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Eicher Volvo JV VE commercial vehicle studying plans to enter mini trucks segment
Published on Fri, 16 May 2014 768 times viewed
VE Commercial Vehicle, a JV between Eicher Limited and Volvo, is exploring the possibility of entering the small commercial vehicle segment with a range of mini trucks, a move that could pit it against bigger rivals TATA Motors Mahindra & Mahindra and Ashok Leyland.

The product portfolio of India\'s most profitable commercial vehicle maker includes trucks with gross vehicle weight of five tonnes to 49 tonnes. It doesn\'t have any vehicle in the sub-5-tonne space, the top-selling category of commercial vehicles in the country.

Sources said that VE is studying the possibility of bridging the gap, launching one-tonne to three-tonne vehicles to challenge the dominance of Ashok Leyland Dost, TATA Ace and Mahindra\'s Maxximo plus.

They said that the company has already assigned the responsibility of spearheading the project to Mr B Srinivas, senior vice president for purchasing.

A decision on whether or not to proceed with the project is expected to be made in the next three-to-six months. If it decides to go ahead and the project passes techno-commercial viability studies, Volvo Eicher may launch the products in 2016-17.

The entry into new segment may also call for a new facility and it is studying the possibility of setting up a new plant on a plot of 150 to 200 acres at Mandideep on the outskirts of Bhopal in Madhya Pradesh.

It has already had a discussion with the state government on the possibility of setting up a plant there.

A person close to the company said that \"Eicher could use its Pithampur facility for SCV (small commercial vehicle) or it may use the new facility. The talks with the state government have been initiated to prepare for the next phase of growth for the company.\"

This is the third attempt by Eicher to enter the SCV space. It had conducted a study in 1996-97 and another in 2003-2004, but decided to stay away from that segment.

Given the size of small commercial vehicle market 3.59 lakh units a year or 56% of the overall commercial vehicle market in fiscal 2014 and the evolution of hub and spoke model (big trucks for highways and mini trucks for dispatches in cities) in the country, Eicher could not neglect this segment for long.

According to a Frost & Sullivan study, the SCV segment is expected to grow to 5.40 lakh units by fiscal 2019.

Mr Vinod Aggarwal CEO at VE Commercial Vehicles said that whether the company is considering entering the SCV segment.

Mr Aggarwal said that \"There are many areas we keep exploring, but there is nothing to share at this point in time. We will make an announcement at an appropriate time.\"

Source – Economic Times

(www.automobileguru.in)

Posted By : admin on Fri, 16 May 2014 | 768 times viewed
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