Kkrishna Vaahan Pvt. Ltd. has come a long way since inception in the year 2014, when it ventured into the commercial vehicle industry with hope and excitement. Backed by TML’s support, they strived hard and adopted a trust-based strategy to emerge as one of the top commercial vehicle dealers in the East region. By nurturing an honest and strong relationship with business partners and customers, Kkrishna Vaahan Pvt. Ltd. has been able to overcome multiple disruptions in its 8 years of existence. Here are excerpts from a candid conversation with their Dealer Principal, Mr Rahul Khaitan.
Q1. Sir, could you please take us through your journey, from the time of your inception as a TML dealer to becoming one of the most prominent CV dealers in the East region?
Kkrishna Vaahan Pvt. Ltd. started its operations in September 2014. Being new to the commercial vehicle industry we didn’t know what to expect; but were very excited due to the opportunity given by TML, and eager to test our mettle in the market. The last 8 years have been nothing short of a rollercoaster ride. However, we have followed only one mantra for success - building a relationship based on trust with our customers and business partners. In the last 8 years, we have witnessed major disruptions in the form of:
- BS3 to BS6 migration
- VAT to GST migration
- 3 Phases of Covid lockdowns
- One wave of downturn in CV market cycle
But none of the above has dampened our spirits and amidst all these we have grown many folds in terms of our infrastructure, service and spares volumes, product portfolio as well as customer base.
Q2. The last 2 years have been tough for the commercial vehicle industry. How did you steer your business during the pandemic?
The last 2 years have been very challenging without any doubt. Migration from BS4 to BS6, coupled with the negative impact of 2 waves of Covid have had a severe impact on the market. But fortunately, it gave us time to sit back and relook at our business model. We analysed the mistakes we were making and potential shortcomings in our business model, namely – high interest costs, low service revenues, profitability predominantly based on sales, and lastly, very high credit to customers with the risk of losing money as a significant chunk of customers were defaulting in the market.
In the last 2 years, we have changed our entire working philosophy and have worked on all the above-mentioned points. This has brought us to a state where we have reduced our interest and other costs by almost half, increased our service revenues to more than double, and reduced our credit to almost zero.
Hence, in a way, the last 2 years have helped us remodel ourselves and now we can say that we are 80 percent resistant to any downturn.
Q3. There has been a lot of action in the CV space lately, with the entry of new age tech players in logistics and fleet management domain. With a booming ecommerce sector and EVs starting to gain traction in the last mile delivery segment, what is your take on the CV industry going forward?
Going forward, the CV industry is expected to undergo a major shift. The cost of acquisition of a commercial vehicle is almost equal to the operational cost of a vehicle in its lifespan of 6 to 7 years. Therefore, we expect that very soon there will be a change in technology and EV/alternate fuel like ethanol will have a very large footprint.
Customers as well as us dealers need to be ready to adapt to these changes and increase our scale of operations as well as work very hard on developing the right infra and educated manpower if we want to survive in the market beyond the next 5 years.
Q4. What are your views on the Automotive Finance landscape in the country, and what changes or developments do you foresee in times to come?
Automotive finance is the backbone of the CV industry. TIV, dealer share or customer growth depends directly on the availability and aggression of auto financiers in any territory. In the last few years, financing has also undergone a major change. Around 8 years back, funding INR 10 lakhs was enough for a customer to buy a truck and today the average product cost is INR 45 lakhs. With technological advancements, the vehicle costs have risen sharply, and finance companies need to respond to major challenges in terms of:
• Structuring a deal, to make the customer’s acquisition of vehicle affordable while ensuring that the EMIs are designed in a way to help the customer retain money every month.
• With increasing vehicle costs, First Time Users (FTUs) are slowing down their purchases, and small fleet owners need to come forward to fill this vehicle gap in the CV space. Financiers need to address this problem wherein most of the customers are over leveraged.
• And most importantly, finance companies need to reorient themselves as potential partners to truck owners in their growth journey, so that in the entire life span of a truck, a customer does not see the financier as a creditor chasing him for money, but as a friend who is with him when the market takes a downturn and helps the customers tide through the situation, while protecting their own investment.
Q5. Last but not the least, how would you describe your association and experience with Tata Motors Finance over the years?
Tata Motors Finance has been with us all through the last 8 years of our operation, standing firmly behind us during our growth and being there for us during periods of downturn. TMF has been highly innovative and aggressive, especially in the last 5 years, launching many innovative and aggressive products in India. These include Leasing, Fuel Financing, Working Capital or Capex Funding schemes for dealers and customers. However, we feel that one quality of TMF which really sets it apart from other financiers is the Transparency of operations.
In our entire working experience of past 50 years, we have never seen a company that is so Transparent. The senior management of the company is extremely approachable and directly in touch with dealers. Any help needed from TMF is just a phone call away and they have always lived up to our expectations, coming forward to help us dealers and customers to the best of their ability.