indian customer requirements and expectations future ... · mayank agochiya indian customer...
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© 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
3© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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 CV market – key questions facing us
4© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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
Indian CV market – key questions facing us
5© 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
6© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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
Increase in power and fuel efficiency
7© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
The industry is expected to achieve c.10-20% improvement in truck
fuel economy in the next decade
Source: Ricardo analysis
Increase in power and fuel efficiency
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
8© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
Contents
Indian CV market – key questions facing us
Increase in fuel efficiency and power
Expected evolution of customer requirements
Summary
9© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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
Source: Ricardo analysis
Recent (prompted) survey done by Ricardo on c.35 end users of Domestic and International brands in India
Expected evolution of customers requirements
10© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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
Expected evolution of customers requirements
Source: Ricardo analysis, CRISIL report
11© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
Instrument Panels expected to remain simplistic and cost focused;
HVAC will not see much uptake in mass applications
Topic Key question Expected trend
– 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
Expected evolution of customers requirements
Source: Ricardo analysis
12© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
Power Steering and Radial Tyres will witness increasing adoption
across segments; Disc Brakes unlikely to see short term uptake
Topic Key question Expected trend
– 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
Expected evolution of customers requirements
Source: Ricardo analysis, Michelin
13© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
Contents
Indian CV market – key questions facing us
Increase in fuel efficiency and power
Expected evolution of customer requirements
Summary
14© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
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
Source: Ricardo analysis
15© Ricardo plc 2013Commercial Vehicle MegatrendsConfidential
Contact details
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