Truck makers to move from basic economy trucks to value trucks
Moving beyond the product to offer complete solutions for truck customers will multiply growth opportunities.
The Indian truck manufacturers are moving away from basic economy truck to value trucks. Research & Consulting firm Forst & Suvillian in report stated that with growing volumes, regulatory changes, and the entry of new global players, customers are looking beyond a low-cost product toward productivity and efficiency at a price premium.
This gives a distinct advantage to market participants that have the ability to provide complete truck solutions to customers. The challenge is that value trucks currently account for less than 10 percent of the market, with volatility in freight rates, high fuel prices, and overcapacity slowing investment. Nevertheless, user focus on higher productivity, efficiency, and lower total ownership costs will steadily push value truck growth rates ahead of the economy trucks segment.
“Higher reliability and productivity are the major benefits of value trucks with overall cost of ownership being the major USP,” said Sunny Manjani, Program Manager, Mobility Practice, Frost & Sullivan. “However, the poor availability of drivers and growing importance of comfort and safety will require value-added services to be packaged in the value truck offerings for increased uptake and customer retention.”
While other significant trends shaping the Indian heavy duty trucks market include improving power-to-weight ratio of Indian heavy duty trucks, which are expected to reach current levels of those in China and South Africa within three to four years. Apart from this, immense potential for value trucks in South Asia, ASEAN, Africa and the Middle East that will encourage Indian OEMs to look at a larger market and compete with Japanese, Chinese, European, and South Korean OEMs offering value trucks.
Intensifying demand from cement, parcel, coal, and infra development industries that will propel truck makers to explore customized solutions for better returns.
“Market-leading, homegrown players should invest more in technology as well as look for more opportunities in export markets,” noted Manjani. Their future-ready technology will enable entrants like BharatBenz (Daimler India Commercial Vehicles) and VECV (Volvo and Eicher) to become formidable players in the coming decade. Other major participants in the India heavy duty truck market include Tata Motors, Ashok Leyland, Mahindra, and SML Isuzu.