Daimler Looks Forward To Growth in India

Daimler trucks will roll out shortly on Indian roads

Daimler trucks will roll out shortly on Indian roads
Daimler trucks will roll out shortly on Indian roads | Source

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Daimler Will Double Its Research Team


Bharatbenz Will Roll Out This Year

Daimler India’s trucks are to be sold with the brand name BharatBenz. Benz is a powerful brand name in the automobile industry associated with the cars manufactured by Daimler. Bharat is the brand name of India. Therefore it makes sense to call Daimler’s trucks as BharatBenz. The company was planning to complete its Chennai plant by June last year and roll out the trucks in the current year. BharatBenz is the fifth brand name for the company’s trucks globally. The company’s plant is located in Oragadam, 45 km from Chennai city. Daimler has a portfolio of trucks ranging from 6 to 49 tonnes in weight. The truck production in India is planned to commence from the middle of the current year. Dr Dieter Zetsche is the Chairman of Board of Management of Daimler AG and also the Head of Mercedes Benz cars.

Daimler Will Double Its Research Team

BharatBenz trucks will be designed, developed and built in India. They will cater to the Indian conditions of driving. Specialist employees from India will be utilized to develop these trucks. Daimler attaches great importance to the Indian market. In the next two years, Daimler is also planning to double its research team to around 1000. Daimler is the world’s largest producer of medium and heavy duty trucks above six tonnes. Daimler is also exploring the possibility of exporting its trucks produced in India.

Not Opting For a Local Partner Was a Wise Thing

Daimler has done a wise thing in not roping in a local partner for its operations. Some of the internationally renowned brand names have failed in India because of the differences with the local partners. Remember Peugeot’ association with Premier Automobiles that ended in a failure a decade back? Remember Suzuki’s association with the TVS group? Remember Hero Motor’s association with Honda that broke up? Daimler is matured enough to handle the Indian challenge on its own. In fact Daimler planned a joint venture with Hero Motors in 2008 but the local partner pulled out of the joint venture.

Competitive Pricing of the Trucks

The Oragadam plant is spread over an area of 160 hectares and has a test track also. Daimler has tested over one million km. Daimler has invested more than Rs.4400 crore in the Indian facility. It has the initial capacity to produce 36000 trucks every year. The pricing of the trucks will be competitive. The trucks will have 80% of local components. The light trucks will be based on the Fuso Canter platform while the heavy trucks will be based on Mercedes Benz platform.

High Speed Diesel Engines

Daimler and Rolls Royce Group made a takeover bid at € 3.2 billion last year for Tognum. This move was to target demand for heavy engines in the emerging markets. Tognum is world’s second largest manufacturer of high speed diesel engines. Caterpillar stands world number one. High speed diesel engines are used in the marine, defence and energy industries besides automobiles. This was Daimler’s biggest purchase after its 34% acquisition of Mitsubishi Motors Corporation in 2000.

World’s Third Largest Producer of Luxury Vehicles

Daimler is also exploring setting up of an auto plant in Jharkhand state in India. It proposes to roll out its Mercedes Benz from there. Daimler has secured licence to start a NBFC (Non Banking Finance Company) in India. It will be used for financing of vehicles sold by Daimler. Daimler was also negotiating with Aston Martin last September regarding the ultra-luxury brand Maybach. Daimler is world’s third largest producer of luxury vehicles. Last year it fired Ernst Lieb as the head of Mercedes Benz’ US operations without any explanation. Both Daimler and Volkswagen are feeling the chill of Europe’s car slowdown. European economy is mired in debt. Already countries like Spain, Portugal, Ireland, Greece and Italy are in deep trouble. The debt of Italy is much more than the combined debt of Portugal, Greece, Spain and Ireland.

Tie-Up with Renault on Cards

In India, Daimler trucks will challenge the dominance of Ashok Leyland and Tata Motors. Daimler has decided to phase out Mayback luxury cars from the Indian market. Daimler is working on new range of buses to challenge the dominance of Ashok Leyland and Tata Motors. Daimler feels there is a huge potential for buses in India with its vast road transport. Daimler reaped a record net profit of € 6.029 billion in 2011 which was 29% more than the previous year. But it gave a caution for the 2012 performance. Daimler has also hinted at a tie-up with Renault in India.

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