Don't see revival in next 12 months: Daimler India MD

Firm stresses on need for long-term solutions instead of short-term ones like excise duty cuts

German auto major Daimler has said it does not see any improvement in the Indian commercial vehicle industry for the next 12 months, though long-term growth looks positive.

The company also said that the need of the hour is long-term solutions from the government, and not short-term ones like cut in excise duties. The commercial vehicle major, which managed to grab the fourth slot in the Indian CV industry within 18 months of its operations in India, said it wanted to move up in the ladder.

Wolfgang Bernhard, Daimler AG Board member responsible for Daimler Trucks & Buses said, "No matter what brand and market the company operates in, it wants to be the No 1 manufacturer. In most European markets, we are the number No 1 player. In Chennai we are heading to the No 2 position."

Bernhard said that within about 18 months after Daimler India entered into the commercial vehicle segment with the Bharat Benz brand, it had raced to the fourth position in the market.

"We will fight it through to move up the ladder. It will take time, but we have the patience to move up," he said. He added that though the industry in India faced a setback, the company was optimistic about the future.

"We don't believe there is no growth in India. We see huge potential. While many other companies focus on weakness and challenges, we will focus on opportunities, mainly the population which will push demand for mobility," said Bernhard, while expressing confidence that there would be a revival latest by next year, after the Lok Sabha election.

He added, "There is a sign of recovery, investments have started picking up and we see that in the long-term, India can grow by 5-6 per cent, which is easily manageable and will set a right tone."

The company on Thursday committed Rs 425 crore additional investment to set up a bus manufacturing facility near Chennai. This is over and above its commitment of Rs 4,500 crore for commercial vehicles.

Marc Llistosella, managing director and CEO, Daimler India CommercialVehicles, said, "BharatBenz, having already achieved the No 4 position in trucks in India, has now become the preferred brand for most truck customers, thanks to its high performance products, backed by service levels."

He added, "This year it will be tough for the CV industry, which already got an inventory of around 40,000-50,000 units, while Daimler has got around 89 units".

Challenges and problems in the industry are home made, and can be addressed with government initiatives. These inventories need to be sold. How do we sell them is a problem now." He was concerned about rising freight rates and fuel prices, unattractive interest rates  and falling customers income.

On the government's recent decision to cut excise duty by around four per cent, Llistosella said that for existing stocks the companies need to fund themselves.

"Not a very helpful situation. Besides, it iso nly for four months and this is short-term solution. What we need is a long-term solution to clean the industry. We hope to see some revival in the second half after the election," he added.

The company has products in 9-49 tonne category and there are more models to follow. As far as reach is concerned, the company has 75 dealers and expects to increase than number to 100.

Llistosell aadded that Daimler vehicles offer around 10-12 per cent efficiency, running cost is also competitive when compared to rival products.