Underperforming MAN has the potential to become a major brand in Indian Market

MAN Truck & Bus, the company headquartered in Munich, Germany is the largest subsidiary of the MAN SE Corporation and one of the leading international providers of commercial vehicles. In this article, we will talk about the origin of this company, how it came into India and some of the ways for its re-return into India in its full glory. MAN Truck & Bus revolutionized the Indian Truck Industry by creating a new mid modern segment. German media has given good coverage about this new Joint venture of MAN in India.

A case study was done on the product range, price position and coordination were the aspects studied and analyzed between the offices at Munich and Pune. One of the aspect which was given major consideration in this study was the working days and time which highly varied between the two offices. This resulted in a lot of days in a week when one of the offices were closed thus affecting productivity. To add to the troubles were factors like lack of communication and time difference between the two places. The overall business was rather complicated.

In the year 2000, MAN was a global company but its knowledge was local to begin with. The company decided to expand the growth and make the presence of the company globally. After nine years of planning and dedicated efforts, MAN now has collaboration with giant companies like CNHTC China. It has purchased Volkswagen Brazil Commercial Vehicle Business, and established JV with Force Motors in India.

Although being a highly reputed brand and a globally known company, MAN could not establish itself in India as well as one had hoped. Let us understand why this happened which will further help us in building its position once again. Before Force Motors collaborated with MAN, it used Mercedes Engine for making Tempo Traveller. While looking for a reliable Indian partner, the company started looking for a company like MAN, Munich to get commercial engines. In the year 2006, MAN Force Motors Ltd was formed. The development of the military vehicle “Shaktiman” has been credited to vigorous efforts of Mr Schumacker who was the first official appointed executive in India.

In the year 2008, MAN made the decision of opening a separate office in Mumbai which had MAN Diesel facility. Three people from MAN Munich Office who worked towards making this dream of a separate office come true are Mr Atul Singh Chandel, Mr Franz-Xaver Polster, and Mr Neundlinger. Even though the initial plan was to build an operation to sell the premium TGX/TGA-WW products in India but this dream had a short life as the office in Mumbai was later closed down due to several reasons.

Intercultural dimensions of two countries was also one of the issue during JV

MAN Trucks India Private Ltd

Between the years of 2006 and 2011, there have been numerous changes in the company. While it started out as a joint venture in the year 2006 with contribution from Force Motors. The plant was inaugurated in April 2006. In the same year, delivery of the first batch of MAN trucks happened in the month of August. The month of October in 2007 saw the first export vehicle and in March of 2012, JV was taken over by MAN and was renamed as MAN Trucks India Private Ltd. Now the company is a full subsidiary of MAN Truck & Bus AG, Germany.

With the headquarters located in Pune, Maharashtra and plant in Pithampur, Madhya Pradesh, the company has over thousand employees. Some of the famous slogans used by the company to promote their brand are India’s Future is Riding the New Expressways, harnessing the world’s Best Technology, Introducing India’s New Benchmark of Reliability, Performance, Efficiency, Safety and Endurance; and Tomorrow’s vehicles manufactured in India only.

Product Launch:

In the beginning stages of the company, the product was launched with the Force product brand later the company realized that this could hamper MAN’s progress and its brand image. Even convincing customers about the premium brand value was not possible.

The company entered into tipper segment after launching tractor head to toe tractor segment with Product brand of MAN.

MAN Buses: In the category of buses, MAN has an AIROBUS, which is a 45 Seater Luxury AC Coach.

MAN Sales Performance

The sales performance of the MAN Company has been steadily growing since the day it started and continued till 2010. But since then the sales have dropped. This is itself is a big signal to the company to re-think its strategies to improve the growth.

BharatBenz, which is another German brand to enter into the Indian Maker has performed much better than the MAN in recent years if sales performance is judged.

MAN product Analysis:

Product Support

Some of the options in case of free service are:

1. If you buy the Haulage, you get six free services at intervals of 15,000 kms or 60 days whichever is earlier.
2. When you buy Haulages with 2VCR&VP44, you get six free services at intervals of 20,000 kms or 75 days whichever is earlier.
3. In case of Tippers and Special Application, you get six free services at interval of 450 hours or 30 days whichever is earlier.

Warranty Policy

For Haulage, the warranty policy stands at 24 months or unlimited kms. In case of Tippers, it is 18 months or 3000 hours, whichever happens earlier. Whereas bus has a warranty policy of 24 months or 200,000 kms, whichever occurs earlier.

The company also offers warranty for the separate parts and works with the goal always being maximum customer satisfaction. The warranty for the parts is available for 6 months or 1000 hours or 40,000 kms whichever happens earlier from the date of purchase from MTI Dealers.

Pan India Service Network

With a wide network of dealers who are spread nationwide, the company provides prompt and efficient after-sales service. The dealers have all the facilities necessary for them to work their best, like mobile service on the spot. All the dealers are situated along the Golden Quadrilateral. In case of large operations, the company also provides customised “on site” support. While they give forty sales, service and spares; the service and spares stand at 35.

Product & Price

When the company first came into the Indian market, the strategy was something like this, 65% Tractor Head product and 35% Tipper sales plan, whereas they had places a price of 24 lacs for 49.280 & 40.280 Tractor head. Initially the customers took interest in the product due to its brand value and the hope that the collaboration which happened between the two companies will reduce the prices in turn due to production of the components in the country itself. At this time, the product support came from Force Dealers and MFTPL dealers who were exclusively brought for this purpose. These MFTPL dealers were from seven places in India namely Bangalore, Chennai, Coimbatore, Jaipur, Mumbai, and Gurgaon.

However due to poor service network, the market of Haulage with its initial plan completely collapsed and this lead to huge disappointment among the customers. Later, the MFTPL changes their track and went towards Tipper models with a capacity of 280 HP and 25 Ton which came under the mining segment and thus stood against Higher HP vehicles like Actros and Volvo but also the ones having vehicle cost. This step slightly improved their plan and increased their Tipper sales. However, in today’s market the competition is with giants like BharatBenz and Tata who have already proven their worth in India with respect to customer prices. The bottom line that comes out of all this is that ultimately after waiting with expectations for a long period, the customers have been forced to move on from MAN to other known brands as they were never satisfied.

Applications

In India, maximum commercial vehicles are utilized in various projects like irrigation work, road construction, mining, RMC for Tipper models, soil and blue metal transportation and Logistics movement for Haulage and Tractor Head models. During the early stages of their entry into India, customers bought the MAN products due to the very high brand value that it held and the reliability and safety of the products. However this did not work as their products started going into wrong places for application like Tippers in Mining segment. On the other hand, the Tipper vehicles that came with a Gear box had technical failures due to the same in the market in the state of Kerala. After conducting lots of trials to validate the vehicle, MAN AIRO bus was launched in India.

Promotion

The promotion techniques used by the company have been just about the basics like the road shows, advertisements and campaigns for creating awareness about the brand. This did some work for them in terms of positive impact of sales.

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Disclaimer
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgement. Neither ACG nor any other member of the organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication.

Source: Autobei