Daimler Trucks to make India its export hub: Marc Llistosella

New Delhi: Marc Llistosella, who took over as head of Daimler Trucks Asia on April 1, is planning a major emerging market push for the world's largest truck maker, with India at the centre of it. With volumes in evolved markets expected to grow in low single digits, Daimler looks to grow its Asia Pacific volumes by 50% in the next five years, with India accounting for half of that, says the flamboyant former MD of Daimler India Commercial Vehicle.

In an interview to ET's Ketan Thakkar, Llistosella, 47, also said Daimler is looking at achieving a break-even in its Indian operation in the next few years and increasing its share in the Indian truck market to 15-20%. Edited excerpts:

What is your view on the performance of Daimler Trucks' Indian operations?

We have done a relatively good marketing job. We have sold 22,325 units till today and that is good, as nobody has ever reached this kind of sales number in such a short span of time. We are already number three in the heavy duty truck segment. So India is significant and now very well exposed in Daimler world.

So, what's the expectation that you have for India in terms of numbers?

Our plan is clear -we want Daimler Trucks Asia, which sold 185,000 units (both Daimler India and Mitsubishi Fuso Japan) in 2014, to grow 50% in the coming five years. Half of that growth will come from India in the next five years. That incremental volume growth does not come from domestic volume alone, but it has a significant export volumes. Now we also have a Fuso network to sell bigger trucks across South East Asia, the Middle East and Africa.

Currently, we are doing light duty trucks in Asia. With Fuso, we need this new range of higher horsepower trucks from India to have a bigger say in the heavy duty truck space in Indonesia, Thailand, in Africa, Kenya as Fuso. It will be a shift from a very much light duty company to a balanced full range truck maker for Fuso. So it is a very strategic direction for both Fuso and for Daimler India Commercial Vehicle. This high er horsepower heavy-duty truck range will be a game changer for domestic market too.

What is your expectation in terms of market share in India?

Domestic operation is doing well -the cost is under control and we are getting stabilised. In the south of India, we have a market share of roughly 16%. We are gradually expanding upwards in north to Maharashtra, Gujarat, Rajasthan. In Kerala, we have a market share of 40% in 9 tonnes plus market, in Karnataka, we have a market share of roughly 18-20%, so when it is working in Karnataka and Tamil Nadu, why should it not work in other states? What we are doing in the south, we have to do in the west and other parts of the country. The competition will be tough, but we are confident of increasing our footprint state by state. I expect a pan-India rollout by the second and third quarter of 2017. And I want to see a market share of 15-20% of south in the whole of India.

A German company running Asian office headquartered in Japan, with India as a key export base - how can you make it work?

The exposure of India will increase in terms of people. We have a lot of people coming to Japan, these guys are young, capable, connected, and they can live in California, London and even in Tokyo. They are very adaptable. By having close link to Japan, we can see the Fuso brand grow. For our Japanese colleagues, it is a challenge and a chance.They can open up to this new India of today, which is on the move. The dynamism of India needs to be channelised with the structured approach of Japanese. If you bring this together, you will see this operation explode.

When do you see your plant in Oragadam near Chennai getting completely utilised?

Probably in another two to two and a half years. We had a capacity to make 36,000 trucks, and we have improved it to 44,000 units without any investment. It depends on the market, but we are hopeful of doing 50,000 units in the next few years.

What role would exports play in your India production?

We expect 25% of production going towards the exports. If the markets in the Middle East pick up, with Fuso we have a brand and a network. Our Benz is known here. I expect much more than 25-30% of buses produced in India to go for exports.

How far is Daimler Trucks Asia from profitability or breakeven point?

In this heavy asset business, it is not possible to make profits in the first few years.Even as the market has fallen, we are on the plan in terms of fixed cost coverage, breakeven and profits. We expect operational breakeven in the third or fourth quarter of 2016-17 and are hopeful of a full year profit to happen in the next few years, it will happen.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.