In terms of products and technology, our new generation CVs offers ‘ProfitTechnology+’, a package of technologies and features ensuring industry-leading fuel efficiency, safety, comfort and reliability.
Lockdown has given Daimler India Commercial Vehicles (DICV) a lot of transformation in dealing with the customers. The government’s recent announcement on incentives for the housing sector and coal mine reforms will definitely spur the demand for CVs going forward, Satyakam Arya, MD & CEO, Daimler India Commercial Vehicles (DICV), told R Ravichandran in an interview. Excerpts:
How do you view the impact on the CV industry which has been under pressure for more than a year now?
The CV industry has been going through a tough phase from April 2019. In addition to the economic slowdown, the revised axle load norms and the NBFC crisis that led to the financing/funding crunch had an impact in the industry. While we were all hopeful of a revival with the BS VI introduction, lockdown has extended the slowdown by a few more quarters. It has expedited digitalisation, with organisations looking towards app-based solutions, e-commerce, digital learning platforms. At DICV, lockdown has given us the chance to take a step back from our daily operations and take a fresh look at our core functions. The transformation has also changed the way we keep in touch with the customer.
When do you see the actual demand pick up for CVs, given the huge challenges and the cost involved in BS VI transition?
The current situation is highly volatile. A lot depends on how long the Covid-19 situation continues to persist. Another factor is the implementation of government’s planned fiscal response. The Rs 70,000 crore-plus incentive boost for the housing and construction sector will have a positive ripple effect on steel, cement, sand, gravel, paint and other construction material, thereby triggering logistics need which will have a positive impact on the CV demand. As for BS VI, BharatBenz was uniquely placed to steer the transition. Thanks to Daimler’s global network and experience, we were able to localise technology to meet the BS VI norms with excellent speed and efficiency.
Which are growth areas you could see for the CV industry?
Commercial mining in the coal sector stands deregulated from government monopoly. While this is a pre-existing policy of the government, the finance minister has used this opportunity to fast-track the reform. Coal gasification and methane gas exploration will receive incentives. The government will spend Rs 50,000 crore to create infrastructure for transportation and export of coal after exploration. These reforms are expected to result in a 40% increase in coal production in India. Various reforms, including the elimination of differences between captive and non-captive mining, are beneficial for the development of mines and minerals exploration and production. Tippers and special applications, such as deep mining trucks, will see more demand as a result. Based on this opportunities, we recently launched India’s first 5228TT on a 4×2 tractor. Apart from HCVs there will also be an increase in demand for MCVs and LCVs to augment the intra-city and inter-city transport with increase in e-commerce.
How Daimler India is gearing up to take on the challenges?
In terms of products and technology, our new generation CVs offers ‘ProfitTechnology+’, a package of technologies and features ensuring industry-leading fuel efficiency, safety, comfort and reliability. Going forward, we are looking to move away from tonnage and focus on customised solutions for different applications with a key focus on increasing digital services for our customers. We have already begun handing over these vehicles to customers all around India. We have recently announced that DICV is integrating its customer service division with that of marketing and sales. We believe that integrating these divisions will ensure a seamless link between customer needs and the products & services it provides in four regional zones — North, South, East and West. Similarly, our regional heads have been empowered for the entire gambit of business they handle with a single face to the customer and with more autonomy for our regional heads to make agile decisions. This restructuring will enable us as a brand to be more customer-centric which will help increase our brand’s presence across the country.
Any short-, long-term projections going forward? What about investments?
It is difficult to project on the growth prospects at this point of time given the ongoing challenges. Last month, we signed our second MoU with the Tamil Nadu government, covering `2,277 crore of investments designed to expand our domestic and import business. This investment represents an approximate 400 jobs and demonstrates our unshakeable confidence in the long-term potential of India as a market for CVs, as well as our ongoing commitment to the country as a whole.
Can you throw light on the export strategy, including entering into newer markets with new products?
With regards to exports, we have already started shipments for some markets. We export to over 50 markets in the world, including countries in West Asia, Africa and Southeast Asia to name a few. We’ve already exported over 125 million parts and more than 30,000 trucks and buses. Our exports will ramp up further as international shipping restrictions ease.