Interview:
In pursuit of growth: Rajaram Krishnamurthy, Vice President – Marketing & Sales, and Customer Services, Daimler India Commercial Vehicles (DICV).
Q. How was the year 2020 for DICV?
A. The year 2020 was about strategic announcements to help shape our business and operations. DICV introduced a host of new services, which helped to gain momentum during the pandemic. Some of these include focus on digitization and connected features, the BharatBenz Exchange programme, MoUs with 18 leading banks for greater financing flexibility, announcement of global competition ‘Startup Sparks’ to support early-stage startups, and expansion of dealerships network to reach 250 numbers.
Q. How did the 2020 models perform amid a very challenging situation?
A. We introduced our BSVI range with profit technology plus in January 2020. Due to the lockdown, April 2020 was a month of zero sales for all the auto manufacturers including us. As the lockdown eased, green shoots were witnessed. DICV recorded over 9,600 unit sales, a drop of 34 per cent against the industry average of 60 per cent sales drop. The BharatBenz range experienced strong traction, especially after the BSVI emission norms gained force in April 2020.
Q. What was the effect on BSVI transition amid what has come to be termed as the world’s most stringent Covid-induced lockdown?
A. DICV was well-prepared for the BSVI transition. It sold all its BSIV CVs before the April 2020 deadline. The BSVI products received tremendous customer support and helped us to capture a much larger market share. In part, we celebrated several key milestones last year. For example, the sale of over one-lakh BharatBenz CVs. DICV also achieved an export milestone of over 35 thousand vehicles and 150 million parts in 2020.
Q. How did DICV support its CV users (transporters, operators, drivers, etc.) from going out of work in 2020, and with utilisation levels falling steeply?
A. During the lockdown, our customers were not able to operate their trucks or visit our BharatBenz workshops to avail scheduled services, warranty or extended warranty. Witnessing this, we extended the warranty by two months of vehicles whose warranty or extended warranty was ending between March 15, 2020 and May 15, 2020. Together with Hindustan Petroleum Corporation Limited (HPCL), DICV offered much-needed support to truck drivers who were away from home via 24/7 toll-free numbers. DICV also maintained close communications with stakeholders through online platforms, including digital webinars. Imparting training and provisioning health, safety, and hygiene guidelines, DICV ensured that claims and advances were paid to ensure cash liquidity. It worked with dealers to optimise operational expenses without compromising customer deliverables.
Q. How do you anticipate the Indian road freight and bus transport to perform in 2021?
A. In 2021, road freight transport is expected to witness an uptick as a result of higher infrastructure spending planned by the government, revival in private consumption and global trade, e-commerce growth and overall economic revival. Payload availability is expected to improve from key sectors such as e-commerce, parcel, coal, steel, cement and agriculture.
Q. For your 2021 models, which include two buses and six trucks, what kind of growth are you expecting?
A. These eight new products will fill the inter-space in our product portfolio. They will target specific segments and meet the precise requirements of our customers. For example, our 1917R is available in 20, 22, 24, and 31-foot load span options, which are ideal for a wide range of on-highway applications and great for freight movement for sectors like FMCG and e-commerce. Our 2828C is now available with 22 cu. m. loading capacity to cater to coal transportation. It comes with the longest wheelbase in its class, which makes it the most stable coal carrier in the market.
Q. What has prompted the shift at DICV from a tonnage-based outlook to an application-based outlook?
A. The need to serve our customers better. For example, vaccine truck needs are very different from that of an oil tanker. Giving either a BharatBenz truck, with best-in-class fuel efficiency, safety and comfort, reliability, maintenance cost and connectivity means they are able to fully focus on their business.
Q. Will the vehicle scrappage policy boost CV growth or drive more and more transporters out of business?
A. The details of the scrappage policy need to be understood in terms of direct benefit to the auto sector as far as demand generation is concerned. If incentives are not sufficient, then voluntary scrappage schemes might not be as effective as they should be. Capable of creating some additional demand for both passenger and commercial vehicles, and providing access to raw materials for the auto industry at an optimal cost, the scrappage policy, apart from a positive impact on demand and environment, could improve safety by taking out older vehicles with poor maintenance, safety and comfort standards. A fitness test for CVs after 15 years is an effective step in this direction. The scrappage policy and infrastructure spends have the potential to trigger M&HCV demand.
Q. Would it not run the risk of what the new axle norms did by creating excess capacity overnight?
A. WScrappage policy’s effectiveness will largely depend on the incentives provided. The policy will,
“The details of the scrappage policy need to be understood in terms of direct benefit to the auto sector as far as demand generation is concerned.”