Following the news that commercial vehicle manufacturer Daimler India plans to have 350 dealerships across the country over next two years;
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:
“The strong headwinds faced by the commercial vehicle industry in India due to COVID-19 and economic instability have not affected Daimler India Commercial Vehicle (DICV)’s expansion plans. The strategic move, which is part of its India strategy announced last year, will significantly deepen its penetration in the Indian market.
“India is a key market for Daimler, both in terms of sales and production. India accounts for significant volume sales for medium & heavy-duty trucks and buses, and is a production hub for the company, exporting to nearly 50 overseas markets. The company achieved major production milestones in 2020 despite the disruptions caused by COVID-19. It ramped up its FUSO bus production for the export market this year and achieved the milestone of 1000 BSVI compliant heavy-duty truck production in Q2 2020.
“Despite the fact that the medium & heavy-duty trucks and bus market has witnessed massive decline in demand earlier due to weak economy in 2019 and later due to COVID-19 in 2020, DICV has managed to remain a strong brand in India. The company accounted for 5.8% market share in 2019. In addition, DICV’s January-November 2020 year-on-year sales decline was relatively lesser when compared to the overall M&HCV industry. With the rebounding economic activities, the medium & heavy-duty truck and buses market is anticipated to follow trend similar to that of passenger cars and witness increase in sales volumes. In turn, laying positive outlook for DICV.
“With enhanced dealership and service network, and increased focus on digitization of business, Daimler will emerge as a better positioned brand and earn significant competitive benefits in India. As the M&HCV sales are slowly recovering, DICV with enhanced products, better network and technologically advanced business solutions will have the potential to attract substantial share of sales volume in the near future.”