Business

Daimler India eyes new sectors to de-risk business

Satyakam Arya

Satyakam Arya   | Photo Credit: Special Arrangement

Defence, off-highway vehicles on the company’s radar

Daimler India Commercial Vehicles Pvt. Ltd. (DICV), a wholly owned subsidiary of Daimler AG, will focus on new sectors such off-highway vehicles, defence and freight aggregation to de-risk its business, said a top executive.

“Apart from making buses and trucks, we have started studying the possibility of making engines for off-highway vehicles. It fits very well into our offerings,” said Satyakam Arya, managing director and chief executive officer, DICV.

Stating they had started the feasibility study by interacting with customers on their requirements, he said the company looked to zero-in upon earth moving machines such as dumpers and loaders. Commercial vehicles business was cyclical and hence, DICV had to look at other business avenues, he added.

While DICV had almost exhausted its BS IV inventories in India, it would be offering BS III and BS IV range of engines for off-highway customers. Besides,it has also started eyeing the defence sector to offer its 4X4 trucks.

“Currently, foreign companies are not allowed to participate in the tenders due to certain restrictions imposed by the Centre. We are seeking some relaxations or changes in the law. We expect the Centre to come out with fresh regulations by April 2020,” he said.

Mr. Arya said that they were also looking at entering the fast-growing freight aggregator space, which had many players. DICV had initiated talks with some existing players while studying other geographies, too.

Regarding the impact of COVID-19, he said Daimler had large manufacturing plants in China that were currently partially working. It was also closely tracking supplies.

For the year ended 2019, DICV recorded a drop of 36% in its domestic truck sales to 14,474 units against 22,532 units. It was in line with the 35% drop in industry sales volume.

Mr. Arya said the drop in truck business in the first half was 15% and in the second half it was 54%. It was mainly due to new axle norms, liquidity crunch, GST, BS IV inventory corrections and economic slowdown.

On exports, he said DICV had sold 8,000 units against 7,000 units, to more than 50 countries.

Thomas Fricke, managing director, Daimler Buses India, said that the unit posted a 11% rise in domestic sales, 12.5% rise in revenue and 56% increase in exports. “The long term outlook for buses remains positive and we are set to grow 5% annually,” he said.

Mr. Arya said that DICV expected to steadily grow its domestic and export business in 2020 with the an all-new product portfolio premiered in January.

“During 2019, domestic truck sales were down. However, DICV remained in the black by managing costs and increasing exports. It would take at least a year for the commercial vehicles business to come out of the economic slowdown,” he said.

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Printable version | Apr 4, 2020 9:17:41 AM | https://www.thehindu.com/business/daimler-india-eyes-new-sectors-to-de-risk-business/article30925194.ece

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