Volvo Eicher’s light, medium duty vehicles segment to sustain growth in FY25

Bengaluru: Poised to take the plunge into making small commercial vehicles, Volvo Eicher Commercial Vehicles Ltd (VECV), is just emerging from a month of decline, when it posted a 18.1 per cent slide year-on-year in its sales volume in April 2024. Yet, speaking to DH’s Abhilash Reddy, the company EVP for Light and Medium Duty (LMD) Truck Business, Vishal Mathur, seemed pretty optimistic about the year ahead and their readiness for electric vehicle (EV) adoption.

Edited excerpts:

What is your outlook for the commercial vehicles in the FY25?

I would rather talk about the segment which I actually handle which is LMD - that means vehicles in the 5-18 tonnes range.

In the last fiscal the industry's growth was very close to the levels achieved in the previous year (FY23), which was actually an all-time high of 118,000. last year (FY24), the industry saw a marginal degrowth of almost 5.5% due to moving from OBD1(Onboard Diagnostics) to OBD2 and the fourth quarter's growth, a tad lower than the corresponding quarter of the previous fiscal.

We expect that this year the industry should definitely be evolving. It should match the last year's numbers and it can even surpass, going by the growth of large segments. You can see this in market load, ecommerce, even construction segment where these trucks are deployed. I think the LMD industry is looking for a good growth in this financial year.

VECVs market share in FY24 stood at 7.37 per cent. So, can you elaborate on the plans to increase this this market share?

In the commercial vehicles industry, one of the largest constituent is the heavy duty trucks, in which we registered sales of around 250,000 trucks a year in FY24 taking the market share up to 9.2 per cent from 8.3 per cent. We are operating very close to 10 per cent when Volvo Trucks, Eicher trucks and buses are combined in the heavy duty category. Also, we are making constant progress year on year. And we are, overall, catching up very high on the market share in that segment.

Coming to LMD trucks, in which I operate in, we are a strong player, we have 34.7 per cent market share in the 5-18 tonne category and we are strongly maintaining our position. We have registered consistent growth in market shares in LMD and HD segments with LMD market share going up to 34.7 per cent from 31.5 per cent last year. So, we expect that industry to be really going well. And we will look forward to maintain our market share or even improvising it.

What should the government do to expedite the EV adoption in trucking and logistics?

Currently we are focusing more on the development of EV market with our own efforts, and we are working with operators to expand their fleet with EV. From the government's side, I want the availability of charging infrastructure to be spread as much as fuel pumps. So, definitely government can facilitate charging infrastructure availability for the trucks so that our customers charge their trucks at the point of their need. It can help expedite the adoption of EVs.

What are advantages and disadvantages of EV adoption to customers?

So, let's talk about advantages. Basically, advantage is, one, I think.

The running costs per kilometre has come down heavily because they are not fuel-powered, the cost of which is prone to fluctuations. So, the total cost of ownership of EV, from buying of the vehicle to using it for 4-5 years, is much lower than the ownership of the conventional diesel truck. Therefore, it definitely makes economic sense for the customers to go for EV trucks.

Currently, the challenge is that limited charging infrastructure, because it is limited to the certain metro cities like Delhi NCR, Bengaluru, Mumbai. So, it doesn't give the customers too much freedom to charge the vehicle like you can fill the diesel at any petrol pump in the country anywhere. So, a big boost to adoption comes from the proliferation of charging infrastructure. If you see from sustainability perspective, 187 tonnes of Co2 emissions can be avoided in 10 years which is equivalent to planting 750 trees.

What are your company's EV expansion plans and investments?

We have taken the lead in introducing the first of its kind 2055, which is 5.5 tonne EV truck for the last mile connectivity. So, the expansion of EV trucks is now moving swiftly and at appropriate time, we will introduce the product in the market. We will definitely be ready for all the requirements and today we see the charging infrastructure is also developing, which helps to boost adoption. So, from our point of view, we are ready to provide advanced versions as and when the market requires it.

We also have EV buses being deployed in various cities into various applications and we are running them very successfully across the country. Our buses are running in Kerala, Chandigarh and Gujarat. Very soon, we will be sending them to MP also. So, we are finding very good momentum for electric buses in the market and working very closely with the relevant operators to increase our market share.