Interview: Satyakam Arya, MD & CEO, Daimler India Commercial Vehicles
The demand momentum for the medium and heavy (M&HCV) trucks seen before the general elections have seen moderation post the new government assuming charge. Satyakam Arya, managing director and CEO, Daimler India Commercial Vehicles, the maker of BharatBenz commercial vehicles, says that the year will end upto 10% below the previous year, in an interview to Swaraj Baggonkar. Excerpts:
The year started off positively for the M&HCV segment. Where do you expect to close FY25?
The market is not surprising us at all. Knowing that it being a general election year, we were expecting that either it will be a flat year or it will be a marginal growth year. January to March was 10% less than last year. April to June was better because there was a slight growth. In July and August, the market went down by 10%. These are about the truck segment only.
What were the reasons for the fall in recent months?
The investment cycle was yet to kick in since the government had just taken over office and there was the Union Budget also that needs to be factored in. We also had many states reporting excessive flooding due to the monsoon. The hope is that from here on, the market will pick up.
Where about the calendar year 2024?
For the calendar year, we expect the market to close between 5% and 10% lower than last year. In 2023, the M&HCV segment witnessed truck sales of 342,000. This year, I am expecting it to be 320,000-325,000 units. DICV would be slightly better than the industry because we have been gaining market share in the heavy-duty segment. The buses, however, show a totally different picture. The market is growing between 30-40% month-on-month. When both these segments are seen together, the market is 2-5% lower than last year.
So the peak volume of FY19 is still far away?
The investment in infrastructure continues and that augurs well for the CV industry. We are seeing good growth in consumption, good numbers from the manufacturing sector like cement, steel, automotive. The peak sales seen in FY19 happened before the axle load norms kicked in. The trucks sold during that time and the ones sold now are very different.
Does the fall in sales force you to revisit your plans?
We expected this year to be soft. In our internal projections we had forecasted that the industry, in best case, would be flat but can also be lower by 5%. So, this does not affect our plans.
The government wants the auto sector to move away from traditional fuels, especially diesel. Do you see this as a challenge for the CV sector?
We are preparing for it because at one point in time diesel will be gone. We all have our decarbonization targets clearly laid out. By 2040 we will be ready with the entire range of vehicles with sustainable technology. Penetration of gas will go up. As the infrastructure for electric vehicles comes up, we will have to see its penetration going up and in the long term there will be hydrogen. Work is going on to bring these technologies to India, indigenize them and make them more efficient.
Is DICV working on CNG technology?
If we want to go to net zero then gas is not offering you that, it’s either electric or hydrogen. Due to various considerations we understand that gas is a good option in transition towards zero emission. We will also come with gas-based products as the infrastructure comes up. We would work in partnership for this technology.
What is the update on the eCanter (electric mini truck)?
We are working on the product for seeding with our first set of customers and that would be done latest by November. This means we are gearing up for launch. The product will be launched next year. There are no other electric options in this segment.
What about exports?
Exports are also a bit slow, looking at the condition of the global CV industry. But nothing concerning since these are the cycles we are used to. For us the Indian domestic market will continue to be bigger than the export market.
