Price hike due to new BS VI norms will be within 5%: VECV CEO Aggarwal

Auto industry has 'mostly overcome' semiconductor issue, says leader of Volvo Eicher Commercial Vehicles

Volvo Eicher Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors, is focused on alternate fuels and electric vehicles, said Vinod Aggarwal, managing director and chief executive officer, of the company.

Vehicle price hike due to India introducing BS VI pollution norms will within 5 per cent, said Aggarwal, who is also the vice president of the Society of Indian Automobile Manufacturers (SIAM). Aggarwal spoke to Shine Jacob about electric vehicles, the semiconductor crisis and the Auto Expo.

Here are edited excerpts from the interview.

At Auto Expo, a lot of focus is being given on alternate fuel plans. Is it the road ahead?

This year's Auto Expo is coming after a three years gap, due to Covid. This time the theme for us is smart sustainability. We are going to drive smart sustainability through future ready mobility solutions. The key areas as part of this are decarbonization, modernization, plans for increasing the productivity and profitability for our customers.

We are going to lead the transition. That, of course, will see in the products that we are displaying. We are displaying all the alternate fuel plans, which are going to be ready within the next few years. We are showcasing liquefied natural gas (LNG) hybrid trucks, which can run both on LNG and compressed natural gas (CNG). VECV will be displaying the electric trucks and a fuel-cell hydrogen truck. Intercity electric coaches for buses and ultra-premium coach from the Volvo side are also being displayed. We are going to define premium-ness for the most comfortable travel for the longer distances on Indian roads through Inter-city. Then, of course, there are various other things that will improve the productivity, for example the connectivity of trucks, predictive maintenance, compliance services,

Can CNG/LNG be seen as a transition fuel? What is your take on hydrogen as a fuel?

LNG, of course, for long-hauls, CNG we cannot go beyond 500-550 km. It is a cleaner fuel and CO2 emissions are absolutely negligible in the gas. For this, dependence on imports is also less, because we have domestic production of gas as well.  Not only CNG, LNG, bio fuels will also be there. We will be ready with all the products which can be run on all these gas-based fuels.

Then, we are ready with the electric technology and we are going to be ready with the hydrogen-based fuels. These are all the things which we are capable of doing and of course the country has to be ready for that. A first step towards this was taken by the government of India recently with the National Green Hydrogen Mission. It will lead to development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum with an associated renewable energy capacity addition of about 125 GW in the country.

The government is going to do a lot of work in promoting the green hydrogen available in the country. We will be ready from our side with the products to help the government is realisation of the vision of the mobility sector. Also, fossil fuel imports will reduce if hydrogen is available as an indigenously produced gas. The government has also mentioned that they would be able to reduce the imports of fossil fuels by Rs 1 trillion.

The government is going to come with BS VI phase II norms. Do you see a huge price difference?

We are ready and are going to introduce it even before time. Some of the products we will introduce may be this month or next month. 

There will be a price increase because this is a new technology and the cost has gone up. However, it will not be like the earlier switchover when we moved over from BS IV to BS VI. That time the increase was much more and this time it will not be like that. It will be within 5 per cent.

What is your outlook for the sector this fiscal and also 2023-24?

Specifically, for the commercial vehicle sector, the first nine months till December the industry has done very well. It is in the recovery phase and will be seeing more recovery in the fourth quarter. Still, we will not be at the earlier peak of 2018-19. Therefore, we will see even more recovery happening in 2023-24. Then of course maybe in 2023-24 or in 2025 we will see the new peak.

This year, for the first nine months, VECV has done 53,247 units, which is a growth of 44 per cent. Last year’s Q4 was around 20,000 units. We are expecting at least one to two good years for the CV industry.

With Covid cases in China increasing, are you concerned about semiconductor availability?

Right now, the scenario is alright. We are cautiously optimistic. There may be some concerns, but the industry has learned how to manage this crisis. It is done through better supplies and planning and better inventory management. Wherever the concern is more, you have to keep some more inventory. That is why the industry has mostly overcome this semiconductor issue. Some dependence on China is there.