Daimler is the fourth foreigner to set foot in Indian truck domain. Will it help break the low foreign sales jinx?
The duo are looking forward to mass manufacturing a new brand of LCVs, MCVs & HCVs; with close to 80% degree of localisation. Sounds encouraging till you hear this one – the Indian market has had a long lasting love-hate affair with Tata Motors. And this will prove a major hurdle for international players including Daimler. Heart-burning stats prove it all: Only 2.51% of total commercial vehicles sold in March 2008 bore a ‘foreign’ tag. Tata on the other hand had a handsome 61.67%; clearly not a level-playing field!
However the dark clouds would pass away for the foreign invaders with the usage of latest technology as a differentiating factor, thus overshadowing the old Indian workhorses, as an auto analyst asserts, “In the long term high-tech machines & investments will work for the foreigners. Even though new players may take time to compete effectively with existing players like Tata Motors, they will have an advantage when it comes to technical know-how and global experience.” Pricing and operating costs still remain the key differentiating factors in the Indian truck market though. And even though Daimler has the competence to deal with the cost differentials that handicapped many other international brands in the past, it still has a tough job ahead; for Indian manufacturers are growing & maturing fast too, just like the Indian economy.
The duo are looking forward to mass manufacturing a new brand of LCVs, MCVs & HCVs; with close to 80% degree of localisation. Sounds encouraging till you hear this one – the Indian market has had a long lasting love-hate affair with Tata Motors. And this will prove a major hurdle for international players including Daimler. Heart-burning stats prove it all: Only 2.51% of total commercial vehicles sold in March 2008 bore a ‘foreign’ tag. Tata on the other hand had a handsome 61.67%; clearly not a level-playing field!
However the dark clouds would pass away for the foreign invaders with the usage of latest technology as a differentiating factor, thus overshadowing the old Indian workhorses, as an auto analyst asserts, “In the long term high-tech machines & investments will work for the foreigners. Even though new players may take time to compete effectively with existing players like Tata Motors, they will have an advantage when it comes to technical know-how and global experience.” Pricing and operating costs still remain the key differentiating factors in the Indian truck market though. And even though Daimler has the competence to deal with the cost differentials that handicapped many other international brands in the past, it still has a tough job ahead; for Indian manufacturers are growing & maturing fast too, just like the Indian economy.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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