There are two types of investment: Investment in R&D and capacity creation. While R&D is an intangible and continuous process, we have always invested in enough capacity to take care of the future. We have got enough capacity for the next two years.
19 Aug 2017 | 4426 Views | By Nilesh Wadhwa
Ravi Chopra, chairman, Piaggio Vehicles speaks to Nilesh Wadhwa on expanding Piaggio dealership network, total production every year and future investment plans.
Small CV sales have been on a decline of late. What is your reading of the coming months?
The sector has not got into a downtrend. ...
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Ravi Chopra, chairman, Piaggio Vehicles speaks to Nilesh Wadhwa on expanding Piaggio dealership network, total production every year and future investment plans.
Small CV sales have been on a decline of late. What is your reading of the coming months?
The sector has not got into a downtrend. What you have seen is temporary. Demonetisation and other factors impacted growth of the economy and consequently growth of commercial vehicles. Look at things differently, and you will realise that the country has done well and the growth which has been projected now is the second phase of growth. The first phase of growth got nullified because of demonetisation.
Do you plan to expand the Piaggio dealership network?
We expect the market to grow every year. The fact that we are in business should take care of growth. Either we grow the market and own the market or the market grows and we get part of growth. The prime minister is doing a good job, the steps that he has taken will go a long way. Taxes are in place, implementation has to happen; you will see tremendous change in the next 3-6 months.
What are your future investment plans?
There are two types of investment: Investment in R&D and capacity creation. While R&D is an intangible and continuous process, we have always invested in enough capacity to take care of the future. We have got enough capacity for the next two years.
What is the level of localisation in the Porter 700?
The Porter 700 is a 100 percent localised made-in-India model. Since our inception in India 18 years ago, we started made in India and continue to make in India. One of our strategic decisions is whatever we produce in India will be localised as much as possible. All our three- and four-wheelers are localised; two-wheelers are also localised up to a large extent.
With a current market share of 0.33 percent ( < 3,000 vehicles sold between April 2016 to April 2017), how do you plan to disrupt the LCV market?
Target fixation is an internal matter for the company. You look at the market through segments (LCV, M&HCV) while we look at the market differently. We cater to last-mile distribution which consists of three-wheelers as well as four-wheelers. In that segment, we were leaders yesterday, today and will continue to be leaders tomorrow. Almost 50,000 to 60,000 three-wheelers are sold by us every year, in a market of 105,000 vehicles. With an over 50 percent market share in three-wheelers (good carriers) and the addition of the new product, the Porter 700 will only add up to our share in last-mile transportation. We will consolidate the entire process and improve the leadership, whereby our overall sales will help grow our market share. We will sustain our leadership in a much more sustained manner.
Will Piaggio shift focus from three-wheelers to four-wheelers in India?
Our focus is not shifting to four-wheelers, it will also be on four-wheelers. Three-wheelers simply cannot be wished away. They may grow 3, 5, 8 or 10 percent but will never stop growing. Cargo-wheelers will always remain and co-exist with four-wheelers.
(This interview was first published in Autocar Professional's 1st July 2017 Issue)