As part of its ‘beyond trucks’ strategy, DICV is currently studying a slew of business ventures which will help the company hedge from cyclical slowdowns in the commercial vehicle industry.
Having completed more than a decade in India and establishing a remarkable footprint in both truck and bus businesses, Daimler India Commercial Vehicles (DICV), a wholly owned subsidiary of German commercial vehicle major Daimler, is now mulling to enter into off-highway engine, defence and freight aggregation verticals, besides engaging with start-ups for new business ideas. As part of its ‘beyond trucks’ strategy, DICV is currently studying a slew of business ventures which will also help the company hedge from cyclical slowdowns in the commercial vehicle industry.
Speaking to mediapersons here on Wednesday, Satyakam Arya, MD & CEO, DICV, that the company is studying new business ideas for new revenues.
“ For example, we are very closely eyeing the freight aggregation space to see whether it makes sense for us to enter that space. We believe it’s a fast growing segment. We will also get very active in the start-up world to see if there is a business idea which makes sense for us.”
Arya said the company has already started studying the possibility of making engines for off-highway vehicles as it fits very well into its offerings. “We have started the feasibility study by interacting with our customers as to what is needed and the potential customers,” he said. The company has also started discussions on the possibilities of supplying 4X4 trucks to the defence sector.
“At present, companies like DICV which has a foreign origin, were not allowed to participate in the tenders due to restrictions imposed by the Centre. Some relaxations or changes in the Act are learnt to be in the offing, so that we can take part in it. We expect the Centre to come out with fresh regulations by April 2020,” Arya said.
The company is also looking at entering the fast growing freight aggregator space. DICV had initiated talks with some of the existing players and checking other geographies too. On whether the company would look at light commercial vehicles (LCVs), Arya said there is enough room for new players in the less than 9 tonne segment.
“If a new player wants to enter this segment, the right strategy is to enter with a electric product and DICV will explore,” he said.
Regarding the impact of Coronavirus, he said DICV has a large manufacturing plants in China that was partially working while it has been closely monitoring the supplies from the alternate sources. For the year ended 2019, DICV recorded a drop of 36% in its domestic truck sales to 14,474 units against 22,532 units. It was in line with the 35% drop in industry sales volume. Arya said the drop in truck business in the first half was 15% and 54% in the second half. It was mainly due to new axle norms, liquidity crunch, GST, BS-IV inventory corrections and economic slowdown.
On the exports front, he said DICV sold 8,000 units against 7,000 units to more than 50 countries. He further said that DICV expects to steadily grow its domestic and export business in 2020 with the all new product portfolio that premiered in January. “It would take at least a year for the commercial vehicles business to come out of the economic slowdown,” he said.
Thomas Fricke, managing director, Daimler Buses India said that the unit posted 11% rise in domestic sales, 12.5% in revenue and 56% in exports. “The long-term outlook for buses remains positive and we are set to grow 5% annually,” he said.
DICV, operating under the umbrella of Daimler Trucks Asia, is a full-fledged commercial vehicle player in the Indian market and the only Daimler entity worldwide with a brand dedicated to its home market, namely BharatBenz. In India, DICV produces and sells above 9 to 550-tonne trucks as well as BharatBenz buses, Mercedes-Benz coaches and bus chassis. DICV’s manufacturing plant at Oragadam near Chennai is spread over 400 acres (160 hectares), including a highly modern test track and is home to the company’s headquarters, R&D and training operations. It also produces brands of FUSO, Mercedes-Benz and Freightliner for Daimler Trucks. Products and parts are exported to more than 50 markets in the Africa, Asia, Latin America and the West Asia. DICV represents an overall investment of more than `5,500 crore in the country.