The Third Wave

Selling not just CVs but Business Solutions

Abhay Firodia, Chairman & Managing Director, Force Motors Ltd

The first wave of development in India's Automobile Industry and business was the localisation of various cars, scooters, LCVs and trucks which activity started in the 60s. After rapid localisation, due to the Permit-Licence Raj, the industry became static. The first wave of development thus petered out by the end of 70s.

The second wave of development starting in the mid-80s, with the advent of new manufacturers with contemporary products in cars, two-wheelers, and light commercial vehicles, ushered in far greater enthusiasm, investment and industry volumes. Thus, the second wave was greatly strengthened with the liberalisation of the economy.

The last decade saw total change occurring in the character of the Two-Wheeler Industry and of the Passenger Car Industry. That change has been comprehensive. The 'Technology' harnessed by the Industry today is contemporary. The 'Products', produced and sold in India have evolved to international standards. The 'Plants', operated by the manufacturers of vehicles and by manufacturers of components are world-class. The 'Distribution Channels', offer unprecedented customer friendliness.

Value-added post-sales activities, have transformed the business models - of dealerships, of manufacturers and of service providers such as financing companies and so on. Above all, a huge 'Talent Pool', of energetic, alert, quality conscious, modern Entrepreneurs, Executives and Operatives has got trained in India. This wave of transformation which occurred over the last decade, has not spent itself. It will undoubtedly result in the further enlargement of the Automobile Retailing Industry, as the penetration of vehicles per thousand of population in India grows. The slowly but significantly improving infrastructure, coupled with today's excellent information technology availability and awareness about it in India, has helped this process to occur with relative ease. Excepting for the most uncompetitive (among Manufacturers, Suppliers, Dealers, etc.), everyone has gained in prosperity. The wealth created has been widely spread. If you take an objective view, the joy of business is all pervasive.

Abhaykumar Navalmal Firodia Abhaykumar Navalmal Firodia is presently the Chairman and Managing Director of Force Motors Limited. He also serves as a Chairman of Jaya Hind Industries Limited and is a Director of quite a number of companies like Bharat Hotels Limited, Dhoot Industrial Finance Limited, Sudarshan Chemical Industries Limited, ZF Steering Gear India Limited, etc. For fifteen years, he has been the Managing Director of Jaya Hind Industries Limited, whereby his managerial capabilities and uncompromising work ethics have served as great examples. Abhay Firodia has also had the honour to be associated with various prestigious bodies. President of Automotive Components Manufacturers' Association (ACMA) during 1981/82, he has gone on to serve as a similar dignitary in Society of Indian Automobile Manufacturers (1990/92), Indo-German Chamber of Commerce (1996/97) and Automotive Research Association of India (2000/02). Besides, his involvement in many social and charitable institutions has earned him many admirers among people from different walks of life. All his achievements during an illustrious career got due recognition on 8th April, 2001, when he was presented the "Jain Ratna Award" by Shri Atal Bihari Vajpayee, the then Hon’ble Prime Minister of India.

 
The next wave, in the transformation of the Indian Automobile Industry, is now imminent.

The 'Next Wave' of transformation, will affect the entire spectrum of the Commercial Vehicle Industry.

The working vehicle in India, like everywhere in the world, has to earn its keep. The 'Business Model' for the commercial vehicle operator - whether he is an autorickshaw driver, or a small tempo stand operator, or a long haul trucker - will undergo a significant change over the next decade. A decade later, say in the year 2015, the country will present a picture with a far greater difference on the commercial vehicle - Products, Plants, Channels and Customer Business Models - than the great change that has already affected the two-wheeler and the passenger car industry over the last decade, from 1995 to 2005. The next change will be faster, more fundamental and therefore stronger. More so, because it is actually late in coming, and also because it is driven by hard economic facts - much more than by softer and more humane issues like Branding, Comfort, Convenience, Style, etc.

The transport operators do not buy vehicles. They buy transport solutions. The possibility for the transporter to compare options, and to evaluate the most attractive economic solutions available to him to choose from, is as much dependent on the different available product propositions - as it is dependent on parameters affecting his business environment.

The choice of commercial vehicles to purchase, is not a matter of choosing between products alone. The load availability (in both directions of a route), the road quality, the average traffic speed attainable, the customer expectations of service, and possibly above all, the Regulatory / Licensing / Permit environment in which he operates, are some of the major issues, which affect the business model of the transporter or of the commercial vehicle operator very significantly.

These aspects are not directly addressable with purely technological solutions. A combination of modern product technology, improved road/load culture, fleet aggregation/ standardization, greater containerisation and standard palletisation, superior information management, etc. are crucially important factors, which can enable or even prevent a technological solution, to actually deliver the potential benefits to the transporter, and thus to the using public.

A significant change in some of these aspects is inevitable. The force of history is too strong and will make the country move in new direction. The pointers are clear.

Higher Power to Weight Ratio

With improved road surfaces and enlarged road infrastructure, the average traffic speeds are enabled to improve. Higher power enables carry greater loads, and if the road infrastructure and traffic culture permits, this can be done at higher speeds. The key question is to ensure that the fuel economy aspect is assured while offering higher load carrying capacity and higher speed capability. It is to be a win-win proposition. This is possible with proper engineering.

New Generation Aggregates

A completely new generation of aggregates like Engines- with significant levels of electronics, Gearboxes with much higher torque capabilities, Axles with far greater reliability and load carrying capacity, as also Cabs with greater safety and superior ergonomics, etc. are bound to become the norm over the next decade.

These changes are win-win changes. The superior engines not only enable higher power and speed, but also offer superior fuel economy and least down time. Similarly, gearboxes with modern technology, including planetary gearing, quality 7-ground gears, servo shifting, etc. offer significantly reduced friction; they enable improved fuel economy, while ensuring least down time. Very high change intervals for oils and excellent drivability, including gradability, etc. are possible. The driver friendliness of these gearboxes encourages use of proper gears - which is a very little understood, but most crucial aspect for achieving good fuel economy.

Safety and Ergonomics

Ergonomics (fatigue control, due to proper engineering of seating posture and placement of control levers, pedals, etc.), NVH - Control of noise and vibration, Improved Visibility for the driver can be assured in the modern cabins thus leading to Diver Comfort. Actually, road safety is severely affected by the commercial vehicle driver's level of comfort. His willingness to drive in the proper lane, at appropriate speeds is greatly dependent on the responsiveness of his vehicle, as provided by the combination of engine power, steering effort, gear shifting quality, visibility, etc.

Fuel Economy

Above all, driving in the proper gear at the proper speed under any load condition, Is the key to fuel economy. Besides a torqy engine and a modern gearbox, a superior cabin offering excellent ergonomics facilitating proper driving speeds, is one of the most effective ways to enable the driver to deliver fuel economy. All this is achievable, while ensuring road safety for the general public.

The commercial vehicle manufacturers - whether selling buses, trucks, taxies, tempos, autorickshaws - will all move in the above direction. The success of their Sales Channels will depend - on the acceptance of the inevitability, not only of new products with superior technology, but of the directly consequent discipline in effecting sales and in providing service, that it imposes.

Electronics in Vehicles

Euro III and above engines will be managed/governed electronically, particularly the diesels. The era of the master mechanics is about to end. In future, engine diagnostics cannot but be computerised, given the complexity of the electronics on the vehicles. The Dealership network in India, selling two-wheelers and passenger cars have adapted beautifully - to the consumer preference in fit, finish, styling, convenience, value-added service, etc. It is a matter of great pride for our country that the vast majority of dealers have learnt and institutionalised the most modern customer friendly systems and culture, in their own activities. They have coped with the more difficult problem of learning to respect the customer. They will have also to tackle the smaller problem of learning to respect technology. Automobile dealers, just as much as automobile manufacturers, will be compelled by events to create the discipline in their organisations, to cope with electronics in vehicles.
 

New Generation Aggregates for Efficiency, Performance, Safety & Ergonomy
New Generation Gear Box Servo - Electronic Shifting	New Generation Engine - Electronically Controlled
Servo Electronic	Complex on borad electronics, connecting engines, transmission, brakes, safety features etc.
Schematic of Servo Shift	European Standard Ergonomic Truck Cab

 
Selling of Business Solutions

The buyer of a two-wheeler or a passenger car, demands and gets greater value from today's automobile, than he could ever get from the previous generation of vehicles. This benefit is available to the car or two wheeler customer, without his having to go through a learning curve on how to use the next generation vehicle. His driving skills were always adequate. Personal ownership ensures loving care for the product.

The game however is quite different for commercial vehicles. New technology will first of all deliver a different business model, a changed business proposition, to the transporter. This calls for a monumental effort to train and enable the driver-

a) to actually utilise the potential economic benefit

b) to manage the expensive and sensitive componentary, with discipline and knowledge.

Training and installation of drivers - and the installation of vehicles - will be increasingly important and will need to be formally and correctly addressed. Without this effort jointly - by the trucking fraternity, by dealerships and by vehicle manufacturers - the full benefit of modern technology in Commercial Vehicles cannot be realised.

The role of dealers in commercial vehicle installation in future, cannot be under-stated. You can't simply sell a truck or bus in future. It is not going to be a simple device, but will likely be a specific business solution, to be used in a careful manner. When carefully calculated in detail - the revenue possibility for a particular type of transport operation on a specific route and for a known load/overload, etc. will need to be compared to the cost outgo for the same activity for a given model/make of a vehicle. This calculation will give significantly different results based on the fuel economy, the trip speed, the maintenance cost that different vehicles offer. These calculations will need to be mapped and compared, to arrive at a business solution which is more profitable. The difference can be most significant.

Creating and Mapping of Solutions

Selling of products is a thing of the past. In future, the Commercial Vehicle Dealers, Automobile Manufacturers and Business Associates such as speciality application builders like tippers, etc. must sell specific solutions. 'One size fits all' will not work in future. Selling of applications instead of products, involves creation of mapped solutions specific to requirement. This is much more so for heavier vehicles. However, this will also be predominantly so, for the medium commercial vehicles. Surely also, vans, taxies etc. will also become much more demanding in terms of seating layouts, customer comfort, long distance versus short distance utility, etc.

The advent of modern buses and vans has already begun in India and this revolution will be very big. Let us not forget that by far a higher number of people moves in public transport. The vast bulk of goods also is carried by trucking companies. The GDP growth of the country, if it is sustained between 7 and 10 per cent per year, will call for multiplying the present vehicle fleets - leading to competition, to specialisation, to selling of applications, to carefully mapped solutions for each usage, and above all to Customer Relationship Management. Loyalty schemes based on economic considerations, is what will drive the business for commercial vehicle dealers, much more than other considerations. And, much more than in cars and two-wheelers.

There are a few issues of down side also to the future. For one, customers will be even less tolerant. Also, the complex equipment and mechanisms are less forgiving of misuse or bad maintenance. Advanced engineering and evolved electronics lead to very few - but when they do occur - tricky glitches. To cope with these issues, creating a new service infrastructure - replete with diagnostics, instrumentation, mobile service capability and above all trained and accessible manpower - will be a big task before the industry.

I am sure the dealer fraternity - and there are thousands of automobile dealers in India who have achieved success in a competitive environment - have what it takes to make the transition to a new era, in commercial vehicle transportation. The future is exciting to say the least.