 "BharatBenz: Late-mover advantage")
Anyone in the trucking business would be familiar with its unwritten code: typically, there is a ratio between the number of trucks sold in a year and the population of a country, which is around one truck sold per 1,000 citizens. One sees this in Germany, where you have 80 million people and a market size of 80,000 trucks (above 6 tonnes) per year. China, with 1.35 billion people, has a truck market of about a million. Now consider this: in India, with a country of 1.25 billion people, the truck market during a good year - 2011 - saw the sale of only 334,000 units. This fiscal, sales in the market are likely to further dip to 200,000 units with the downturn.
For an industry synonymous with large production capacity, a backlog of unsold inventory and frenzied discount pricing didn't paint a promising picture for Daimler India Commercial Vehicles (DICV) back in 2011, when it first announced the launch of its trucking arm, BharatBenz. Unfazed, it was committed to exploring the untapped trucking potential in India. With an investment of Rs 4,400 crore to build its manufacturing plant in India, develop dealerships etc, BharatBenz not only studied the complex Indian market, it also used its famous German engineering DNA to develop a comprehensive product range of trucks, including rigids, tippers and tractors.
While the manufacturing in India kept costs under control, being a new player, BharatBenz needed to do things differently. Indian customers, the company saw, focused on the purchase price but not on running costs (the truck had to be affordable). BharatBenz had to explain to its target customer that though the vehicle cost 10 per cent more initially, there was saving on fuel and service. Then, the term 'Benz' conjured images of an expensive car thus making it even tougher for the company to garner traction. Nonetheless, when the first series of its heavy duty trucks was launched on September 26, 2012, at a price point of Rs 17 lakh initially, BharatBenz positioned itself as a modern, value for money brand with fuel efficiency 10 per cent higher than that of other domestic brands.
The nationwide 76 dealerships of BharatBenz are not just uniform in layout, thus, adhering to corporate identity guidelines, they are also innovative in that they have special lounges where people can rest while the trucks are serviced thereby adding to the overall customer experience. Furthermore, global commercial vehicle financer Daimler Financial Services has set shop in India too, introducing BharatBenz Financial as its captive brand, so that through one touchpoint - the dealership - consumers can avail not just the product, but also the service, financing and insurance.
To address concerns of truck breakdowns anywhere in India, BharatBenz has introduced over 150 mobile service vans or rolling workshops that reach customers within four hours once the company's 24x7 helpline (available in eight languages for India) is called. To be sure, every BharatBenz dealership has two such vans.
It also had a strict no discount policy (unlike its rivals) to ensure customers didn't feel the vehicles had higher margins. Though it lost customers in the short term, in the long run, the company was seen as honest and trustworthy.
Within 18 months of rolling out its vehicles, BharatBenz became the third largest player in the heavy duty truck (above 16 tonnes) segment, and the fourth largest in the overall trucking sector (6-49 tonnes). In a span of little over two years, BharatBenz has 16,000 trucks running on Indian roads. The brand is strongest in south India, with over 30 per cent market share in Kerala, and over 15 per cent in Tamil Nadu. Operating within the 9-49 tonnes segments, BharatBenz's all-India market share stands at seven per cent.
For an industry synonymous with large production capacity, a backlog of unsold inventory and frenzied discount pricing didn't paint a promising picture for Daimler India Commercial Vehicles (DICV) back in 2011, when it first announced the launch of its trucking arm, BharatBenz. Unfazed, it was committed to exploring the untapped trucking potential in India. With an investment of Rs 4,400 crore to build its manufacturing plant in India, develop dealerships etc, BharatBenz not only studied the complex Indian market, it also used its famous German engineering DNA to develop a comprehensive product range of trucks, including rigids, tippers and tractors.
While the manufacturing in India kept costs under control, being a new player, BharatBenz needed to do things differently. Indian customers, the company saw, focused on the purchase price but not on running costs (the truck had to be affordable). BharatBenz had to explain to its target customer that though the vehicle cost 10 per cent more initially, there was saving on fuel and service. Then, the term 'Benz' conjured images of an expensive car thus making it even tougher for the company to garner traction. Nonetheless, when the first series of its heavy duty trucks was launched on September 26, 2012, at a price point of Rs 17 lakh initially, BharatBenz positioned itself as a modern, value for money brand with fuel efficiency 10 per cent higher than that of other domestic brands.
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Though it didn't have as many repair shops (with the claim that the brand's vehicles wouldn't break down so often), BharatBenz worked overtime on building its dealership network from scratch. It was here that many customer-friendly strategies were put in place. First, it sold vehicles through a consultative selling model wherein the salesperson was a specialist of sorts who could guide and suggest the right model to the customer. This helped the brand build trust at the outset. It also employed master drivers in each of its dealerships who spent time teaching nuances of efficient driving to customers.
The nationwide 76 dealerships of BharatBenz are not just uniform in layout, thus, adhering to corporate identity guidelines, they are also innovative in that they have special lounges where people can rest while the trucks are serviced thereby adding to the overall customer experience. Furthermore, global commercial vehicle financer Daimler Financial Services has set shop in India too, introducing BharatBenz Financial as its captive brand, so that through one touchpoint - the dealership - consumers can avail not just the product, but also the service, financing and insurance.
To address concerns of truck breakdowns anywhere in India, BharatBenz has introduced over 150 mobile service vans or rolling workshops that reach customers within four hours once the company's 24x7 helpline (available in eight languages for India) is called. To be sure, every BharatBenz dealership has two such vans.
It also had a strict no discount policy (unlike its rivals) to ensure customers didn't feel the vehicles had higher margins. Though it lost customers in the short term, in the long run, the company was seen as honest and trustworthy.
Within 18 months of rolling out its vehicles, BharatBenz became the third largest player in the heavy duty truck (above 16 tonnes) segment, and the fourth largest in the overall trucking sector (6-49 tonnes). In a span of little over two years, BharatBenz has 16,000 trucks running on Indian roads. The brand is strongest in south India, with over 30 per cent market share in Kerala, and over 15 per cent in Tamil Nadu. Operating within the 9-49 tonnes segments, BharatBenz's all-India market share stands at seven per cent.