Volvo and Daimler have emerged as the front-runners among foreign OEMs
Having set-up full-fledged
manufacturing base in India and developed vehicles to meet to local
requirements, Volvo (through its JV with Eicher Motors) and Daimler have
emerged as the front-runners among new entrants. Daimler, which began
operations in June 2012, has managed to gain approximately 7.9% market share in
the M&HCV truck segment, while Volvo is relying on its new range of Pro
Series trucks to gain traction. Among other European players, Scania is also
present in Indian market but has restricted its presence to niche applications
like deep mining tippers and luxury coaches so far, restricting its investment
to only an assembly facility. In 2006, MAN had also entered the Indian market.
However, it has met with limited success and has been working on tweaking its
product offerings past couple years to satisfy local requirements, says ICRA.
Scania has been represented in
the Indian market since 2007. In 2011, Scania established the company Scania
Commercial Vehicles India Pvt. Ltd. to strengthen its presence through sales to
additional segments of the Indian commercial vehicle market and to widen its
offer of Sustainable Transport Solutions. Scania has launched a range of
on-road haulage truck models specially adapted for the Indian market – India’s
most powerful puller the R 580 V8 6x4, the G 460 6x4 and the G 410 6x2 and also
the off-road P 410 8x4 Mining and Coal Tipper. Scania has a partnership with
Larsen & Toubro (L&T) in the Mining segment.
In the beginning of 2013
Scania launched a new bus range, Scania Metrolink 12, 13.7 and 14.5. Scania
handed over the first ethanol run Green Bus in India to the city of Nagpur in
August 2014. With this ethanol bus, Scania also introduced an engine complying
with Bharat stage 5, which is a huge step to minimize emissions. The company
inaugurated its first Industrial Facility in Narasapura, Bangalore, in October
2013 and inaugurated its first bus plant in March 2015. With a collective
investment of Rs. 3000 crore, this facility serves as the centre of the
company’s commercial operations in the country. Scania has sold more than 1500
trucks and over 250 buses in the Indian market. Scania has a current production
capacity of 2500 trucks and 1000 buses, and aims to double its capacity by
2020.
The competition from foreign
players is not just limited to M&HCVs. With growing demand for last-mile
connectivity, OEMs have also set their eyes on the LCV segment as well.
Although the market has faced headwinds over the past couple of years owing to
over-capacity and tight funding environment, the long-term drivers for LCV
segment remain favourable, due to low penetration levels, says the ICRA study.
Daimler India Commercial
Vehicles (DICV), the wholly-owned subsidiary of Daimler AG, has had a
successful 2015. Domestic sales increased by 37 percent to 14,000 units on the
strength of the BharatBenz brand’s powerful product lineup. Following its
market launch in September 2012, Daimler’s Indian truck and bus brand has
introduced 20 products so. Far more than 30,000 BharatBenz vehicles have since
been delivered to customers
Erich Nesselhauf, Managing
Director and CEO of Daimler India Commercial Vehicles, said: “2015 has been
another successful year for us. With our portfolio of modern trucks, we have
powered ahead on our growth course domestically in India and in our export
business. This success was made possible thanks to the excellent contributions
of the entire team and our partners.”
Demand for BharatBenz products
in 2015 rose especially in the heavy-duty segment. New tailored applications
for the mining and the construction segments, such as the highly recognised
BharatBenz 3143 CM, resonated well with customers. At the same time, the
company’s FUSO-branded export business - as part of Daimler Trucks Asia -
continued to grow favorably.
The year 2015 was good for Daimler India Commercial Vehicles due to
various milestones that were achieved:
Start of bus production in the
425-crores expansion of the company’s manufacturing operations in Oragadam,
entry into the bus segment with BharatBenz staff buses and Mercedes-Benz
Super-High-Deck (SHD) luxury coach
Launch of second wave of truck
products – including BharatBenz high-powered engine trucks, BharatBenz heavy
duty tractors
Launch of the BharatBenz 3143
CM, the first Super-Heavy-Duty truck localized in India
Display of the widest range of
mining and construction vehicles at the 2015 EXCON in Bengaluru, South East
Asia’s largest construction equipment and technology trade fair
Crossing of the 4-million
exports mark of Indian-made parts to other Daimler Trucks entities across the
globe
Commenting on the company’s
outlook for 2016, Nesselhauf continued: “With important new BharatBenz product
generations hitting the market in 2016, we are committed to sustainably grow
our business as part of Daimler Trucks Asia. Both in the medium and heavy-duty
segment we will once more raise standards and customer value. At the same time,
Indian-made FUSO trucks will play a key role in opening up important growth
markets in Asia, Africa, and Latin America.”
“Overall, we believe that
competitive intensity in the Indian CV industry is likely to rise as OEMs expand
their product offerings and distribution reach. However, the ability of foreign
OEMs to gain significant traction will hinge on the performance of their vehicles
from the perspective of total cost of ownership. While it may be argued that
the product portfolios of foreign OEMs would certainly score above those of
Indian OEMs in terms of technological advancements, their current product
portfolio need to be customized to Indian conditions. In addition, domestic
OEMs would continue to score above them in terms of easier and cost-effective
serviceability, established re-sale values (for their vehicles) and strong
brand equity,” the ICRA study noted.