India is becoming the Export Hub for Daimler and Volvo Commercial Vehicles
Published On May 03, 2017
India is a land of opportunities and the same has been well comprehended by the global automakers in the past few years since the beginning of Make-in-India policy. Daimler AG and Volvo AB are now banking on the same strategy in a bid to make India a global export hub for heavy duty vehicles.
Mercedes-Benz, Freightliner and Mitsubishi Fuso, the subsidiaries of Daimler AG and UD Trucks, the subsidiary of Volvo AB are now making their products locally for overseas markets with the notion of cementing their position in India and expanding their automotive portfolio beyond passenger cars and two wheelers that are generally being exported to emerging economies and India’s immediate neighborhood.
It’s a good sign for India’s growing automotive industry when we see from the perspective that both Daimler AG and AB Volvo are world’s top 2 heavy-duty truck makers. DICV has already started shipping Mercedes-Benz trucks and buses from it Chennai based facility to the Southeast Asian markets. The company also exports made in India Mitsubishi Fuso trucks to 28 countries while it has plans to export Freightliner badged trucks to Mexico in the second half of 2017.
Erich Nesselhauf, Managing Director of DICV said “Company has been awarded significant responsibilities within Daimlers’ global truck and bus businesses. With the launch of a third product line for exports in 2017 at DICV, we will enter the next stage in the strategic collaboration of DICV and Mitsubishi Fuso Trucks & Buses Corporation, under Daimler Trucks Asia”.
In the year 2016,Daimler India Commercial Vehicles shipment grew twofold to 4,300 units, taking the collective exports from India to whopping 7,500 units. Company currently exports to Africa, Middle East, South East Asia and Latin American markets and with the intention of adding of 10 new markets this year and the local production of new 9-tonnes truck under Fuso brand, will further make company’s position strong.
DICV besides its truck business, also exports bus chassis to 10 different markets and Mercedes-Benz school buses to Middle East while it plans to ship 16-tonne bus chassis this year to 10 new markets. Erich Nesselhauf declined to comment on export targets but stated that FY17 sales of 13,100 units in the domestic market and 4,300 units of exports would give a fair impression of the distribution company does between its domestic sales and exports.
On similar lines, Volvo AB is expected to begin its export of UD branded light duty trucks this year, which are being manufactured at its Pithampur plant, a joint venture of Eicher and Volvo. The UD badged trucks will be exported to Indonesian market and are currently under trial.
India’s exports figure in the M&HCV rose to 25 percent in 2016-17 to 43,719 units helping the automakers to counterbalance the revenue impact of lukewarm sales in the domestic market. Especially, for Daimler and Volvo this has emerged as a vital strategy of their business model as higher exports has helped them fix high cost associated with their investment in India.
Another reason of progress in export volume is the good response India made trucks are getting abroad. India is already a manufacturing hub for medium-duty 5 to 8 litre Euro VI compliant engines for Volvo in Europe and Swedish automaker has plans to export buses to European markets made from its Bangalore based plant in future.