Daimler’s defining moment

The history of Daimler is the history of the automobile. The company, which originated in the 29 January 1886 patent application by Carl Benz for his “Vehicle with Gas Engine Drive”, commemorates its 125th birthday with a packed calendar of celebrations at its Stuttgart headquarters and subsidiaries around the world.

Amid the festivities surrounding the anniversary, the passenger car and truck colossus is also gearing up for another event that will define its future direction. On February 17 Daimler unveils its first new brand in almost 15 years. Not in Stuttgart, but in Chennai.

The name “smart” was given to the now popular micro-compact car it introduced in Europe in 1997; the newest brand will adorn vehicles at the other end of the size spectrum — trucks for the “middle market” in India, a segment the chief of Daimler Trucks believes will be “a game-changer in our industry overall”.

Andreas Renschler sees sales of the emerging modern generation of trucks in the volume segment, vehicles of the kind his company will produce here beginning mid-2012, growing from 430,000 today to 1.4 million in 2020, accounting for 80 percent of the overall market then.

Although a third of its sales in 2009 were in the emerging markets, Daimler has no significant presence yet in the mass market for medium- and heavy-duty trucks in China, India, or Russia, a market estimated to grow by more than 10 percent year over year for the next decade. But that’s going to change. Beginning in Chennai. Daimler is betting its future on the growth in demand for “second-layer” trucks, vehicles Renschler describes as 30 years behind the state of the art in the “triad” (Europe, North America, and Japan) but of higher quality than the “low-cost” lorries on Indian roads today and nevertheless “still price-wise affordable”.

Indeed, the company’s hopes are riding on Daimler India Commercial Vehicles (DICV) to help it regain the global market leadership it ceded to Chinese truckmakers Dongfeng and FAW last year. “India is set to outperform even China in the next 10 years with its increasing middle class, high investment rates, and really young workers,” Renschler told analysts at a presentation in Wörth last November, referring to GDP forecasts – “a clear indication of how a truck market is developing”– for the world’s two biggest truck markets by volume. All the action is centred on Chennai, where 50 prototypes, a mix of test mules and 20-odd C-samples built entirely using off-tool component samples, log test mileage round the clock on DICV’s own proving ground and on roads in and around the city. The vehicles reportedly have met with approval from the highest authority in Daimler, Georg Weiberg.

Over a series of visits at three-month intervals, the global head of truck product engineering drove every one of the 14 heavy duty (HDT) C-samples, even tested them against “newly bought” vehicles from Tata, AMW, and Eicher. And the man responsible for the Actros successor that will also be launched this year pronounced them “excellent”, according to DICV chief executive Marc Llistosella. Good enough to bear the Star on their grilles? Not quite, Weiberg evidently decided, though the inventor of the successful Mercedes Sprinter van, the man Llistosella calls “godfather” and “the last castle to take”, did rate them “10 times better than the competitors”.

“He is Mercedes-Benz. Everything he judges in terms of quality is against the Mercedes-Benz standard,” Llistosella says. So what was Weiberg’s assessment? “Eighty to 90 percent of the global best benchmark — and Mercedes-Benz calls itself the best.” At a cost that is “40 to 50” percent, Llistosella is careful to add. Ironically, he’s determined his company won’t be seen in Daimler as a centre of excellence for low-cost manufacturing; rather, he is building it into an organisation that emulates the parent in Germany in every particular, with an emphasis on the core competences of “design, engineering, testing, and planning”. “We have our own approval rights for our designs. No-one else in the Daimler world does. We don’t need to have our products tested and approved by Germany — we have the final veto,” he tells this correspondent. “We decide when we’ve tested enough, not the Germans.”

The confidence to assert its independent stature stems from the fact that DICV has been able to develop a robust domestic supply base and accomplish 87 percent localisation on its prototypes in just 2½ years, achieving its “cost position” well before start of production. “We have cut the lines to our global suppliers. Now we are able also to develop with Indian suppliers. And with Indian engineers — we already have 180 on board. In a department of 350 people, there are not more than 10 foreigners including myself,” R&D vice-president Aydogan Çakmaz says.

No less important are the support services from commercial vehicle engineering specialist Engineering Center Steyr (ECS), a division of Magna Powertrain in St Valentin, Austria, that DICV has relied on heavily from the very start. An ECS team was engaged in the extensive exercise of identifying and qualifying local vendors and, with Magna Powertrain’s Pune engineering office, worked on the detailed product definition. ECS continues to support DICV through the various stages of development till start of production and beyond, even as it assists Daimler’s Truck Product Engineering unit in Germany with the development of the Actros successor. Interestingly, this correspondent learns, the styling of the HDT cabin and the design of the driver’s cockpit are the handiwork of the Magna Steyr Design team in Graz.

Total commitment

The first vehicles introduced in the market in 2012 will all be HDTs — a 25 tonne 6×2 with two wheelbases, in cab-and-chassis and cowl versions, and a 25 tonne 6×4 tipper, all powered by the 6.4 litre OM 906 engine rated at 230 hp. A 40 tonne semitrailer tractor with 230 hp and 280 hp ratings will follow in 2013. The target is to sell around 15,000 trucks that year, including 5,000 tractors. The 280hp-rated OM 906 will also power the 49 tonne tractor to come in 2014 in 6×2 and 6×4 variants, and application-optimised variants of the 25 tonne 6×4 and a 32 tonne 8×4 construction chassis the year after. Total sales of all types put together are projected at 36,000 in 2018. To be able to produce an almost 100 percent Indian truck in four years there was no way the company could “start from scratch”, Erich Nesselhauf, vice-president of procurement, says. The plant in Oragadam, when it is completed in the third quarter of this year, will be a pure assembly shop, the first Daimler Trucks facility worldwide with almost no vertical integration except for the cab-in-white.

Instead, DICV has set about establishing “win-win” propositions for, and “lifetime” partnerships with, its growing constellation of suppliers, on whom it is going to be totally dependent for a variety of critical manufacturing processes. It is intensively engaged not only with vendors of the main components – the “DNA”, Nesselhauf calls them collectively – but also their suppliers to bring their products and processes up to Daimler, nay, Mercedes-Benz standards. For example, foundry experts from Mercedes-Benz Mannheim are working with the foundry in India to consistently control the temperature of the melt and the pour speed, thus ensuring that they are able to eliminate “Lunker” (shrinkage cavities, which weaken the engine block or head) in production. “Gear grinding is another operation for which entirely new processes have had to be implemented to achieve our quality level,” Nesselhauf says.

“We not only bring our specialists here; we also take suppliers to our own locations in Germany and show them how we do these processes. This is an ongoing exercise. We also help them select the right equipment,” he adds. This knowledge transfer comes at no cost to the supplier, but the understanding is that he has to use what he learns primarily for Daimler’s benefit. Although each and every part has to be pre-tested by the supplier for material and dimensions even in this pre-series phase, it must still pass through a “firewall” at DICV and survive rigorous bench-testing before it goes onto a test prototype. There’s no question of stopping a truck on the track because of a part mismatch or whatever, Nesselhauf says. “We’ve run several hundred thousand test kilometres already on our own track. We are also using test benches and proving grounds elsewhere in India and in Germany, Japan, and the US.”

In parallel, the intensity of the focus has already shifted to ensuring process stability at the suppliers, preparatory to the start of pilot assembly at Oragadam later this year. Nesselhauf’s supplier management team of 50 is monitoring them closely to ensure high quality and delivery during SOP and subsequently. “Given our strict project plan, any delay by one supplier holds all the others up. This would be unfair, because we’ve all invested,” he explains.

Far wider benefits

Formerly responsible for export activities from China, India, South Africa, South Korea, Brazil, and Turkey for Daimler’s Procurement Truck and Buses (PTB) organisation, Nesselhauf has seen a good deal. But he admits even he was surprised to be able to achieve such a high maturity level on the C-samples. “Nobody thought we would find suitable suppliers for all our commodities. This just goes to show that with a stringent process you can make it. Working in true partnership with your suppliers, it is possible to localise a complete truck in India.” Nesselhauf, who also heads PTB7, the Indian purchase office, says the localisation project for the HDT (the 25–49 tonne range based on Turkish configurations of the Mercedes-Benz Axor), and the LDT (the 9–16 tonne range based on older-generation Mitsubishi Fuso models), makes for more efficient exports to Daimler plants worldwide and better quality overall because of the R&D capacity available onsite.

“The RFQs we place in India for our global organisation are received more enthusiastically by suppliers than if they were issued out of Germany. It’s better too for our plants in Germany — if there’s an issue, we are here to help. Otherwise, if a supplier needs support to ramp up, our colleagues would have to use the flying doctor approach. That’s a never-ending story. You have to have somebody on the ground,” he points out. Nesselhauf reveals that the OM 906 engine has been more than 90 percent localised already except for the electronics and the Bosch unit pump fuel injection system, which will have to be imported because of the small numbers. This same engine powers the O 500 U city bus chassis that Mercedes-Benz India plans to assemble later this year, which means it will likely be supplied from the Chennai plant right from the beginning. The 7.2 litre OM 926, essentially a longer-stroke OM 906, could equally be supplied from Chennai, allowing Mercedes to localise the O 500 R chassis for its two-axle coach as well.

“At the moment the chassis for these buses come in CKD from Brazil. Apart from the engines, we (PTB7) are trying to localise as many parts as possible,” Nesselhauf says. This no doubt also makes it easier for Mercedes-Benz’s bodyworking partner MCV to realise its declared ambition to sell its C120 LE city bus at the price level of Indian competitors like the Tata Marcopolo Starbus. The next step after localisation is export — this is possible because all key components in Daimler trucks and buses are modular. For example, DICV will assemble versions of the G 85 six-speed and G 131 nine-speed gearboxes of the Axor with gearshift systems redesigned for right-hand-drive operation and the shifting comfort expectations of Indian drivers. These could in future be fitted without any difficulty on the Axor sold in RHD markets like South Africa,” Nesselhauf says.

Where West meets East

In November 2010 Çakmaz and his team put their first LDT prototype onto the track, a 9-tonner they’ve based on the chassis of the larger Mitsubishi Fuso Fighter, a popular medium-duty (10–24 tonnes) model in the US, Australia, and New Zealand, to ensure generous overload reserves. It is powered by the 3.9 litre Fuso 4D34 four-cylinder engine upgraded with a common-rail fuel injection system. Developing an entire truck range that combines two diverse heritages – Japanese (Fuso) and German, with Brazilian and Turkish influences (Axor) – has been a unique challenge for DICV. Nowhere else in Daimler has this been done so far. Both R&D and procurement have had to redefine platforms, unify processes, and document it all in English in a way that eliminates any possibility of misunderstanding by the company’s Indian engineers.

On the other hand, they’ve also been able to commonise lots of parts — “less than is technically possible, to preserve the DNA and keep the trucks from getting ugly” (Çakmaz) but “more than you would expect” (Nesselhauf). “Because of the different heritages we have different material grades — the Fuso’s are based on JIS and the Axor’s on DIN. We changed the material grades to harmonise the cab-in-white,” Nesselhauf says. “But if you want to keep the heritage you cannot change everything. For high-value parts such as gearsets and axles we have, instead, common suppliers.” Çakmaz elaborates: “Both families are well known in other markets and we know exactly where we stand with the main parts, we know how they work. So they stay as they are. It’s also an issue of styling and the aspect of interiors versus exteriors. If you go for too many parts in common your trucks will be ugly.”

Çakmaz’s concerns go beyond the aesthetics of styling, though — more particularly, he is determined to change forever the professional outlook for drivers of the present crop of low-cost Indian trucks who have all along been at the mercy of manufacturers who never considered it worth insulating them from the heat and noise of the engine, or gave a thought to ergonomy or haptics. “Our trucks have to fulfil basic principles of ergonomy and provide an acceptable NVH profile — not based on rules, or on homologation certificates. We have to bring more.” “The driver should be the one in control of the conditions in his workspace,” he continues passionately. “The supermodern trucks in Europe today are like your mobile phone that you can adapt to yourself, personalise. We obviously can’t put in all the features those trucks have, but I want to move the environment in our cabins a little bit in that direction.” Accordingly, the driver interfaces will have “80–90 percent” of the functions available in the Axor, using locally developed hardware that is either adapted from that model or redesigned. “The ergonomic functionality of our vehicles will be really good,” he promises. “Everything you need to drive them will be in your direct field of vision or within easy reach of your extended arm. Regardless of your size and shape, your feet will be able to operate the pedals comfortably.” The list of safety functions the trucks will feature includes an engine brake, hazard warning lamps, and a non-reflective instrument cluster that’s visible in every condition. None of the existing manufacturers provides these. But DICV will also deliver “more” performance in individual functions, he emphasises. “It’s very important that the quality aspects of our trucks that you can touch and feel are sustainably available. That’s why we track-test so intensively.”

It’s easy to agree with his assertion that few of the functions presently available in Indian trucks last for a sustained period. Çakmaz marvels at just how many functions Indians will keep on truckin’ without. The functions of their vehicles die out one after the other, but they don’t stop —they drive till the truck can no longer be driven. “This is one way to avoid maintenance,” he observes ironically. “But it is also a sure-shot way to cause accidents, for example if your tail lamps aren’t working. Tail lamps are a simple function in fact, but they are probably the most important function in an Indian truck that doesn’t work!”

Important as it is to deliver the right functions with the right performance, it’s absolutely vital to deliver them at the right price, “otherwise you can’t survive here”, he adds. “The customer may get this or that function from a competitor, but we’ve ensured that our price is always the lowest. This was one of the major imperatives for our R&D in India,” he says. To minimise maintenance effort and the possibility of breakdowns, the key aggregates in each vehicle have been dimensioned precisely for its intended application area, and every chassis will be further optimised for its specific mission. So, for example, the same 6×4 construction chassis will be tuned differently for tipper or concrete mixer application because of the different operating conditions.

Aiming for the Actros

Having tasted success with “Indianising” the Axor, Llistosella’s engineers are raring to have a go at the Actros, “to make it more feasible, suitable for India”. So far, he says, Weiberg has warned them against touching it. But he hopes that will change when the construction models of the Actros successor (in our picture spied testing in Germany) come out in “three or four” years. “If you ask Çakmaz, he would say he’d love to do it. There are some things we could change easily, because we have an understanding of the market now. Having cut their teeth on the Axor, our engineers are eager to show what they can do with the Actros. This is a product out of Germany — it’s sold everywhere. But the Indian needs are specific. This is why we would really like to tailor it for this market. For cost reasons too…”