Daimler to expand Oragadam facility, set to unveil 14 new models this year

CHENNAI: Ramping up production, recording best sales performance and raring to launch 14 new vehicles this year are among the key driving factors that will define the growth roadmap of Daimler India Commercial Vehicles for the next ‘dashak’ (decade), Satyakam Arya, MD-CEO, DICV, said on Tuesday.

After the leadership team made the annual presentation at its 400-acre Oragadam facility, near Chennai, Arya sought to elaborate on the plans and the strategic intent of the 100 per cent subsidiary of the Germany-based Daimler Truck AG.

DICV, which has an annual capacity to produce 36,000 trucks and 4,000 buses, has already started using the existing facility to expand production given that it has reached full capacity. This will include de-bottlenecking and improving efficiencies, he said at a media round-table.

The capacity expansion is already on at the welding and paint shops at no additional capex, Arya said, adding the first step is to reach 45,000 vehicles as part of the three-year expansion programme.

Noting that in calendar year 2023, DICV “outperformed” the domestic truck and buses market, he said, last year, sales went up by 39 per cent, revenue grew by 21 per cent while the auto parts business surged 21 per cent. Exports reported over 30 per cent growth. Bus sales doubled with 107 per cent growth over 2022, while cumulatively (including exports), sales grew by 13 per cent against 2022.

“Our best-ever sales and financial growth, since inception, was spearheaded by excellent demand for our tipper and tractor trailer product lines which grew 53 per cent and 79 per cent respectively compared to CY2022,” he said, outlining a slew of strategic initiatives that DICV undertook in 2023, which helped the company take informed decisions on costs, tackle headwinds effectively and sharpen focus on key areas of its business.

“We have started CY2024 with great confidence, and with an ever-stronger product portfolio, engineered and packaged to drive business growth to new heights in 2024,” he added.

Arya also explained while DICV continues to evaluate the light commercial vehicles (LCV) segment, it would continue to stay focused on the heavy CV business, as it did not feel the need to enter the mass market segment. “We want to be ahead before de-carbonisation reaches the HCVs,” he said, adding it was also clear not to enter the CNG space as global research showed it was not a viable proposition. However, it is currently evaluating the LNG space and gearing up to stitch tactical alliances in this regard.

“We will announce our de-carbonisation roadmap this year,” he said, noting that the pace of infrastructure development in 2-3 years would determine its strategy accordingly.

While big fleet continues to thrive, DICV expects Q2 to be slow due to impact of upcoming elections in India. But, Q3 and Q4 would report strong growth, Arya said, stating that order book for exports also remained flat this year compared to 2023 on account of elections being held in multiple geographies globally such as Indonesia and the US.

DICV saw operational break-even in 2018 for its truck business. Last year, it became “financially profitable as a company” in the truck and bus businesses, he said, highlighting the impact of Red Sea crisis that had impacted the logistics and inventories.

Arya also said having seen the market from all dimensions, the company had tweaked its strategy so that it can focus on becoming a leader in segments that it operates in – heavy duty construction and tractor trailers.