'The DICV plant is the only Daimler plant worldwide to make three brands of trucks and buses.'

Erich Nesselhauf, managing director of Daimler India Commercial Vehicles, speaks to Kiran Bajad on how the company has fared till now in India and the upcoming bus plant at Oragadam, Chennai. 

India’s commercial vehicle industry continues to face difficult times, so what is your assessment of the market?
These are challenging times for the CV industry with continuing economical sluggishness. There is an obvious trough in the market. Several economic indicators are under severe strain and this is reflected also in the trucking industry. However, we at DICV focus on long-term developments. The downturn in the trucking industry is a part of the cyclical turns that any industry faces even though the current downturn has lasted longer than expected.

We believe in the India growth story and that the CV industry will ride back on the growth in the near future. The renewed focus on infrastructure projects and industrial production coupled with favorable policies and reforms at the Centre would certainly boost the sentiments of customers in the industry. We believe that ‘Made in India’ can become a sign of quality and if you have seen our DICV plant in Oragadam then you will see that world-class development and production can take place in India.

How has the sector performed over the last year and how you see the sector moving in 2015?
At DICV, we concentrate on trucks (more than nine tonnes) and buses (over nine tonnes); that is only 50 percent of the total CV industry. In general, the entire market volume (9 to 49 tonnes) is around 160,000 units, whereas it should have been about 300,000 units per annum. In the long-term, this market has a potential of 450,000 units.  It is difficult to forecast 2015 growth but overall we expect the market to grow. There are clear signs that we will have a positive sloping curve this year and BharatBenz is all set to participate in that growth.

Talking about the year 2014, how did DICV perform in terms of sales? What are the numbers you have sold and what is your target for 2015?
We don’t share sales or production numbers broken down product-wise. However, we have entered the Indian CV sector only three years ago and have had a very good start from beginning breaking into the list of top three truck makers in the country in the heavy duty segment.

We currently have over 16,000 trucks on the Indian roads since our launch in September 2012 – and not a single truck sold with any discount.

Sales in the first 11 months (year to date 11/14) climbed by 61 percent to 9,700 (as against 6,000 in the previous year) units. By now, we have established a network of 78 BharatBenz dealerships across the country  with a plan to cover more than 100 locations by 2015.

What are the challenges the company has encountered in the year gone by?2014 has been an exciting and challenging year. Our accomplishments, just to mention a few are: we laid the foundation stone for our bus plant, celebrated the market launch of three tractor-trailers and a construction, mining truck, started production of our first LHD Fuso, exported more than 1,000 trucks out of India, and a few weeks ago rolled out our 20,000 truck off our assembly line in Oragadam.

While CV market conditions in the Indian truck market remain difficult, there are now indications that it is stabilising. In these tough surroundings, we have achieved a market share of seven percent, the third spot in the HDT segment and for the first time, the third spot in MDT. This is all led by better product proposition versus our competitors.

In terms of product, to give one example, our drive goes on with our new BharatBenz 3143 later this year. The BharatBenz 3143  was already showcased at the IAA Commercial Vehicle show at Germany last September. It is specially designed keeping in mind the requirements of the Indian mining sector. Highly researched and meticulously engineered, the BharatBenz 3143 will be made and sold in India, targeting the niche deep-mining segment, hitherto operated by highly-priced premium deep-mining trucks from global players.

With high levels of localisation, the product will offer the Indian mining truck owners an unbeatable value proposition and higher return on investments. Developed on the existing HDT platform – the Mercedes-Benz Axor platform – the BharatBenz 3143 is the first truck with higher horsepower (430 hp) made-in-India, optimally engineered to meet the most demanding operating conditions at mining sites.

What has the response to DICV’s new products been?
Along with the trucks presented in January 2014, three tractor-trailers and one truck for construction-mining purposes, BharatBenz now offers vehicles in the 

9 tonnes to 49 tonnes range, delivering best value for money.

With our trucks, we have transformed the Indian truck industry. That’s confirmed by our customers and proven by a high acceptance in the market due to excellent quality of the product as well as best sales and aftersales experiences.

What is the current capacity utilisation at DICV?
We have a capacity of 36,000 vehicles and have already made investments to double the capacity.

Can you give us an update on the bus manufacturing plant?
Construction of the bus plant is well on track and is expected to be completed by the second quarter of 2015. Then,  next to trucks, BharatBenz and Mercedes-Benz Buses will roll off at our new bus manufacturing plant which has been built within the existing Oragadam plant. The bus facility is spread across 27.91 acres. An investment of Rs 425 crore has been earmarked for the bus project for an installed capacity of 1,500 units in the initial phase. The capacity can be expanded to 4,000 units. Our DICV plant will thus be the only Daimler Truck plant worldwide that manufactures three brands of trucks and buses, all under one roof.

What about exports?
Together with Mitsubishi Fuso Truck and Bus Corporation (MFTBC), we combine our strengths under the umbrella of Daimler Trucks Asia to tap into further sales potential.

While we continue to focus on India with BharatBenz vehicles, MFTBC will service the rising demand in the Asia and Africa with its existing portfolio of Mitsubishi-Fuso trucks from our plant in Kawasaki/Japan and our Fuso trucks from Oragadam. We export to nine countries including left-hand-drive markets. After introduction of the models to select Asian and African countries, there are plans for a further rollout in markets like the Middle East and Latin America. n