Volvo-Eicher JV rides infrastructure, e-commerce boom

The facilities of VE Commercial Vehicles (VECV), a joint venture between the Volvo Group and Eicher Motors, are running at near-full capacity, thanks to the strong demand for commercial vehicles due to rising infrastructure activity and delivery of e-commerce shipments by leaders like Flipkart and Amazon. To address this, the company is planning to expand capacity in the coming fiscal. Shyam Maller, executive V-P, sales and marketing, VECV, says the industry’s recovery after September has been remarkable: “Most of us were unprepared whether the industry will bounce back so quickly. So, I think we are all more than rushing back to the drawing boards, to ensure how we don’t lose out on the opportunity.” The company’s manufacturing plants are currently working in three shifts, and their utilisation is almost touching 100%. While the company produced 6,000 units, across its model range, in January, it is targeting 7,000 units in February.

One of the drivers of demand is the e-commerce sector. The firm told FE that e-commerce firms have started placing bulk orders and generally require trucks ranging from light to heavy, which has resulted in better volumes. To cater to the segment’s specific needs, VECV has launched variants of its existing line-up that maintain the payload, or the weight a truck can carry, but increase the overall volume or space provided to carry goods. This is done by widening the body and providing a longer wheelbase. The demand is also expected to rise because of the country’s transition to the GST.

The firm has also launched existing products with slightly higher payloads in its portfolio, to help transporters overcome overloading restrictions placed in various states in the country. However, Maller says despite the rising growth in sales, the high discounts on trucks may continue. “I can call it a disease. It is something for which each OEM blames the other. It is a vicious circle that we are all stuck in,” he said.

Volvo India