Daimler to cash in on unused facilities

Written by R Ravichandran | Chennai | Updated: Jun 30 2010, 04:41am hrs
Daimler India Commercial Vehicles is mulling the option of creating profit centres within the organisation to make the company more competitive. It also plans to grow more profitable by letting on lease excess infrastructure or the existing set up to third parties at its Oragadam manufacturing complex.

Some of the centres that can become profitable in the future include test track, IT/computer aided design/engineering and digital testing, said Marc Llistosella, managing director & CEO, Daimler India. Going forward, we may also consider letting the body shop and the paint shop, among other prominent divisions, on lease to those who seek to use our quality infrastructure, he added.

Speaking to FE, Llistosella said,"It is a unique concept. We have invested on infrastructure and human resources heavily and we look at optimum utilisation of these investments. We want the employees to look beyond their regular responsibilities to make their divisions profitable. They should take total control/ownership of their respective divisions and will pool in their ideas, motivations against all odds to ensure the profitability of their divisions/centres.

For example, the company has invested heavily on the test track at Oragadam facility for testing the vehicles. The company has decided to make it a profit centre by letting it out to third party manufacturers, body builders and private operators on lease to test their vehicles. The idea is to utilise the excess capacity of the existing infrastructure. State transport undertakings, suppliers and auto component makers are among other potential customers for these centres.

Llistosella said to stay fit and to be a cost-competitive player, Daimler is seriously investigating introducing `Cowl' version of products in the 25-30 tonnage ranges so that customers can have cabins of their choice. There are a number of private body builders who can offer cost-effective solutions with high quality and we want them to come under our fold. This will not only raise their bars through slight modernisation of their shops but will also help them to grow bigger down the line. Apart from collaborating with banks, financial institutions and other truck finance companies, Daimler is also looking at the possibility of floating its own financing arm, Daimler Financial Services, to fund its products in India, he said.