German auto giant Daimler plans a new truck model targeted specifically at the Indian market. The company is investing about 700 million euros in the project.
Daimler's new 'Indian' truck will build on existing models
Under the name "BharatBenz," Daimler plans to introduce a range of trucks from 6 to 49 metric tons, starting with a 25-ton truck in 2012. In several Indian languages, Bharat means "India."
BharatBenz is Daimler's fifth brand of trucks including Mercedes-Benz, Mitsubishi Fuso in Japan and Freightliner and Western Star in the United States.
'Detroit of India'
Presenting the new brand at the production site near Chennai in south eastern India, Daimler CEO Dieter Zetsche said the name "Bharat" was supposed to signal that "Daimler is at home in India." In a statement, Zetsche referred to the trucks as "the right combination of Daimler's DNA and India's market know-how."
Confident about the new brand: Daimler's CEO Dieter Zetsche
The trucks will be developed and built at a factory in Oragadam near Chennai. How "Indian" the BharatBenz will actually be depends on how much development comes from India, said Stefan Bratzel at the Center of Automotive Management in Bergisch Gladbach.
In Chennai, Daimler currently employs 650 people in administration and plans to increase the number of employees to more than 3,000. Global car and truck manufacturers as well as automotive suppliers have already settled around Chennai, earning the city the name "Detroit of India."
The lighter BharatBenz models up to 16 tons will be built on the basis of Mitsubishi Fuso, and include elements of the Fighter and Canter models.
The heavier trucks over 25 tons will go back to the Axor and other Mercedes-Benz models.
Earning a piece of the pie
"When introducing a new brand, the normal procedure would be to use 80 percent of parts already within the portfolio and adapt about 20 percent," Bratzel told Deutsche Welle. "Considering the bad street infrastructure in India, BharatBenz trucks will have to be more robust than trucks for other markets."
Cars and trucks face bad roads and heavy traffic in Indian cities
India is the world's second-largest market for heavy-duty trucks, according to Andreas Renschler, head of Daimler Trucks and Daimler Buses division, The company expects the market to double by 2020.
Daimler wants to start manufacturing and selling 36,000 trucks per year starting in June 2012. When operating at maximum capacity, the factory will be able to produce 70,000 trucks annually.
By 2014, Daimler also intends to have established a network of dealers at 73 key sites in India.
As in China, Daimler has come late to the Indian market where it faces competition from other global truck manufacturers such as Sweden's Volvo and Germany's MAN as well as regional competitors like Tata Motors and Mahindra.
"It's three times harder to win new customers than to keep existing ones," Bratzel said. "And that's especially so in the truck market in which any given model will be produced 12 to 14 years."
That said, it's still easier to enter a market that is growing, Bratzel said.
Author: Andrea Rönsberg
Editor: John Blau