Daimler banks on exports to turn profitable soon

With its sales figures in the export basket jumping from 2,100 units to 4,500 in 2016, the MNC is expecting a “significant” ramp up and focus on the Middle East over the next two years to counterbalance the uncertainties and cyclical nature of the commercial vehicle business. It has set up an “ambitious target” as DICV plans to expand its export footprints by eight to ten countries to its current spread of presence in 33 countries.  

Marc Llistosella, President and CEO of Mitsubishi Fuso Truck and Bus Corporation (MFTBC) and Head of Daimler Trucks Asia, says: “Our Indian operations at DICV are a cornerstone of our success at DTA. With the launch of a third product line for exports in 2017 at DICV, we will enter the next stage in the collaboration of DICV and MFTBC - this successful journey we began in 2013 pays off day by day.”  DICV will start production of this third truck product family in 2017.  

The new sub9tonne vehicles, initially designated for exports as FUSO brand variants, will be rolled out in the first half of the year. Describing the Indian market to be one of the “most brutal markets” in the world, he said the availability of knowledge and engineering skills enabled the German behemoth to roll out products fast into the market. 

DICV has also exported parts from its extensive Indian supplier base to other Daimler entities globally (Japan, Europe, North America and Brazil) with the entity breaching the mark of 35 million parts. Focus on cost-efficiency and technology advancements have paid off. 

“Our productivity increased drastically since 2013 despite difficult market conditions,” he said, adding that the use of one-third energy from solar panels for efficient production facilities and introducing products at competitive price points making them comparable to diesel pricing from 2018 to 2020, were driving profitability. 

Erich Nesselhauf, MD-CEO, DICV says: “We have kept our focus on profitable growth in 2016, which has been a mixed year for the Indian CV industry at large.” 

To a query, Marc said that though DICV had not yet generated profit, it would break even this year, as efforts were on to report the first quarter of profitability. Such an exercise would help the company to cover all its fixed costs, turning 2018 into a level of profitability that was planned by it. “We see this company as a start-up and therefore, like the norm of typically turning profitable in 5.5 years, we expect to become profitable around that time,” he said.