BMGI Presents Roadmap for Top and Bottom Line Growth for the Indian Commercial Vehicle Industry

PUNE, April 24, 2014 /PRNewswire/ --

As the strategic advisor for India Commercial Vehicle Summit 2014, held in Hotel Novotel, Pune on the 10^th and 11^th of April 2014, BMGI presented the road ahead for the Indian commercial vehicle industry's uncertain times. The event was organized by Shanghai based Lnoppen who facilitates business through events and market research across Asia and Europe. The event comprised thought leaders from across the world from the industry with senior management representations from OEMs, Tier 1 and Tier 2 suppliers that included Ashok Leyland, Tata Motors, Hino Motors, John Deere, Volvo-Eicher Commercial Vehicles, SML Isuzu, SKF to name a few.

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Event chairman Mr Naresh Raisinghani, CEO and Executive Director, BMGI, recounted the current realities in the industry viz., unutilized capacities, YoY de-growth, dependence on GDP amongst others that would continue to detract the industry in the short term. He identified the opportunities, comparing the vehicle densities in India and the developed market, planned infrastructure spending and the opportunity for exports. Mr Raisinghani appealed to the tier 1 and 2 suppliers to cut costs through a cost tree drill down, optimize man-power and reduce material costs through value engineering. He advised addition of products/service lines, entering new geographies and expanding reach through channels to enhance the top-line.

BMGI unveiled a whitepaper titled "Forward and Upward - Coming Out of the Cyclical Downturn" that explores alternate business models and asserts that for the CV industry to cease dependency on the volatility, an innovation in the business model innovation is the way forward. The paper says this could be brought about even through a cross industry synergy, where the challenges of one industry could as well be the core strength of the other. The paper was made available exclusively for the participants of the summit.

Providing a perspective on the future of Indian trucking, Mr Shyam Maller, Sr Vice President, Sales & Marketing, Eicher Trucks & Buses, pointed to the consumer shifting to products that perform better. He shared actions taken by VECV towards offering fully built solutions like focusing on driver comfort and drivability, vehicle lifecycle profitability, optimized maintenance cost, high re-sale value for the owner, amongst others.

Demonstrating that technology can be leveraged to improve safety, Mr Abhay Damle, Director, Central Institute of Road Transport (CIRT), Pune shared how event data recorders, akin to the black box in an aircraft, records and transmits information in real time about the vehicle even to the detail of over-speeding.

Mr Amba Preetham Parigi, advisor to the NEA, India projected the likely actions in the first 100 days post forming the government in cases of either a stable government or a hung parliament. Mr Parigi explained that the actions viz., developing industrial corridors or investments in infrastructures would remain the same, irrespective of which political party comes to power. Sharing the success of Yamuna Expressway, he said the faith is reinforced despite the almost nil expectations from the government and shared that key policies like GST, land acquisition and rehab bill are bound to help the industry. He urged the industry to cheer up and advised the global OEMs to plan for their respective India story in Decades and not years.

How to rationalize product costs? Can the challenge of cost be converted into a sustainable advantage? Mr Nirmalya Banerjee, Business Head, BMGI seemed to answer this question through his presentation as he drew the attention to the contradiction between the sales and profitability. Starting with a tear down analysis of the design by benchmarking by function alone and subsequently analysing the value of the function w.r.t the cost of the function, the opportunities for cost reduction can be zeroed in, he illustrated. With a case study and utilizing tools like Biomimicry, TRIZ, Mr Banerjee showed that not only is it possible but also the potential for CVs in India is high.

Dr PKC Bose, MD & CEO, Saertex made a case for advanced composites which are light in weight, superior in strength and can withstand greater fatigue. With Finite Element Analysis results proving ruggedness of the composites, he reminded the audience that technology disruption takes time but is absolutely critical to India's future public transportation needs. Continuing the pitch for light-weighting, Mr Dileep Naik, Head - Auto Projects & Production Engineering, Tata Motors recommends use of high strength steels. Given the fact that formability and strength are inversely proportional, Mr Naik outlined challenges this may pose in the primary process of stamping and proposed solutions for the same.

Spreading wings into the ecosystem for CV industry, Mr Ganesh Tandon, Head - Spare parts & outbound logistics, Piaggio Vehicles (Vespa) India showed how to leverage aftermarket business and the opportunities it provides. He shared that an average automotive company generates 10% of its revenues from spare parts sales and more than 40% of its profits from it. The aftermarkets' potential for business becomes high because of the ever increasing installed base and getting customers locked in, explained Ganesh.

For a detailed report of the event, please click here.

Key Take-Always: 

• Industry experts advise OEMs to work on enhancing the top-line and take an active role by designing the product to the varied customer needs yet being sensitive to price; leverage the opportunity of bringing the best of technology in the world to the widest market that India has access to and focus on designing plants for lean; to look at cost cutting through function based value engineering, use of composite material or light-weighting.
• The tier 1 and 2 suppliers continue to look at cost cutting albeit through a cost tree drill down; optimizing man-power, reducing material costs through value engineering and de-bottlenecking the Capex.
• A visible shift in focus by the OEMs exploring newer business models through offering fully built solutions keeping the megatrends in mind and designing for the specific markets and opportunities the aftermarket business provides
• Safety is getting upgraded through event data recorders, speed limitation devices and vehicle tracking systems both through research institutes and policies.
• An effort towards greener environment through xEV/EV/HV from the industry, government and also oil manufacturers alike

About  BMGI 

Breakthrough Management Group International (BMGI), a global consulting firm, partners with organizations to transform their business performance with a strong focus on delivering results. BMGI enables businesses to solve strategic, organizational and process problems. Headquartered in the US, BMGI has developed a loyal clientele that today exceeds 200 active clients comprising more than 400 engagements delivered by about 200 full-time consultants spread across offices across the globe. BMGI has partnered with organizations in various stages of their business life cycles and has delivered cumulative benefits to its clients worth several billion dollars with an ROI of 5:1 to 20:1.

In India, BMGI is located in Mumbai. Our clients include leading Fortune 1000 Global companies and other Indian  companies from diverse industries such as financial services, IT/ITES, airlines, chemicals, FMCG, discrete manufacturing, telecommunications, petrochemical, textiles, healthcare and energy. Some of our global clients include Hitachi, Siemens, Philips, Unilever, DeBeers, Avis Budget Group, TNT Express, General Dynamics to name a few. Our Indian clients include, amongst others, Asian Paints, Glaxo, Apollo Tyres, ITC, Yes Bank and Sudarshan Chemicals.

Media Contact: Vishnupriya Sharma, [email protected], +91-22-4002-0045, Breakthrough Management Group India Pvt Ltd