A Brief Report on:

Daimler India Commercial Vehicles

Bharat Benz

For Academic Purpose Only. Not for any commercial use

Source: Internet

Agenda

Agenda:
Daimler Platforms for India
Definitions for understanding customer segments
Customer Segments Targeted by Daimler Light Duty Trucks (ICV)
Customer Segments Targeted by Daimler Heavy Duty Trucks (HDT)
Customer Segments Targeted by Daimler Tippers
Daimler Key strategies for Indian Market
SWOT Analysis of Daimler India Commercial Vehicles.
Daimler India Pricing Strategy
Daimler India Fuso Update

For Academic Purpose Only. Not for any commercial use

Source: Internet

Daimler Platforms for India

Premium Segment
MB India

MB Truck based

Bharat Benz

Heavy Duty
Trucks (HDT)

Actros 8x4 Tipper

CKD

GVW >25T

Localized

Fuso-based

Medium Duty
Trucks (MDT)

Light Duty
Trucks (LDT)

GVW 6 16 t
Localized

For Academic Purpose Only. Not for any commercial use

Source: Internet

Definitions

Definitions for understanding Customer Segments Targeted by Daimler India Commercial Vehicles

Usage Characteristics

User Characteristics

Extent of
loading

Rated
Load (=
GVW)

Moderate
Overload
(upto 30%
of GVW)

High
Overload
(upto 60%
of GVW)

Extreme
Overload
(> 60% of
GVW)

Haulage
Distance
(One way)

Very Short
(upto 100
km)

Short
(100-250
km)

Medium
(250 - 700
km)

Long (>
700 km)

Driving
Speed

Low Speed
(upto 40
kmph)

Medium
Speed (4060 kmph)

High
Speed (>60
kmph)

Fleet Size

OD (1
vehicle)

OND (2-4
vehicles)

SFO (510
vehicles)

Business
Sourcing

Market
Load

Contract

Captive

MFO (11-25
vehicles)
and LFO (>
25 vehicles)

KBF Key Buying Factors

Captive = Owns vehicle and transportation is means for doing primary business
Market Load = Stands in the market / stand / yard / Transport Nagar to get business (directly from single customer), transportation is primary business
Contract = Transportation provided through long term service agreement, transportation primary business

For Academic Purpose Only. Not for any commercial use

Source: Internet

Customer Segments Targeted by DICV Light Duty Trucks (ICV)

Segment Characteristics

Segment
Customer Segments
Targeted by Daimler
- LDT

Rated Load
60%

Economy
\Strider\ Price
Minimiser

Performance
Seeker \ Zipper

Progressive

Industry
Size:
65000
(CY
2011)

Over Load
40%

(40%)

Customer
Source of
KBF's
Usage
Type
Business
Low Acquisition Price Medium Speed
Market Load
OD,OND,
More Fuel Economy Medium, Long Haul SFO,MFO
Contract

(15%)

Customer
Source of
KBF's
Usage
Type
Business
Turn around Time
High Speed
Pick Up & Acceleration Medium, Long Haul MFO, LFO Contract,
Ease of Driving
Captive

(5%)

KBF's
Safety & Comfort

Performance
Seeker \ Zipper

(10%)

(2%)

Usage
Medium Speed

Customer
Type

MFO,LFO
Style

Economy
\Strider\ Price
Minimiser

Future Outlook

Source of
Business
Contract
Captive

Medium, Long Haul

Customer
Source of
KBF's
Usage
Type
Business
Low Acquisition Price Medium Speed
Market Load
OD,OND,
More Fuel Economy Medium, Long Haul SFO,MFO
Contract
Customer
Source of
KBF's
Usage
Type
Business
Turn around Time
High Speed
Pick Up & Acceleration Medium, Long Haul MFO, LFO Contract,
Ease of Driving
Captive

KBF's
Work Horse \
Overload
Capacity
Striver \ Load
(28%) Sturdiness
Overload
Rated Load
Maximiser
Reliability
Upto 10% of Overload on GVW is not considered in Moderate Overload Strong Engine (HP)

Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better.

Usage
Medium Speed
Medium Haul

Customer
Source of
Type
Business
OD,OND,
SFO,MFO
Market Load

2016

2020

2025

(40%)

(37%)

(32%)

(17%)

(22%)

(28%)

(7%)

(11%)

(20%)

62%

70%

80%

(8%)

(5%)

(3%)

(4%)

(5%)

(6%)

(26%)

(20%)

(11%)

38%

30%

20%

For Academic Purpose Only. Not for any commercial use

Source: Internet

Customer Segments Targeted by DICV Heavy Duty Trucks (HDT)

Segment Characteristics

Customer Segments
Targeted by Daimler
- HDT

Rated Load
80%

Economy
\Strider\ Price
Minimiser
Performance
Seeker \
Zipper

(55%)

KBF's

Usage

Customer
Type

(20%) Turn around Time

High Speed
MFO, LFO
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's

Progressive

(5%)

Future Outlook

Customer
Source of
KBF's
Usage
Type
Business
Low Acquisition Price Medium Speed
OD,OND,
Market Load
SFO,MFO,
More Fuel Economy Medium, Long Haul
Contract
LFO

Safety & Comfort

Style

Usage

Customer
Type

Medium & High

Speed
MFO,LFO
Medium, Long Haul

Economy
\Strider\ Price
Minimiser

Over Load
20%

Performance
Seeker \
Zipper

(8%)

(2%)

KBF's

Usage

Turn around Time

High Speed
MFO, LFO
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's

Rated Load

Overload

Work Horse \
Striver \ Load
Maximiser

Overload Capacity

(10%)

Customer
Type

Sturdiness
Reliability
Strong Engine (HP)

Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better.

Usage
Medium Speed
Medium, Short,
Long haul

Customer
Type

OD,OND,
SFO,MFO,
LFO

2025

Contract,
Captive
Source of
Business
Contract

Customer
Source of
Type
Business
Low Acquisition Price Medium Speed
OD,OND,
Market Load
More Fuel Economy Medium, Long Haul SFO
Usage

2020

Source of
Business

Rigid
KBF's

2016

Data needs to be added

Segment

Source of
Business
Contract,
Captive
Source of
Business
Market Load,
Contract

For Academic Purpose Only. Not for any commercial use

Source: Internet

Customer Segments Targeted by DICV Tippers

Segment

Segment Characteristics

Future Outlook
2016

Rated Load
5%

Economy
\Strider\ Price
Minimiser
Performance
Seeker \
Zipper

(3%)

KBF's

(1%)

Progressive

Usage

Customer
Type

Turn around Time

High Speed
MFO, LFO
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's

(1%)

Safety & Comfort

Style

Usage

Customer
Type

Medium, High
Speed
MFO,LFO
Medium, Long Haul

Source of
Business
Contract
Source of
Business
Contract

Tipper

Economy
\Strider\ Price
Minimiser

Over Load
95%

Rated Load

Customer
Source of
Type
Business
Low Acquisition Price Medium Speed
OD,OND,
Market Load
More Fuel Economy Medium, Long Haul SFO
KBF's

(40%)

KBF's

Work Horse \
Striver \ Load
Maximiser

(55%)

2025

Data needs to be added

Customer Segments
Targeted by Daimler
- Tippers

2020

Customer
Source of
KBF's
Usage
Type
Business
Low Acquisition Price Medium Speed
OD,OND,
Market Load
SFO,MFO,
More Fuel Economy Medium, Long Haul
Contract
LFO

Overload Capacity
Sturdiness
Reliability
Strong Engine (HP)

Usage

Customer
Source of
Type
Business
Medium Speed
OD,OND,
Market Load,
Medium, Long haul SFO,MFO,
Contract
LFO
Usage

Overload

Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better.

For Academic Purpose Only. Not for any commercial use

Source: Internet

Daimler Key Strategies for Indian Market

3 key strategies of Bharat Benz to establish itself in the Indian CV space:

Aggressive target pricing so as to compete effectively with entrenched competitors like Tata Motors
and Ashok Leyland
Focus on Customer Service from the beginning to differentiate with the existing CV majors and
establish its brand
Placing products in the new middle market which are just about 5-10% costlier but with high-end
features and higher HP engines (for faster turnaround time) unlike Tata Prima, Volvo FH etc. which
comes in at a very high premium pricing (almost 2-3 times of the basic / conventional CV range)

Emergence of a new middle market where Bharat Benz plans to establish itself

Rs 1.5 to 1.8 MINR

Rs 1.8 to 2.2 MINR

Rs 3.0 to 4.5 MINR

Source: Internet
Price Ranges have changed, only for reference to show the relative price positioning

For Academic Purpose Only. Not for any commercial use

Source: Internet

SWOT Analysis for Daimler India Commercial Vehicles

SWOT Analysis of Daimler India Commercial Vehicles
Strengths:
Weaknesses:

Benz brand recall among many sections of the

Lack of Indian market experience and knowledge

Indian market make Bharat Benz easy to establish

Unproven products given that they are tweaked for

itself
the Indian market

Aggressive pricing may allow it to compete

Lack of strong and established sales and service

meaningfully with entrenched players
network

Backed by global technology

India operations have been built from scratch, with

Changing paradigm with customers willing to

no readily available global blueprint for help
experiment may support its entry in the Indian
market

Leverage the export potential along with domestic

volumes.
SWOT Analysis
(Daimler India
Commercial
Vehicles)

Opportunities:

Upgrading the Indian CV operators by creating the

new-middle market through provision of global
technology at a marginally premium priced products

Participation in one of the worlds largest CV market

Daimler can get a strong foothold in the rapidly

growing Indian CV market

Export to various countries.

Threats:

Execution risk Current Capacity: 70000,

Investment: 700 Million Euros. Daimler must ensure
that all the elements of its strategy must get well
executed. Else, its bold attempt can prove to be a
big setback which may floor Daimler for a long
period of time

Timely aggression from the Indian CV players.

Source:Internet

For Academic Purpose Only. Not for any commercial use

Source: Internet

Daimler India Pricing Strategy

Pricing Strategy Global trucks at local prices
Daimler plans to price its BharatBenz trucks just about 5-10% expensive than the existing truck models in the market of that of Tata and
Ashok Leyland. Some of the pointers to this aggressive pricing strategy may be as following

Higher localization (85%) from the beginning at local prices

o Local manufacturing of engines contract & in-house
o In-house manufacturing of frames, axles, sheet metal parts etc.
o Local procurement of most of the components with a large vendor base (~50%) located within a 50 km
distance of the mother plant in Chennai.
o Will also act a shield against currency fluctuations
Huge tax benefits Full-fledged manufacturing in India helps in reducing taxes
o Customs duty for imported FBU
o Customs duty for imports of SKD kits
o Excise tax for locally manufactured trucks (including engines and other aggregates)
No-frill / Stripped down versions of their existing models Mercedes-Benz Axor and Fuso Canter
products. Basically, Daimler would provide a no-frill products without features such as AC, power
windows etc.
Additional revenue stream test track as a Profit Centre, i.e. it will lend out the test track to others
even to its component vendors and non-core competitors which will help in augmenting its revenues,
although it may not be a major revenue earner

Source: Internet

For Academic Purpose Only. Not for any commercial use

Source: Internet

Daimler India Fuso Update

Fuso Update:
Daimler Trucks Asia exports first FUSO Trucks Made in India

The Daimler commercial vehicles subsidiaries Mitsubishi Fuso Truck and Bus Corporation (MFTBC) and Daimler India
Commercial Vehicles (DICV) are working side by side on achieving the joint unit sales target of 290,000 commercial
vehicles until the year 2020.
Under the umbrella of Daimler Trucks Asia, MFTBC is now going a step further together with DICV: With a view to
boosting the presence in the growth markets and tapping into further sales potential, the two companies are going
forward with an integrated product portfolio for greater variant diversity and an optimized production network with
the truck plants in Kawasaki, Japan, and Chennai, India, as the main production hubs.
In addition to producing BharatBenz trucks for India, since May 2013, DICV is also making FUSO trucks for selected
export markets in Asia and Africa.
By the end of the year, Bangladesh, Zambia, Tanzania, Uganda and Brunei will also be supplied with state-of-the-art
trucks under the FUSO brand from India.
The successive roll-out in the growth markets of Indonesia, Thailand, Malaysia, Malawi, Zimbabwe, Mozambique,
Mauritius and the Seychelles is planned for the year 2014.
The new, medium-duty and heavy-duty FUSO models are based on the same technical Daimler Trucks product
platform as the BharatBenz trucks. This enables the production of both truck brands under one roof.

Source: Daimler Investor Relations Release June 2013

For Academic Purpose Only. Not for any commercial use

Source: Internet

Thank you