Marc Llistosella, the outgoing president and CEO, Mitsubishi Fuso Truck & Bus Corp and Head of Daimler Trucks Asia, on repositioning the Fuso brand, Daimler Trucks' EV strategy for India, and why India is special for him.
The outspoken Marc Llistosella, president and CEO, Mitsubishi Fuso Truck & Bus Corporation and Head of Daimler Trucks Asia, in a candid conversation with Sumantra B Barooah, during his last visit to India before leaving Daimler by end-March 2018, talks about repositioning the Fuso brand, Daimler Trucks' EV strategy for India, the challenge of leading Daimler's entry into the Indian trucking industry, the hurdles on the way, and why India is special for him.
Could you tell us the story behind the e-Canter and its scope going forward?
We decided to proceed with what was started in 2004, a project called the E-Cell, and cut to 2014, when we had the first product test drive for our customers. We had a long discussion as to how we should proceed, and were in a quandary, whether we stick to E-Cell just for fancy or decide if we really did believe in it.
In 2015, it became clear to us, as a strategic decision that we wanted to do something else and wanted to re-position Fuso as a brand. Fuso, for a long time, was known for the Canter. It was the icon of the light utility segment and millions of units have been sold across the world.
We were clear that now, after so many years, when we give the brand a new core, then, it has to be something which is a change for the whole industry. I wouldn’t say that this is by coincidence, but, what we have been seeing over the last few years is a dramatic interest towards electric mobility.
We have seen massive attempts towards vehicle electrification in the past, in the 1990s and several times over the past 20 years. But, now, I think we are at that right spot and at the right time that electrification of not only cars, but also of CVs and buses, is also at a tipping point.
Will electric mobility be a big play in the CV space, given that a number of people are still apprehensive about it?
This is a typical reaction when we are at the beginning of any new technology. China is investing heavily towards electric mobility and the country has announced to infuse billions of dollars in developing a charging system, with an aim to establish around 4.5 million charging stations across the country over the next three years, going ahead of what the whole world today has together combined.
So, what we are seeing is a massive shift of interests, investments, and development work being done on batteries, which was earlier overshadowed by research on curbing emission norms with next level of combustion technologies.
China and the US are already seeing sales of thousands of small and mid-size electric cars, but, none of the countries have yet stepped feet into trying electrification in the light duty commercial segment, in the range of 7.5T. And, that is where we, as a truck manufacturing company come in, and have decided that we can do it and that we should do it.
As regards Tesla, the company has been a wake-up call for the entire automotive industry over the last few years. They are the new kids on the block and, for a long time, had been underestimated. That is the typical problem when someone is new into the field. Similar things happened to us when we were under BharatBenz and a lot of people underestimated us dramatically. Now, we have around 10 percent market share and are No. 3 in the HD segment after five years, and our story is definitely not over yet.
The same happened with Tesla and now they are being taken rather seriously. The work Tesla has done has brought it into the eyes of the whole world and their research, funding and R&D initiatives only hint at a strong future for the company.
Would the e-Canter be the platform for the start of Daimler’s electric CV journey in India?
Yes, it would be the platform from where we would be getting out the derivatives for the Indian market and later, pursue them. India is another new kid on the block and India too is underestimated. I am saying this with my modest experience of working here for over eight years now.
India is underestimated in the overall mobility sphere as compared to others. We speak about South Korea, the US, China, Europe and even after being the sixth largest car producer in the world, India is still underestimated. India is seen as a follow-up as compared to some other countries, with examples such as late adoption of BS IV, which was implemented here between 4-10 years later than other markets.
Similarly, with a lot of catching up to do with the world and the country leapfrogging to BS VI norms, is again giving an impression that even electric mobility is going to take a few decades to happen in India, because everyone is thinking in existing paradigms.
But, this could change easily because we see that a lot of focus is being paid on solar energy and while India is ranked very low in terms of environment-friendly energy sources, India has the potential and with the current government in action, which is seen taking concrete decisions, it can be done. Implementing BS IV across the country and bringing in GST have been some of the achievements of this government, which pose a better future for the automotive sector in the country.
This is a surprise which only a new kid on the block has, and eventually can surprise whole of the world. With readiness in some spots and not all across the country, electric mobility could be started from these urban spots and then be spread across the country. We should not limit ourselves when we have the technology.
When do we see Daimler to enter the e-mobility space in India?
We have a very clear growth path for the next five years and we are going to start with the e-Canter version 1, and then after two years, we are going to upgrade it to the next version, so that we leverage the development in the battery technology every second year and we groom with the technology, and not remain stuck with the older technology.
This would give us significant advantage because it will allow us to get continuous feedback from our customers and keep using that to better the technology and come out with even better and latest technology for India. Bangalore, for instance, has a very good power infrastructure and we could start from here itself. In a nutshell, we are ready, we just need the call.
Would the whole chapter of setting up the Daimler India Commercial Vehicles (DICV) business remain as one of the most special parts of your entire career?
This is absolutely the venture of my life. My family was here and my youngest two kids have grown up here in India. I feel at home here and appreciate the friendliness of the people and the sheer willingness to take risks. I also have seen the greediness, the chaos and all other bad things, but, I would just forget the bad stuff and focus on the positives. The spirituality and the willingness to groom are commendable. My chauffeur, for instance, spends half of his income towards the education of his son, which hints at the spark of an upcoming change.
India is ready and this country needs change and I love to see things groom and you can see growth and change here in India. We have done a remarkable job by setting up BharatBenz, where we did not just blabber, but, we delivered what we said and I think we brought a lot of change to the industry by not only pulling down the profitability of our competitors but also bringing in more technology, new systems and new models. We were ready with BS IV way earlier and this kind of change is something which is hard to imagine to be done somewhere else.
Currently, I am honoured to be the head of Daimler Trucks Asia, and while it is a tough call, but, I can’t be the sole prophet of change.
This company allowed me to realise these ideas. We have a localisation, which is exceeding 96 percent and we currently have a dealer base of 134 across India. All this is when nobody believed in us and we have no partner. People say that you cannot succeed without a partner in India, which I do not buy, because if you have a vision and a super team, you could do anything.
I would always be grateful to Daimler that they allowed me to do this and take a brown-field approach and turnaround Fuso, which is now a real strong company and we have a perfect financial situation. We have had growth last year, which has exceeded every expectation out of us; we really are in a good spot and I must say that while it was great, now, what next?
I am always on the lookout for the next unbelievable challenge and eventually this could also be it. And, being in Daimler for more than 23 years, Daimler is going to stay and enjoy a very special place in my heart.
Some industry professionals say that while Daimler’s intent was very clear, but, somehow things haven’t gone as per plan. The dealer partners have made huge investments, but, not many of them are profitable. What are your thoughts on that?
This is always there when you invest and you start from scratch. I would say that almost 60 percent of them are now profitable. But, this is where you have to have a vision and be persistent. One should be adaptive and not change the strategy too often. One should listen to the surroundings, bow the head and then all that matters is focus and shoot. We have a localisation, which was not dreamt of, and we have nudged existing players in the market, who have been operating since decades before our arrival.
Nobody believed that we would ever be allowed to put the Fuso, Freightliner or the Mercedes badge on trucks produced by us, but, we did it. So, when everyone says that it is not possible, that is always a motivation for me to stand up and show that it is possible.
Where does BharatBenz stand today in terms of market performance?
We stand one-and-a-half years behind our original expectations, but, in terms of market share, we are in double-digits since quite a few months. In terms of profitability, we will have break-even and our target is 2018, and if this comes true, after five-and-a-half years into operations, then, not boastfully, but, it is something significant.
We are ranking good in market position, localisation, product quality and it is the belief of our suppliers, dealers and our associates, who have always made us stronger. Who would have believed that the quality of the products would be so sublime and outstanding that we could directly put a ‘Mercedes-Benz’ badge on them and be allowed to sell them abroad?
That's also an indicator then that India as a whole is coming up as being a better manufacturing base.
Exactly and there are companies like Motherson, Bharat Forge and Sundram Fasteners, among many others, who are really located where we are and are flexible and have a willingness to learn, invest and take risks. We would not be successful without our stakeholders or our partners. We needed to have close relationships with our suppliers, our dealers and our customers.
Navistar, AMW and many other companies came here and left. It was our duty then to stick to our promise and perform.
Was there any phase of working here in India that you think was a lot tougher than you actually imagined?
The credit crunch of 2009 was tough, but we survived it. Then, 2014 again was tough as GST was getting postponed, the BS IV emission norms were postponed. All these factors, which were important to our vision of modernising the trucking industry in the country, were not in our favour. This led to a certain form of frustration, but, even though it has been slightly delayed, now, everything has fallen into place.
We wanted to be the brand of aspiration, and in our perception, we are the best truck you could get for your money in India as of now. The more customers say it, that states exactly where we wanted to be.
What is your opinion on some of the economic, financial and infrastructural developments being done in India over the recent past?
I think the new government is active and makes calls. Whether I like the government or not, is completely irrelevant to this picture. What India needs is decisions. Some of them will be tough and hard and it is always better to take some sort of decisions than not taking any of them at all.
India is the fastest growing large economy in the world and has been moving tremendously over the past two to three years. Indians have started to believe in themselves and that’s the most important thing.
We have an average age of 28 in the country, there are hundreds of best mathematics and engineering institutions in the country, and there is an extremely rigorous education system, so there are always millions of competitors within the peers. With this government, Indians have started to believe in themselves and now, sky is the limit.
Given that, could India then be one of the top three, if not the top manufacturing bases, for Daimler Trucks in the future?
That, you’ll have to ask our shareholders!
What are the key mantras that you live by as a leader and also as an industry professional?
That’s an interesting question! I’d say the first would be - listen to others, but do what you think is best. Don’t do what other people say. Think about it. No. 2 – be modest. Whatever you do, how hard you work, in the end, it’s destiny, and it’s luck which helps you. If someone thinks that they have destiny all under their control, sorry to say, I believe in the ‘Chaos Theory’ and in co-incidences. Of course, the co-incidences will be on your side if you work harder than others, but, you cannot predict everything.
Having said that, I sometimes struggle there in my case, and I am not known to be the most modest person. You have to be modest and you have to be a little bit grateful for the things which happen to you.
The most important learning is that you are nothing without your team. You can claim that you are super-smart and you have the best talent. This is ego shooting, which what some people think makes them so successful, but you’re nothing without your team. The team is what brings you up and it is what reflects your leadership.
Leadership is something where you trust each other blindly and there’s no need for you to be reminded that you have one more stripe up your shoulder. It is important that you have an acceptance by mutual trust, sympathy and by constant team-work. And that is something, which I experienced here in India massively. There is a very great team-work, and a great team-spirit for BharatBenz, and that is exactly what we have built up in Fuso.
Teamwork is attractive to the whole world, but it has to be honest, fair, and it has to be based on sympathy and empathy which you have for human beings. If you don’t like humans, you should never go in a leading position.
On that note, thank you very much Mr Llistosella for your time, and I wish you all the best for your future endeavours.
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