Daimler India Commercial Vehicles goes light
In line with its model plan, Daimler India Commercial Vehicles has rolled out its first batch of BharatBenz Light/Medium Duty Trucks. Karthik H reports.
DICV also announced that it is on track with its plan to launch one new truck per month till it has all 17 of its models on the road, by which time, the company said, there will be close to 110 dealers across the country. The LDT trucks carry over a large portion of the tried-and-tested Fuso Fighter chassis and Canter cab. While rival truck-maker Ashok Leyland had introduced the winning combination to India back in 1985, DICV is confident that its strategy would work. “Not much de-contenting has been done for these LDTs,” said Dr Albert Kirchmann, president and CEO, Mitsubishi Fuso Truck and Bus Corporation and vice-chairman, DICV. “No compromise has been made on the efficiency, durability and reliability. We monitor all activities by our suppliers so that we can maintain the quality,” he added. Close to 85 percent of the components for the trucks are localised, 40 percent of which comes from within 100km of its plant. “The de-contenting was only in regard to the local regulations in terms of lights and safety equipment,” said Dr Kirchmann.
Insisting that the development of the LDT range has seen contribution from all of Daimler’s facilities, Georg Weiberg, head of truck product engineering, Daimler Trucks, said: “Our focus was to create a truck with superior performance, efficiency and the best quality at a very competitive price. To achieve this, we involved our German/Japanese engineers for their technology, experience and our Indian engineers for their local expertise and ability to create cost-conscious solutions.”
What's clicking in India
When queried on the aim behind launching the 9-12 tonne trucks while DICV’s range starts at six tonnes, DICV’s MD and CEO Marc Llistosella said that the segment lower than 9 tonnes is “stable, but not growing right now.” He continued, “The 9-tonne segment doesn’t exist anymore, it is now the 9.8-tonne segment. Same is the case with the 12-tonne segment which is moving to 12.8 tonnes or 13 tonnes, which is one of the most dynamic segments. Likewise for 25 tonnes, which was 80,000 units three years ago and continues to remain at the same level. The 25-tonne three-axle segment is diminishing and moving towards the 31-tonne four-axle segment.”
DICV’s vice-president for marketing, sales and aftersales, VRV Sriprasad, confirmed that the 7-tonne products will be “one of the last products to be launched.” He corroborated Llistosella’s comments about the 9-12 tonne segment, stating that even in a good year the segment sees a volume of 80,000-100,000 units. “The Indian truck market has not matured the way the other global markets have,” Sriprasad said, adding, “The major segments to look out for in the future would be the 40- and 49-tonne trailer segments.” “With the infrastructure in India improving, powerful trucks are the need of the hour,” Llistosella said. “India is a continent, not a country. For a country of this size, you need long-haul trucks. Recently, I read somewhere that 11 percent of the world’s vegetable production comes from India. This is huge. But I was also not aware that close to 40 percent of this is wasted. This is simply unacceptable as the farmer doesn’t get his due. This means that we need to provide trucks with refrigeration options. This cannot happen with trucks that are underpowered. Obviously, this configuration is not working,” the outspoken German said.
Trucks to the future
Commenting on plans after DICV has launched its entire range, Llistosella said, “We need to look at specialised solutions, like various configurations of axles – different axle houses, for example, is something we are considering. But this is a complex task as it is extremely customised. Twin-speed axles are something we are considering. We are also looking to bring in some technology in the rear-axles that is not yet present in India.” “Market conditions right now are the toughest in India in the last 10 years,” said Llistosella. “However, we are happy with the sales that we have achieved for the three models we had launched earlier. Three models, 30 dealers, three months, 1,098 trucks sold. What surprised us about the sales,” he added, “is that so far, 85-90 percent of the trucks we have sold are fully built trucks. We estimated that this would hover around the 40 percent mark.” Elaborating on the present market conditions, Llistosella said, “Part of this is home-made, while part is due to the global financial friction. Are we happy with the conditions? Of course, no one can be. But we have sold out. There is no stock at the dealers. What we see now is very close to the conditions in 2009 when the world was facing the aftermath of the recession,” he said. Pulling a long face at his competition’s strategy, Llistosella said that offering discounts is not the way to go ahead. “Even during the 2008 depression, we saw only a 10 percent discount. Now we see Rs 2.5 lakh-3.5 lakh in discount. So, we are surrounded by a market which is totally different than what it is used to be. We will not offer discounts. We are here to garner mind share and not market share,” he added. However, on a wishful positive note, Llistosella said that the country needs to adopt GST as soon as possible, “GST means faster delivery times from point to point. When that happens, you don’t need small trucks, you need inter-state trucks.”
DICV’s sales of 1,098 trucks from its launch in late-September till December 2012 saw major contributions from Kerala where it currently holds a 30 percent share in a relatively small market. Llistosella said, “In the construction segment in Kerala, we have a 30 percent share. For a whole new brand, that’s good.” In more important and larger markets like Mumbai, it has managed to claim a single-digit share. “Mumbai is one of the key hubs in the country contributing close to 9 percent of the total CV market. We have one of our biggest dealers there. There, we just have 8-9 percent share. Overall though, the market share is insignificant as we haven’t launched all our models yet,” he added.
Talking about financing of trucks, Sriprasad said that 40 percent of all trucks bought under finance are done through BharatBenz Financial Services, a wing of Daimler Financial Services. “We offer branded insurance with a ‘zero depreciation’ policy and funding for AMC. We want to change most of our clients’ variable cost into fixed costs,” Sriprasad added. He also categorically denied that the company is interested in the SCV segment. “We don’t want just volumes,” he said.
DICV's plant at Oragadam can produce between 36,000-40,000 trucks per annum, expandable to 72,000. Asked if this has been done with moving production of Mercedes buses, which currently takes place at Daimler’s facility in Chakan, Sriprasad said, “While it is logical to assume that production of all commercial vehicles like trucks and buses will happen under the same roof, we have not made any decision on that front.”
All in all, DICV, like many other OEMs of both CVs and passenger cars, echoes the sentiment that the current sluggish market is just a blip and that India is the place to be, given its long-term growth prospects. As a testament to this, Llistosella nudged Dr Kirchmann saying, “The numbers in the future (from India) will surprise you.”
By drawing the participation of every key player in the automobile and component sector, as well as major industry assoc...
The 7 Series Protection expected price can reach up to Rs 4 crore.