Creating start-up culture to look beyond trucks: Daimler India MD&CEO

Satyakam Arya said that the commercial vehicle segment took the worst hit during the automobile slowdown in India

Commercial vehicle (CV) industry in the country has been seeing a downturn for several months in a row before the coronavirus (Covid-19) hit the operations completely. With the unprecedented pandemic situation impacting its operations for more than a month, German automobile major Daimler is looking at increased localisation, more digitisation of supply chain among others, says Satyakam Arya, MD&CEO, Daimler India in an interaction with T E Narasimhan. Edited excerpts.

Despite the government allowing manufacturing, infrastructure, and real estate projects partially, you have said the industry may see a 50-60 per cent drop. Why so?

The automotive sector in India was already under severe slowdown for over a year. Out of that, the CV sector was the worst affected with over 40 per cent de-growth last year. These factors coupled with the pandemic has affected the market that was already slow purely because there was hardly any economic activity going on and the fleet capacity was lying idle. While some sectors may have started, only time will tell how difficult it will be for the economy to recover. It will take time for demand to match supply and further grow.

What needs to be done for the sector to revive?

The government can provide some stimulus including reduction of GST from 28 per cent to 18 per cent and implementation of incentive-based scrappage policy.

Are you planning to increase localisation as Covid-19 disrupted the global supply chain? What lessons have you learned?

The lockdown has given us the chance to take a step back from our daily operations and take a fresh look at our core functions.

We have taken the opportunity to improve efficiencies in our business processes and have started our operations in a safe, sustainable manner. We will need to build more self-reliant supply chains as we continue to work towards achieving higher localisation levels.

This will also bring more transparency to the global supply chain. Going forward, supply chains will turn more digital with more usage of robotics, internet of things, artificial intelligence which will make supply chains more resilient in adverse situations.

We currently source about 90 per cent of our parts locally and are actively looking for viable local suppliers for the remainder. Having a wide network of reliable partners is the key to a resilient supply chain.

Our suppliers contribute greatly to exports of parts to other Daimler entities. As of today, we have exported more than 125 million parts. 

Our global manufacturing processes have been completely re-aligned to not only include Indian operations but also to utilise the competitiveness and capability of India more in the future. This will grow with India now ready with BSVI emission norms enabling us to export these aggregates and parts to new markets.

How much of the manufacturing is automated?

Daimler globally is working on smart factory solutions, to design in real-time. In the current situation, automation and robotics will reduce the dependence on human intervention and will increase productivity at the plant. Our existing facility already has a high level of automation with robots in our cab-in-white and our 100 per cent automated paint shop.

It won’t be only the shop floor that will see automation; digital solutions will be seen across the entire value chain right from customer service to internal processes. We have already introduced the Proserv app, a unique single sign-on application offering all services across the product lifecycle. From fixing a service appointment to ordering parts, from renewing service contracts to finding the nearest fuel station, this app provides all that our customer needs at their fingertips. This can help customers reduce visits to our dealerships and, together with our Truckonnect telematics solution, help with better fleet management.

How DICV is planning to derisk in the future? Will you be looking beyond trucks and buses, for example, SCVs, LCVs?

Agility is a priority at DICV, and this is where our initiative “Swarm” comes into play. A Swarm organization facilitates agile work. The members of the swarm focus on a task where the solution remains open and throws up creative work with agile methods. It is very important to be quick while responding to market requirements.

We have been working on creating a start-up culture within the organization where the idea is to look beyond trucks. The thinking behind this move is that the world of mobility is changing by the day with new disruptions such as connectivity, electrification, and autonomous driving becoming a reality across the world.

There is a lot of work happening at DICV beyond BSVI, with the ultimate objective being to deliver more value to the customer. We are studying different segments constantly and will take appropriate steps at the correct time. 

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