Daimler’s BharatBenz to take on Tata, Ashok Leyland

German major charts out ambitious plan to reach top spot with highly localised products and an Indianised name to strike a chord with Indian customers.

Daimler, the world’s largest manufacturer of medium- and heavy-duty trucks above six tonnes, has taken a first-of-its-kind step to drive into the Indian mainstream truck market, dominated by homegrown brands Tata Motors and Ashok Leyland. BharatBenz — an Indianised brand name -- has been launched and it will be the face of Daimler’s trucks in India. The new brand will also ensure that the exclusivity associated with the Mercedes-Benz name, in high-end cars and trucks, remain unaffected. With this introduction, Daimler has added a fifth brand to its truck portfolio. The first of BharatBenz trucks will debut mid-2012, and the portfolio will range from six-tonners to 49 tonners. So, what is the rationale behind introducing a new brand when it already had Actros in the market, or could have introduced on of its other existing brands? Speaking exclusively to Autocar Professional, Dr. Dieter Zetsche – chairman, Daimler AG & Head -- Mercedes-Benz car division, says: “There's a relatively small niche in this market for imported trucks, which we serve with our Mercedes-Benz trucks (Actros) as well. This is high end and higher priced. Then there is the local production, local manufacturers, which serves a vast majority of the market today. We see a start of a development of the segment into a medium quality and longevity kind of truck and that‘s where we think we have a great chance out of a combination of Indian skills, Indian suppliers, local production and the technology we can bring from Daimler.”

The products coming out of the combination of German technology and Indian skills will play in a market which stood at 212,000 units during April 2010-January 2011, a healthy 42 percent growth over the same period in the previous year. Tata Motors leads the segment with a 63 percent share, followed by Ashok Leyland at 22 percent.

At present, Daimler India Commercial Vehicles’ project in Chennai is far from ready but its test track is buzzing with activities. Camouflaged trucks are going round the tracks, which is designed to be used day and night. The company claims that its trucks have already clocked one million kilometres of testing in India. Branding an Indianised name, Daimler’s trucks will also have a good amount of local components to be price competitive.

Eighty percent of the truck’s value will be localised during launch as Daimler wants to be fully ready to capture the potential it sees in this market. “India’s macro economy has been on a growth track over the last years and is estimated to grow between seven and eight percent in the next 10 years. Additionally, India has become the world’s second largest market for medium- and heavy-duty trucks. By 2020, we expect the Indian truck industry to double. We will play a significant role in this leap. For us, the most promising market is the ‘new middle market’, for which we will offer our new truck product portfolio. This market is expected to grow to as much as 80 percent of the Indian truck market until 2020,” says Andreas Renschler, member -- Board of Management, Daimler AG & Head of DaimlerTrucks.

The BharatBenz range will derive from some existing Daimler platforms. The light-duty trucks of this range will be based on the Fuso Canter, while the heavy-duty range is based on one of Mercedes-Benz trucks platform. “With these platforms, the trucks have been ideally tailored to the needs of our India’s customers,” adds Marc Llistosella, CEO, Daimler India Commercial Vehicles (DICV). To achieve the target of products ‘tailored to Indian customers’, Daimler plans to double its existing R&D team of 500 professionals by 2013.

DICV is in the process of building a 430-strong vendor network to ensure that its products are Indian in terms of price also. The trucks will be sold through a network of 70 dealers in the first phase. Daimler Trucks had entered India in 2008 through a joint venture with the Hero Group, but the JV was closed the next year. Officials cited recession as the main reason for the decision.

Joint activity for Daimler-Kamaz?

There’s a possibility that Daimler may have some joint activities with Russian truckmaker Kamaz in India. Daimler, which had bought a 10 percent stake in Kamaz in 2008, increased it to 15 percent last year. Andreas Renschler - Member of Board of Management of Daimler AG & Head of Daimler Trucks, told Autocar Professional: “We are partnering with Kamaz already. We have established two joint ventures to produce certain models of trucks. Basically, direction-wise we are interested but there’s no activity on that front.” Kamaz has a small presence in India. It started assembling its trucks in Hosur, near Bangalore from February, 2010. FACTFILE

Daimler AG is celebrating its 125th year in 2011. Co-founders Gottlieb Daimler and Carl Benz invented the automobile in 1886. The world’s first truck was introduced by Daimler in 1896.Daimler truck’s association with Indian goes back to 1954 when Tata Motors (then Telco) entered the truck market with a Daimler product.