Daimler India reaches break-even, gears up to launch BS VI vehicles

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Chennai | Published: February 16, 2019 4:28:27 AM

Daimler India Commercial Vehicles (DICV), the wholly-owned arm of global CV major Daimler, said that it has achieved the break-even in its truck business in six years after the launch of BharatBenz.

daimler, daimler indiaThe company said it sees 2019 a challenging year given the new axle norms as well as liquidity problem which continues to have its impact on the Indian commercial vehicle.

Daimler India Commercial Vehicles (DICV), the wholly-owned arm of global CV major Daimler, said that it has achieved the break-even in its truck business in six years after the launch of BharatBenz. The company said that it is ready to offer BS VI vehicles in the Indian market well ahead of others.

The company said it sees 2019 a challenging year given the new axle norms as well as liquidity problem which continues to have its impact on the Indian commercial vehicle. With the ensuing general elections, the growth trend may get affected at least till the first half of 2019, said DICV’s new managing director and CEO Satyakam Arya.

Addressing the media at the company’s annual press meet, he said: “We are happy to have achieved financial break-even in 2018 in our truck business, the first company to do so in the short span of six years of BharatBenz launch in India. This could be possible through improved domestic and export sales as well cost cutting measures (including increasing the localisation level to more than 90% across all the products). We strongly believe that we will be able to sustain this break-even momentum in the coming years too with our innovative products and higher exports.”

“The year 2018 was the best year in the history of our Indian operations. We have reported a 35% growth in 2018 sales to 22,532 units as compared to 16,717 units sold in 2017. Even we grew in the last quarter (October-December 2018) strongly, when the entire industry reported substantial degrowth owing to new axle norms, lack of liquidity in the market,” Satyakam said.

In response to a question, he said: “With the continuation of impact from new axle norms, lack of liquidity, coupled with the ensuing general elections, we see the first half of 2019 will be slower than expected and the second half will witness some pre-buying spree due to new emission norms — BS VI, which will become effective April 2020. Overall, the year 2019 will be a flat one or will see a little bit of growth.”

According to him, the company’s focus would be doubling of its distribution network, getting ready for launch of BS VI emission norms compliant trucks, digitisation of customer interface. “We will be doubling our distribution network to 360 touch points in next two years and will launch new products, particularly on the heavy duty side with better fuel efficiency, after taking into considerartion of new axle norms.”

On the impact of BS VI norms, Satyakam said: “We see there will be higher cost impact. The second and third quarter of 2020 (post BS VI norms launch), will also see some slowdown. We are gearing up fast to launch vehicles ahead of others. It is to be seen how the things fan out as the issues such as availability of BS VI fuel across the country, body building, registration are crucial to ensure smooth switch over.” The company also see the proposed scrap policy will play a major role in pushing BS VI vehicles.

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