indian customer requirements and expectations future ... · mayank agochiya indian customer...

© Ricardo plc 2013

Chennai

27th February 2013

Mayank Agochiya

Indian customer requirements and expectations

– future evolution?

2© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential

Contents

Indian CV market – key questions facing us

Increase in power and fuel efficiency

Expected evolution of customer requirements

Summary


The Indian CV market, over the past 5 years, has become

increasingly competitive with most global players in India now

A number of international entrants in the Indian market over the past few years

– Bharat Benz

– Mahindra Navistar

– MAN Force

Chinese and Russian players also eyeing the Indian market

Volvo has strengthened its domestic position with Eicher

Domestic players still have a dominant market position

How will the Indian truck product evolve with international entrants and new products from domestics?

CommentsDaimler

Volkswagen

Tata

Volvo Group

85%

Ashok Leyland

EvoBus

56%

Force MotorsNavistar

Mahindra & Mahindra

46%

Tata

Asia Motor Works

Swaraj

Isuzu

Cooperation, JV International group Domestic Company

Source: Ricardo analysis



Indian PV went through a similar transition in 1990s with standards

and expectations evolving significantly – will CVs be the same?

IQS definition: JD Power measures the problems owners experience during the first two to six months of their car purchase

Indian CV industry is in a similar position to where the Indian passenger cars were in the mid 1990s

Customer requirements and expectations for passenger cars have evolved over the past 15 years

Will Indian CVs have a similar evolution which changes face of the Indian product?

At what rate will power increase?

Will it raise customers’ QRD expectations (on similar lines to the passenger car industry)?

What will be the rate of change?

India passenger car JD Power IQS industry evolution

0

50

100

150

200

250

300

350

400

450

500

1995 2000 2005 2010

Timeline

IQS

sc

ore

(P

rob

lem

s /

10

0 v

eh

icle

s)

Source: JD Power 1) IQS: Initial Quality StudySource: Ricardo analysis, JD Power



Contents




Summary


Market hasn’t yet evolved to higher power densities as expected;

better infrastructure and productivity to create market “pull”

20

25

30

35

3.0 4.0 5.0 6.0 7.0

PowerDensity(kW/L)

Engine Capacity (L)Europe 1980 Europe 1990 Europe 2000 Domestics Internationals

EUR avg. 1980s

Evolution in European CV engines from 1980s to 2000s – will we follow a similar trend?

Power density in Europe for

engines launched over the

past 30 years has evolved

significantly:

− 1980s: 22 kW/L

− 1990s: 28 kW/L

− 2000s: 33 kW/L

In India, the average power

density currently is:

− Domestics: 23 kW/L

− Internationals: 28 kW/L

Expectations for higher

density with improving

infrastructure and more

focus on productivity

Domestics have higher

power density variants

developed, awaiting “pull”

from the market and

customers

Source: Ricardo analysis, PSR database



The industry is expected to achieve c.10-20% improvement in truck

fuel economy in the next decade



CV fuel efficiency has improved significantly but the effect of EU V+ has slowed this trend

Traditional improvements in: Base engine, Aerodynamics, Tyres, Transmission, Exhaust aftertreatment (SCR)

Future improvements: Base engine, boost and aftertreatment, Intelligent auxiliaries, Cooling system and

aerodynamics, Waste heat and kinetic energy recovery, Telematics and location awareness


Contents


Increase in fuel efficiency and power


Summary


Domestics Internationals

Indian customers going for Domestics or Internationals have varying

purchasing criteria in mind – will there be a convergence in future?

Most important

purchasing

criteria

Least important

purchasing

criteria

Running cost

Roadside assistance

Quality

Reliability

Initial price

Load capacity

Running cost

Warranty

Quality

Cabin comfort

Cabin comfort

Display operations

Exterior design

Entertainment /

Telecommunications

Buy back offering

Leasing / Finance

Euro standards


Recent (prompted) survey done by Ricardo on c.35 end users of Domestic and International brands in India

Expected evolution of customers requirements


Overloading expected to further reduce but not be completely

eradicated; 4x2 and 6x2 to continue usage in mass applications

Topic Key question Expected trend

– short term

Comments

Overloading Will it reduce in the near

future?

Enforcement, in general, has

always been a problem due to

rampant corruption

Few disciplined fleets having a

no overload policy

So majority of operators still

indulge in overloading in the

range of 30~50%

Overloading by 10% reduces

the life of road by 35%

Wheel

configuration

What will be the

standard wheel

configuration?

6x2 configuration used for

traditional multi-axle rigids and

4x2 for tractors

Recently launched tippers with

6X4 and 8X4 and tractors with

4X2 and 6X4

Evolution will take time


Source: Ricardo analysis, CRISIL report


Instrument Panels expected to remain simplistic and cost focused;

HVAC will not see much uptake in mass applications


– short term

Comments

Instrument panel What will be the trend

for the IP design?

Mix of simplistic IP designs (in

mass) to more ergonomically

designed (niche volumes)

Education levels of drivers

limited – ability to use and

appreciate higher functionality

is low; no “pull” demand from

user / customer

Cost will be overriding factor

HVAC What will be the trend

for HVAC?

Cost (TCO) is paramount

HVAC is not expected to be a

standard offering in the short

to medium term, only in niche

Truck code may prescribe

norms to limit cabin

temperature to 35°C, may

require additional ventilation




Power Steering and Radial Tyres will witness increasing adoption

across segments; Disc Brakes unlikely to see short term uptake


– short term

Comments

Steering Is power steering a

standard?

Become a standard offering

for all vehicles greater than 16

tonne GVW

Expected to penetrate into

vehicles less than 16 tonne

GVW in the medium term

Brakes What will be the

standard?

Market will remain cost driven

It is unlikely there will be a

move towards to disc brakes

in the short to medium term

Tyres What will be the

standard?

Currently Cross-ply tyres used

Radial tyres are being offered

as optional in a few variants

TCO (fuel economy benefit)

will be key in uptake of radials

Recent studies suggest c.50%

penetration by 2020


Source: Ricardo analysis, Michelin


Contents


Increase in fuel efficiency and power


Summary


Prediction of Indian customer future expectations is crystal ball

gazing...but hopefully some aspects may change for good...

Power density to increase over the next 5

years with engines mainly in the range of

27~30 kW/L

Fuel efficiency to increase by +5% due to

various factors (powertrain, aerodynamics,

tyres etc.)

Overloading to decrease – self policing or

stringent enforcement (come down to

c.20%)

Power steering to gradually have

increasing adoption in lower GVWs

Radial Tyres to have higher adoption

HVAC and Brakes not to witness much

changes

Purchasing criteria for Domestics and

Internationals to converge to certain extent

Evolution of Indian customers’ expectations?

Cu

sto

mer

exp

ecta

tio

ns

Timeline2010 2015 2020 2025

?

Summary



Contact details

Mayank AgochiyaPresident

Telephone: +91 (0) 11 4014 1406

Switchboard: +91 (0) 11 4014 1400

Facsimile: +91 (0) 11 4014 1430

Mobile: +91 (0) 96 5074 6661

[email protected]

www.ricardo.com

Ricardo India Private Limited – Plaza M6

District Centre, Jasola, Mathura Road,

New Delhi – 110076, India

indian customer requirements and expectations future ... · mayank agochiya indian customer...

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