Q & A : Rajaram Krishnamurthy, Vice President – Marketing & Sales, and Customer Services, Daimler India Commercial Vehicles (DICV)
Interview by Bhushan Mhapralkar
Q. How was the year 2020 for DICV?
A. The year 2020 was about strategic announcements to help shape our business and operations. DICV introduced a host of new services, which helped to gain momentum during the pandemic. Some of these include focus on digitization and connected features, the BharatBenz Exchange programme, MoUs with 18 leading banks for greater financing flexibility, announcement of global competition ‘Startup Sparks’ to support early-stage startups, and expansion of dealerships network to reach 250 numbers.
Q. How did the 2020 models perform amid a very challenging situation?
A. We introduced our BSVI range with profit technology plus in January 2020. Due to the lockdown, April 2020 was a month of zero sales for all the auto manufacturers including us. As the lockdown eased, green shoots were witnessed. DICV recorded over 9,600 unit sales, a drop of 34 per cent against the industry average of 60 per cent sales drop. The BharatBenz range experienced strong traction, especially after the BSVI emission norms gained force in April 2020.
Q. What was the effect on BSVI transition amid what has come to be termed as the world’s most stringent Covid-induced lockdown?
A. DICV was well-prepared for the BSVI transition. It sold all its BSIV CVs before the April 2020 deadline. The BSVI products received tremendous customer support and helped us to capture a much larger market share. In part, we celebrated several key milestones last year. For example, the sale of over one-lakh BharatBenz CVs. DICV also achieved an export milestone of over 35 thousand vehicles and 150 million parts in 2020.
Q. How did DICV support its CV users (transporters, operators, drivers, etc.) from going out of work in 2020, and with utilisation levels falling steeply?
A. During the lockdown, our customers were not able to operate their trucks or visit our BharatBenz workshops to avail scheduled services, warranty or extended warranty. Witnessing this, we extended the warranty by two months of vehicles whose warranty or extended warranty was ending between March 15, 2020 and May 15, 2020. Together with Hindustan Petroleum Corporation Limited (HPCL), DICV offered much-needed support to truck drivers who were away from home via 24/7 toll-free numbers. DICV also maintained close communications with stakeholders through online platforms, including digital webinars. Imparting training and provisioning health, safety, and hygiene guidelines, DICV ensured that claims and advances were paid to ensure cash liquidity. It worked with dealers to optimise operational expenses without compromising customer deliverables.
Q. How do you anticipate the Indian road freight and bus transport to perform in 2021?
A. In 2021, road freight transport is expected to witness an uptick as a result of higher infrastructure spending planned by the government, revival in private consumption and global trade, e-commerce growth and overall economic revival. Payload availability is expected to improve from key sectors such as e-commerce, parcel, coal, steel, cement and agriculture.
Q. For your 2021 models, which include two buses and six trucks, what kind of growth are you expecting?
A. These eight new products will fill the inter-space in our product portfolio. They will target specific segments and meet the precise requirements of our customers. For example, our 1917R is available in 20, 22, 24, and 31-foot load span options, which are ideal for a wide range of on-highway applications and great for freight movement for sectors like FMCG and e-commerce. Our 2828C is now available with 22 cu. m. loading capacity to cater to coal transportation. It comes with the longest wheelbase in its class, which makes it the most stable coal carrier in the market.
Q. What has prompted the shift at DICV from a tonnage-based outlook to an application-based outlook?
A. The need to serve our customers better. For example, vaccine truck needs are very different from that of an oil tanker. Giving either a BharatBenz truck, with best-in-class fuel efficiency, safety and comfort, reliability, maintenance cost and connectivity means they are able to fully focus on their business.
Q. Will the vehicle scrappage policy boost CV growth or drive more and more transporters out of business?
A. The details of the scrappage policy need to be understood in terms of direct benefit to the auto sector as far as demand generation is concerned. If incentives are not sufficient, then voluntary scrappage schemes might not be as effective as they should be. Capable of creating some additional demand for both passenger and commercial vehicles, and providing access to raw materials for the auto industry at an optimal cost, the scrappage policy, apart from a positive impact on demand and environment, could improve safety by taking out older vehicles with poor maintenance, safety and comfort standards. A fitness test for CVs after 15 years is an effective step in this direction. The scrappage policy and infrastructure spends have the potential to trigger M&HCV demand.
Q. Would it not run the risk of what the new axle norms did by creating excess capacity overnight?
A. Scrappage policy’s effectiveness will largely depend on the incentives provided. The policy will, however, remove end-of-life vehicles plying on road and create demand for new vehicles that are less polluting, safe and efficient.
Q. What would be the effect of steadily rising fuel prices and other prices, including road toll tax on CV industry growth?
A. Higher fuel prices and road toll taxes are straining fleet owners and leading to higher cost of operations. With best-in-class fuel efficiency, safety and comfort, reliability, maintenance cost and connectivity of BharatBenz trucks, DICV is helping its customers to optimize their operations and run them more efficiently. The economic revival and necessity to transport more goods domestically and outside the country in 2021 should lead to the return of demand for M&HCVs.
Q. With M&HCV segment showing slow signs of growth, is DICV looking at new segments?
A. Green shoots can be seen in the economy that indicate the worst is over when it comes to market demand. We expect the Indian M&HCV segment to register non-linear growth in 2021, up 50 to 80 per cent compared to 2020, before returning to a linear growth rate in 2022. We are continually looking at market needs and industry trends. In-line with that, we are adjusting our portfolio.
Q. How do you look at the emerging vaccine transportation segment? Will it grow faster than the e-commerce segment?
A. Trucking will play a crucial role in vaccine transportation across India. The biggest challenge faced by the government is seamless and safe transportation of vaccines via an adequate number of advanced reefer trucks. We expect good demand for vaccine trucks in the second round of vaccination. With an estimated increase in demand of over 10,000 specialized trucks needed for the vaccine to be transported across the country – and a strong export opportunity as neighbouring countries rush to vaccinate as well – we are positive about growing demand for vaccine-carrier reefer trucks. The National Centre for Cold-chain Development has said that India needs 30,000 new pack-houses with pre-cooling facilities and 60,000 refrigerated trucks.
Q. Who did you collaborate with the tanker superstructure?
A. We have many authorised body-builders that we collaborate with in different parts of the country. We work with them on the basis that they should be able to meet the various customer requirements towards customisation and others.
Q. How has been the progress of the used CV business that you entered in 2020?
A. The business has picked up well and providing DICV a sizeable chunk of its monthly sales. Offering customers the chance to trade in their vehicles of any brand for a BharatBenz, the BharatBenz Exchange programme has been very popular.
Q. DICV was to announce an alternate fuel roadmap by the end of 2020. Will it do so this year?
A. We are currently working on a ‘Future Mobility’ roadmap that will address this and many other
forward-looking topics. This will be presented in the coming months.
Q. How do you think the decision to hive-off the trucks business by Daimler Group will influence the Indian operations as its Asian manufacturing hub?
A. The announcement by Daimler AG is welcomed by Daimler India Commercial Vehicles (DICV). It will help Daimler Trucks become faster, more agile, and more focused. It will be easier to find new partners and forge new cooperation pacts to tackle the manifold challenges of transformation. The development would help leverage scale in the truck industry, to raise returns, and to fulfil customer needs. CV
