Daimler India has entered into the used CV market.
Story by Bhushan Mhapralkar
Amid the ‘unlockdown’ scenario, Daimler India Commercial Vehicles (DICV) has announced its entry into the used CV market with an intention to increase its reach further. A logical move by the Daimler Group company as the sale of new CVs sputters, the attention to used CV market is expected to draw new customers as well as keep the existing ones in the same family. A new step, according to Satyakam Arya, Managing Director & CEO, Daimler India Commercial Vehicles, the move to participate in the used CV market through the ‘BharatBenz Exchange’ business vertical will also enable the CV maker to leveraging its growing customer base and nation-wide dealer network other than supplementing its existing new vehicle sales. Offering a platform where customers can exchange their used vehicles of any brand for new or used BharatBenz vehicles, ‘BharatBenz Exchange’ is currently limited to the intermediate-, medium- and heavy-trucks range. A programme for buses would be announced soon. Open to exchange of other brands of intermediate-, medium- and heavy-duty trucks with BharatBenz trucks of their choice, DICV’s exchange business builds on the fact that over 100,000 BharatBenz trucks and over 3000 BharatBenz buses have been sold by it in India since its entry into the Indian market in 2008.
Stressing on high level of localisation (CVs made at the Oragadam plant carry 97 per cent local content by value) from the day it started operations in India, and chose a market-specific brand ‘BharatBenz’ for the respective market. Daimler has been driving the Indian operations through not just the supply of relevant and latest technology but also through relevant investments. Announcing that it has entered into an MoU with the Tamil Nadu Government in May 2020 to invest Rs.2,277 crore to expand the Oragadam plant, which would lead to the generation of another 400 jobs approximately (the current employee count is roughly 4000), DICV, according to Arya, saw phenomenal demand emerge for its BSVI CVs as BSVI emission norms came into force since April 2020. Stating that 2020 has been a tough year, he drew attention to the efforts taken by the CV maker to upgrade almost each and every product it was offering to BSVI level. Informing that his company has been offering 43 BSVI models, and is ready to adapt to the new market conditions as they emerge post the national lockdown, Arya mentioned that he is confident of the exchange initiative further boosting the sale of its BSVI vehicles.
Stressing on DICV’s ability to address the requirements of the Indian market by tapping into the vast technology and knowledge pool of Daimler Group’s commercial vehicle operations the world over, Arya averred that the exchange programme is part of the extensive change in their business strategy, which anticipates acceleration in digital ways of working. An integral part of the company’s digital strategy thus, the exchange programme, according to Rajaram Krishnamurthy, Vice President Marketing & Sales, and Customer Service, DICV, banks on the used CV market being three times bigger than the new CV market. Keeping the customer at the centre, and ensuring that he gets AMC and warranty benefits, gets standardised resale value, and enables drivers to turn owners, the exchange programme builds on the other two pillars of financiers and dealers. Said to provide those looking to exchange their CVs or buy new ones (only BharatBenz trucks would be offered), the exchange programme looks at carving a place for itself in a space that is highly unorganised, locally funded, not as transparent and often lacking in sound technical or legal framework.
By leveraging rising digitisation in the post Covid-19 environment, DICV, through its used CV initiative is keen to provide certified vehicles. Banking on the premise that many operators are shifting to BSVI BharatBenz CVs because of the superior TCO benefits they offer, Arya explained that they will offer a one-stop-shop experience by involving not just the financier but also the dealer. Apart from providing the customer a peace of mind, the initiative will lower the risk to financier and an additional revenue earning potential to the dealer, he added. As part of the exchange programme, DICV is clearly looking at higher sales of spares and service offerings. Having exported no less than 30,000 CVs to 50 markets worldwide and far more spares to the Daimler Group’s manufacturing locations the world over, DICV, to drive its used vehicle programme, is not just banking on its ability to provide superior technology, but also the ability to provide warranty of up to eight years. “We were the first CV maker in India to provide an eight-year warranty on our vehicles,” quipped Arya.
Including refurbishment of vehicles and documentation as part of the one-stop-shop strategy, DICV, with the exchange scheme, is looking forward to the announcement of the vehicle scrappage policy. This, it is of the opinion, will boost its efforts. Open to tie-up with other companies if it would help to scale-up, the CV maker is expecting medium-duty vehicles to amount to the largest chunk of the transaction. Redrawing all its strategies by going back to the drawing board, DICV, according to Krishnamurthy, is taking into account the changing market dynamics due to factors like the steep escalation in fuel prices.
Confident that the used CV market will will explode once the scrappage policy is announced, he averred that transporters are shifting to BharatBenz trucks after understanding the benefits they offer in view of the fluid business environment. Expecting a drop of 50 to 60 per cent, DICV, according to Arya, is contrary to the perception, working towards hiking production at Oragadam.
“We are adding second shift to our operations,” he remarked. Witnessing a lot of contradictions in the Indian market, the CV maker, said Arya, is emphasising on safety and comfort. Finding it tough to come to terms with the fact that the Indian market is catching with the most advance markets in the area of vehicular emission technologies and lacking in safety technologies with the sale of BSVI compliant cowl-chassis, he opined that his company would continue to value human life. Pointing at a 74 per cent drop in CV sales in March 2020, Arya mentioned that the supply chain and dealer network will have to be regigged. “It will take months to stabilise,” he concluded.
