Daimler India Commercial Vehicle has been able to create a space for its offerings in the already crowded domestic commercial vehicle market. Erich Nesselhauf, MD & CEO - Daimler India Commercial Vehicles discusses the plans for the company in an exclusive interaction with IBEF. Edited excerpts:
Where does India currently figure in the current global Daimler plan, especially with regards to the Chennai plant?
Daimler India Commercial Vehicles (DICV) is far more than a manufacturing hub in Daimler Trucks’ global production network; it fulfils strategic targets for the world’s leading truck manufacturer. We cater to the important Indian growth market with our dedicated brand BharatBenz. We also serve as a highly competitive export hub, delivering products to 40 markets on four continents. Last but not least, we leverage best-cost sourcing opportunities with the capable Indian supplier base for export of parts and provide shared services to other Daimler group companies.
DICV is the only facility across Daimler to produce vehicles under four different brands: BharatBenz, FUSO, Mercedes-Benz and Freightliner. The total investment of more than INR 5,000 crore which Daimler has made in DICV reflects the strategic relevance of our activities and the significant role we play within Daimler Trucks’ global operations.
What are your thoughts on Make in India? Is it heading in the right direction, and how has DICV been impacted by the initiative?
We always firmly believed in the Make in India initiative. We’re probably one of the most successful poster examples: we’ve not only exported far more than 10,000 vehicles to other markets, but also millions of parts from our Indian production material suppliers to other Daimler entities around the world – in Japan, in Europe, in South and North America. Production material for our manufacturing operations in Oragadam near Chennai we largely source from Indian suppliers—we started with a localization ratio of 85% percent and have increased it to about 90% by today, while at the same time adhering to Daimler’s stringent global standards. This clearly shows that we provide very interesting opportunities for Indian companies, also on the global scale when they are willing and committed to compete internationally.
According to you, what more can be done to take Make in India to the next level, especially with regards to infrastructure and skilled labour?
The unavailability of natural deep-water harbours in India is a major constraint. Developing the port infrastructure to further large-scale vehicle transportation vessels will help us in exporting easily to other countries. It is the need of the hour to position India as a well-developed export hub.
The good pool of skilled blue and white collar staff available in the Chennai automotive cluster has been a key factor in our decision to build our plant here. At the same time, we have invested into training and skill development of our employees as a core element of our business from the start, following the idea of vocational training in Germany. This link between education in schools and practical experience in the industry should be developed further.
What are the long-term goals of DICV's R&D division? Do you see it as a potential area where Daimler can grow even more in India?
Research and development have always played a key role at Daimler. Today, we are shaping the future of mobility. Our R&D anticipates trends, customers’ wishes and the requirements of the mobility of the future, and systematically implements these ideas in products that are ready for series production. Our goal is to offer our customers best-in-class products in the Indian commercial vehicles industry and customised solutions for needs-oriented, safe and sustainable mobility. Our technology portfolio and our key areas of expertise are focused on this objective.
For you, what has been the most unique aspect of being in charge of a top international company in the country?
One of the biggest challenges for DICV was setting up our local supplier base. We always wanted to localise a very high level our parts from the start in order to be competitive in the domestic market. We optimised our capacity and believed in the Indian suppliers to live up to our quality standards. It’s been a win-win situation, and there are numerous great memories and personal relationships attached to all the efforts. It’s an exciting and rewarding task.