Daimler to launch bus series in India next year

Entering its next phase of expansion Daimler India Commercial Vehicles (DICV) will launch its bus range in the domestic market to compete against strong incumbents like Tata Motors and Ashok Leyland.

The Chennai-based company, which is a wholly owned subsidiary of Germany's Daimler AG, will launch its city buses under its home grown brand BharatBenz starting next year.

The new buses, which are slated to be made locally at the company's new Oragadam plant in Chennai, will compliment its parent's luxury intercity bus line sold under the Mercedes-Benz brand. Presently

A new Rs 425 crore bus plant built within the premises of the truck making plant will commence operations in the second quarter of next year. Buses will be offered in the 9 tonne and above categories having front and rear engine configurations. The plant has an installed capacity of 1,500 units per annum in the first phase and can be expanded to 4,000 units per annum.

Erich Nesselhauf, chief executive and managing director, DICV said, "Next year we bring in the buses under the Bharat Benz and Mercedes Benz brands. We will be present in all the segments".

Tata Motors and Ashok Leyland controlled 79 per cent of the medium and heavy bus segment as of last year, market share shared almost equally by the two companies. However, these two players have a near monopoly in the city bus segment (operating across or within municipal limits) with little competition.

Scania, the Swedish bus giant recently entered the market with its luxury range. The company which will open a new manufacturing facility in the south has already sold several coaches to bus fleet operators.

Like the rest of the market the bus segment too witnessed demand contraction. Last year sales declined 17 per cent to 38,709 units compared to the year previous to last, pushing the industry back to the levels recorded in 2008-09. The segment has been on a decline for two years in a row, according to data shared by the Society of Indian Automobile Manufacturers.

Last year DICV integrated Mercedes-Benz bus division with itself taking charge of marketing, sales and aftersales of the luxury liner. Post intergration Mercedes-Benz buses, which competes with Volvo and Scania, will be made at the new plant as against the existing plant at Chakan near Pune.

Existing truck dealerships (targeting 100 dealerships by end of the year) will be given the additional task of selling buses. Bus manufacturing companies are banking on renewed government orders for inter and intra city buses as well as orders from private fleet players on the back of improving road conditions.