Wilfried Aulbur, Managing Director, DaimlerChrysler India

What was the experience negotiating with the Maharashtra government?
We had a very professional interaction with the Maharashtra government and the negotiations were tough. Overall, it was a positive experience and they were proactive and supportive. We visited 70 sites in Maharashtra, Tamil Nadu and the northern region before zeroing in on Pune. Chennai was also a strong contender since the state government has done a lot in terms of infrastructure and getting industry to move there.

What finally tilted the scales in favour of Pune?
Logistics and availability of suppliers were important factors. Infrastructure in the Talegaon and Chakan industrial belts coupled with supportive government policies also played a role in the final decision. Apart from this, DaimlerChrysler India has also had a good experience operating out of its present premises in Pune.

What is the significance of the new plant?
It is an emotional moment for us because it is for the first time that we have headquarters in India. The senior management (from Germany) including our chairman, Dieter Zetsche, Rudiger Grube (corporate development) and Thomas Weber (group research & Mercedes car group development) visited India to see our operations. It was nice to get their commitment on further expansion and investment in this country.

What are those commitments?
You can appreciate the fact that I cannot give you any financials or talk about future projects following a directive from DaimlerChrysler AG. We are constantly looking at opportunities in the Indian market. The whole team is working very hard to make sure that some of these become realities. Clearly, India is a much more mature market than it was a few years ago. It is developing extremely rapidly and we think we are only scratching the surface of what is potentially possible.

Will the new plant impact your relationship with Tata Motors?
We have been discussing this issue with Tata Motors for some time. We have a positive and cordial relationship with them. I think Tata is one of the most admirable companies in India. We will continue working with them. Even with the new plant, their paint shop will still be used by our vehicles.

What is your view on the quality of vendors in India?
We have been working closely with our vendors for 11 years to ensure that they reach the quality standards that customers expect from our vehicles. They are up to the mark in quality in terms of global DaimlerChrysler quality standards. Otherwise, we just could not have sold our cars in India. The quality is the same as our products in Germany, if not better. We give our vehicles a lot of individualised attention since we produce only eight to ten vehicles a day.

What role does India play in DaimlerChrysler’s global sourcing strategy?
We have a global sourcing hub in India. There is a team of about 12 people who have, over the last eight years, worked intensively with Indian vendors and have been able to really position them as first tier suppliers to DaimlerChrysler. We have sourcing volumes for Chrysler, Mercedes and Fuso. So the US, Europe and Japan is covered by sourcing out of India. The result at the end of the day is that India is the largest sourcing hub in south and southeast Asia. We source more components out of India than say from Malaysia, Indonesia and these various countries put together. Nevertheless, we are still small in terms of the total procurement volume of DaimlerChrysler. It is important that Indian suppliers understand that nobody really has the time for dillydallying. The global automotive industry is extremely competitive. As a consequence, we do not have time to waste on people who come in with very high price expectations. If you come with a high price, the Thais and Chinese are cheaper and you could end up losing business. So, it is imperative to be good in quality, delivery time and pricing. This is a challenge also for our suppliers and the good ones understand this.

Who is the biggest challenger to Indian vendors then?
India in general has a large range of very professional companies. The fact that currently we are able to source more than some of the south and southeast Asian nations put together clearly indicates we are not doing badly in India in a comparative scale. China has a few advantages in that the volume there is very large. We sold 21,000 Mercedes cars in China which is ten times the number we sold in India. This allows localising components and presenting a business case to a supplier for both domestic and export markets. With their large volumes, the Chinese have a leg up on sourcing as well.

Is there any likelihood of Chrysler products coming to India?
We are excited about their range and will keep you updated on the prospects/possibilities of introducing them in India. I believe that we have the right products but just need to find a way to bring them to the Indian consumer. However, for the moment, we do not have any project or intention in terms of Chrysler vehicles here.

What is the way forward for the Actros trucks?
We are putting them into operation and they are proving to be good. I am actually quite amazed because we had expected some more challenges. In the first step, we want to expand our base so that we have more vehicles in the market. Last year, we sold 50 trucks. We want a small and slow entry into the market because it will help us to constantly go up the quality ladder. The Indian mining environment is one of the toughest in the world in terms of practices. One must ensure that products can function efficiently before getting into bigger numbers. I would also like to add that we are also looking at buses and only evaluating what can be done.

What then sums up the commercial vehicle strategy?
DaimlerChrysler India is going in for a step-by-step approach in terms of market penetration. We will then see what else needs to be done to make sure that we have a significant market share.