‘We will work here to be competitive in other markets’

Despite disengaging Indian partner Hero, Daimler India Commercial Vehicles is still open to the idea of having multiple partners, to leverage the functionality the alliance partner would bring on the distribution, legal, operational and supplier fronts. The 100% subsidiary of Germany’s Daimler AG may even consider a distribution pact with its former partner Hero. While the world’s largest truck maker is yet to decide,

Daimler India CEO Marc Llistosella indicated it is keen to bring on board an Indian partner, during his interaction with ET at Oragadam, near Chennai — the location of its Rs 4,400-crore greenfield CV plant (including a Rs 25-crore world-class test track) which will have an initial truck annual capacity of 36,000, to be scaled up to 75,000. Excerpts:

Your partnership with Hero dissolved last year. Any changes after that?

It was a hard and tough decision but the disengagement was done professionally. We don’t change anything — the investment and plan stay. We are looking for long-term relationships, even with Hero. So whether the
disengagement happens or not, this is not changing our relationship with Hero, we see them as a partner when it comes to the point of sales.

Are you looking at a distribution tie-up with Hero?

It’s under discussions. That is also one of the key drivers for the partnership in the initial stages. Currently, we are going in for multiple partnership discussions, we are not fixated on one. We are also being approached by non-Indian companies, which is very interesting. But our focus is Indian companies and Indian partners that we know already. The choice of partner must make sense in business and also suit our DNA. With TVS, we are working at producing some system components. The local content at Chennai plant would be to the extent of 85%. Key components and final assembly will be done by us.

Daimler exited Tata Motors recently. Will that money be ploughed back to India through the Chennai plant?

We don’t have direct linkages between disengagement and investment. This plant investment is Rs 4,440 crore of which Rs 1,200 crore has been allocated for R&D. We will work on India and in India to be competitive in other markets, too. We are an over 100-year-old truck company.

The Indian commercial vehicles market is getting crowded by JVs. Where does Daimler stand?

We made a long journey to India, started with Tata, the recent disengagement also based on excellent co-operation. One thing is sure that we are getting more competitors. But our investment has nothing to do with day-to-day operations. Even a financial crisis could not shake our investments. India is not a market but the market. Its much more than a short-term step, it’s a long journey and we have done it in Brazil and Turkey. We have reached, after some years, a significant market share in these countries and you can be sure this is what we want to do in India. What the others are doing, we have respect for them, especially for Tata. But we are also confident of our strengths.

What about the impact of Renault-Nissan discussion with Daimler globally. How will that impact your plans for India?

No. That alliance is cars, not trucks.