Nifty targeting gets Bharat Benz rolling

Daimler's medium-heavy trucks have earned it around 7 per cent share, it claims. But it will have to rev up as consumer sentiments turn positive for others too

Recently a big fleet operator from south India placed orders for 50 tipper trucks from Daimler India, the new kid on the block in commercial vehicles. The heavy-duty trucks were to be used for mining purposes.

Few days later, the businessman abruptly cut his demand to 42 trucks. Daimler, which is desperately trying to find its footing in the CV market populated by Tata Motors and Ashok Leyland, reacted with disappointment.

The buyer who was looking to replace his existing fleet later clarified that eight Daimler trucks were good enough to do what 10 trucks of its competition could accomplish. This is why the bulk order was cut down by 16 per cent.

"He said 'quite frankly, I need just 42 trucks to work'. He earlier had 50 trucks that needed replacing. In this case, yes we lost eight trucks, but he is a satisfied customer. I am happier that for this reason we sold eight trucks less," says Erich Nesselhauf, the managing director and chief executive of Daimler India Commercial Vehicles.

Daimler retails its trucks under the Bharat Benz brand, through a network of 76 dealerships. It presently has 12 models on sale in the 9-49 tonne category. After making its commercial foray three years ago, Daimler has garnered 7 per cent market share in the category (part of medium and heavy trucks) it operates in. In addition to its products Nesselhauf says that a major reason behind its success in India is the initial target audience it had identified.

The company refused to sell its products to small truck-operators (someone with one-two trucks) despite there being a large demand, and instead, targeted the large fleet buyers who, in turn, became its brand ambassadors, according to the company.

"We had a policy right when we started. We decided not to sell our trucks to people who owned one truck. The big fleets are professionally managed, this is the top-end of the market and if they are happy owners, then others would follow going by their word-of-mouth. Thirty per cent of our buyers are repeat-buyers", says Nesselhauf.

Unlike competition, which has a strong hold on the market, Daimler does not share sales data with the Society of Indian Automobile Manufacturers (SIAM), the apex body of automobile companies, but claims to have sold 16,000 trucks till date and swears by its market share assertion.

"Knowing that we have four-digit sales and a monthly market volume between 14,000-16,000 for the 9-49 tonne segment in which we are actively participating, we get a good estimation of our market share that we currently see at 7 per cent", the company adds.

Tata Motors, a rival, while still strong, has seen a slide in market share. It reported a fall in market share, which stood at 58 per cent last year as against 62 per cent reported in 2011-2012 in the medium and heavy commercial (goods) vehicle segment. The Chennai-based Ashok Leyland, meanwhile, reported a growth in market share at 22 per cent, up from 20 per cent in 2011-12.

The medium and heavy goods truck segment, which starts at 7.5 tonne presently stands at 162,000 units every year (last year), according to SIAM. This segment marked a 7 per cent growth during the first seven months of this year on the back of revived consumer sentiments. Though the light commercial vehicle segment is 66 per cent of the total CV (goods) market, Daimler wants to stay clear of this segment and instead focus on the medium and heavy goods truck segment.

"The target of market share is achieved and this is something which is significant especially under such market conditions. The market has crashed and is not where we had projected it to be. Despite this, slowly and steadily we have grabbed market share. The reasons behind this are new products and new dealers", says Nesselhauf.

Daimler would have to set the bar higher from here. Rising customer sentiments would also mean a beneficial effect for its competition, too. Next year, the company will launch its most ambitious product, the Bharat Benz 3143, which its Chennai-based engineers developed from scratch. The new truck built to operate in very demanding conditions such as deep-mining sites was showcased at the Hanover Auto Show in Germany in September, 2014.

Daimler will also enter Daimler's entry into the bus segment where it intends to launch buses targeting city transport under Bharat Benz. A new Rs 425-crore plant 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 every year in the first phase and can be expanded to 4,000 units. While the Mercedes-Benz brand will continue to remain luxury, Bharat Benz buses will be priced a notch below.

Daimler will strive to fully utilise its installed capacity of 36,000 units in two years.