Running for the fourth time and attracting more than 300 delegates, The Commercial Vehicle Forum is the leading event for the Indian Commercial Vehicle industry.
The Q&A session with Partho Roy, AVP, Foton Motors, sheds light on some of the key trends in the commercial vehicles industry from a sales and marketing perspective. This forms part of the 'Knowledge Series' and offers a preview of the thoughts participants can expect to gain insights from during the Commercial Vehicle Forum, scheduled to take place on November 24, 2016 at The Westin, Chennai.
With the industry starting to feel a shift in thought from upfront cost to total cost of ownership of a vehicle, how will this change the game play for premium players?
This shift is not new, not something that is happening now, this has actually been the case for some time now. For example, if you analyse any large fleet operator you will realise that these companies always looked at total cost of ownership. They have their own estimates in place as to the useful life of the vehicle as part of their fleet and how much load will it carry during its lifetime. They estimate as to how they will recover their costs through the life of the vehicle so that they can dispose it off at the end of its useful life and then replace it with another new vehicle. In such a scenario, any player, be it even a premium player needs to come up with a Customer Value Proposition (CVP) for the customer.
With the brand lines (product ranges) going deeper and deeper to satisfy the differing needs of consumers, how does this impact the business model from a cost perspective?
In today’s markets, CV players are not only catering to the customer’s application needs but are being forced to further deep dive within those particular product applications due to varying customer needs. Which product range should be picked up and pushed in the future versus which one should be dropped are some key questions that players need to answer. It necessitates that the OEM’s look and relook at their business plan both in the short and the long term. And any small change in their business plan can have a huge cost impact. For example, answering questions such as should I upgrade an existing 35 tonnes in my product range or launch a completely new product in its place are matters which the OEM’s need to deal with on a regular basis.
What innovative process engineering techniques should be followed to keep a check on cost as well as the meeting the desires of consumers (i.e. more and more variety)?
Costs need to be kept in check by the vehicle manufacturing OEMs even at the dealer level. For OEMs to reach mass market or even the premium segment requires having an extensive dealer network in place. However, establishing a dealer facility can be an expensive proposition given high real estate cost in India. Industry is slowly evolving from having large dealerships in place to having dealerships which take up lesser space and are highly modular in nature. This results in lesser initial investment and provision for scale-up as business grows. Use of digital tools and initiatives is helping provide customers with the whole touch and feel experience in such smaller dealerships. Similarly, in case of after sales/services, players are looking at innovative processes to serve customer needs. For example, provision of mobile repair services to minimise breakdown losses without obviously comprising on the quality of care and service to be offered. This is extremely important, as potentially a vehicle could be carrying perishable goods wherein breakdown loss is not an option. In such a case the diagnostic needs to be quick and perfect and the repairs need to be spot on.
Also, in case of spare parts, no repair facility can have 100 per cent of the spare parts in store. What is important in such a case are efficient logistics. If a truck breakdowns and a spare part is required, then how can the spare part reach the repair facility in the least amount of time. You need to have an efficient spare parts supply chain in place to take care of such issues.
How is digital impacting the commercial vehicle industry? Is there an uber like disruption waiting to happen in CV industry? How will it impact the CV players?
I don’t think that such a disruption will take place anytime soon. The industry has not matured to a stage wherein such a disruption can take place. Maybe this happens in the future but not at this
point in time. Customers have still not warmed up to the use of new innovations such as telematics, Fleet Management portals etc.
How important is after market in the overall game play, especially in a country like India? Should this be one of the critical pieces to be answered/assessed while the product is still on the drawing board?
Yes, it absolutely is. Before a new product is launched in the market it is imperative that a player answer questions such as which customer application should I cater to; how can I best serve the service needs of this product segment etc. For example, a mining tipper is not going to get used on a highway. In such a case the player in this segment needs to have in place a clear strategy as to how they will go about serving the breakdown, preventive maintenance and spare parts needs of such a product in remote/difficult terrains of India.
About Commercial Vehicle Forum 2016
Running for the 4th time and attracting 300+ delegates, The Commercial Vehicle Forum is the leading event for the Indian Commercial Vehicle industry. This year’s theme will be: Indian Commercial Vehicle Industry 2020 – 3Cs (changes, chances and challenges) and how can resulting potential be captured.