Interview with Gaurav Saxena, Director- Sales & Marketing, International Cars & Motors Ltd.(ICML)

Company Description: ICML is part of the Rs 5000 crore Sonalika group. The group Chairman is LD Mittal. His two sons A.S. Mittal and Deepak Mittal are the group’s Vice Chairman and Managing Director respectively. The flagship company of the group is International Tractors Ltd and is based in Hoshiarpur in Punjab. ICML is based in Amb, Himachal Pradesh’s Una district. The state-of-the-art facility of ICML has an installed capacity of 24,000 units per annum and manufactures four variants of the Rhino multi utility vehicle. The Amb facility has a modern paint shop where at one time the Tata Ace was painted as part of contract manufacturing job undertaken by ICML. ICML’s sources engines and transmissions for the Rhino from the ITL plant in Hoshiarpur. According to latest information,  ICML is likely to become a joint venture company shortly.

Sales of the Rhino vehicle have been slightly slow in the past. Are things looking up for International Cars and Motors Ltd (ICML) and the Rhino brand?

We had started in a very small way in the beginning. Now we want to become a pan-India player. We are trying to find ways as to how to re-create the Rhino brand. In the process we have recently launched a few new models. We have introduced the Crd-fi technology in the engine and have done a lot of modifications in the vehicle. All this will help us in re-building the brand. We are working on different variants of the Rhino. Currently we have the Delite, Royale, Winner and Xciter. Over and above we are planning a pick-up version of the Rhino. It would be on the same platform. This vehicle will be introduced shortly. This would be in the 1 to 1.5 tonne category. We are also working on a rural mass market vehicle which will be called the economy model. It will be below Rs 5 lakh and currently no such vehicle is available in such a category and price. We are confident that with these models we can create a good space for ourselves in the market.

ICML does not have huge capacities at the Amb facility in Himachal Pradesh. So with new models planned, how would you cope?

Currently we are not utilising the full capacity at the plant. We have currently a capacity of 24,000 units per annum.  With the new products and also the variants of the current Rhino we shall be able to ramp up production soon.  In case we have to enhance capacities more we have additional land of 25 acres which can be developed very fast.

What about the much talked about Pininfarina deal and the world car that the two companies were planning to launch jointly?

The code name is world car and it is an SUV. We are working with Pininfarina to develop this SUV. The prototype is ready. It is progressing well and I cannot share at this moment when we are launching this product.

Would there be a problem with the brand perception of the new SUV especially when the Rhino brand has not been well established in the market?

Initially in 2007 and 2008 we could not create a brand for the Rhino vehicle because of some teething troubles with the product. At that time we were also not present pan India. We are hopeful now with a more reliable product with better technology. We are trying to rebuild the new vehicles like Delite, Xciter and Royale. These products are now much better. We are trying to create a new brand image with the improved Rhino. In future for all the models we are planning we shall create a niche brand for them. We are focussing big time on the new brands we are developing.

Is ICML forming a joint venture with any existing player?

All products like the world car, the pick-up vehicle etc, we are developing, we are doing so internally. This is without any collaboration. But to become a full fledged player we are working on a collaboration. We shall shortly be announcing a joint venture and that JV will have a full range of vehicles from UVs to LCVs and other four-wheelers.  The new JV partner would be from outside India most probably. The JV is in its final stage.

Do ICML and International Tractors Ltd (makers of the Sonalika brand of tractors) have any synergies when it comes to sourcing components for its vehicles?

The major share of revenues within the Sonalika group comes from the tractor business. Which contributes as much as 85 to 90 per cent. We have a common plant for engine and transmissions. A lot of body parts are being made in house. We make around 60,000 tractors per annum. The synergy between the two companies is helping us a lot especially when it comes to sourcing parts from the vendors. Thus this impacts the cost and we are able to manufacture the vehicles at a reasonable cost.

What about exploring foreign markets with the Rhino?

We are already selling Rhino vehicles in the neighbouring countries. We are selling good numbers in Nepal and in the last few months we have been selling in Sri Lanka. We are getting extremely good response from these countries. Wherever the public transport system is not so developed, the Rhino vehicle can be useful since it can carry a lot of people. We are hopeful that shortly we will be present in many more countries, not just in South East Asia but also in Africa and Latin America. In Nepal we are doing CBUs while in Sri Lanka we have a distributor who gets our products in CKD from.

Among the four variants of the Rhino which is selling the most?

The Xciter model is selling the most. We are selling this model with a Crd-fi engine as well as a DI engine and the former is selling more. Since it is a powerful vehicle and is fuel efficient, it is very popular in tourist taxi segment and the BPO segment. Around 60 per cent of Rhino sales comprise the Xciter model, around 30 per cent comes from the Winner model which is the lower model.  Around 10 per cent comes from the high models which are the Delite and Royale models. These are going purely into the personal segment.  In the personal segment people have a lot of choice.  The crd-fi models are selling in the major metros while the Di engines are selling in the tier 2 and 3 cities. The Delite model comes only with a crd-fi engine while the others come with two engine options. These are also available in double and single AC. The Delite of course comes only with double AC.

What is the state of your distribution channel for the Rhino?

Distribution was a problem initially. Being a north India based company, ICML used to sell its products mainly in the North.  Around a year back we were having 45 dealers.  Now we have close to around 70 dealers. We are hopeful that in a year’s time we shall reach the 100 mark. Now with our new products we are confident that we shall be able to create our own space, especially now that out distribution channel too is in place.

Have you signed the deal with GM India to supply your crd-fi engine for the Tavera?

The talks are on. We shall share the outcome once the agreement is signed. There are a lot of companies outside India that are looking at our engine. It is a BS 4 complaint engine and this kind of engine is not available in Europe easily. Shortly we will be ready to supply this engine to several countries. There are a lot of Indian and foreign companies looking at our transmissions and other parts.

Does the Sonalika brand which is primarily a tractor brand inhibit the  growth of your Rhino brand which is into the passenger vehicle segment?

There are many companies in India that started as a tractor manufacturer and have grown into big corporate entities. There are also many companies that began as truck manufacturers and have become big automotive players. It depends how you position yourself in the market. In the coming years we have to give a clear demarcation of our different product offerings. As far as the branding is concerned, we shall be working on it after the JV is formed so that we are able to give a different flavour to the customer.