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00:00We are now taking stock of VECV on the back of their September sales as well as their

00:04outlook for the full year as well as any kind of commentary they have on the new PM eDrive

00:08scheme as well.

00:09We are now joined by Mr. Vinod Agarwal, MD and CEO of VECV.

00:14Good afternoon sir and thank you so much for joining us today.

00:16I wanted to start off with the September sales numbers because it was a very strong show

00:20by VECV in this particular month.

00:23When you look at the competition as well, both players have reported a negative sales

00:28outlook while you have shown 5-6% growth in this particular month.

00:32Talk to us what led to this particular growth and we will get into the FY24 outlook in just

00:37a bit.

00:38But just for September, what led to this strong growth?

00:40Absolutely, as we have said, we have grown by 5.7% in September and in fact, if you look

00:48at our track record even last full five months, we are consistently doing better than the

00:56industry.

00:57So September the industry has dropped by almost 16% and we have grown by 5.7% which means

01:03that we are improving on our market shares every month and that is happening because

01:12of very, very, you can say, wide product range and then of course we are also improving on

01:19our network.

01:20We are adding more distribution points and then of course it is based on the satisfaction

01:29of the customers with us that they are preferring Aishwarya trucks, Aishwarya and Volvo trucks.

01:36So all these factors combined together, we are doing better than the industry.

01:41Now before I come to the new scheme which is coming by the government, I wanted to talk

01:46about your segmental performance as well because we have seen for this month as well

01:51as for FI25 specifically, you have shown positive growth while the other players operating in

01:58the space are still 1-2% down.

02:00Now you have shown good growth in the heavy-duty trucks specifically while the light and medium-duty

02:07trucks has been around 3-4% fall for these first six months, for the first half of FI25.

02:13How are you seeing the market now going forward for both these segments because it's a divergent

02:18trend that's happening in the industry versus what's happening at VECV, so just talk to

02:22us on that also a bit.

02:24Fundamentally, if you look at the heavy-duty trucks first, in heavy-duty trucks we are

02:30still relatively a very small player.

02:34So we have a very high room for growth.

02:38We are still both Aishwarya and Volvo brands put together.

02:43We have a market share of around 9.7%, which is still, you can say it is much, much lower

02:50as compared to the other players.

02:52So therefore, we have a very clear objective that we have to consistently improve in our

02:59market shares in heavy-duty trucks.

03:02And that's what we have been doing over the past few years.

03:05Step-by-step, steadily, we are improving the heavy-duty trucks market share based on a,

03:13you can say, very wide product range and improved distribution network and better customer satisfaction

03:22with our products.

03:23For example, we are offering better fuel efficiency, all our trucks are connected, and we are offering

03:31various services which are based on these connected trucks, very advanced telematics system.

03:42We are providing predictive maintenance.

03:44So we are providing various types of value-added services which customers are preferring and

03:51they are liking that, and more and more customers are therefore moving towards our trucks.

03:57So that is why we are improving the market share.

04:01And if you look at the light and medium-duty trucks also, even though there is a drop as

04:08compared to the previous year, but that drop is less than the drop in the industry.

04:13So therefore, in the light and medium-duty trucks also, our market share is consistently

04:18improving.

04:19On a YTD basis, our market share is now 35% plus.

04:23So there also, we are doing better than the overall industry movement.

04:29Point well taken, Mr. Agarwal.

04:31Now just wanted to shift focus a bit to the electric truck side as well, because we've

04:35seen the new scheme announced in the PM eDrive scheme.

04:38Now there is, while we are still awaiting the final prints of the day scheme, there

04:45is an understanding that roughly about 35% to 40% allocation will go towards buses as

04:51well as trucks will also getting a higher exposure now compared to FAME 2.

04:55How are you seeing the new PM eDrive scheme as a whole?

04:58And I'll come to the payment security mechanism a bit later on.

05:02Just wanted to understand on allocation and what's announced until now on the PM eDrive

05:06scheme.

05:07How do you see that playing out over the next couple of years?

05:12And where is VECV in terms of electric trucks as well as LCVs as well specifically?

05:19If you look at the eDrive scheme, PM eDrive scheme, now all the details are available.

05:24Government has already issued the notification and they have given the complete details that

05:28how much is the allocation for each category of vehicles.

05:32For example, for buses, government is proposing to give this subsidy for 14,000 plus buses

05:40and the amount allocated is around four and a half thousand crore.

05:44I don't remember exactly, but it is around four and a half thousand crore.

05:48And the subsidy will range from 20 lakhs per bus to 35 lakhs per bus depending on the capacity

05:55of the bus.

05:58And then, of course, as you mentioned, payment security mechanism is also there, which earlier

06:03was not there.

06:04So they have allocated around three and a half thousand crores in addition to PM eDrive

06:09scheme, which will go towards mechanism of security for payment by the state transport

06:20undertakings.

06:21So that is also a very good scheme.

06:24Just wanted a bit more color on this because you mentioned previously in our previous conversations

06:29as well that the absence of this payment security mechanism is keeping you out of the market

06:35because the current mechanisms or the fares that is allocated and the operationalizing

06:43of the buses for the next 10 to 12 years once you sell the buses as well is a key concern

06:49that you had.

06:50How are you seeing and what's the current strategy for VECV after this change and addition

06:55of payment security mechanism?

06:58I think that was one of the very big concerns for the entire industry that the buses were

07:04given on gross cost contract basis, under which you are not only giving the bus on a

07:12lease basis, you are also running and maintaining the buses.

07:18And of course, you get the payment in the form of per kilometer basis every month.

07:24Now, this payment has to come for 12 years, since this 12 year is a very long period and

07:31the exposure is on the state transport undertakings.

07:35So there was the risk of payment coming on time during this 12 year period.

07:41Therefore, the industry had been discussing with the government that unless there is a

07:45security mechanism by which the payment is guaranteed, suppose there is some default

07:50in any payment, then of course there should be some mechanism under which that default

07:55can be corrected immediately.

07:58So that government has now addressed that concern.

08:00So therefore, we are expecting now the new tenders will be floated by CESL and then under

08:09those tenders, we will participate.

08:11And of course, we have all the products and we are very keen to participate in these tenders.

08:17Well, that's great to hear Mr. Agarwal.

08:19So just confirming, so you already have an EV bus product that's already ready and ready

08:25to go in the market.

08:27And do you also have an EV truck also that is already ready to go in the market or what's

08:32the timeline on both these aspects?

08:33No, we have both the products.

08:35We have the trucks also and we have the buses also.

08:39Just one final question, Mr. Agarwal.

08:41Now, how are you seeing the fiscal year for VECV as well as for the industry?

08:46Because while quarter 1 was very strong, which was a key surprise for many, quarter 2 has

08:52been a key laggard, which generally is slower for the industry, for commercial vehicle segments

08:56specifically.

08:57Now, the impetus has shifted to growth in H2 itself.

09:02So how are you seeing the industry growth for Q2 for trucks as well as buses specifically?

09:08And if anything, you can quantify for VECV as a whole for FY25.

09:12I know you are in silent period for Q2, but for FY25, how are you seeing the volume growth

09:17for VECV as well?

09:20As you have rightly said, the Q2 has been down as far as the entire industry is concerned.

09:27Like for example, the month of September, the industry has been down by around 16% for

09:333.5 tonne and above vehicles.

09:36The months of July and August also were down by 8% and 9% respectively.

09:41So the entire quarter 2 has been down.

09:44Quarter 1, of course, there was growth.

09:47So both the quarters put together, the industry is down around by 2% first six months.

09:53And as against this drop of 2.2%, I think, we have a growth of 3.5%.

10:01So we have consistently done better than the industry.

10:04Now, if you look at second half, I think there are a lot of positive factors in the second

10:09half, which should give better situation for the industry.

10:14For example, infrastructure investments will start in a big way because the government

10:20has now allocated a lot of allocated money for the infrastructure projects in the last

10:28two cabinet meetings.

10:29Various decisions have been cleared, allocating the money for rural areas as well as for the

10:36infrastructure projects.

10:38And the overall allocation, of course, for the full year has been very handsome, 11.1

10:43crores.

10:44And most of that will happen in the second half only.

10:48So therefore, infrastructure will lead the growth story in the second half.

10:53Apart from that, the other fundamental factors are also better, like monsoon has been better

10:59this year.

11:00Rural economy is relatively better as compared to the earlier years.

11:04We have seen the two wheelers also are now doing well, scooters are doing better, which

11:10are largely in the rural economy.

11:14So therefore, rural economy is better.

11:16There is a good economic case for doing more replacements.

11:19Then, of course, we are also expecting that there will be some respite in the interest

11:24rates.

11:25Reserve Bank of India might reduce the interest rates in the coming months because inflation

11:31is better controlled.

11:34Inflation is now, retail is just around three and a half, four percent.

11:40And of course, the other factors are also positive.

11:44Like if you look at the overall economy, we are expecting good growth in the economy.

11:48The challenges are only geopolitical factors, because this war which is now going on and

11:53there are chances of escalation.

11:56I think these are the factors which create the negative sentiments and which, of course,

12:01lead to some people waiting and watching.

12:04I think that is the biggest risk which currently we are having.

12:09Other than that, I think we have all the positive factors and we are very optimistic

12:13that second half will be much, much better than first half.

12:16Well, that's great to hear.

12:17So just one final question on your domestic bus market share.

12:21Now, you spoke about the electric bus market that you will be able to enter now with this

12:24new scheme.

12:25I just wanted to ask you for your strategy on ICE as well, because we've seen that the

12:31market is divided between a couple of players having one third market share while the others

12:35are cramping for the third part.

12:37How are you seeing the strategy for VECE specifically on the ICE bus market over the

12:42next 12 to 24 months, if longer term as well?

12:46Do you have any kind of target market share that you want to achieve?

12:50If you look at the bus market, in fact, that is the segment which is doing very well.

12:54Even though the trucks are down in the first half, the buses have grown by 21% in six months

13:00and buses are all-time high.

13:01Even last year also, bus market was all-time high.

13:06And this year, for six months, there is further growth of 21% on the higher base.

13:11So therefore, I think the bus market is doing very well.

13:14And within the bus market, we are also doing much better.

13:17Our market share in the light and medium duty buses, it is around 24-25%.

13:23And in heavy duty buses, we are around 10%.

13:26So overall, we are growing in the bus market also.

13:31We have good plans even for the second half and we are expecting to have good growth in

13:36the bus market in the second half as well.

VECV Outperforms Peers In Sept Auto Sales | NDTV Profit

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