High OEM discounts hit resale value of trucks: Daimler India

The discounts go as high as 25%, which was never offered in the history

The German automajor Daimler today said that the high level discounts offered by few commercial vehicle majors is hitting resale of trucks.

The company, which narrated that discounting is a reflection action by OEMs to the slowdown in the commercial vehicle industry, but it doesn't solve any problem.

Speaking at the 'Commercial Vehicles Megatrend India' conference in Chennai today, organised by Automotive World, Marc Llistosella, CEO and Managing Director, Daimler India Commercial Vehicles said that the industry has been offering high discounts in the last five months and it  affects the resale value of trucks.

"It (discounts) goes as high as 25%, which was never offered in the history," he said

"Fleet owners will endure asset losses by around 12-18%. Customers will get too used to discounts. This also affects the established brand value.”

He added, companies have to look at real solutions like launching good products, new technologies at affordable costs, service orientation, driver education, maintenance contracts and packages including tailor made insurance, said Llistosella

He added, Daimler will take it “step-by-step, slowly but surely, keeping in mind the long haul", said Llistosella.

Meanwhile, Philippe Divry, President, Volvo India said “India will soon catch up with global trends by modernising its trucks and India has great potential as an export hub.

“We (Volvo group) are working on plans to export the Eicher brand of trucks from India. There is a need in certain export markets for trucks with Indian specifications,” said Divry.

Kapil Arora, Partner, Advisory Services, Ernst & Young added that, while the next couple of quarters will continue to remain challenge,  light commercial vehicles will make up for the decline in medium and heavy commercial vehicles.

He added, OEMs must look at increasing the localisation and diversify to related sectors such as railways and defence, and focusing on after-sales services.