Indian Economy News

World's second largest truck maker Daimler expands footprint in India

Mumbai: Daimler AG, the world's largest commercial vehicle maker, is deepening its footprint in the Indian commercial vehicle space by entering segments dominated by Tata Motorsand Ashok Leylanand introducing new categories and price points.

The truck maker, which has climbed to No 4 position in the country in less than four years, is planning to create a new entry point by introducing a 5-7-tonne light truck in a couple of years.

The product will take on Tata Motors' 407 and Eicher's Pro Series. Daimler also plans to create a mid-price segment of Rs 50-80 lakh with its new range of Thunderbolt trucks, which will be positioned between the high-end models of Tata Motors and Volvo Trucks, mainly for the mining and high-dimensional cargo segments with its tippers and tractor trailers.

In India, Daimler operates Mercedes Benz India, which handles its car business, and Daimler India Commercial Vehicles (DICV), which makes trucks and buses. DICV had started with 9-49 tonne Bharat Benz trucks.

Entering the 5-7-tonne range will not only give Daimler a foothold in the 2,500-3,000 units a month market, which accounts for a significant 8-9% of light to heavy duty truck market (5-49 tonne) in India, but it will also help the truck maker export them as 'Fuso' to Latin America and Indonesia, where such vehicles are in demand, said people aware of the company's plans.

They said Daimler is targeting the potential buyers of Scania and Volvo trucks—which are priced over Rs 1 crore—with a highly-localised Thunderbolt range, which will be priced 30-40% lower than the rival brands but deliver on same attributes.

Erich Nesselhauf, managing director of Daimler India Commercial Vehicles, told ET that within three years of starting operations in the country in September 2012, the company has met its sales target before time.

"2015 was a very successful year for Daimler in India, be it for domestic market or exports. The company's domestic sales grew by 30% and exports doubled. We are adding capacity on one hand and adding new products in our portfolio, we will widen our range further - we can go up and we can go down," said Nesselhauf.

DICV closed 2015 with sales of 14,000 units and saw its market share increase to 7.3% from 6.2 % a year ago in the 9-49 tonne segment.

While its cumulative market share stands at 7.3%, in some markets and segments, Bharat Benz's share ranges from 5% to 50%, according to Nesselhauf.

The company has so far sold about 30,000 trucks in India, and just last year it rolled out a range of Bharat Benz buses.

For 2016, the company is targeting 40% increase in sales to over 20,000 units, while production is likely to touch 25,000 units with 'Fuso' trucks in high demand.

The company declined to comment on forward looking numbers.

Nesselhauf said that apart from exporting trucks, there is also potential of exporting full engines and aggregates to Euro VI markets, which will help Daimler be ready for 2020 BS VI emission norms.

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

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