Changing the face of trucking in India
Transportation is a backbone to progress and helps infrastructure building. Construction of road networks, new cities and towns and all the requirements of a modern economy require a variety of equipment. Trucks form the backbone. They are required both in movement of goods and infrastructure building. Even though, India
has the largest rail network, they do not reach every corner and trucks are required to complete the logistics chain. With improved networks for transportation it is important to also focus on efficient trucks, otherwise it risks being a weak link.
Over the past six decades Indian trucking has had a rather slow pace. Technology was brought in from abroad and very little was done to enhance the performance. In a very price-sensitive market, truck manufacturers did not better their performance beyond minor changes. Most of the time, changes were done to meet the slowly changing regulatory norms. The market itself was held by 2-3 players and there was generally no serious demand for change to drive the manufacturers, from customers. The lack of modern infrastructure also played a part in the lack of modernisation of trucks. Once in a while, foreign players attempted to enter the Indian market without a complete understanding of requirements. This led to failed attempts. The Indian customer may not have been exposed to advanced technologies but is very sharp to understand what was being provided to him. Daimler Benz had a role to play in the 1950s and ’60s when it helped bring the first heavy trucks to India through a joint venture. However, subsequent decades post Daimler’s involvement in India very little was done to modernise. Only in recent years there have been attempts to change by existing players. This is only due to better infrastructure, regulatory norms but, more importantly, the arrival of true competition. The future is very good for Indian trucking with this change. The customer is the biggest beneficiary.
Almost six years ago, Daimler was analysing its presence around the world. It wanted to focus on those markets that were set for growth in future. Being the leader in trucks, it is important to constantly look ahead to make sure that we maintain our leadership position. The BRIC markets were the immediate focus. India was seen as the next growth market after China. But, as mentioned earlier, the Indian market has several challenges and it was not going to help if we brought our existing trucks into the country. So we decided to understand the market requirements thoroughly. The initial idea was to have a partnership with a leading player in the Indian automobile field and so Daimler joined hands with the Hero Group. This was supposed to help in the smooth entry of Daimler into India. Then came the economic slowdown and Hero decided to focus on its core areas. At first, even though this was viewed as unfortunate, it turned out positive for the long run. Daimler could drive its Indian operations without dilution of thought. Daimler clearly viewed long-term and went ahead with all the steps fully under its control.
To start, it was a challenge to look at many issues. We needed to build a good understanding of the Indian country and the customers. What were they getting and what did they require. We set several teams including R&D and marketing to experience in real time. At the same time, the challenge was to create trucks that were high on reliability in line with Daimler’s principles and also rightly priced. Our teams spent a lot of time identifying suppliers in India. This is important. If we needed to make a cost-efficient truck, there is no place like India. We identified suppliers, supported them with the correct processes, audited their entire chain and trained them and monitored the entire sequence. This has helped us in not only achieving a reliable supplier chain but also ensured that over 85 percent of our trucks were locally sourced in terms of value.
Simultaneously, we began the construction of our trucks using known and reliable platforms that would suit Indian requirements. Every aspect was checked, rechecked and put to gruelling tests. We built our test track first even before the plant to ensure 24x7 testing. Our engineers have done a phenomenal job. The Mercedes-Benz Axor platform for the Heavy-duty and the FUSO Canter/Fighter for the Light-duty were chosen as the reference platforms. After ensuring that no element of testing was ignored and after completing more than 7 million test kilometres, our trucks were certified ‘Ready’ for the market.
The parallel challenge was to ensure that the right partners were chosen as our dealers. They are the backbone of our marketing efforts. We were surprised to witness the positive response we received without in any way having to advertise our requirements. However, at Daimler, we have very strict processes to ensure that we chose the right partners and no step was discounted. We ensured that we had the infrastructure ready at the time of going to market. The policy is to provide a complete experience that would steadily transform the industry.
To go back a little, with great products being built and a long-term view focussed on India, it was also important to brand our products in a way that the Indian customer would not only be proud of associating with but would also rely upon. The Mercedes-Benz brand is well known in India for high standards of quality, both in passenger cars and trucks. After all, the first Indian trucks were Mercedes-Benz. The name ‘Benz’ is clearly associated with a promise of high reliability. We decided to associate this name with the proud name of India – ‘Bharat’. This is our way of stating that we bring our ‘Quality & Reliability’ through ‘Benz’ and our ‘Commitment’ to this important country by adopting ‘Bharat’ in our name. Thus ‘BharatBenz’ was born.
Trucking in India is going through a major change and we can already witness this happening. Existing players have already been driven to change. They are now bringing new products. They are becoming aggressive. Daimler’s focussed entry has much to do with the cause of such changes. At the end of the day, the customer is the biggest beneficiary. India’s infrastructure is set to grow even further. We are only at the tip of the iceberg. The next 10 years will bring a big change and trucking will also see a huge transformation. More new technologies will be brought in and the highways in India will not see struggling trucks. Daimler will be in the forefront of this transformation.
The future years with many changes are an opportunity for Daimler and also Indian industry. While Daimler will ensure that right technologies are brought and adopted, it will always remain close to the Indian customer’s requirements. We also see it as our responsibility to ensure that quality technology is always used in creating trucks. We will also push for a strong and healthy competition. The aim is to ensure that the Indian customer has the right edge to ensure his business grows. We want the customer to be able to focus on his core business while we take responsibility to provide him quality trucks. This is also the reason that we believe in our brand promise ‘Power Ahead’. It actually promotes the importance for our customer to be able to improve and succeed in his business with BharatBenz trucks as a reliable tool. We want our customers to be confident to be able to grow. Our trucks will help him concentrate on his business while we will ensure that his trucks are performing reliably.
Daimler is a key player in other layers of the commercial vehicle industry. This positions us with the ability to also to look in other means of transportation. With the fast-changing scenario in India, there would be many opportunities for Daimler. However, we will ensure that every step we take is part of a long-term presence and meaningful contribution to both India and Daimler.
On the other hand, with our close co-operation with many suppliers in India, there is a major opportunity for India suppliers to look at Daimler’s global presence in their favour. Talent and skill is available in abundance in India. It is for the industry to take forward-looking steps to utilise the opportunity. On Daimler’s part, we are certainly looking at the opportunity with excitement. Any promising possibility will be suitably explored.
Overall, the future for Indian trucking and Daimler is very optimistic. It is already on the right path and we are positive that it will only get better.
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