Daimler India rides on BS-VI line up for higher market share in 2020

Daimler India is taking on rivals Tata Motors and Ashok Leyland with its BS-VI line of vehicles

Daimler India Commercial Vehicles (DICV), which sells trucks and buses under the Bharat Benz brand, expects the current year to be a decisive one for the company. DICV is taking on rivals Tata Motors and Ashok Leyland with its BS-VI line of vehicles. 
 

It is also seeking to aggressively expand its service touch points from the current 237 to 300 by year end and beyond 350 by end of 2021, according to Satyakam Arya, managing director (MD) and chief executive officer (CEO), DICV.
 

“After a strong growth in 2018, the market took a U-turn in 2019. We restructured the entire company in terms of costs and made it much more resilient. We also sharpened our focus on exports. As a result, the company is now much better positioned financially,” said Arya. 
 

He added that the latest range of BS-VI models the company will introduce in the current year will give it an edge over rivals in India. 
 

DICV doesn’t report monthly sales volumes. The company’s calendar year volumes are estimated to have dropped to 14,500 units in 2019 from 22,000 units in 2018.  
 

The key differentiator in technology will be the after treatment systems used in vehicles. Bharat Benz trucks have up to six years standard warranty and an extended warranty of up to eight years.
 

The trucks will have service intervals up to 20 per cent longer. This will reduce maintenance cost by up to six per cent, the company claimed.
 

DICV’s resolve to give a tough fight to rivals comes at a time when truck sales in India have plunged to a record low amid a slowing economy. 
 

Sales of medium and heavy trucks fell 43.5 per cent year-on-year to 146,780 units in the first nine months of the current year, according to the Society of Indian Automobile Manufacturers (SIAM). 
 

Demand is expected to take a further hit as India’s auto industry leapfrogs to BS-VI emission norms from April 1. The new emission norms are expected to make the BS-VI trucks at least 10-15 per cent dearer compared to BS-IV models.  
 

DICV invested close to ~500 crore and developed new facilities and over 1,000 new parts for BS-VI. It achieved localisation of over 80 per cent, the company said. 
 

One of the late entrants into India’s truck market, which has largely been a race between Tata Motors and Ashok Leyland, Bharat Benz claims that unlike its competitors, the company doesn’t not believe in discounting or panic selling. The top two firms control 80 per cent of the market.
 

“I do not understand the panic selling which other manufacturers have resorted to in the last few months. I think it was triggered by the inventory (of BS-IV models) they have. We never participated in that game as we believe in steering the company profitably and not through market share,” said Arya, alluding to the deep discounts being offered by the companies to woo buyers ahead of the BS-VI switchover.  
 

The value a truck owner will get by investing in Bharat Benz BS-VI models will be higher than that of a BS-VI variant of other trucks. 
 

Unlike most other trucks, Bharat Benz models do not compromise on fuel efficiency because of transition to BS-VI, claimed Arya.
 

He expects 2020 to be a tough year as the impact of the axle norms, which allows a 16-49 tonne truck to carry 25 per cent more load, has not been absorbed yet. 
 

“A back-of-the-envelope calculation shows that if India’s GDP grows at 7 per cent, we will take three years to absorb the additional capacity. With the economy having slowed, the pain due to the additional capacity will continue,” he said.