After laying the foundation stone for a bus plant a month ago, Daimler India Commercial Vehicles (DICV) today announced that it has crossed the threshold of 10,000 sold BharatBenz trucks since market launch in September 2012. In addition to achieving the feat within 18 months of launch, the company also witnessed another milestone with sales crossing 1,000 units in a month in March. The company hopes to achieve operative breakeven from the last quarter of 2015 onwards.
Marc Llistosella
Selling roughly 2,200 vehicles in the first quarter of 2014, DICV achieved a growth of 67% as compared to the same period in last calendar against the truck market above six tonnes that decreased by around 20% in the first three months of the year. In calendar 2013 the company sold around 6,500 vehicles with one-third coming from medium trucks and the rest from heavy duty vehicles.
Reacting to the achievement Marc Llistosella, Managing Director & CEO of DICV said, “It is a tremendous success for us. Despite a challenging market environment, we rely on high-quality products and transparent pricing without any discount. This is how we have gained the trust of our customers in a quite apparent way.”
Addressing the media, Llistosella said more than 10 percent of the sales come from existing customers. Most of the 71 dealers have started earning operating income due to lower inventory at retailers and the company as well. According to him the cumulative inventory for the company as on today at the dealerships is around 200 units and 102 at the company stockyard for all models put together, against 48,000 trucks in the market.
“The next two years will be a game changer for the truck market and so we are advancing our investments. Going forward, our main focus will be on fleet operators and captive users as well,” he said.
Llistosella is confident that the market will improve from the beginning of the second half of this calendar. It will achieve operating breakeven from the last quarter of 2015 onwards. “Calendar 2016 will be the first full year when the company will make operating profits and four years later it will amortise the investments towards the project,” he said. The company hopes to achieve this feat based on a three-pronged strategy – minimising the fixed costs by enhancing the localisation from the present 85 percent to 95 percent; compensating forex drain by increasing exports when the exchange rates are favourable, and increasing the market share. Besides, India operation is opening up as a second sourcing link for Daimler global, which will pave the way for the 220 suppliers to go global.
In September 2012, DICV commenced its sales with the market launch of the first heavy-duty truck models under BharatBenz brand. The product portfolio grew by several variants and medium-duty trucks in the months that followed. Along with the trucks presented in January 2014, three tractor trailers and one truck for construction-mining purposes, the company now offers vehicles in the range from 9 to 49 tonnes GVW. In the segment above nine tonnes, the company has notched a market share of 5.3% in the commercial vehicle market.
Since May 2013, DICV has added FUSO trucks to its production portfolio, meant for Asian and African growth markets with Tanzania being the latest addition. Under the umbrella of Daimler Trucks Asia, the company works with the Japanese subsidiary of Daimler, Mitsubishi Fuso Truck and Bus Corporation (MFTBC). Next to trucks, BharatBenz- and Mercedes-Benz-branded buses will roll off the assembly line in Chennai starting in the second quarter of 2015. Daimler is investing around 50 million EUR for this purpose.
