Switching to Bharat Stage IV emission norms is likely to boost adoption of automated manual transmission (AMT) technology among India's commercial vehicles (CV) fleet. Industry expects at least 10 per cent of the trucking and buses industry to shift to AMT.
This is because AMT technology (which basically implies that the driver does not need to change gears manually) needs electronic engines and BS-IV vehicles sport electronic engines. At present, the size of the tonne and above trucking industry is roughly around 400,000 units per annum and this is expected to grow to 600,000 trucks in the next three to five years. For buses, it is around 90,000 units per annum at the moment.
Market research analyst Technavio says that the market looks more bullish in the case of medium and heavy commercial vehicles as they are used in longer trips and a small price hike due to the additional cost of AMT can be recouped by their higher fuel economy.
"There has been a lot of developments in this space for past 2-3 years which makes us believe that almost all the OEMs (original equipment manufacturer) and major AMT suppliers like WABCO, Eaton and ZF are looking up to this segment as one of the major growth drivers. Although the market for AMT in this segment was close to 5,300 units in 2015, we estimate the growth rate to be close to 26 per cent in Medium & Heavy commercial during 2015- 2020.Tata Motors and Ashok Leyland have been the frontrunners in adopting AMT in their lineup," said Technavio analyst Praveen Kumar.
Leading CV player Tata Motors, which saw its market share in the space dip to 44.37 per cent in FY16 from 47.2 per cent a year back, is now trying hard to get back to a more than 50 per cent share in the CV business. The company plans to launch new AMT based products.
"At Tata Motors, we constantly engage with our customers and other stakeholders to develop and integrate new and future ready technologies for our range of commercial vehicles. In line with this objective, we plan to launch new AMT based products. A formal announcement will be made in due course "
Vinod Aggarwal Managing Director and CEO of Volvo Eicher Commercial Vehicles (VECV) said that while the initital cost of acquisition of an AMT variant is higher by 8-10 per cent, if one looks long term, fuel cost savings is a huge plus for AMT variants. "Fuel costs account for roughly 50 per cent of the operating costs, while acquisition cost is around 20 per cent. AMT variants are highly fuel efficient, and hence, the long term savings is higher," he said.
VECV has launched its AMT-equipped range of medium duty trucks and 9-16 tonne buses. It aims to target the state transport corporations for AMT buses. Aggarwal claimed that at least 10 per cent of the market can be expected to shift to AMT variants over the next few years.
Kumar too felt that in medium and heavy commercial vehicles (MHCV), the market for AMT variants is estimated to be 35,000-40,000 units by 2020.
Tata Motors has given the mandate to vehicle management systems provider Wabco to supply AMT kits for its CV range. Ashok Leyland has launched the Boss light truck with AMT already. Tata is likely to launch AMT version of its popular light CV Ace.
Kumar said that AMTs are likely to be popular in the LCV segment. "We believe AMT can come in very handy for LCVs as they are primarily used in city traffic putting additional fatigue on driver. As the market for e-commerce grows in India, one can expect the market for AMT equipped LCVs to flourish, as they are predominantly used in last mile distribution."
He added that the market leaders of commercial vehicles in India are planning to equip their best- selling LCVs with optional AMT to act as a product differentiator.
Ashok Leyland could not be reached for a comment. As such the company's sales growth in the MHCV segment during April to February period of 2016-17 was 2 per cent, while its LCV segment grew by 4 per cent on a year on year basis during the same period. Its dealers noted that queries for the AMT variant of Boss light truck is on the rise. "These are used in last mile connectivity. And we have noticed demand from logistics players who cater to e-commerce companies in the recent times," said a dealer.
However, it may also be noted that as such the domestic CV industry growth has moderated from 11.5 per cent in FY 2016 to 3.5 per cent in nine months of FY17, informed ICRA.
Of this, the MHCV segment has witnessed the most slowdown as reflected by a decline of 2.2 per cent during the same period. Subrata Ray, Group Head, Corporate Sector Ratings, ICRA Ltd thus said, "The usage of Automated Manual Transmission (AMT) in Indian CV market is minuscule at present. OEMs are exploring opportunity to offer AMT in low-floor buses and other premium category buses. However, we don't expect its usage in the truck segment due to overloading and poor road conditions."