MTBL to invest Rs 500 cr on product development

Despite slowdown and record negative growth (nearly 40 per cent) in the truck business, Mahindra Trucks and Buses (MTBL) is investing Rs 500 crore in the next two to three years on product development. MTBL has reaffirmed its intent on investing Rs 300 crore to explore new product lines in the light commercial vehicle (LCV), intermediate commercial vehicle (ICV) and medium commercial vehicle (MCV) segments besides another investment of Rs . 200 crore to strengthen the current product line-up of trucks and buses including the refurbishing of existing LCVs. The company is all set to showcase new products TRACO 49 and TRUXO 37 at upcoming Auto Expo 2014 at Delhi.

Speaking on this, Rajan Wadhera, chief executive - technology, product development & sourcing & director and head Mahindra Trucks and Buses Limited, said, "We will be investing a a total of Rs 500 crore in the next two to three years on product development. In future, we will not form any joint venture for truck business. The ICV segment is growing rapidly and we are focusing on this category. The size of the market is around one lakh units annually and can grow up to 1.5 lakh units. The Auto Expo will provide us with the opportunity to do this through our varied product displays. In addition, our plans to enter new segments like ICV and MCV besides completing and upgrading our existing range are also on a firm footing. "

At the Auto Expo, MTBL will also showcase TORRO 25 Tipper with 9-speed transmission and bogie suspension and LCV load products like Loadking ZOOM Container Truck and Tipper besides the Tourister COSMO Bus.

Company's service network is of 1,856 touch points and spares network reaches 575 retail points to further improve the reach on important trucking routes across the length and breadth of India.

He added, "Our 50 per cent sales come from the repeat orders. Now, our constant effort is to increase the market share. Relatively, we are new in the truck business. Normally, it takes 5 o 7 years make impact in the market. But our plans are hit by recession due to recession. The truck business has already registered negative growth of 40 per cent in the last two years. The Indian truck manufacturing business is enough developed now and we do not need any external support for engineering. Mahindra is well placed in HVC segment and we are now refurbishing in LCVs."

Nalin Mehta, managing director & CEO, Mahindra Trucks and Buses said, "Despite severe recessionary market conditions, MTBL is endearing itself to a large section of buyers which includes top fleet owners pan India across segments and load applications. Our exhibits at the Auto Expo will further reinforce our customer centricity in the form of new products and offerings."

Mahindra & Mahindra (M&M) had partnered with Nort American company Navistar International Corporation for the commercial vehicle segment. But in December 2012, M & M bought its partner from their two joint ventures Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Ltd (MNEPL) for manufacturing of truck and buses, and engines for Rs 175 crore. Mahindra's current market share in LCV is 10 per cent and HCV is 2.8 per cent. In the year 2013, it has sold 11, 989 vehicles. MTBL's annual turn over in the FY2012-13 was Rs 1200 crore.