which is a very small number. Look at big Chinese cities like Beijing, Shanghai and city-state like Singapore which have terrific bus-based transportation service system, which is not the case in Indian cities, unfortunately. But then, there are some good signs coming along the way as, during the last Budget, there was specific mention of making bus permit more liberal, though we have not seen much of action in that regard.
LNG-based fuel has a lot of potential because LNG terminals are already coming up along some of the coastal areas of the country. It is better and more efficient than CNG and the vehicle can even ply to a greater distance.
Cargo is an industry where the goods need to be transported as soon as possible. The vehicle stops every now and then at the signals, which will make plying it on pure electric less feasible. Though, technologically, it is not impossible. Hence, the hybrid would come as more handy as it regenerates the electricity during the plying. Also, the electric vehicle has limits as far as speed is concerned.
