The FINANCIAL -- Less than three years after the market launch of the BharatBenz brand, Daimler's commercial vehicles division in India is already heralding its next phase of growth.
Today, Daimler Trucks and Buses is opening a new bus plant at its Chennai production facility in the south east of the country. The company also revealed its new buses and a heavy-duty truck to customers, business partners and representatives of the media, according to Daimler.
"We have become firmly established in the Indian market with our BharatBenz brand, despite only operating in the market since 2012" stressed Dr. Wolfgang Bernhard, member of the Daimler AG Board of Management responsible for Trucks and Buses. Sales of BharatBenz trucks in India rose 63 percent year-on-year in the first quarter of 2015 alone. A total of well over 20,000 of the brand's trucks are now on India's roads.
"We continue to strengthen our presence in the Indian commercial vehicle market with new products, now also including buses. In doing so, we are opening a new chapter of growth," Dr Bernhard added. "This investment represents the ongoing pursuit of our strategy of targeted expansion for our global market presence."
Volume of Indian Bus Market Set to Double by 2020
"We see enormous potential for growth in the Indian market. We expect the volume of the Indian market for buses weighing over eight tons to more than double by the year 2020," specified Hartmut Schick, Head of Daimler Buses. "Our two-brand strategy allows us to offer our customers in the region the right products and services for them."
The front-engine buses of the BharatBenz brand meet the requirements of the Indian volume market in the school, staff, and tourist segments. The British manufacturer Wrightbus mounts extremely light aluminum bodies onto the vehicles directly on Daimler's plant premises.
In the future, Daimler will produce rear-engine buses under the Mercedes-Benz brand in Chennai for the premium segment. These will mainly be used for longer coach trips.
Both the front and rear-engine buses will be available with a gross vehicle weight rating of nine and more than sixteen tons when they go on sale in the fall of 2015. Buses with a gross vehicle weight rating of sixteen tons will be available from next year. Sales activities are carried out via the wholly owned Daimler subsidiary Daimler India Commercial Vehicles (DICV), for which it uses and is constantly expanding its established network of dealers and service providers. Customers in India can also rely on support from a single source when it comes to repairs, maintenance and after-sales.
Daimler is investing about EUR 50 million in the expansion of the bus business. The bus plant, which covers a total area of roughly 113,000 square meters, is initially set up for a capacity of 1,500 vehicles a year. This can be expanded up to a maximum of 4,000 units. Once production has been ramped up, Daimler Buses will employ about 300 people in India.
Once the new bus plant has been inaugurated, the plant in Chennai will be the first Daimler Trucks plant in the world to produce trucks, buses and engines for a total of three different brands: BharatBenz, FUSO and Mercedes-Benz.
New BharatBenz 3143 Truck Breaks Into Important Segment
In addition to the buses, DICV is adding the new BharatBenz 3143 heavy-duty truck to its portfolio of products. The 3143 is a truck for mining applications and construction site traffic that celebrated its international debut at the IAA Commercial Vehicles last year. With a gross vehicle weight rating of 48 tons and a four-axle configuration, the truck has been designed for use in mines in deep and steep exploration sites. It thus ideally serves customer demand. The mining segment is particularly important because India boasts a wealth of natural resources and extracts raw materials such as iron ore, anthracite and many different minerals. The 430 hp offered by the BharatBenz 3143 make it the strongest local truck by far for the Indian market. Reliability, low servicing costs and the best possible adaptation to local conditions such as the heat and unsurfaced roads are other advantages that the vehicle offers to customers. The vehicle is the first truck produced in India meeting these requirements, perfectly expanding the BharatBenz product portfolio.
The intelligent platform strategy allowed the engineers at Daimler Trucks to develop the model in less than three years. That is why the BharatBenz 3143, for example, is powered by the tried-and-tested Mercedes-Benz OM 457 engine, which has proved itself over many millions of kilometers not just in Asia, but also in Europe and North and South America. The OM 457 will set new technological standards in India.
From Chennai to the global export markets
The company, which operates under the umbrella of Daimler Trucks Asia, is also using the new vehicles to reinforce its export business from India. FUSO trucks destined to be exported to the growth markets of Asia, Africa and South America have already been rolling off the line in Chennai since May 2013. The Middle East and other markets in Latin America are to be added this year.
Both the buses and the BharatBenz 3143 will complement the export portfolio in the future. Daimler Buses already started exporting bus chassis from India to Egypt in February. Because the chassis are technically similar to those of the medium-duty BharatBenz truck, export activities from Chennai started even before the bus plant opened.
“Opening another production facility and introducing a second wave of products in such a short time is another testimony for the strength of our Indian operations. And in combination with our worldwide FUSO network, this makes the recipe for sustainable growth at Daimler Trucks Asia.” summarized Marc Llistosella, Head of Daimler Trucks Asia.