Daimler India Bullish On Govt’s Atmanirbhar Bharat programme
Daimler India Commercial Vehicles (DICV), a wholly-owned subsidiary of Daimler AG, is betting big on the current government’s self-reliant programme. Projecting itself as a unique combination of Indian engineering with German DNA and tailored to local customer requirements, the Indian arm of the Stuttgart-based firm has already invested Rs. 5,500 crores for manufacturing and other operations since its foray into India in 2012. The company has affirmed that India is already its 5th largest market in the world for as a single country and is hoping to be among the top 3 in the coming decade. At present, DICV produces and sells in India above 9 to 55 tonne trucks and, under its bus division BharatBenz buses and Mercedes-Benz coaches.
Talking to BW Businessworld exclusively, Satyakam Arya, Managing Director & CEO, Daimler India Commercial Vehicles, maintained, “We are a full-fledged commercial vehicle player in the Indian market and the only Daimler entity worldwide with a brand dedicated to its home market i.e. Bharat Benz. We believe we are a good example of ‘Make- in-India’ as less than 10% of our revenue is (derived from) imports. So, we localise our products by more than 90% and more than 30% of revenues is (derived from) exports. We are a great example for Make-in India’ as well as ‘Vocal for Local’. Although our products carry the DNA of other countries, they were designed and developed in India. Now we send them in more than 50 countries. So, what else in vocal for local.
It may be recalled that Daimler AG forayed into India in the year 2012 and has set up a manufacturing facility in Chennai, which has an annual production capacity of up to 72,000 units per annum for trucks and 4,000 per annum for buses. Till date, it has sold more than 100,000 units in the domestic market and 30,000 trucks and buses cumulatively in the overseas markets. It had also commenced its bus operations in 2015 and have sold roughly 5,000 units in the domestic market till date. It has also partnered with 100+ component suppliers, which have supplied 130 million parts to various Daimler facilities worldwide.
“This Chennai plants is the only one in Daimler globally where all four brands are produced under one roof, which also speaks about how much confidence we have about capabilities of India. We produce Bharat Benz sold in India and for two neighbouring countries i.e. Nepal and Bhutan, Freightliner for Mexico, Mercedes Benz for Indonesia and build Mitsubishi Fuso for more than 40 countries. Even though we have witnessed three economic downcycles, we have made significant progress in our Indian operations,” added Arya.
When enquired about its manufacturing operations post the lockdown, Arya maintained, “As with every companies, we had to shut down our complete operations when this lockdown was announced in March. After the unlocking happened, we had to reboot our (manufacturing) operations, we had to do it not only within our plant but also with all our suppliers and dealer partners. We restarted our operations during the beginning of May with basic fumigation exercises and began our (production) ramp up in a step-by-step manner. We gradually ramped up to 75% of the capacity till the Middle of June when Chennai faced another lockdown. Now we are back again with 100% capacity. Infact, we are planning to go for two shifts during the month of August.”
When asked about the company’s plans to foray into the Small Commercial Vehicle segment, Arya maintained, “This is the largest segment. We keep on exploring different segments at any point of time to see if it makes sense for us to enter. But right now I cannot tell you anything concrete on whether we enter this segment or not.”
Meanwhile, DICV has announced the launch of ‘BharatBenz Exchange’, an exchange platform where customers can exchange their used vehicles of any brand for new or used BharatBenz vehicles. The company has claimed that BharatBenz Exchange will provide buyers with a carefully-picked pool of used trucks that have undergone thorough quality checks, made available via its nationwide dealership network.
While talking to reporters in a videoconference, Arya stated, “As the number of BharatBenz owners rapidly increases, we feel it is the right time to tap the massive potential presented by the used commercial vehicle segment. We look forward to delivering BharatBenz’s superior quality, service and TCO to an even larger customer base.”
Talking about the economic stimulus, Arya terms it a mixed bag as he sees only a select segments of the CV sector doing better. “If there is a continuous thrust on infrastructure, construction vehicles will see an uptick. If mining reforms are accelerated, we will see an uptick in demand for those vehicles. As e-commerce is picking up due to Covid, last mile delivery vehicles will get a boost. Due to WFH and no intercity travel, there will be no demand for buses in the near term. All in all, the market will remain subdued but there will be some segments that will do better. When the normalcy starts, schools, corporates, etc would reopen and have to buy more buses.”
When asked to share his near to medium term outlook for the industry, “This year, we expect the demand to be down by 50-60%. So, we will be back by 20 years. The reasons are obvious (as) the economic activity is subdued. Also, we are witnessing lockdowns continuing in certain parts of country. So subdued economic activity will mean lower GDP (growth). Infact the economists are saying that GDP will contract by 5%. CV sales will be low as it is closely linked with the GDP.” However, he maintained, “2021 onwards, the market will start to grow back and I expect it will be a sharp rebound, which means we could grow in 40-50%. I expect India to recover better and sooner than other countries.”
