Martin Lundstedt, President & CEO of the Volvo Group, was recently in Bengaluru with his senior board members. Volvo is in India for the past 20 years, and Lundstedt said the company is “gradually increasing” its presence. In an interview, Lundstedt said the next big thing in India is GST, which he describes not only as tax reforms, but also as a transformational vehicle driving efficiencies.
Q: What is the idea behind getting everybody here? Also, you’ve been here quite often in the last two years? What is your reading of the market?
A: It is important to be in different business regions, instead of staying in the headquarters. We have been here for the past 20 years and are gradually increasing our presence.
I’ve had a chance to work with India for quite some years now in different roles. When you come to India, you feel the aspirations and what has really happened in the last 3-4 years is that it is not just about dreaming big but it is combined with execution. The next big thing is GST. It is not just a tax-reform, it will completely transform and make things more efficient. The marketplace is maturing and discussions are happening on uptime fuel economy, renewable fuels, hybridisation, and using different means of transportation, including waterways and highways.
Q: You met the PM yesterday. If you could share with us the discussion areas?
A: I think (his) is a very modern leadership and we had the opportunity to discuss the big picture coming from the big programmes run by the PM like Make in India , smart cities, Skill India and Digital India.
Q: You’ve participated in the Make in India Summit last year. Do you visualize Volvo playing a big role of Making in India for the rest of the world?
A: During Make in India, we had announced some decisions and have been executing them. We are running our global platform for the 5 and 8 litre engines up to the Euro VI standard, (Euro VI standard will be called BS VI), which will come in 2020 and is a strong direction from the government. We are already producing Euro VI here and exporting to Japan, Europe and other parts of the world. In addition, with some of the companies here, we have also been developing the T1 and T2 suppliers, because it (Make in India) is also about very strong component manufacturers and that is for me is safety, quality, productivity, and cost.
Also on the trucks side, in addition to Make in India, (we are working on) designed in India as we have the ownership of a number of platforms. So it is about competence and engineering and manufacturing, sourcing, developing together because Make in India will only happen if we have a strong ecosystem.
Q: What is your view on the presence of Volvo brands across categories in India, be it buses, trucks or commercial vehicles…
A: I think we have, over the years, created a strong platform in all categories. Take the trucks: So far, the most advanced solutions that trucks were standing for has been appreciated and maybe from a total cost of ownership perspective possible to defend in the most advanced segments like mining.
Then on the bus side, we continue to build on that. The next generation will shift to buses with Euro IV and also the right power, so you’re getting the average we required.
Penta will use the same platform that we are doing for buses and trucks, use that platform as Euro VI, DME, power the waterways. We are very proud partners of the Indian Navy. We have a strong line-up now for construction equipment.
Q: Volvo Bus is a very strong brand in India, but at the same time, profits seem to be another matter. What is the road to profitability?
A: If you take it from a group perspective, obviously it has been a pretty late transformation in the Volvo Group. Now we are focusing on commercial vehicles and construction equipment machinery .What we see now is that 8-9 quarters in a row we are constantly improving. We are also starting this year in a good way. The goal is not money, the goal is to serve the customer and the result is money.
Q: You’re one of the leading truck manufacturers of the world. In India, there is still some distance to go on that front. As a brand, how do you plan to change that?
A: Consistency is the name of the game because we are into B2B. First you have sales and then you have the aftermarket, I don’t necessarily follow that expression because that is our customer’s main market. We are actually providing production equipment – trucks, buses, engines, construction equipment for usage and the way we are treating customers over those years in terms of basic quality of the product, services, financing will actually play a very important part. B2B is about delivery, it is about the peace of mind for the customer, so that is our target. That is what builds the brand, there are no shortcuts. But in some of the segments, you don’t have the logic to buy a Volvo truck because the mileage is not there…
Q: How’s the JV with Eicher?
A: We are a very proud partner in the joint venture, Volvo Eicher commercial vehicles, and I think 8-9 years down the road knowing that partnership we have redefine dasweet spot for developing that competence.
Partners must have trust and we are in this because it is good for the two parties. We are bringing value to the table. We want to concentrate our investments on the VE Commercial Vehicles side, including the component investment and engineering. I can proudly say that that is one of the most well-functioning JVs that I have ever met and I’ve met a few.
Q: What are your plans for the UD brand in the Indian market?
A: This is also localised, and we are building it here. We have 6 brands on the truck side around the globe, we have 5 bigger brands on the bus side, including Eicher. We have some of the DRT solutions coming out now depending on traffic flows, frequency, number of passengers. India is not a country, it is a big continent if you think about it, with a lot of different needs, from the small villages, to the major cities and really modern developments happening and we don’t want to be missing opportunities, that’s the story.
Q: Where do you see electric buses?
A: As I said, the hybrid’s done and we are doing now two trials in Mumbai. Full electric is the next step.
Q: Technology is changing and with automation, internet of things what are the biggest challenges you see in future?
A: We need to embrace the fact that for us as a B2B company, what will be the real need for these types of automation, according to digitalisation of different end applications, such as mining. And then how do we actually use these technology opportunities to improve the operations for these guys. Trucks are connected, and with buses, we can do preventive maintenance, we can decrease service time, we can have distance driver coaching when we see that the driver is not using the equipment as he should do.
Source: The Economic Times
