Riding on their successful joint venture with Volvo Group in India, Eicher has posted impressive growth in the domestic M&HCV market in the recent past on the back of vastly improved / upgraded models with the help of Volvo’s technological prowess. The JV has also invested significantly on exclusive engine plant & Bus Body plant to further enhance their capabilities. While Ashok Leyland growth has been stagnant for sometimes with only a handful of new launches which are far & few in a scenario where the market is gradually maturing towards high tech & high power products. The graph below illustrates the closing gap between the two brands in the domestic >3.5T GVW CV Industry
- Dominant position in ICV segment
- Range of Variants suitable for various applications
- Huge investment in product development/up gradation in HCV range
- Support of Volvo’s global technical expertise in manufacturing & product development
- Growing network reach
- Continuous product upgrades/innovations
Current Product Portfolio: Truck
With the current product position, Eicher does not have the product range for entire segments. ACG believes that for VECV to become number 2 in Indian CV market, they need to launch complete product range which fits in every segment and application. VECV is having brand Eicher for mass market and Volvo for niche market but are not present in the budget segment. Recent surveys by ACG indicates that customer purchasing behavior is slowly shifting towards the budget segment. This gap can be filled by the introduction of UD Trucks which is one of the most successful brand in Asia.
Around 75% of global UD sales is coming from Asia region because this product is well accepted in Asian markets.
Current Product Portfolio: Bus
VECV Medium Term Plan
VECV’s objective is to touch 100,000 units by 2015 (including exports). However considering the current market sentiments, ACG believe that a realistic possibility to achieve this milestone will be by 2020, provided they renew their entire Eicher range to take on looming competition from the likes of Bharat Benz, TML Ultra series etc. & plug the gaps in the product portfolio. It would be interesting to see how Ashok Leyland will gear up to face this new challenge.
- Sales Target: By 2015 touch 100,000 units
- Covering complete product range
- Extensive network coverage
Eicher has good growth potential in HCV segment. To explore this Eicher need to cover the segment with an appropriate product mix. This will further enable them to focus on export markets specially Africa, South Asia and Middle East along with Volvo.
VECV with local market expertise of Eicher and Volvo's technical expertise are currently developing a new Engine platform for global market in Medium Duty Engines (5 litre and 8 litre) for Volvo Group, same engine platform being adapted for Euro 3 and Euro 4 needs for VECV as well as Volvo Group. Further more a new plant for bus body manufacturing is being set up at Pithampur.
This Article is Compiled by ACG Analysis Team and is a part of 'OEM Sales Strategy Analysis'
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