Mr. Andreas Renschler, Member of the Board of Management, Daimler AG and Head, Daimler Trucks is quietly confident about the prospects for Bharat Benz. He believes that he can win buyers using the total cost of ownership advantage that his trucks will enjoy. Mr Renschler and the Managing Director and CEO of Daimler India Commercial Vehicles Pvt. Ltd., Mr Marc Llistosella, interacted with a group of Indian journalists visiting IAA 2012 in Hanover last week. Excerpts:
On the India venture
Renschler: We were not in India and we thought of the different possible ways to go to the country. This (Bharat Benz) is like a global platform rollout in markets where it makes sense. The target is clear, we want to be number one in the world, not just in volumes but we want to be number one in quality. There are simply two points that I expect from our operational units around the world, including that of Mr (Marc) Listosella’s. First, we have to be the regional champion in the region where we have our operational unit. Second, we have to push our advantages when it comes to sales and in this context, economies of scale is very important to us. There is no reason to be arrogant. No doubt we have tough competition around the world but it is good for us and motivates us. We have every reason to be confident. We have laid the foundation and with some hard work we can go on to achieve our overall targets.
Llistosella: We have 90 dealers in place. The dealerships are standardised, all dealers are already in auto industry. We will be launching seven products this year and another 10 products from January. The supplier landscape is a challenge for us and a challenge for the supplier. It’s a give and take and we have to make a win-win out of it. For the dealerships too it will be a challenge to be in time, exactly how we want it and how they can do it. The product is excellent and the feedback is better than expected. You must have seen the actions of our competitors even before we entered the market. The market has really awakened now, the new player is on the pitch and people are saying let’s see what they are going to do. But Tata (Motors) is extremely active doing whatever they can do. I only ask why haven’t they done this in the last 10 years; our friends close to us in Tamil Nadu are also very active. Without having sold a single truck officially, we have already brought a lot of change in the industry. It is good for the market and shows we have the right momentum with us.
On price-discounting
Renschler: When you are going into a market like India, we have to offer customers something over and above what they can buy today. You can talk about durability, the robustness of the truck and so on but one measurement is very important: fuel consumption. There we offer 10-15 per cent better fuel efficiency, different engines. The customer has these reasons to buy Bharat Benz or they can go for a discounted, old-fashioned truck. I don’t know what the customer would do but our experience from around the world is that he would go for the modern truck because it helps him to make money in the medium-term and not for a discount and end up on the wrong side. As you know, there is always risk but in the medium-term no company can afford to sell only on discounts because they have to make cash to at least renovate their fleet. I know Ratan (Tata) a little bit, he will not accept this in the long-term. It is always risky if you are entering such a market but we are clear with the product quality and will try to convince the customer without a big discount.
On exports from India
Renschler: India is an export country for us. On exports, the question is what kind of customer requirements we have in different markets. There are certain countries in south east Asia and Africa where we can export from the Indian plant without any changes to the trucks. In the second phase, exports will surely be an option. The focus point first is India because we have to have a home position, we cannot live from just exports. We want to be a major player in India. So the first phase will be some opportunities with trucks one-to-one; we are working on it with some countries. But the major exports I will only push when we have the right home base in India and hopefully we’ll have it soon.
(The correspondent was in Hanover at the invitation of Daimler AG.)
