Price point
Even if there is a complete turnaround, CV OEMs will still have to keep their prices competitive due to the increasing competition. But Anirudh believes that price competitiveness is just one pivot on which the industry functions.

"A much larger concentration of marketing really depends upon how you have been able to position your product, how you have been able to service your customers and how your product is able to perform vis-à-vis the customer requirement over a period of at least five years. A truck - unlike a lifestyle product - takes time to build its experience. It is indeed an experiential product where the customer utilises it over a period of time. So nothing in the short term really works in this business. Even if someone were to come and reduce prices dramatically it would not ensure sale."

On the pricing front, AMW pegs itself as the leader. "From the beginning, we have been a price premium to the leader which is Tata Motors. We continue to command that premium over the competition in that segment. We continue to upgrade our products in line with our positioning as the premium player in the tipper segment. So despite the entry of new competition, we have been able to command the premium on our trucks," Anirudh says.

With the market likely to see a positive turnaround, AMW will also be looking at increasing its capacity utilisation. Although he does point out that he does not look at capacity utilisation as a barometer of success as the asset to turnover ratio is very high in this industry. "We used to do about 1,000 trucks a month and right now we are down to 350 trucks a month. We are hoping that we should get back to our original volumes by Q2 of the next FY."

Looking at other segments
AMW also had plans to foray into the LCV and the bus segment but those were put on hold for obvious reasons. Does he see any chances of reviving the same in the near future? "While we did showcase an LCV product way back, currently we are still on the drawing board and we have not progressed further.

Clearly because the medium and heavy duty truck opportunity itself was large enough and as a result we have spent the last two years building the portfolio in those segments. So we have put the LCV on the back burner. Having said that, in the migration of the company, over a period of next five years, that will be the next horizon for sure but it is clearly not there in the short to mid-term plans."

AMW had also developed a luxury bus but looking at the market environment for the last three years it was not making sense to launch it. "But when the opportune time comes, we will get into that market as well," Anirudh says. He also sees defence as another interesting opportunity.

"We have already been supplying to the Border Roads Organisation for the last three years. Now with the Ministry of Defence really articulating its plans both from the Make in India perspective and beefing up the defence portfolio, we are very excited about that segment." 

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