Daimler to Debut India-Made Trucks by September

ORAGADAM, India – Daimler AG will start selling trucks from a €700 million factory in India by September, with plans to eventually make as many as 70,000 trucks a year as it attempts to get a bigger foothold in this growing market for commercial vehicles.

The plant, spread over 400 acres in Oragadam near the southern port city of Chennai, will start with a capacity of 36,000 vehicles a year and employ 1,400 workers, Daimler Chairman Dieter Zetsche said. The factory is one of only three Daimler plants worldwide where trucks as well as their engines and transmissions will be produced at the same location.

The company plans to develop and manufacture as many as 17 truck models based on its Mercedes-Benz Axor and Mitsubishi Fuso Truck and Bus Corp.'s Fuso platforms. It will sell the trucks under its new India-specific Bharat Benz brand, it’s fifth globally.

The Stuttgart-based company, whose truck division is the world's largest maker of commercial vehicles by sales, sells trucks under the Mercedes-Benz, Freightliner, Western Star and Fuso brands worldwide.

India has become a lucrative market for global auto makers looking for growth regions. The country's truck market is dominated by Tata Motors Ltd., but Daimler and other global companies such as Volvo AB, MAN AG and Navistar International Corp. are expanding their presence to capitalize on potential demand.

Asia's third-biggest economy is spending billions of dollars to widen existing highways and build new ones, a move that has given a fillip to movement of goods through roads.

Local sales of trucks and buses in India rose 18% in the financial year that ended on March 31 to 809,532 vehicles, even as most other segments witnessed weak demand due to expensive loans and higher fuel costs.

"India's truck market is one of the largest and fastest-growing in the world," Mr. Zetsche said. "Now at number three, it will climb to number two worldwide by the end of this decade. So in the long run, you could say, 'if you don't make it here, you won't make it at all'… a strong position in the global truck market requires a strong position in India."

Daimler plans to have about 70 retail outlets in 12 states across India by the end of 2012 to sell the trucks. This will be expanded to more than 100 locations by 2014.

Daimler has been assembling its Mercedes-Benz Actros brand of heavy-duty trucks as well as buses at a factory near the western city of Pune since November 2007. The plant is owned by Daimler's passenger vehicle unit, Mercedes-Benz India Pvt. Ltd., which also assembles C-Class, E-Class and S-Class luxury sedans.

Marc Llistosella, managing director and chief executive of Daimler India Commercial Vehicles Pvt. Ltd., said the company is planning to shift the assembly of the Actros trucks to the Oragadam factory.

Mr. Zetsche said Daimler will source up to 85% of the parts for the BharatBenz trucks from more than 450 vendors across India.

He said the company will also "significantly" increase its count of research and development workers in India from the current 1,000.


Reference-: http://online.wsj.com/article/SB10001424052702303425504577351690175701270.html