German truck major's Indian arm raises production target to 50 percent exports in the next two to three years, and contributing 10 percent to global production.
27 Jun 2017 | 6997 Views | By Nilesh Wadhwa & Sumantra B Barooah
German truck manufacturer MAN Truck & Bus is bullish on its India operations. The commercial vehicle major sees its Indian production contributing 10 percent to its total global volumes in the next four years.
MAN's truck range for India ranges from 16 to 49 tonnes with up to 82 ...
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German truck manufacturer MAN Truck & Bus is bullish on its India operations. The commercial vehicle major sees its Indian production contributing 10 percent to its total global volumes in the next four years.
MAN's truck range for India ranges from 16 to 49 tonnes with up to 82 percent localisation for various applications in the construction and haulage segments. Headquartered at Pune, MAN Trucks India has its production facility at Pithampur, Madhya Pradesh from where it has produced over 25,000 vehicles for domestic and international markets. At present, it has dealership network in over 60 locations.
With the company exporting 40 percent of its domestic production to Africa, Middle East and Central Asia, the internal target has been raised to achieving 50 percent exports in the next two to three years, and contributing 10 percent to MAN’s global production. The company already commands a strong presence in the EU market with dominance in Germany, the UK, France, Italy and Poland.
MAN Trucks India, a 100 percent subsidiary of MAN Trucks & Bus, crossed the milestone of the 25,001st vehicle rollout from its Pithampur plant in May 2017. With an installed capacity of 9,000 vehicles a year, the company claims 35 percent capacity utilisation.
Joerg Mommertz: "India is one of the most promising markets for us."
With huge challenges in the Indian market, the company has experienced difficulties in terms of subdued growth, competition from domestic majors, ending its JV and price parity. But MAN is driving ahead by banking on value for money. “India is one of the most promising markets for us. The company will not be looking at competing with domestic players in terms of pricing. We want to give our customers value for their money, it is just not about being the cheapest one,” said Joerg Mommertz, chairman and MD, MAN Trucks India.
With an R&D team in Pune, the company claims its Indian plant is the only plant globally where everything is assembled under one roof. In May 2017, the company introduced its latest EVO range equipped with a BS-IV engine, which replaced its existing products.
Optimistic on GST
With the GST rolling out from July 1, MAN, which positions itself in the premium segment, is quite optimistic that growth will return and customers will look positively towards total cost of ownership (TCO) and not just look at the purchase price as a factor. In the GST regime, the main driver for growth will be the hub-to-hub transport segment for M&HCVs.
Speaking to Autocar Professional on MAN’s India game-plan, Mommertz said, “The cost of truck hardware is just 15 percent of the total cost of ownership for a truck owner. Maintenance, fuel and taxes contribute significantly to the TCO. Our customers have found that our products offer better performance and with our strong focus on aftersales service, they can be assured of having a reliable partner with them.”
Future plans
Meanwhile, the company is not only planning to make India an export hub, but has also spoken about exploring cleaner and efficient energy. MAN Trucks is exploring the idea of CNG trucks but believes that diesel engines have come a long way from their invention to their current stage. Mommertz is of the opinion that diesel engines cannot be simply replaced with electric engines as they do not provide the necessary power.
However, despite the strong focus on growing its domestic presence and also making India production a significant contributor in its global volume portfolio, the company does not have any immediate plans for new investments.