Interview: Satyakam Arya, MD and CEO, Daimler India Commercial Vehicles
Published On Jul 27, 2020
In a comprehensive interview with Trucksdekho, DICV India’s managing director and CEO talks on how the company is navigating through the pandemic, the focus on employee care & safety, the shift towards digitisation, the production ramp-up, the opportunity in the mining sector and the critical way forward for the Indian commercial vehicle industry. According to Arya, agility, creativity, and adaptability are the key characteristics for success in today’s challenging times, and rather than waiting for the ‘new normal’, and companies must expect the ‘never normal’!
Before we go ahead with the new initiative of DICV, please give us an overview of the industry as to how things are on the ground. The lockdown, reopening of plants, and the demand/supply scenario right now?
India’s real GDP growth rate (base year 2011-12) in the first quarter of 2020 slipped to just 3.1%, a decade low level after 2008-09 global financial crisis. The ongoing slowdown in the Indian economy was aggravated by a slump in exports in Jan and Feb ’20 after the COVID-19 outbreak in many countries and an almost complete shutdown of the Indian economy in the last week of March ’20 when the government imposed the lockdown. The manufacturing and services PMI were at record low levels in April and May 2020 indicating the severe impact of the lockdown, which has led to plummeting private consumption barring essential goods.
The economy is expected to recover from the first half of CY2021. The magnitude and velocity of the economic recovery will depend on many factors such as the spread of the COVID-19 virus, success with the vaccine, consumer behavior in the new normal and government’s policy response. The commercial vehicles industry will go through a tough phase in 2020 but is likely to emerge more strongly in the second half of 2021. If the government introduces measures like a scrappage policy, reduces taxes or gives a big boost to infrastructure spending, the recovery could be faster.
How is DICV navigating through this challenging time? Some steps the company has taken in these unprecedented times?
At times like these, OEMs must focus on their employees’ well-being, especially the ones on the shop floor who have come to the cities seeking greener pastures. Once things do stabilize, OEMs will need to hit the ground running. A lack of workforce during that situation would be crucial and may delay the rebound the industry is eagerly awaiting. That is why DICV paid all employee salaries during the entire lockdown period and provided support for ones caught in other regions to return to Chennai.
The next priority is sustaining the eco-system. The supply chain is called a chain because all the companies are interlinked and if one falls, it will have a knock-on effect all the way to the customer. That is why we need to change from a supply chain to a supply net – making sure we have multiple suppliers locally and abroad that we can rely on. Of course we must also support our existing suppliers to ensure they can ramp up as quickly as possible. The same goes for the rest of the eco-system. Dealers, customers and even our local communities. Knowing that, DICV has taken measures to support all stakeholders. Of course through CSR, but also health and safety training, sharing of restart manuals and free vehicle checks and sanitisation for our BharatBenz customers nationwide.
With these unprecedented times, many OEMs are going through a phase never encountered before. That means rethinking the strategies put into motion before the COVID crisis. Only the most agile will survive. As Charles Darwin famously said, it is those with the best ability to adapt who survive. At DICV, we pride ourselves on our ability to think ahead and pivot quickly. That’s why we were able to sell all our BS4 trucks stock before the deadline – an achievement which put us in an enviable position once the lockdown lifted.
Lets shift focus on the different customized solutions that DICV is offering to customers in various sectors such as construction, mining e-commerce? What are the strategies that you are working on right now? THe opportunity?
We know that one potential trigger for CV demand creation is mining. The commercial mining in the coal sector stands de-regulated from government monopoly. While this is a pre-existing policy, the Finance Minister has used this opportunity to fast track the reform. Coal gasification and methane gas exploration will receive incentives. The government will spend Rs 50,000 crores to create infrastructure for transportation and export of coal after exploration. These reforms are expected to result in a 40% increase in coal production in India. Various reforms including the elimination of differences between captive and non-captive mining are beneficial for the development of mines and minerals exploration and production. Tippers and special applications, such as deep mining trucks, will see more demand as a result. Apart from HCVs we also see a decent rise in demand for MCVs and LCVs to help in the transport to warehouses and then from there on to individuals for sale.
This is one of the reasons we recently launched India’s First 5228TT on a 4x2 Tractor. The 5228TT model is unique as it provides the benefits of a tractor-trailer but with decreased total cost of ownership. It has the load bearing capacity of a 6x4 tractor, but with lower fuel consumption. With the tough economic situation, customers will be looking for products that offer the most value. Our new BharatBenz 52 tonner sets higher benchmarks for the tractor trailer segment with improved revenue, fuel efficiency, safety and connectivity. That’s the kind of TCO customers want and that DICV provides.
BharatBenz has always been at the forefront of introducing new technologies in Indian truck industry. Can you list a few of them in the all-new BS6 trucks? How are the customer engagements and the response to new technologies?
Our new generation of BharatBenz CVs offers ‘ProfitTechnology+’, a package of technologies and features ensuring industry-leading fuel efficiency, safety, comfort and reliability.
For example, customers will gain better fuel efficiency from the gearshift advisory, PR air compressor, new turbocharger and, of course, the proven engine platform. For safety and comfort we have many feature like a crash tested cabin, reverse parking assist, and air suspended seats to name a few. BharatBenz customers enjoy longer service intervals (60k) kms resulting in fewer dealership visits. The engine oil drain increases to 120 kms.
When it comes to connectivity, we offer peace of mind to customers with fuel monitoring, track and trace, real time alerts and better truck utilization thanks to our Truckonnect platform. Needless to say, this is backed by one of the best warranty packages in the industry with a six year warranty on powertrain and a three year warranty on vehicle, apart from offering attractive extended warranty programs.
Telematics and Connectivity are vital for modern fleet management and a profitable logistics and transport business. DICV sees in this area of opportunity? If yes, then kindly elaborate on the plan and roadmap over the medium-term?
DICV already introduced a telematics solution back in January when we premiered our new range of BS6-compliant trucks and buses. Our telematics solutions Truckonnect and Busconnect are connectivity-enhancing services that allow operators to track and analyze their vehicles in real time.
Truckonnect gives owners an unprecedented level of control over their fleet. Based on Daimler’s global platform that already connects over 300,000 trucks worldwide, Truckonnect lets customers remotely monitor all key performance indicators including utilization, fuel & Adblue consumption, fleet health and driver behavior. Users can access all this information 24/7 through an online analytics dashboard.
Truckonnect is provided as standard in all BharatBenz trucks over 16 tonne and as an option for the rest. It allows customers to remotely check and analyze vital vehicle information in real time via the Truckonnect online portal, including vehicle location and health, plus fuel consumption. With this, fleet managers can optimize driver performance, increase fuel efficiency, and reduce downtime. Vehicle owners will also be supported by a customer assistance center available during all hours of the day.
Bus Connect will cater to both passengers and operators. Passengers will be able to select routes, get tracking alerts, access onboard entertainment and also earn reward miles. Operators will get fleet summaries and dashboards with reports that will improve fleet administration.
You recently achieved a production milestone even during this pandemic. How is DICV ensuring employee & worker safety and focusing on robust plant operation?
DICV recently celebrated production of its 1000th BSVI-compliant HDT, one of over 1500 BSVI-compliant vehicles produced since the new emissions norm came into effect in April. The only way we were able to achieve this success even during lockdown is with the hard work of our loyal employees and partners. Throughout the crisis, we have maintained closely connected with our employees to ensure they have all the support they need to feel safe and valued. For example, DICV paid all employee salaries during the entire lockdown period and provided support for ones caught in other regions to return to Chennai.
We held online seminars for employees and their loved ones on health and hygiene procedures and holistic wellness measures. We provided them with an incredibly comprehensive set of guidelines designed to train them on social distancing and other preventive measures. We also put in place a crisis management team that works with our in-house medical team to ensure employees have 24/7 support for all their health enquiries; including free counseling.
Now that DICV is back to 100% production, we continue to follow strict health and hygiene guidelines designed to maintain social distancing and help stem the spread of infection.
Digitization is the new way for every industry now due to the pandemic, how does DICV, primarily a truck maker embrace this new technology? Are the customers open to a new way of business? (Both sales and aftersales!)
Over the last few years, we have conducted a comprehensive investigation into every department and function to look for digitalization opportunities. Currently, around 2 dozen digitalization projects are being investigated and we have doubled investment in digitalization despite the crisis. Some examples of digitalization include internalizing projects that were previously outsourced, such as website hosting and communication apps, and changing from paper-based to digital reporting/tracking systems such as for the canteen management. There is even a digitalization swarm now being formed to look for further opportunities internally.
On the external side, a major example is Truckonnect, the telematics solution rolled out at the beginning of the year with the new BS6 portfolio that allows fleet owners to remotely monitor and track the location and status of their vehicles 24/7.
Another key example is the very popular ‘Proserv’, our customer service digital platform. The Proserv application is enabled with 65+ features including advance booking, parts ordering, renewal of contracts, extended warranty, insurance, fleet maintenance, 24x7 RSA and integration with all types of online payment options bringing everything for the customer at their fingertips.
How are you dealing with the customers on two fronts- the retail sales and secondly the after-sales services? Kindly elaborate.
A few months ago, we announced a significant change in our organization’s structure. The Customer Service division was integrated with the existing Marketing & Sales division to ensure a seamless link between customer needs and the products and services we provide. Additionally, our Regional Heads were empowered for the entire gambit of business they handle with a single face to the customer. This enables them to tailor the solutions we offer on a local level and improve the speed of response to the customers.
Our Indian business is organized into four regional zones; North, South, East and West. Each zone’s Regional Head is in charge of their area’s complete business, giving them more autonomy to make agile decisions. With India being so diverse in terms of geography, language, culture and customs, each region is as different as another country. By empowering Regional Heads to make decisions at a local level, we offer our customers solutions that suit their individual business needs.
Lastly, in your closing comment- the way forward for the industry- When will you see the industry's pre-COVID situation? What are the immediate focus areas and the near-term future of the CV industry?
From a financial point of view, the commercial vehicle industry will go through a tough phase in 2020 but is likely to emerge more efficiently in the second half of 2021. If the government introduces measures like a scrappage policy, reduces taxes or gives a big boost to infrastructure spending, the recovery could be faster.
In a more holistic point of view, rather than waiting for the ‘new normal’ we must expect the ‘never normal’. In other words, we may never return to the pre-COVID situation in terms of how companies work and how consumers think. Knowing that, the CV industry needs to quickly adapt to a world of change. Agility, creativity and adaptability will be the key drivers for success.