Economics, not technology, to shape India’s HDV market

Michael Nash summarises a panel discussion from HD Truck Pune, with the focus on the next ten years in India’s heavy-duty truck market

The heavy-duty vehicle (HDV) market in India could soon witness considerable growth and development, providing certain factors do not hold it back. With this growth helping profits, OEMs could start to introduce new features.

Optimistic outlook

At HD Truck Pune, a one-day event hosted by Automotive Megatrends, executives from India’s HDV market came together to discuss what could take place over the next ten years or so. The panel consisted of Joerg Mommertz, Chairman & MD, MAN Trucks India, A. Ramasubramanian, President of AMW Motors and A.K. Jindal, VP of Tata Motors.

The initial discussion was centered upon the potential for growth in the market. “If you look at the heavy-duty segment, it has generally been a bit up and down for the last four to five years, but it grew very well last year,” recalled A. Ramasubramanian, President of AMW Motors. “My dream is to see a heavy-duty truck market close towards 800,000 trucks, which is probably what we deserve.”

Hosted by Automotive Megatrends, HD Truck Pune included an outlook panel featuring Joerg Mommertz, Chairman & MD, MAN Trucks India, A. Ramasubramanian, President of AMW Motors and A.K. Jindal, VP Tata Motors

For Joerg Mommertz, Chairman & Managing Director, MAN Trucks India, the outlook looks bright: “If GDP is at a level of 5% to 7%, and hopefully it will continue to be next year, the transport volume will grow. Also, customer demands are getting more focused on profitability and efficiency, which is leading to a higher speed for replacement.”

However, to ensure growth and development can take place, Mommertz thinks several key factors will play a role. The first, and perhaps most influential factor, will be regulations.

Regulation and economics

“What we need as an industry is a stable and predictable regulatory environment,” he continued. “This is very important, and inside this, we can develop the best solutions for the customers, whether that’s in comfort, safety, efficiency or productivity.”

Ramasubramanian agreed, referring back to the introduction of the emissions stage BSII in 2000. Initially, experts across India’s HDV sector agreed that it would take around four years for BSII measures to be implemented, but on reviewing this claim, the authorities enforced the targets in just 16 months.

With more stability, Ramasubramanian and Mommertz think that companies would be encouraged to be more competitive on a level playing field, fighting to identify the best solutions and bring them to market as fast as possible.

Aside from regulations, Ramasubramanian thinks that factors such as low total cost of ownership will play a key role: “I don’t think the technology is going to change the industry drastically, it will be economics as it has always been economics. It is nice if we can launch vehicles ahead of their time, but if we want them to sell, it has to be profitable for the customer.”

A.K. Jindal, Vice President of Tata Motors, agreed with this point of view, suggesting that technologies that could lower the total cost of ownership will often be top of the list for fleet operators when they are considering investments. This, he added, is closely followed by technologies that enhance connectivity.

Connectivity, digitalisation and automation

“A significant amount of work has been done in the space of digitalisation,” Jindal affirmed. “But, unless the user starts seeing the value of increased digitalisation, it could be a big challenge. And sometimes the users aren’t able to pay for these new digital features. In times to come, this will change.”

In India, as in other markets such as Europe and the US, connectivity in the HDV sector is used for diagnostics and telematics purposes. However, Ramasubramanian thinks connectivity and digitalisation could soon have other uses.

“If you ask fleet operators in India what the biggest problem in trucking is, they will say that they don’t have enough drivers,” he said. “Autonomous vehicles could allow us to operate vehicles without drivers, and we don’t have to worry about drivers losing their jobs. It may happen much faster than we think.”

Mommertz also believes that autonomous driving could prove extremely important for India’s HDV market. However, he thinks there are several factors that need to be addressed before autonomous trucks are deployed on India’s roads. “It is definitely a part of the future, there’s no doubt about it,” he affirmed. “But I don’t want to speculate on the speed of implementation. On the highways, there needs to be a type of infrastructure that can cope with autonomous trucks. And then there is the political discussion, which we are currently having in Europe, about who is responsible for the autonomous trucks. So there are many challenges.”