Cost reduction, increase in sales help company cross the milestone

Daimler India Commercial Vehicles (DICV), the Indian arm of Daimler AG, has achieved, for the first time last year, a break-even in the trucks business, said a top executive.

“It was a 10-year challenge. We have come a long way from being a greenfield project to full blown unit,” said Satyakam Arya, CEO and MD, DICV.

“We have achieved the break-even in trucks business within six years after the market launch of BharatBenz. For the first time, an automotive OEM has done it in India. The break-even was achieved due to cost reduction and increase in sales last year,” he said.

DICV sales grew 35% in 2018 by selling 22,532 trucks against 16,717 units in 2017. The growth was attributed to the strength of BharatBenz product portfolio and expansion of pan-India sales and service network to over 180 touch points from 130.

Doubling network

Over the next two-three years, DICV plans to almost double its distribution network to 350 outlets and would digitise its entire customer interface, he said.

Asked about the prospects for 2019, he said: “In second quarter, we have elections in the country. And this normally leads to slow down of demand because buyers will postpone their decisions. We expect the first half of the year to be slower than 2018. In the second half, we expect pre-buying effect of BS-VI. In our terms, the year will be mostly flat or little amount of growth.”

Last year, DICV exported 7,054 trucks against 6,553 trucks to 50 countries, marking an increase of 8%. Since 2013, more than 20,000 vehicles have been exported. Last year, DICV’s Chennai plant crossed one lakh units in production, he said.