‘Digital solutions will be seen across the entire value chain — from customer service to internal processes’

The commercial vehicle (CV) industry had been on rough terrain even before the pandemic disrupted operations. Given the halt in operations since more than a month now, German automobile major Daimler is looking to increase localisation and enhance digitisation of the supply chain, Daimler India MD and CEO SATYAKAM ARYA told T E Narasimhan in an interview. Edited excerpts: You said the industry may see a 50-60 per cent drop, despite the government’s nod for partial resumption of manufacturing, infrastructure, and realty projects. Why?

The auto sector in India was already reeling from a severe slowdown. Within this, the CV segment was worst-affected, with over 40 per cent de-growth last year.

This, coupled with the outbreak, has worsened the market, which was in a bad shape given the lack of economic activity and fleet capacity lying idle. Though some sectors have re-started, time will tell how difficult it will be for the economy to recover.

What needs to be done to revive the sector?

The government could provide stimulus, including reduction in the goods and services tax (GST) rate from 28 to 18 per cent, and implementation of an incentive-based scrappage policy.

Are you planning to increase localisation, following the disruption in global supply chains?

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

We have taken the opportunity to improve efficiencies in our business processes and start 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. This will also bring in more transparency to the global supply chain. Going forward, supply chains will turn more digital with a higher usage of robotics, Internet of Things, and artificial intelligence, which will make supply chains more resilient in adverse situations.

We source 90 per cent of our parts locally, and are actively looking for viable local suppliers for the rest.

Our suppliers contribute extensively to export of parts to other Daimler entities. We have exported more than 125 million parts. Our GMDT (global medium duty truck) operations have completely shifted from Germany to India.

Our global manufacturing processes have been completely realigned, not just to include Indian operations but also to utilise the competitiveness and capability of India more. This will grow, given India is now ready with BS-VI emission norms, thus enabling us to export these aggregates and parts to new markets.

How much of the manufacturing is automated?

Globally, Daimler is working on smart factory solutions and design in real time. Automation and robotics will reduce dependence on human intervention and increase productivity.

It won’t only be the shop floor to see automation. Digital solutions will be seen across the entire value chain — right from customer service to internal processes.

How is Daimler India planning to derisk in future? Will you be looking beyond trucks and buses?

Agility is a priority, and this is where our initiative “Swarm” comes into play. A Swarm organisation facilitates agile work. Members of the swarm focus on a task where the solution remains open, and throws up creative work with agile methods.

We have been working on creating a start-up culture within the organisation, where the idea is to look beyond trucks. There is lot happening at DICV beyond BS-VI, with the ultimate objective being to deliver more value to the customer.