The Indian subsidiary of Swedish transportation major Volvo Trucks is set to shift into top gear as revival in mining and infrastructure sectors has spurred the demand for its premium trucks (400 HP and above).
Though the company took 17 years to sell 10,000 trucks, with 5,000 units in the first decade (1998-2009) and another 5,000 over the last six years, the subsidiary is gearing up to meet the growing demand in the core sectors. It is now confident of selling the next 5,000 trucks in three to four years.
"The worst is behind us. We are upbeat on maintaining 50 per cent annual growth rate this year too, as more coal blocks have been opened up for mining and infrastructure projects are being implemented faster than before," Pierre Jean Verge-Salamon, President, Volvo Group Truck Sales, India told Business Standard on the sidelines of a company event here on Thursday.
Though Volvo was the first mover in the premium truck segment (It claims to have pioneered the segment in the country as no other Indian truck marker manufactures heavy-duty trucks) in India way back in 1998, its sales moved on a slow lane for many years.
Volvo got a major boost in Indian market after it entered into a joint venture agreement with Eicher and formed VE Commercial Vehicles Ltd in 2008. VECV is now the sole agency to market both Volvo and Eicher branded trucks in India, while Volvo India Pvt Ltd is only a manufacturing unit having its factory at Hoskote near Bengaluru.
In the last nearly two decades of its presence in India, Volvo was the first to introduce fully air-conditioned and crash-tested cabin in trucks and pioneered the driver training concept even before it rolled out its first truck in India. The centre has till now trained over 55,000 drivers in the country.
"Our long tradition of developing market-leading technology and solutions with products operational for over 45,000 engine hours in tough and challenging Indian mines is a proof of our commitment," Rama Rao A S, Senior Vice President, Sales, Marketing and Aftermarket, Volvo Trucks, VECV said.
Today, Volvo trucks facilitate around a third of coal production in India by moving overburden in the mines and in the process has been driving progress for the country. Over the years, Volvo has built up an elite customer base having over 100 vehicles in their fleet operating at various mining sites across the country. It delivered the 10,000th truck (Volvo FMX 440, 8x4 I-Shift) to Ahmedabad-based infrastructure company Mahalaxmi Infracontracts, which has bought 392 trucks from Volvo till date.
Capitalising on its JV with Eicher, Volvo is now trying to redefine the premium truck market. It has recently launched a technologically advanced Volvo FMX 440, an 8x4 I-Shift truck.
India's progress is closely entwined with the progress of the mining, infrastructure and transport industry. With the recent developments in the coal mines and infrastructure sectors along with lifting of ban on the iron ore mining in several states, Volvo is looking at huge demand for heavy-duty tipper trucks. It is confident of achieving 50 per cent growth in 2015 over its sales in 2014, when it sold 900 trucks. It is also confident of overtaking its highest ever yearly sales of 1100 trucks in 2011.
"The ambition of Volvo Trucks is to capitalise on these developments and continue to maintain leadership position in the European truck segment and further improve on it," Salamon said.
Currently, the premium truck market is estimated at 1,350 units in 2014 and is set to grow by 50 per cent in 2015 to touch 2,000 units. Volvo trucks are dominating the market with about 60 per cent market share and is closely followed by its Swedish rival Scania and other European major Mercedes Benz. However, Mercedes Benz will now be represented by its
Indian arm Bharat Benz from this year. Typically, premium trucks are priced at Rs 90 lakh and above, while other trucks, largely made by Indian companies like Tata, Ashok Leyland and others, are equipped with 230-280 HP and priced in the range of Rs 35-40 lakh.
Volvo Trucks is currently present in India with more than 150 touch points including modern workshops and service support centres.
"With the gradual turnaround the Indian economy is witnessing and this milestone of 10,000 of our truck delivery is a reiteration of the need for technologically advanced solutions in the market. We are looking at exciting times and we are ready to meet these opportunities," Salamon added.