Says experience with Euro-VI engines is an advantage; to go ahead with investment programme despite slowdown

VE Commercial Vehicles Ltd (VECV), a joint venture between the Volvo Group and Eicher Motors, is upbeat on the company’s prospects in the BS-VI era as it goes ahead with planned investments in a new plant and products amid an unprecedented slowdown in the commercial vehicle (CV) industry.

The nation’s third-largest medium and heavy commercial vehicle (M&HCV) manufacturer has indicated two major developments. First, it is going ahead with its planned investments — in a new 150-acre plant in Bhopal, new products and platforms, and in BS-VI readiness.

Second, it sees itself having an edge over the competition, particularly domestic players, in offering more reliable BS-VI products.

While construction activities for the new manufacturing unit in Bhopal are on, the company is also strengthening its portfolio with two new engines and BS-VI products.

“We are a long-term player and we are not cutting down on our planned investments,” Vinod Aggarwal, MD & CEO, VECV, told BusinessLine. “We are going ahead with our investments in a new unit in Bhopal, new engines and product series along with BS-VI preparatory work. We have been investing ₹500-700 crore every year. This year, too, we have planned a ₹500-crore investment and there is no change in the plan.”

While the company is also undertaking measures for cost reduction and optimal inventory, its investment plan remains on track. VECV expects the market to see a revival in six months or a year.

The Euro-VI experience

Aggarwal said VECV’s experience in supplying Euro-VI engines — manufactured at its facility in Pithampur, near Indore — to the Volvo Group in Europe and Asia would come in handy while producing BS-VI trucks.

“As far as BS-VI is concerned, we are in an advantageous position relative to the competition. We have produced and delivered more than 1 lakh Euro-VI engines to Volvo globally for more than five years. We understand the nuances of the BS-VI technology. We have a lot of learning and experience from the Volvo Group and those have been incorporated in our development for BS-VI in India,” he added.

If VECV offers more reliable BS-VI trucks, it will help the company improve its market share in the M&HCV segment, where the company has been struggling to make any significant progress despite having a modern truck platform, the Pro Series.

“We are not bothered about the current slowdown. We are now working hard to commence BS-VI engine assembly by mid-November. We hope to start BS-VI vehicle assembly by mid-January, 2020,” RS Sachdeva, the company’s COO, said at its plant in Pithampur.

He added that the after-treatment process in BS-VI trucks will vary from one application to another. “A lot of product issues will crop up if it’s not calibrated well. This is where we will have an edge due to the Volvo experience,” he said.