BRANSON ON HIS PRIVATE ISLAND Heavy dutystatic.theceomagazine.com/content/downloads/pdf/IND_2016_August... · Works: Shivashahi, Hotgi Road, Solapur – 413 224 ... KIRLOSKAR FERROUS

23

Name Vinod AggarwalCompany VE Commercial VehiclesPosition CEOHQ Haryana, IndiaEmployees 11,000+ globally

EXECUTIVE INTERVIEW

Heavy duty players

VE Commercial Vehicles is well positioned to provide for the transportation needs of India’s emerging economy.

IMAGES VE COMMERCIAL VEHICLES

VE Commercial Vehicles (VECV) was established in 2008 as a joint venture between Eicher Motors and the Volvo Group, combining to become one of India’s largest truck and bus manufacturers. However, the company is much more than that.

Eicher’s first badged truck was manufactured in India in 1986, three years after the joint venture’s current CEO Vinod Aggarwal joined the company in an entry-level position, as a junior executive. Vinod grew with the business, and was still there at the time of the merger. “When the joint venture was initiated in 2008, I was the CFO of the Eicher Group, so I was very closely associated with setting it all up. I played a key role in establishing VE Commercial Vehicles,” he says.

One of the first things that VECV looked to do was align the vision of Eicher and Volvo to ensure that the merger would operate with one clear mission and voice. “Both the organisations already had their values, vision, and identities,” Vinod explains. “But when they became part of the joint venture, the first thing

As featured in The CEO MagazineFor more info visit theceomagazine.com

ONE ON ONE WITH BRANSON ON HIS PRIVATE ISLAND

“A BUSINESS IS SIMPLY AN IDEA TO MAKE OTHER PEOPLES’ LIVES BETTER.

24

EXECUTIVE INTERVIEW

“WIL cherishes its long association with VECV. We are the preferred source for wheels, having our presence across all models. Our efforts on NPD, quality, and cost have been recognised by VECV. It’s been a pleasure partnering with them. We look forward to many more years of mutually beneficial association and wish the company the success that it deserves.” - Wheels India

we did was to create a shared vision and shared values. A lot of the values were common to both businesses, but it was important that the entire organisation should share the same vision. We began by defining what these shared values were at the management level, then we deployed it down to the work level across the entire operation.

“The leadership team defined our vision very clearly : to establish a high-performance team built on individual and collective strengths, creating a culture of mutual respect,

honouring commitment, with a very clear focus on results.”

The five core values that the team settled on were: respect; fair and ethical; excellence; customer-centric; and, passion. VECV states that in an enabling environment that recognises, embraces and celebrates differences, respect to all stakeholders will deliver on its promises and hold itself accountable to all commitments. It also believes that to build and sustain its reputation for the long term, it must conduct its business with

integrity, treat everyone fairly, and be reasonable and ethical in all dealings.

The core value of excellence prescribes that, in reflection of its power and heritage of delivering supreme quality and achieving ambitious goals, VECV will constantly challenge itself to innovate for the future and strive uncompromisingly to develop new standards that meet and exceed customer expectations, as the customer’s point of view is central to VECV ’s organisational process. With a proactive focus on changing needs, coupled with consistently excellent service, it aims to create a mutually

“The leadership team defined our vision very clearly: to establish a high-performance team built on individual and collective strengths, creating a culture of mutual respect, honouring commitment, and a very clear focus on results.” - Vinod Aggarwal

Wheels India Limited. TVS Group. Since 1962Lift Axles | Air Suspension Systems | Components for Energy Sector | Steel Wheels | Aluminium Wheels

[email protected] | www.wheelsindia.com | +91 44 2623 4309 | +91 442625 8511

Forged Alumimium Wheel

Commercial Vehicle Wheel

Air Suspension

Agriculture Wheel

Passenger Car Wheel

Off Highway Construction

Wheel

Wheels India Limited

26

beneficial long-term relationship with its customers. The final core value — passion — means that VECV revels in its work and strongly believes in making a difference to its customers’ lives by walking the extra mile. This passion inspires it to demonstrate constant enthusiasm and unlimited drive to deliver beyond its stakeholders’ expectations.

It’s a lot to live up to; however, Vinod says: “These values are extremely important and no one can devalue them. We have also given very clear examples of dos and don’ts,” he says. “These are the things that we will do to  ensure that we deliver, which are publicly shared with our stakeholders, suppliers, customers, as  well as our employees, so everyone  knows.”

Thanks to this united front, VECV has managed to achieve significant growth — something that Vinod had his sights clearly set on when he took over as CEO in 2010. The joint venture’s commercial vehicle operations have three main market segments: light–medium duty trucks, heavy-duty trucks, and buses. Of these, light–medium is by far the strongest performer. “We were at 26 per cent market share when the joint venture was made. Today, we are at 35 per cent, so we have improved where we were already fairly strong,” Vinod says.

Buses are the next strongest sector for the business. Eicher has a long history

EXECUTIVE INTERVIEW

“We have consistently improved our position in the market and that has happened based on a very close collaboration with the Volvo Group.” - Vinod Aggarwal

Registered Offi ce: Laxmanrao Kirloskar Road, Khadki, PUNE – 411 003, Maharashtra, INDIAWorks: P.O. Hitnal 583 234, District - Koppal, Karnataka, INDIA Tel: +91 8539 286711 • Fax: +91 8539 286706, 286714 Works: Shivashahi, Hotgi Road, Solapur – 413 224, Maharashtra, INDIA Tel: +91 2172 600211 • Fax: +91 2172 600220 CIN No. L27101PN1991PLC63223

Enriching Lives

KIRLOSKAR FERROUS INDUSTRIES LIMITEDKirloskar Group Company

CRAFTED WITH CARE

KFIL Foundry has world class manufacturing facilities to cater to the growing demand of high-quality castings.

From design to delivery, we believe in providing the best experience to our customers. We have adopted the most advanced technology in the product development process in order to minimise development lead time, enhance integrated supply chain planning, and support our logistics and infrastructure to ensure on-time delivery.

KEY CAPABILITIES:• State of the art moulding lines with automated

sand plants• Robotic core centers for core making, assembly

and washing• Mechanised robotic fettling• Manufacturer of Grey Iron casting up to 300kg,

and SG Iron casting up to 120kg • Capable of producing castings conforming to

EURO VI emission norms• In-house design development of intricate water

jacketed blocks, heads, and housings.

For enquires contact: [email protected]

www.kfi l.com

Kirloskar Ferrous Industries Limited (KFIL) is the fl agship company of the Kirloskar Group

28

EXECUTIVE INTERVIEW

in India of making buses under the badges ‘Starline’ and ‘Skyline’, as well as providing chassis for clients to build their own buses. Skyline is the premium line, offering superior styling and comfort, and Starline offers value for money. The Eicher School Bus was the first ‘safe’ school bus to be designed in the country in 1997, in conjunction with the IRTE (Institute of Road Traffic Association), parent bodies, and IIT-Delhi. Eicher buses and chassis are also making rapid inroads into the staff, tourism, and public transport sectors, where its products have been specifically designed and adapted to the needs of these segments. Because of this, the market share has

grown from 6 per cent to 15 per cent since 2008.

The largest segment of the market, and where Vinod can see the most opportunity for growth, is the heavy-duty truck market. This is also the sector where Volvo’s influence can be credited for achieving growth. “In the beginning, our market share in this segment was only 1 per cent and now we are at 5 per cent,” Vinod says. “We have consistently improved our position in the market and that has happened because of a very close collaboration with the Volvo Group.”

Vinod is referring to the recently launched Pro Series of heavy-duty trucks. Volvo’s technology prowess, quality systems, and advanced production processes are intrinsic to the design and manufacturing of these products, and so is the fuel-efficiency edge that Eicher continues to champion. It also gives access to global expertise in testing and validation,

ensuring that the Pro Series is engineered for performance, reliability, and durability. Vinod says that this is crucial, as a key focus at VECV is value for the customer. He says that if it produces products that will save time and money for customers, VECV is assured success.

“Whenever anyone talks of the Eicher brand, immediately they think that if it is Eicher, then it will be more fuel efficient,” he says. “Our products are always developed with the customer in mind — we always say we are ‘pro customer’. Fuel efficiency means big savings for our customers, because if you analyse the total cost of operations of a truck for the customer — the total cost of ownership — around 40-50 per cent of the total cost is fuel. The initial acquisition cost is probably only around 20 per cent. Then there are other costs like toll taxes, maintenance, and driver costs, but these other costs are not that high compared with the total cost of operations. If we’re giving

“In the beginning, our market share in this segment was only 1 per cent and now we are at 5 per cent.” - Vinod Aggarwal

30

EXECUTIVE INTERVIEW

them better fuel efficiency, it directly affects their profits,” Vinod says. “Our product has to always deliver better value for them.”

“Then, of course, it has to deliver better productivity for them, because if they can do more with our products, they can earn more. For example, if a normal truck does around 8,000 kilometres per month, then our truck has to do more. That is based on the product features, including extra comfort in driving, less fatigue, better cabins, better suspension. We are very careful to ensure that when we deliver our products to the customer they can maximise their efficiencies; not only via cost savings, but also productivity.

“That includes the after-sales service and how we treat them going forward. Because once the customer chooses VECV, the relationship starts there, and has to continue throughout the product’s lifetime, and if treated well — with care and respect — it can lead to a repeat purchase by the customer.

“That will happen if you give them better service — if you give them a better response, whenever they need it, to ensure that the vehicle continues to do business and remains on the road. If it is off the road for some reason, our response time is still very fast, as our after-sale services and products are available across the country.

“The customer is the most important thing for us. That’s why one of our values is customer-centric, and day-in and day-out we have to display that behaviour. If a customer is having any problems, that draws maximum attention from us. This is the differentiation that we create at VECV — not only in the product, but also in the service.” VECV also places a big importance on the relationships it has with its suppliers.

“With the suppliers, our relationship is based on win-win,” Vinod says. “There can never be a situation that our suppliers have to lose and we will win, or they will win and we will lose — we have to take care of both sides. It is based on mutual trust and respect. We have a very strong relationship with our suppliers, and these relationships have

developed over a long time. Eicher started its business in India in 1960, so for the last sixty-five years our relationships with these suppliers have gone from strength to strength. They are all professional relationships; very fair and ethical dealings with everything above board. We send a very clear message to our teams as well as to

“We are very careful to ensure that when we deliver our products to the customer they can maximise their efficiencies; not only via cost savings, but also productivity.” - Vinod Aggarwal

32

our suppliers’ teams that in all dealings with us, it is only the work or the business that will matter; nothing else,” Vinod says proudly. Vinod is also proud of the VE Powertrain division, which manufactures engines for Volvo in India and exports them to Europe for assembly. Building for the European market means that VECV must meet Euro 6 compliance requirements — a level that won’t be necessary to reach in India until 2020.

Vinod says this has helped VECV get ahead of its competitors by preparing for the future. The diesel-base engines are supplied to Volvo Europe and the same platform has been adapted to Euro 3 and 4 engine (BS3/BS4) technologies to meet the VECV requirements and other Volvo Group requirements for these types of engines in Asia. “Apart from our growth in our own segments in

India, we have also started supplying Euro 6-compliant base engines to Volvo Group,” Vinod says.

“Volvo Group joined us to set up an exclusive manufacturing hub where we build medium-duty engines for their automotive needs. They could have set up anywhere else on the globe, but found that being in India, we could give them a better cost reduction — firstly with the set-up cost, and then successfully supplying the engines from this plant at a very competitive price.”

In India, Volvo Trucks is synonymous with the mining and construction industries. Over the years, Volvo Trucks has built up an elite customer base, having more than 100 vehicles from its f leet operating at various mining sites across India, and it continues to produce trucks tailored to this market.

In 2010, Volvo launched the FH520 Powertronic Truck, dubbed ‘the most powerful and technologically advanced truck on the Indian road’. Volvo also introduced its global truck FMX 440 at EXCON in Bangalore in November 2011. This truck is also specially targeted at construction and mining applications. Then, in 2012, Volvo Trucks launched the innovative, all-new Volvo FM480 10x4 Dump Truck in India, built specifically for deep open-cast mining. Offering an all-round solution, Volvo Trucks also supplies driver training for its commercial vehicles — a first in India. There are now more than 30,000 drivers trained by Volvo, operating Volvo vehicles across the country.

Vinod says that Eicher, too, is committed to addressing the issues of the automotive, transportation, and logistics sector relating to skills shortage and competency, as there is an acute shortage of commercial vehicle drivers in India. VECV estimates that 20 per cent of trucks are sitting idle because of this shortage, and more drivers are leaving the industry than joining. New drivers need to be encouraged to join the workforce or this trend will worsen. Because

“Rane shares three decades of relationship with Eicher/VECV. The longstanding relationship is nurtured on three main principles: (a) strong support on product development; (b) joint initiatives to drive continuous improvement; and (c) transparency and communication on requirements. VECV sets a high bar on QCD and NPD parameters, which motivates us to work harder to achieve excellence.” - Mr Harish Lakshman, Director, Rane Group.

EXECUTIVE INTERVIEW

“Apart from our growth in our own segments in India, we have also started supplying Euro 6-compliant base engines to Volvo Group.” - Vinod Aggarwal

34

EXECUTIVE INTERVIEW

“VECV is a professionally run organisation practising sound business ethics and modern management systems. The relationship between VECV & Anand goes back several decades and has grown in strength, with all Anand companies catering to the CV segment and supplying products to VECV.” - Mr Deepak Chopra, Group Chief Executive Officer, Anand Automotive

of this, Eicher has established state-of-the-art high-tech training facilities, primarily focused on the large number of students who don’t finish school, to prepare them for a job in the automotive industry.

Eicher has also launched several driver-training programs, as according to VECV, India has around 1 per cent of the world’s vehicles, but more like 10 per cent of its road accidents. According to NCRB data and the MORTH Road Accident Report 2014, in India there are 1,214 road accidents every day, one road accident death every four minutes, and 1,287 injuries from road accidents every day. To help combat this, Eicher’s training programs cover safety, correct driving technique, vehicle maintenance, and fuel conservation.

As well as the driver-specific programs, Eicher has undertaken many initiatives in its mission to create awareness of the importance of road safety among the public. It actively participates in various road safety conferences and also sponsors National Road Safety Week. It also has a school-based

program that teaches children about road safety. Called ‘Road Safety Champs – Safe Kids Today, Good Citizens Tomorrow’, the program is delivered by expert trainers to teach students about road rules and regulations in the hope that they’ll be well prepared as drivers in the future.

Further to the extraordinary care that VECV shows to drivers, it has launched a new program aimed at supporting commercial drivers with en route rest-and-revive facilities. Built adjacent to petrol stations, the ‘Pro Lounges’ will offer secure parking, healthy and subsidised food, clean bathroom facilities, and a place to rest. Vinod hopes that this will change people’s perceptions about choosing a career in transport and logistics, saying: “India is growing, and the transport industry will naturally grow with it. We know that the commercial vehicle market will grow, and we aim to increase our share, but we need more drivers. That is why at VECV we look after our customers, but we also look after the drivers, because if no-one is there to drive our commercial vehicles, the industry will not reach its potential.”

VECV has already seen some benefits from this growth, particularly in the heavy-duty sector where it wants to see the most growth occur, receiving orders for its buses from state transport operators as the economy strengthens and old buses are finally being replaced. Complementing VECV ’s truck and bus business is Eicher Engineering Components (EEC), and Eicher Engineering Solutions (EES). EEC was established in 1992 as an automotive components manufacturer and has since grown to become one of India’s largest and most respected gear manufacturers. “Not only does EEC meet all the automotive component requirements of Eicher trucks and buses,” Vinod explains, “it also manufactures differential gears, transmission gears, and shafts for a large domestic and global clientele, both in the OEM and spare-parts segments. EEC also supplies gearboxes to industrial, agricultural, and other segments in the United States and Canada.”

EES provides design and engineering solutions to clients worldwide that operate in the transportation, aerospace, and consumer products sectors, and is yet another reason why VECV is so much more than just a commercial vehicle business.

“At VECV we look after our customers, but we also look after the drivers.” - Vinod Aggarwal