M&M to invest Rs 700 cr in its truck, bus business

Mahindra Truck and Bus Division (MTBD), part of Mahindra Group, is investing Rs 700 crore in the business to expand its footprint in the light and intermediate commercial vehicle segment.

In the last two years the market has witnessed a robust pickup in the sales of trucks and buses. The announcement was made by the company at the roll out of 15,000th heavy truck from the Chakan plant in Pune on Wednesday.

"We are taking aggressive steps to become a full range player. The ICV (intermediate commercial vehicle) segment is growing rapidly and we are focusing on this category. With a portfolio ranging from 3.5 tonnes to 49 tonnes, Mahindra Truck and Bus Division is set to become a full range CV player within the next two years. In Mahindra portfolio, there is a vacuum in range of 7 to 25 tonnes. To fill up this gap, we are investing Rs 700 crore to explore new product lines in the light commercial vehicle (LCV), ICV and medium commercial vehicle (MCV) segments ," said Rajan Wadhera, president & chief executive - truck & power train, and head - Mahindra Research Valley, Mahindra & Mahindra.

The new range of medium and heavy commercial vehicle is being manufactured at the new greenfield plant at Chakan. In the LCV segment, Mahindra Truck and Bus Division has a market share of 8.9 per cent, while in the HCV segment it has a share of 2.7 per cent.

"We are in the process of manufacturing the prototype for new products especially for ICVs. It will be ready in the next three months. After the prototype stage, the new product will take two years to launch in the market. The company will launch different variants in each category on timely basis. The company is in process of addressing every segment of the commercial vehicle market; form 3.5 tonne to 49 tonne, with variants that meet the varying needs of passenger transport, cargo and specialised load applications", said Nalin Mehta, CEO & managing director, Mahindra Truck and Bus Division, Mahindra & Mahindra.

According to Mehta, growth in GDP will help to boost the trucks business. Also, if the Goods and Services Tax (GST) is introduced it will help the transport business to grow up.

He added: "Over 6,000 customers are using Mahindra's trucks in various applications across the country, 30 per cent of them have opted for repeat purchases. Despite severe recessionary market conditions, MTBL is endearing itself to a large section of buyers which includes top fleet owners pan India across segments and load applications."

The size of the ICV market is around 100,000 units annually and can grow up to 1.5 lakh units. Sales of MHCVs (good carriers) shot up 25 per cent in the second half of last financial year at a time when economic activity within the country is yet to gather substantial pace that could justify the commercial vehicle demand. Sales in the April-July period was also up 25 per cent despite the fact that discounts are running high.

Mahindra Truck and Bus has rapidly expanded its after sales service and spares network. The company is also planning to expand its network to 80 3S dealership from 66 currently, 173 authorised service centres from 93 and 2,516 roadside assistance service points and a retail spares network of 2,000 outlets.