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VECV posts 38% rise in total sales at 5,805 units in October

VE Commercial Vehicles Ltd (VECV), a part of

Eicher Motors

group, on Monday reported a 38.2 per cent growth in total sales at 5,805 units in October 2021. The company, a joint venture between Eicher Motors and Volvo, had sold 4,200 units in the same month last, Eicher Motors said in a regulatory filing.

Total domestic sales of Eicher branded commercial vehicles (CV) last month stood at 4,863 units, as against 3,815 units in the year-ago month, a growth of 27.5 per cent, it added.

The company further said the exports of Eicher branded CVs last month stood at 826 units, as compared to 315 units in October 2020, a jump of 162.2 per cent.

Sales of Volvo branded CVs were at 116 units, as compared to 70 units in the same month last year, a growth of 65.7 per cent, the filing said.

VECV reports 19 per cent rise in sales at 5,457 units in February

VE Commercial Vehicles (VECV), a Volvo Group and


Motors joint venture, on Monday reported a 19 per cent increase in sales for February at 5,457 units. The company had sold 4,586 units in February 2019, VE Commercial Vehicles (VECV) said in a statement.

Eicher branded trucks and buses recorded total sales of 5,335 units last month as compared to 4,439 units in the year-ago month, up 20.2 per cent, it added.

In the domestic market, sales of Eicher branded trucks and buses were at 4,825 units last month as against 24.5 units the same month a year ago, up 3,875 per cent, the company said.

Exports of the Eicher brand of commercial vehicles were at 510 units in February as compared to 564 units in the same month last, a dip of 9.6 per cent, it added.

Further, Volvo trucks posted sales of 122 units last month as compared to 147 units in February 2020, the company said.

Volvo Car launches S90, XC60 with petrol mild-hybrid powertrains

Volvo Car India on Tuesday launched two models — S90 and XC 60 — with petrol-mild hybrid powertrains as part of its plans to shift to the petrol-only portfolio by this year-end. The new S90 B5 Inscription sedan and XC60 B5 Inscription SUV now feature a 1,969 cc petrol engine paired with a 48-volt battery.

Both the models are priced at Rs 61.9 lakh (ex-showroom).

“We have had a good three quarters this year, which are a reflection of customer confidence. This has given us a good footing as we commence into 2022 with new cars.

“These models come power-packed with new feature offerings, which I am confident will increase the luxury mobility of our customers,” Volvo Car India MD Jyoti Malhotra said.

With the introduction of these new models and the upcoming XC90, the automaker would complete its transition to the petrol portfolio, he added.

“After shifting to petrol, we plan to start the shift towards electric. The first battery-electric car would be launched in 2022 as per our plans to be a fully electric car company by 2030,” Malhotra said while unveiling the new models.

Features like digital services giving access to Google apps, other apps and services, which offer hands-free help with Google Assistant, navigation through Google Maps are available in both the models.

The cars also feature the next-generation infotainment system that offers customers personalisation and connectivity.

Volvo Car Group has teamed up with Google on integrating an infotainment system powered by Android with Google apps and services.

Meet the man who steered Mercedez Benz back to pole position in India

The India head of Mercedes-Benz, Roland Folger has a valid complaint. Since 2015, when the 58-year-old took over the company’s India reins and shifted to Pune, he has been denied the pleasure of driving. “As a company policy, I am not allowed to drive here.” The rationale being that poor discipline on Indian roads can be difficult to deal with. For the German, used to autobahns with a speed limit of 130 kmph, India’s chaotic and congested roads are a picture in contrast. “Even in a city like Pune, things have turned for the worse. There is chaos of an unimaginable level,” he says.

Folger, however, has had the pleasure of another ride: of making Mercedes-Benz the largest selling luxury car maker in India.

This decade began on a bad note for Mercedes-Benz India Ltd (MBIL), which first lost the long-held crown to


. By 2012, Audi — part of Volkswagen Group — had pushed it down to the third slot. But MBIL returned to pole position by 2015. It has also become the world’s largest selling luxury car maker. Today, the company with the slogan “The best or nothing” leads the luxury car market in India by a huge margin.

Folger is now packing his bags. Come October, he will shift base to Thailand as head of Mercedes-Benz operations in Thailand and Vietnam. “Going to Thailand is like closing the circle.” In the 1980s, he first moved to Bangkok to take charge of a parts’ organisation of Daimler Group. “I have very fond memories of that place. My wife visited me there. We weren’t married then,” he recalls. He now has three children – daughters aged 27 and 21 and a 25-year-old son — who are based in Germany.

There’s another reason why Folger is looking forward to the Thailand stint. Unlike India, which has been tentative about its electric vehicle (EV) push, “Thailand is moving distinctly towards EVs,” he says. It will offer a good learning curve.

Sitting in his expansive corner office, located inside MBIL’s 100-acre plant in Chakan near Pune, Folger finds time to reflect on his India stint, though his schedule is packed with travel plans and multiple farewell dinners. “It is hard to say goodbye. My wife and I have made a lot of friends. We had a great time here.” Those fond memories are built on some robust business performance in India.

India can surprise you in many ways, says Folger, recalling an incident in his early days. He was inaugurating a dealership in Dehradun when a customer told him: “You have to promise that you will stay and not close down soon.” Folger was surprised by the request. But he soon discovered the reason for the request. Many luxury car makers opened showrooms in tier-2 and tier-3 cities but soon shut these down due to viability issues. This left customers in a lurch. Folger learnt his first India lesson then — prioritise after-sales service over sales. “A customer can drive a long distance to buy a car. But he expects after-sales service to be easily accessible.”

India was merely a microcosm of Mercedes’ global woes when Folger arrived here. Around 2011, Mercedes-Benz was facing multiple challenges. Apart from losing market share to BMW and Audi, the company was seen as a luxury car maker for old men. The product pipeline was uninspiring and the cool factor to lure millennials was missing. But MBIL was able to race back to the pole position because of a combination of global and India-specific initiatives.

Folger borrowed heavily from the global turnaround strategy but added enough India-specific initiatives, too. Portfolio revamp was the most critical step. His three-year tenure saw 30 model launches. MBIL launched new-generation entry-level models A, B, GLC and CLA to woo younger buyers. He calls the local production of long-wheelbase E-Class (its best-selling model today) as a game changer. The company also introduced the right-hand drive SUV GLC in India.

“Globally,” says Felipe Munoz, global automotive analyst at JATO Dynamics, “Mercedes’ new sporty young design brought back the cool factor to the brand.”

After-Sale Service
New dealerships and a differentiated customer service fortified MBIL’s strategy. Dealerships have risen from 78 in 2015 to 93 now. Focusing on service as a differentiator, it launched “service on wheels” — service trucks with tools and spares to attend to cars in locations where MBIL does not have a direct presence. It rolled out service packages of up to 10 years to lower ownership cost. The service packages helped E-Class become its best-selling model. “While our new E-Class is more expensive by 10-12% on paper, in real terms, it works out cheaper with these packages,” says Folger. Half of the E-Class sold now are under this package.

Organisational overhauls were also rolled out. Earlier, “left hand didn’t know what the right hand was doing”. Dealership promoters have been asked to appoint dedicated CEOs to improve management. Efforts have been made to expedite decision making.

The strategy seems to have worked. When the goods and services tax rates were announced in May 2017, the MBIL team worked out the revised rates within four days. “In the past, it could have taken a month,” says Folger. MBIL today leads with a 39% market share. Most importantly, the average age of a Mercedes buyer has come down from 45-plus to 37.

Rakesh Batra, partner (automotive), EY India, says: “MBIL has made significant investments in manufacturing localisation, product range, sales network and differentiated service, which has enabled their prime position.”

Folger’s India journey had started with some big bumps. Soon after he took charge, the government banned diesel vehicles. An upset Folger spoke about Germany stalling investments. The auto industry was hit by a diesel tax, luxury cess and myriad policy flip-flops. Folger has since recovered his German poise: “We see this as a market with a lot of potential. We are trying to figure out how best to grow here.”

MBIL is now laying out its 2020 strategy with a thrust on qualitative growth — increasing revenues without adding cost. It is also preparing for growing competition and shifting industry landscape. Volvo and JLR are growing and will slice the market in multiple ways, says Deepesh Rathore, director, Emerging Markets Automotive Advisors.

“We do not disregard anybody as a competitor,” says Folger. But he sees a fundamental difference in approach. “The Japanese have formed joint ventures with local partners to build a local network. But I don’t think that is a guarantee for success.”

Electric vehicles, today’s buzzword, do not excite Folger. “EVs are overrated. The world has too high hopes from EVs.” Look beyond tailpipe emissions and understand where and how electricity is being produced. There are no easy answers — thermal is polluting, nuclear energy has serious safety implications. To top it off, EV charging infrastructure is expensive but a critical prerequisite. “Now the Indian government is again talking about EVs in just top 10 polluting cities. That may be a better way to look at issues,” he says.

EV Plans
To hedge all risks, Mercedes is betting on a three-pronged strategy — improve its internal combustion engine technology, develop plug-in hybrids and make full-fledged EVs. It expects to have 10 EVs by 2022. “India has gone back and forth on its EV policy. China is rushing towards EVs faster than any other country. There are strategic thoughts behind it. China found out it could not compete in internal combustion engine technology so is betting big on EVs to get ahead in the race.”

But Folger is optimistic about India. He loves the fast pace, its young population, the emotional energy abound, the culture and warmth, and persity. “Unlike the West, where people think what’s in it for me, there is a high level of commitment here without holding back.” He says he hopes the country preserves its history before it is too late.

He wants the government to reach out to the industry more often. “We need more dialogues.” Instead of five-six ministries, the government should appoint one person for the industry. “There are challenges, but opportunities outpace everything else in this country,” he adds.

Commercial vehicle makers set to hit top gear as economy picks up

MUMBAI: The auto dispatch numbers for the month of August have been impressive. While passenger car sales have been steadily rising, dispatch figures of the commercial vehicles (CV) manufacturer Ashok Leyland took most participants by surprise.

As the Indian economy looks set to rebound and with interest rate expected to come down next year onwards, the battered CV segment will be in limelight, say analysts.

Ashok Leyland reported a sales volume growth of 16.7 per cent (Y-o-Y) in August at 8,331 units. Medium and heavy commercial vehicles (MHCV) volumes grew 18 per cent (YoY) to 5,830 units. Growth in light commercial vehicles (LCV) has turned positive with a 14 per cent (YoY) growth to 2,501 units.

The company management has indicated improved demand outlook for 2H, led by acceleration in economic activity.

Volumes of MHCV were down nearly 46 per cent in FY14 vs the FY12 levels, while other categories fared relatively better during the same period.

“We expected the commercial vehicle segment to likely do well, because there were early indicators of increased freight movements and a small uptick in freight rates too, which means utilisation rates are moving,” said Jitendra Sriram, Director & Head of Research, HSBC Securities, in an interview with ET Now.

The Indian CV market is showing clear signs of being in the early stages of a cyclical revival and Ashok Leyland is nicely positioned to benefit, say analysts at Ambit Capital.

“We continue to expect a revival in domestic CV demand from 2HFY15, given our expectation of an overall economic and investment cycle recovery. The recent formation of a stable Central government is an important catalyst and driver of our expectation of a macro-economic recovery,” said an Ambit Capital report.

The brokerage’s channel check suggests that there is moderation in discount levels for CVs and improvement in sentiment across truck operators/dealers.

“We expect Ashok Leyland’s margins to bounce back in FY15 to 7.1 per cent (vs 1.7 per cent in FY14) and further expand to 9.8 per cent in FY16. We have broadly retained our FY15 EBITDA margin estimates at the earlier levels,” the report added.

Ambit Capital has a ‘Buy’ rating on the stock with a 12-month target price of Rs 44 per share.

Another heavy vehicles manufacturer Eicher Motors reported a sharp rise in sales following a strong demand for Royal Enfield motorbikes. The Enfield bikes volumes increased by 66 per cent YoY to 26,643 units while VECV sales declined by 5.6 per cent YoY, mainly on account of a decline in bus sales.

According to Motilal Oswal, VECV is better placed among new entrants, given the marriage of Volvo’s technological strength with Eicher’s local market expertise.

“It is taking initiatives to gain share in HCVs and initial signs of success are visible,” the brokerage said in its August report.

In three-wheelers or the small commercial vehicles (SCV) segment, Atul Auto will perform better than Bajaj Auto, says a Centrum Broking report.

“Over the long term, we expect the 3W industry to grow at 6-8 per cent driven by replacement demand, opening up of permits and also as a viable option to SCVs. From our coverage point of view, we remain positive on Atul Auto,” the report said.

It has a target ‘Buy’ rating on Atul Auto with a target price of Rs 850 per share.

The brokerage has maintained Hold on Bajaj Auto (as concerns remain on its ability to gain market share in the domestic motorcycle segment). It has a target price of Rs 2,280 on the stock.

VE Commercial Vehicle to invest Rs 500 crore for BS-VI technology

MUMBAI: VE Commercial Vehicles, a joint venture between Volvo AB and

Eicher Motors

, would invest Rs 500 crore to make trucks that comply with the latest emission norms after India skipped a stage in the chronologically progressive set of standards monitoring automobile pollution.

Car- and truck-makers selling in India have less than four years to transition from BSIV to BSVI norms, compared with about 10 years required by European manufacturers. Of course, Europe did not skip the intermediate stage called BSV. VE Commercial Vehicles, which currently supplies Euro VI engines to Volvo for the Swedish giant’s global operations, has the manufacturing capability to make the engines that conform to stricter emission standards. Yet, the company will have to develop its own product portfolio to meet the BS VI emission norms that would be implemented by April, 2020.

Eicher and the Gothenburg, Sweden-based Volvo own 50% each of the joint venture company that has already invested Rs 400 crore on upgrades related to BSIV compliance, and the development of other products. It is India’s fourth-biggest maker of heavy-duty trucks.

“We have been constantly upgrading our line-up,” Vinod Aggarwal, MD of VE Commercial Vehicles, told ET on the sidelines of an event that introduced into the market the Pro 5000 series of heavy-duty trucks running on the EGR technology. “The Pro 5000 Series BS IV line-up, with the new cab and fuel-efficient EGR engine, would allow us to compete more effectively in the heavy -duty space. With the short deadline for BS VI, we are already preparing for the future.”

The new Pro 5000 series gives the company a new entry-level truck that would use the affordable EGR (Exhaust Gas Reduction) technology for the BS IV diesel engine. This addition to the product portfolio would allow VE Coomercial Vehicles to compete more effectively with

Tata Motors

and Ashok Leyland.

VE Commercial Vehicle, whose sales expanded at 12% in FY17, expects to beat the industry growth rate yet again in FY18, led by the new range of BS IV Pro 5000 series trucks. With the pre-buying ahead of the BS IV rollout and the implementation of GST, Aggarwal expects the first half of FY-18 to be subdued before demand revives toward the end of the financial year. The company has secured a 5% share in the heavy-duty truck range, with average volumes of about 1,000 units a month.

Volvo plans Hybrid, E-cars to take on German rivals

MUMBAI: Volvo Auto India, the Swedish luxury car maker on the fringes of the Indian market, will be banking on range of hybrid and electric cars to be rolled out in the coming years to challenge the top three German luxury car makers -Mercedes-Benz, BMW and Audi -in the country .

Volvo plans to double its market share to 10% by 2020 and is considering bringing in electric and hybrid vehicle options across the portfolio right from its entry car to the top of the line one in the next three years and if volumes grow, they may also be assem bled in the country eventually. Volvo India’s XC90 plug hybrid launched a month ago has already seen over 50 bookings for the model and in 2017 it plans to roll out the plug-in hybrid model of S90, making it the first luxury car maker to bring in hybrid model in the mainstream sedan space.

Eventually , the company is likely to have 4-5 hybrid and electric vehicles in the country by the end of the decade.

Launching the new Volvo S 90 last week, Tom Von Bonsdorff, managing director, Volvo Auto India told ET, that he sees hybrid portfolio as a key differentiator.

“I really hope Hybrids can be called our thing. We have the capability of employing the technology in all our cars and if we are able to have a good Hybrid offering, we can eventually get a better ranking in the premium segment,“ Bonsdorff said.

Volvo eyes long haul transportation segment in India

NEW DELHI: Swedish commercial vehicles major Volvo is eyeing long haul transportation segment in India with GST rollout expected to spur growth of the category.

The company, which makes premium trucks for specialised sectors like mining, buses and construction equipment, also aims to cut logistics cost by achieving greater efficiency and minimising wastage.

“With GST coming in and changes in taxation, there will be positive changes in the transport sector and we would like to play a role, for instance in the long haulage transport, which would be more effective now with cross-border traffic between various states,” Volvo Group Chief Sustainability Officer and Chairman of the Board of Volvo India, Niklas Gustafsson told PTI.

Currently, he said, due to the long wait for commercial vehicles at state borders for paying entry taxes, it is not economically viable to operate such large long haul trucks.

The company believes it can be part of the solution for transporting goods over long distances, he added.

The GST would replace a plethora of cascading central, state, inter-state and local taxes with a single, nation-wide, value-added tax on goods and services.

The government now expects to roll out GST by July 1 after revising its April 1, 2016, target.

Elaborating further on the company’s roadmap, Volvo India Managing Director Kamal Bali said that so far, it only had presence in mining segment as far as its trucks were concerned.

“In mining sector, value proposition of Volvo trucks is very strong. Our efficiency and productivity was 30 per cent more than competition but when it came to long haul transportation due to interstate borders, the advantage disappeared because of the long wait at the borders.”

With GST roll out round the corner promising seamless movement of trucks across state borders, Volvo trucks would be able to cover a lot of distance.

“Today, trucks in India do an average of around 250 km daily and that can go up to as high as 800 kms. That is where Volvo technology will come into play,” Bali said.

The company already has the trucks which can do long distance haulage of goods in the country, he added.

“Besides, the next possible step in India is to check wastage..logistics cost in India is 13 per cent of the GDP which is very high. The global average is around 7-8 per cent so, I think efficiency will play a vital role,” Gustafsson said.

Bali said the company is doing a lot of work in IT and technology area and big part of its vehicle engineering and design is happening at Bengaluru.

“Also, Volvo group is sprucing up Eicher range in the heavy duty trucks’s happening both ways — the synergies between Eicher and Volvo group,” he added.

Volvo Group has a joint venture with

Eicher Motors

in India — VE Commercial Vehicles.

When asked about the impact of demonetisation on the company, Bali said: “There was a temporary impact for 1-2 months but the trucking segment bounced back in January.”

Expect two wheeler sales to increase amid COVID-19 situation: Eicher Motors

New Delhi: Going forward,

Eicher Motors

expects increased demand for two wheelers as people would be wary of using public transport amid the coronavirus pandemic, according to the company’s annual report. The company has presence in the two wheeler segment through Royal Enfield, which sells niche bikes across domestic and international markets.

Eicher Motors Managing Director Siddhartha Lal said Royal Enfield was witnessing a strong initial customer interest with the gradual easing of the coronavirus-led lockdown.

“Going forward, we do estimate an increased demand for personal transportation and two wheelers as people would be wary of using public transport. This we believe will augur well for us and for the industry as a whole,” Lal said in the 2019-20 annual report.

He also said that Royal Enfield continues to make concrete inroads to expand its retail network, while further strengthening its supply chain and vendor ecosystem.

“With an aim to further build accessibility through a host of seamless digital solutions and a variety of financial solutions, we are confident of capitalising on this demand as the situation stabilises,” he said.

Commenting on Royal Enfield’s international operations, Lal said it was well poised to expand and lead the middle weight motorcycling segment globally.

“Our international markets are beginning to show significant and sustainable growth trends on the back of motorcycles we have recently introduced — the Himalayan and the 650 Twin motorcycles — and we believe we have strong potential for further growing these markets for Royal Enfield,” he noted.

The company has recorded an overall volume growth of 96 per cent across international markets, Lal said.

“Both developing markets and matured markets have performed exceedingly well, with Europe registering a 100 per cent growth over last year,” he added.

The company’s overall volumes last fiscal declined 15 per cent to 6,97,582 units as compared with 8,22,724 motorcycles in 2018-19.

Total revenue from operations dropped 7 per cent to Rs 9,154 crore in the last fiscal compared to the year-ago period. Revenue from domestic business reduced 12 per cent to Rs 8,323 crore in the last financial year from Rs 9,418 crore in 2018-19.

However, revenue from international business more than doubled to Rs 831 crore 2019-20 from Rs 379 crore in 2018-19 on the back of a strong response to the 650 Twins resulting in almost doubling the export volume.

About the VECV business, Lal said, “while we expect the current year to continue to be challenging, we remain focussed on our long-term initiatives and are optimistic that the industry will be back on track soon, largely led by investments in infrastructure”.

VE Commercial Vehicles, a Volvo Group and Eicher Motors joint venture, is also bringing sharp focus on cost management and improving productivity, he added.

“We will continue to focus on driving modernisation in the commercial vehicle industry and we hope to better the market as the economy improves and the industry comes back on track,” Lal noted.

Nissan targets mass-market EVs

Nissan Motor has launched a study to gauge the opportunity for mass-market electric vehicles in India, close on the heels of Maruti Suzuki and Hyundai Motor announcing their intent to enter the same space.

The government is very serious about pushing the electric vehicle segment and Nissan will be part of it, said Peyman Kargar, chairman for Asia, Middle East and India region at Nissan Motor.

“We are considering getting into the mass-market EV segment, the study is on,” he said. “For the penetration of EVs, lot of factors are important … the battery cost, charging infrastructure and acceptability among the buyers. However, you will definitely see the Nissan Leaf from our side very soon.”

In June, Nissan India president Thomas Kuehl had said the company would bring the second-generation Leaf, one of the highest selling electric cars in the world, to the country in the current fiscal year.

The company is also exploring bringing the E Power technology to India by the end of the decade as part of its plan to participate in the green vehicle push.

Nissan’s alliance partner Renault has already started working on a small EV car based on the Kwid platform for the Chinese market.

It is almost a foregone conclusion that if Nissan enters with a mass market product, it will try to leverage the group synergies with Renault, which has expressed its desire to bring in Kwid EV for India as well, depending on the clarity on the electric vehicle policy.

The electric vehicle push is part of a larger come back plan by the Japanese carmaker that has remained a sub-optimal player in the India market despite introducing volumes car brand Datsun a few years ago. Kargar said the company was not happy with the its current position in the Indian market and was revamping the domestic operation, focusing on people, processes and products.

Apart from hiring fresh resources for the sales and marketing team, Nissan will be recruiting more than 1,500 people for its R&D pision and global digital centre recently set up in Kerala. The company will be setting up four zonal offices to address the large market more effectively than being managed centrally.

“India is the biggest priority market for Nissan. It is one of the fastest growing markets in the world with forecast of 5.5-million-unit sales by 2022. We want to participate in the growth of this market and we are working on fixing the fundamentals of our operation,” Kargar said.

Nissan also intends to clearly distinguish the mother brand from the mass market Datsun.

In the coming years, while Datsun will transition to the modern CMF-A+ architecture which will be more enhanced and competitive to challenge Maruti Suzuki, Nissan will have a portfolio of cars which are global and high on technology, including electric. The focus is on the global SUV portfolio starting with the Kicks coming in 2019.

Kargar said he did not want to pin point a specific volume or market share target, but the 5% market share target expressed by the company in the past was not a “stupid number”; that should be the first goal to achieve.

“We hope to fully utilise our plant by 2022 and exports will be a key part of the strategy,” he said.