05 April 2020

Table of Contents for Ticker Tapes



Arvind K. Garg, Executive Vice-President & Head, Construction & Mining Machinery, Larsen & Toubro Limited, has been elected new President of Indian Construction Equipment Manufacturers Association (ICEMA), for the term 2017-19. This was decided at ICEMA’s AGM held in New Delhi recently. He was earlier ICEMA Vice-President 2015-17. As its new President, he plans to take ICEMA global, encourage environment-friendly technologies amongst member companies, and advocate tax rationalization of this industry. He will represent ICEMA in international shows like BaumaMunich, Intermat, ConExpo, and steer major exhibitions/trade fairs on the domestic front like Excon 2017, BC India, ConMac, and IMME.





Earth and Construction Equipment (ECE) OEMs may be delayed in reaping benefits of GST in the short term. After touching record levels in 2011, CAGR for the ECE industry plummeted between 2012 and 2015, after which demand showed some buoyancy. However, GST may subdue demand again in the short term until adjustments on GST issues are completed. Although ECE OEMs have welcomed the new GST regime, the industry got nasty jolt by the move to classify it under the 28 per cent levy. Mostly construction equipment has been attracting 18 per cent duty across different parts of the country and the move to impose 28 per cent GST has been a shocker for ECE OEMs, who have invested a lot in manufacturing technology for construction equipment. By the end of the way, all their equipment will be used for creation of infrastructure, and where a hefty levy hardly helps the cause, they feel. Since the levy will have to be passed on it will definitely hurt prospective buyers who are mostly construction companies with stressed balance sheets with precious little funds for equipment purchases. It remains to be seen if the Centre will relook at a lower GST for ECE, which is a critical factor in the government’s trillion dollar budget to modernise India’s creaking infrastructure.





Leading NBFC Sundaram Finance expects to achieve growth in three vehicle segments and maintain its market share in two other segments. The NBFC expects to post reasonable growth in the light commercial vehicle (LCV), construction equipment and tractor segments, while maintaining market share in the medium and heavy commercial vehicle (M&HCV) and passenger vehicle segments. It is optimistic that M&HCV off take would see an upturn once the GST related transition issues are resolved. Eliminating interstate check posts has enhanced viability of truck operations, leading to better utilisation and absorption of existing capacity, in turn leading to subdued demand in the near term. GST was a major step in the reform of indirect taxation and would benefit Sundaram Finance’s customers significantly, the company feels. In the short term, however, there could be concerns with regard to the preparedness of businesses, especially in the small and medium segments - with which the company deals extensively. Preparedness assumes greater urgency, considering the rapidly narrowing regulatory gap between NBFC’s and banks.





A global major in heavy duty trucks, MAN entered the Indian market a little over a decade ago through a joint venture. Now MAN is also looking at a larger global role for India in terms of sourcing for its global markets. It plans to leverage top-class component vendors already present in India for its requirements from the global network. Interestingly, MAN is part of global major Volkswagen Truck and Bus, which also owns Swedish commercial vehicle maker Scania, and recently took a 16.6 per cent stake in Navistar of the US. To that extent, the sourcing opportunities from India are immense, except that this will take time. Scania has a facility near Bengaluru and it will be interesting to see if any synergies can be achieved for both at the back end. It was only last year when Volkswagen announced that teams consisting of engineers from both brands would develop core components of the drivetrain together. There would also be common platforms for engines, gearboxes, axles and exhaust after-treatment systems. In India, MAN is keen on staying true to its DNA, which is about legacy and core competence in the higher tonnage mining trucks. MAN’s strategy is to find the right brand positioning and maintain it, which effectively it wont go to segments below 16 tonnes, at least for now.





After flat demand last many months, commercial vehicle makers have reported a double-digit growth in volumes sold to dealers last month. Leading player Tata Motors reported a 15 per cent growth in sales of commercial vehicles at 27,842 units last month. After a sluggish Q1, Tata’s share in the domestic market in July grew 15 per cent due to a ramp-up of BS-IV production. With the commercial vehicles segment, Tatas’ sales of medium and heavy commercial vehicles grew 10 per cent in July to 8,640. This segment, which was seeing a decline in the last few months, saw a rebound in July and witnessed pick-up in demand and availability because of continued production ramp-up. Ashok Leyland also reported 14 per cent higher sales at 11,981 units. Sales of medium and heavy commercial vehicles grew 10 per cent to 9,026 units. Mahindra clocked a 14 per cent growth in commercial vehicle sales to 15,023 units last month. All three companies saw decline in sales during the preceding April-June quarter. According to CTC Logistics, which has a fleet of 550 trucks, manufacturers are resorting to steep discounts to sell vehicles and utilise manufacturing capacities, hence the spurt in CV sales.




After repeated complaints by tyre manufacturers about large scale dumping of tyres by the Chinese in the Indian market, the government has finally decided to act and will soon levy anti-dumping duty on tyre imports, which mainly hurt China. In a massive relief for domestic tyre manufacturers like CEAT, Apollo Tyres, JK, Good Year, and Bridgestone, the government may soon levy an anti dumping duty on radial tyres. An investigation carried out by the Commerce Ministry has concluded that Indian manufacturers need to be safeguarded from Chinese dumping cheap radial tyres in the Indian market. The Directorate General of Anti Dumping has proved in its study that the economics is not adding up, with Chinese companies selling at 20 per cent less than Indian companies. The final quantum of the anti dumping duty will be decided between the Commerce Ministry and Finance Ministry, but it is expected soon. Nearly 30 per cent of the truck radial market is cornered by the Chinese. Although post demonetisation its share has come down, industry experts are of the opinion that if anti-dumping duty is not imposed, there is a chance of this Chinese domination coming back into the market.




Bosch Power Tools India has launched its new range of High Pressure Washers which help in removing stubborn dirt. Bosch’s problem solving approach has generated innovative products with features that deliver a better user experience, besides greater product uptime and improved performance. Instead of expanding its product range, the company focused on developing high pressure washers with an aim of removing stubborn dirt under tough working conditions. Users have option to choose from the tried-and-tested fan jet, a rotary jet, and the new high-pressure pencil jet for removing particularly stubborn dirt. Furthermore, the scope of delivery now also includes a high pressure detergent nozzle. This enables the cleaning foam produced to be distributed evenly and quickly over the surface to be cleaned. The new tools range is priced at Rs.7,600 to Rs.35,000.





Swedish auto giant Volvo is betting on economic reforms of the Modi government, including the recently introduced GST, for growth in India, but it underlined the need to improve flexibility of hiring and firing labourers in the country.

The Volvo Group has been in India for almost 20 years and has set up three production bases in the country to manufacture trucks, buses, and construction equipment. The company, in association with Eicher, expects to double its turnover in India to $ 4 billion by 2020 from present levels. Highlighting that the rollout of GST has resulted in 30 per cent faster logistics, Volvo Group India says it is extremely bullish on the massive socio, economic and political transformation in India and will further enhance its commitment to here by developing an export hub for the rest of the world. . Volvo Group has a combined capacity of 15,000 units of trucks, buses and construction equipment annually, while its joint venture partner has a capacity of about 75,000 units. About 15 per cent of Volvo’s production in India is currently exported, which it hopes to increase substantially over the years.





Eicher Trucks and Buses, a part of VE Commercial Vehicles, has reduced its prices by up to 5 per cent in order to pass on the GST benefit to customers. The company is offering price reductions from 1.5 per cent up to 5 per cent on its range of trucks and buses. The price cut varies model wise and state wise. The immediate impact (of GST) is some reduction in taxes on an average basis and Eicher has passed on the expected benefits from the new tax regime to its customers.

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