German commercial vehicle heavyweight Daimler will make new investments while launching 100 products this year to combat competition from Tata Motors and Ashok Leyland, who control 62 percent of the total domestic CV market.
In an exclusive chat with Chillicious, Eric Nesselhauf, Managing Director and Chief Executive of Daimler India Commercial Vehicles (DICV), said that the company will go ahead with its plans despite uncertainty over demand owing to new emission norms, regulatory changes and proposed rollout of the Goods and Services Tax.
“Beginning April we will have a completely new range of heavy-duty trucks on new platforms for the Indian market,” Nesselhauf said. “We will also have 16-tonne and 9-tonne trucks for launch. All in all we will have at least 100 launches this year.”
DICV’s sub 9 and 16 tonne vehicles will debut in the second half of the year. “As a matter of principle, we do not disclose details of product-related investments for competitive reasons,” said Nesselhauf. DICV had invested Rs 500 crore last year. taking its total investments in India to Rs 5,000 crore.
New launches by DICV come at a time when the industry is facing several hurdles. The two most critical are the regulatory changes made by the government, which are the upgradation to Bharat Stage IV emission norms and mandatory fitment of air conditioning units in driver cabins. Demand for commercial vehicles itself has been lacklustre, doubly hit by demonetisation.
According to the Society of Indian Automobile Manufacturers, the apex lobby body of the auto industry, sales of medium and heavy commercial vehicles (MHCV) declined by nearly 11 percent in the last three months to 59,208 units as against 66,300 units sold in the same period last year.
For DICV, demand during last year largely remained flat. The Chennai-headquartered company logged sales of 13,081 units, a drop of 6.5 percent compared to 13,997 units sold in 2015.
Tata Motors and Ashok Leyland jointly control 83 percent of the MHCV market. New entrants in the last few years such as Mahindra & Mahindra and VE Commercial Vehicles (Volvo- Eicher JV) have made deeper inroads into the CV market.
Tata Motors is also believed to gearing up for launching around 100 models and variants this year spread across its portfolio of 1 tonne to 49 tonnes. The company kick-started the year with the launch of a new pick-up truck called Xenon Yodha.
Rivals Mahindra & Mahindra said it will invest Rs 700 crore to develop intermediate and light commercial vehicles over the period of next two years. The Mumbai-headquartered company wants to become a full range CV player with an aim to launch 15-16 new products in the ICV and LCV range.
DICV has its facility in Oragadam, near Chennai, which houses truck and bus plants. Spread over 400 acres, the facility has a truck-making capacity to produce up to 72,000 units a year depending on the shift model. Buses have a capacity of 1,500 a year, which is expandable to 4,000 units a year.