Daimler expands its range with three new trucks

Daimler launches three trucks as part of introducing 17 BharatBenz branded trucks in India by next year
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First Published: Wed, Feb 20 2013. 09 09 PM IST
The company has so far sold more than 1,000 BharatBenz trucks in India in the five months since its launch and will be launching 12 more trucks this year besides expanding dealerships. Photo: Satish Kaushik/Mint
The company has so far sold more than 1,000 BharatBenz trucks in India in the five months since its launch and will be launching 12 more trucks this year besides expanding dealerships. Photo: Satish Kaushik/Mint
Updated: Thu, Feb 21 2013. 12 58 AM IST
Chennai: In a contracting market for commercial vehicles, Daimler India Commercial Vehicles Pvt. Ltd (DICV) launched three trucks on Wednesday as part of introducing 17 BharatBenz branded trucks in the country by next year.
The German truck maker launched the three vehicles (one 9-tonne truck and two 12-tonne models) at its Oragadam plant. The trucks are based on the Fuso platform developed by Mitsubishi Fuso Truck and Bus Corp.
“We expect the overall market of the 9 to 12 tonne segment to reach 60,000 units this year. This is a relatively stable segment, and there are only two players here (Tata Motors Ltd and Eicher Motors Ltd), and we want to have a stake there,” said Marc Llistosella, managing director and chief executive of DICV.
The strategy may not be the right one for the market, said Vijay Kakade, director, automotive and transportation practice, Frost and Sullivan.
“With the emerging hub and spoke model, what will be most important are the LCVs (light commercial vehicles) and the heavy duty vehicles,” he said. “In the last five years, LCVs have grown at a CAGR (compounded annual growth rate) of 27% while the medium commercial vehicles (9 to 16 tonnes) have grown only at 13.6%.”
Even though Fuso has a wide range of small and light commercial vehicles, Daimler currently has no plans to launch small and light commercial vehicles. Part of the reason for this being the lower margins on such vehicles.
The margins on small commercial vehicles, which comprise the bulk of LCVs, is around 6-8%, while those for medium and heavy commercial vehicles is 10-12%, Kakade said.
The company will, however, be launching a 7 tonne truck as the last product among the 17, according to V.R.V. Sriprasad, vice-president, marketing and sales.
“We are looking at it differently than the other truck manufacturers. We are looking at segments that will be critical in the long term and those that will be sustainable, which is the heavy duty range (above 25 tonnes),” he said.
In an earlier interview, Llistosella had said the company needed another three to four years to consider launching LCVs. “Waiting for three to four years to launch an LCV will be too late, as that space may get too crowded,” said Umesh Karne, an analyst at Brics Securities Ltd.
Already there are about 20 products in the small and light commercial sector, and Tata Motors leads the pack with a 59% market share in this segment, Mahindra and Mahindra Ltd has a 31% share and Ashok Leyland Ltd, 7.2%, said Kakade.
A company needs to have vehicles in the one tonne to 7.5 tonne category to have a meaningful presence in India, analysts said.
Some BharatBenz dealers said that having a small commercial vehicle in the portfolio will be useful, as there have been trade enquiries for such a product.
The LCV segment is likely to grow at a CAGR of 15% to 925,000 units in FY18, while the MHCV (medium and heavy commercial vehicles) segment is likely to grow at a CAGR of 8-9% to 327,000 units in the same period, according to Kakade.
However, Daimler’s Sriprasad said the Indian truck market has not matured into a particular model and the market is scattered between various tonnages. “We are putting our money where we see growth.”
The company has so far sold more than 1,000 BharatBenz trucks in India in the five months since its launch and will be launching 12 more trucks this year besides expanding dealerships to more than 80 from the current 36.
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First Published: Wed, Feb 20 2013. 09 09 PM IST
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