It is a catchy, yet profound, line from Satyakam Arya’s point of view. “The more you sweat in peace, the less you bleed in war,” says the MD & CEO of Daimler India Commercial Vehicles (DICV).
The reference is to the extensive efforts that have gone into making the company more robust especially during the last two years when Covid-19 spread like wildfire across India. “When the markets are low, the more you sweat and when they return, the less you bleed,” says Arya while exuding confidence that the BharatBenz brand maker hopes to reap the dividends from a strong market this calendar.
Sure, the Russian onslaught in Ukraine continues unabated while crude prices continue their rollercoaster ride. Input costs have gone through the roof too but it is not as if it is the end of the road either. “We always play in the longterm and have started our journey of transformation for the next decade. The vision is to be future-ready,” continues Arya while outlining his company’s top four priorities for 2022.
One, to be the frontrunner in redefining mobility in commercial vehicles; two, to have greater focus on mobility as a service; three, create a lean, digital and agile organisation which can deal with volatility and transformation aspects; and finally, make DICV the preferred choice of employer.
Skills and talent
“Skills and talent are another area of focus because this is what is important for the transformation. We are changing things that were a given for decades,” says Arya. For instance, diesel was always the fuel of choice but this could change going forward. Likewise, there was no talk of digitalisation for processes or interface with customers earlier.
“There are some things that will be fundamentally different going forward. Companies that offered products will now have to think of only mobility as a service and this will involve a change in mindset. In technology terms, it will be a challenge for everyone to get the right skills in these areas,” says the DICV chief.
According to him, it is important to precisely define what skills are being sought and think differently in terms of tapping them. Re-skilling or up-skilling is important because of electric and hydrogen which means “retraining your existing workforce” to ensure that they can deliver. “At BharatBenz, we are taking this very seriously and working on all aspects in terms of building critical skills for the future,” continues Arya.
This will involve identifying the right people within the company who are best suited to take this vision forward. Various schools are also being created at the Chennai-based entity— there was one on quality that came up last year where shopfloor associates are taught to understand the tools and deliver better. “We are doing that even in new skill areas,” he adds.
There will also be a new school on electric, hydrogen and digitalisation — “it is a kind of academy with different schools” which will play a vital role for the future. DICV “regularly sends people out” — there was a batch of 18 engineers recently sent to IIT for further skill enhancement and Arya says the effort to work with knowledge providers will continue.
Looking back at the last two years, the DICV chief believes “the worst is behind us”. Clearly, 2021 was the toughest year for the auto industry in terms of volatility which began with the second Covid wave in Q2 followed by the double whammy of commodity inflation, especially steel prices, and supply chain constraints in the form of chips and containers.
“These were issues every business was grappling with and I would say it was the toughest year,” reminisces Arya. Yet, there is always a silver lining and the CV market started to recover on a low volume of 100,000 trucks in 2020 going up to over 200,000 in 2021. It was a tough year in terms of challenges and yet business boomed which was good for all stakeholders including BharatBenz.
Independent truck entity
Last year also saw the company emerge independent as a truck entity following the global move at headquarters to split the truck and car businesses. “This move will help us in the future journey,” says Arya.
For now, there is enough confidence within the ecosystem that truck volumes are heading back to pre-Covid levels. Exports recorded an all-time high of 9,000 units in 2021 ( more than twice the levels of 2020) and clearly the crisis was leveraged as an opportunity.
“I believe 2022 will be a great year for the industry growing on the momentum of 2021. We will have at last 20 percent growth in M/HCVs over last year,” he says. According to Arya, inflation remains an area of concern but commodities could “cool off hopefully and remain flat” in 2022. DICV also sees a healthy pipeline of exports and the tally could even surpass the numbers posted in 2021.
The domestic market is coming into “the normal corridor of pre-Covid" and could see 250,000 to 270,000 units of M/HCVs in 2022. DICV is also banking on its powerful fuel efficient engines with lower turnaround times to make the most of the e-commerce boom. “The segment is demanding in terms of committed delivery times and this can be done only with a reliable quick product. E-commerce will see strong growth in 2022 and we are well poised to keep a larger share,” says Arya.
Asked if the company will explore a foray into the light cargo category, he says studying different segments and checking if there is “something interesting for us” is an ongoing exercise. “We have our strategy for the next decade and this is about transforming our business,” adds Arya.
Sustainability of operations and product along with innovation will be the key. Interacting with startups and bringing that mindset into the organisation is already being done in terms of funding right ideas and developing solutions.
Arya believes the standalone Daimler Truck will help the CV business become more entrepreneurial, take the appropriate technology choices and deliver the right products. “India always played a critical role but now mobility is transforming and we need to make the right choices quickly. These will help us define our strategy and execute them,” he explains.
According to him, though the worst seems behind in terms of the pandemic, the future remains uncertain and there is greater need to be vigilant. Supply chain concerns remain and as demand picks up, it needs to ramp up and sync with this requirement.
By the end of the day, companies are operating in a volatile world and the key is to deal with this effectively. “The last three years have seen us becoming more agile and adaptable to different scenarios. It has been a huge learning and we need to keep this intact,” he says.
While electric is creating waves in India, Arya agrees with the commonly held view that two and three-wheelers will take the lead followed by buses that have a predictable route and usage pattern for electric. Next will be cars and much later medium and heavy commercial vehicles. This sequence is a result of the limitations in charging infrastructure, technology development and the inherent challenges of the CV segment.
Electric, however, will not be the only solution for intercity buses even while emerging a pragmatic alternative for intracity transport. Hydrogen could be considered instead for long distance travel. “These options need to be examined through more research on technology and economics of costing. As we move forward, there could be some interesting developments happening,” hints Arya.
CNG and LNG could also be other fuel options and eventually all these choices will primarily be driven by India’s economic needs. “We are importing massive amounts of crude and solutions like gas can also be looked at beyond hydrogen and electric. The key is to reduce imports and improve emissions,” he explains.
The feature was first published in Autocar Professional's April 1, 2022 issue.