Mr. A. Ramasubramanian, President, Asia Motor Works Limited, Spanning almost four decades of rich experience in the Indian Automobile Industry, Mr Ramasubramanian or ARS as he is fondly called, spearheads business at Asia Motor Works Ltd. Currently President at AMW, ARS guides the overall performance and growth of the organization in an ever-changing volatile Heavy Commercial Vehicle (HCV) segment. He began his work in 1975 with TELCO (now Tata Motors Ltd. After a six-year stint with TELCO he moved to Axles India Ltd. (a joint venture between Eaton Corporation of USA and TVS Group). He then joined Eicher Motors Ltd. as Head Group ERC (Engineering Research Centre). Later on, he became Director-Technical and Chief of Product Development (1993-2003) at Eicher Motors Ltd. and Group Head for Product Development for the Eicher Group. In 2003, ARS took over as CEO of Eicher Tractors. In April 2006, he took over as CEO of Eicher Motors (Commercial Vehicle Unit). Joining AMW in 2009, ARS has drawn on his rich technical expertise to drive the development of new CVs. ARS has also played a key role in the growth and development of AMW into the third largest heavy commercial vehicle manufacturer in India. A member of SAE, ASM and Indian Institute of Metals, and a qualified CFA, ARS has also published several technical papers in SAE since 1985 and holds several engineering patents. ARS is a Mechanical Engineer from the College of Engineering, Pune University.
Asia MotorWorks (AMW) is India’s third largest manufacturer of heavy commercial vehicles and has achieved a unique position in India’s transportation sector through innovative engineering and customer orientation. Rolling out its trucks in 2008, AMW has increased its presence in a competitive market place through its products and wide service network. AMW is the fastest growing truck brand in India with an annual volume growth of over 100% for the last three years. In addition, AMW has a dominant presence in the fast growing Tipper segment. Its vehicles are the preferred choice in the mining, construction and infrastructure sectors. The company has a widespread and growing dealer and service network across India. AMW offers trucks ranging from 16 to 49 tons. AMW’s fully integrated manufacturing facility in Bhuj, Gujarat, has a planned capacity of 50,000 commercial vehicles per annum. It currently employs about 1,200 people and uses state of the art production processes to build world class trucks.
In an exclusive interview with Hemant P. Maradia of IIFL, Mr. A Ramasubramanian says, “Margins will continue to be under pressure this year with cost increases not fully recovered through market prices.”
Your sales volume in FY12 jumped 50% to 10,000 trucks. What is the outlook for FY13?
The industry has continued to face inflationary pressures during the year 2011-12. In addition, there were inadequate price increases during the past financial year. AMW hiked prices by just 9% during the past year. However, this was neutralized to some extent by cost reduction efforts within the company.
The first quarter of 2012-13 has seen a continuation of this scenario - both in terms of domestic inflation as well as the weakening of the Rupee.
Margins will continue to be under pressure this year with cost increases not fully recovered through market prices. Also the increase in excise duty would put additional burden on the customers. We do feel that the CV industry growth would stay moderate to low during the current year.
What are your plans for the Indian market? Which segment are you betting big on?
AMW has lined up launches of a full range of vehicles for the haulage market in the 16, 25 and 31 tonne categories with planned entry into the 37 tonne category for later in the year.
Our range expansion is aimed at increasing the addressability of AMW CVs to cover the full range of commercial vehicles during this year.
Are you likely to foray into any new segment? What about the premium end of the market?
Our key focus in 2012-13 would be to
Secure our market position in the off-highway market with balancing products, actions and strategies to counter the impact of the macro environment as well as competition activity.
We would be progressively entering the entire range of CVs especially the Haulage segment.
Are you also planning to launch buses in India?
We have already shown a new luxury bus model at the Auto Expo 2012 and plan to launch it towards the end of this year.
Our new model is one of India’s longest buses at 14.2 metres, has a front engine design and can seat 57 passengers. It will compete at the top end of the bus market.
Tell us about the production capacity at your Bhuj factory?
Our Bhuj plant has a capacity of 50,000 units per annum and we have no plans to increase this in the near future.
How will you fund the expansion?
We will fund any future expansion through internal accruals and debt.
How many components do you import currently?
We currently import 20% of our trucks in terms of value.
Are you confident of maintaining the current momentum?
We have the first mover advantage in the emerging markets of heavy trucks. We have products to cater to the full range and don’t see this as a constraint.
What is the size of the MHCV trucks market in India? What is the growth rate?
Despite various challenges, the M&HCV truck market grew by 9% to a high of 299,000 units during the year ended March 2012.
Tell us about your marketing and distribution plans?
We currently have 123 dealers and 1,500 touch points across the country which would help us to drive sales and ensure that we provide excellent after sales service to our customers.
Any plans to hike prices?
We have just raised prices by about 1% in mid-April 2012, due to higher input costs and the increase in excise duty on trucks in the latest union budget.