Mumbai, May 27: Telco’s commercial vehicle business will become insulated from downturns in business cycles as the company refocuses its strategy by adding new revenue streams.
Non-vehicular business, which accounts for almost 15-to-17 per cent of total revenues, will contribute more in the future. “We are going into non-vehicular business in a big way,” said Ravi Kant, executive director of its commercial vehicle business.
Non-vehicular business includes vehicle financing, after-sales service and spare-parts sale.
Telco's commercial vehicle unit, which now contributes almost 60 per cent of the company’s volumes, will change its image from a track and chassis manufacturer to a complete body built vehicle manufacturer. It will sell more buses and other fully-built vehicles in the future.
“It's an extremely exciting prospect to offer a complete transportation solution,” Ravi Kant said. The company has clearly gained from a surge in demand, with domestic commercial vehicle volumes up 30 percent to 107,438, the highest in last six years.
Medium and heavy commercial vehicle volumes are up 31 per cent and LCV volumes are up 28 per cent.
In the commercial vehicle business, Telco has squeezed costs to such an extent that it can break even at 30 per cent capacity utilisation. Ravi Kant said recent years have seen a gradual shift towards road cargo from rail transport.