VE Commercial Vehicles, a 50:50 joint venture between Eicher Motors and Volvo Group and the country's third largest commercial vehicles maker, sees revival in demand for heavy duty trucks on the back of expected rise in investment in the mining sector amid coal mine auction slated early next year, and hopes of likely fund inflows in the infrastructure sector aiding the segment which has been showing signs of uptrend for the past five months.
While sales of bigger trucks have revived to some extent since the ban on export of iron ore was lifted in Goa by the Supreme Court in April, the uptick in demand for the medium sized mining trucks is expected to be seen early next year, said Shyam Maller, senior vice president, marketing, with VE Commercial.
"There are now positive things happening with demand going up for deep mining trucks those served by our joint venture partner Volvo. We believe the trickle down effect would come to VE Commercial's range suitable for shallow mining within the next few months. A major trigger would be the coal block auction which, we understand would be completed by April," Maller said while launching VE's Pro series of trucks and buses.
The company is present in the 5 to 49 tonne segment while partner Volvo separately caters to higher end trucks.
While demand for the mining trucks has shown signs of improving, VE Commercial, however, failed to cash on as consumer preference has undergone a change, admits Maller.
"After two years of recession, we have seen the heavy duty truck market growing during the last five months. The heavy duty truck segment grew by 9.8% during the 10 months of calendar 2014 till October while our performance has been sub-par de-growing by 9%. We have also lost market share, which has come down to 3.7% from 4.4%. This happened because heavy duty trucks are witnessing shift in consumer preferences towards higher power-to-weight ratio and our earlier models couldn't keep pace with the change. We hope our Pro 6000 range (in the 16-40 tonnes range) will address that requirement," he said.
Total light and medium duty truck sales in the country, ranging from 5-14 tonne, contracted by 23% while sales of VE's trucks in this segment dropped by 16%. "This helped us improve market share from 30.1% to 32.6% during the 10 months of calendar 2014 till October."
In the 5-15 tonne bus range, market has de-grown by 14.7% but VE's offerings bettered and shrunk by only 4%.
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