Daimler India eyes break-even by 2016: MD & CEO

Hoping for the domestic truck industry to consolidate in 2014, Daimler India Commercial Vehicle (DICV), Indian subsidiary of German commercial vehicle maker Daimler AG, today said it has drawn up plans to break-even by 2016.

Noting that industry was at its 'worst" in 2013, DICV Managing Director and CEO Marc Llistosella said the first half of this year would not be good. But in the second half compared to last quarters, there would be some consolidation.

"So in 2014 you will see consolidation. But the next two years will be the game changer (for the industry)," he told reporters here.

On the company's strategy for its Indian operation, in which DICV invested about Rs 4,400 crore at its facility at Oragadam near Chennai, he said, "we think the last quarter of 2015 or in 2016, you must be able to achieve break-even".

The Chennai plant has capacity to produce 36,000 trucks annually with capacity ranging between six to 49 tonnes and operating two shifts. Tamil Nadu Chief Minister J Jayalalithaa formally inaugurated the plant in 2012.

Since commencing the market launch of its popular "Bharat Benz" range of trucks 18 months ago in the domestic market, the company had sold 10,000 units, Llistosella said.

"So 10,000 trucks were sold in 18 months and in March we sold 1,000 trucks. There are 5,000 customers for DICV. Please track whether (any commercial vehicle maker) has reached that level," Llistosella, who will take over as Trucks Asia and DICV Head Marketing, Sales, and After-sales from June 1, said.

Llistosella said growth was 67 per cent in the first quarter of 2014. Sales of 49 tonne Atros range of trucks was 265 units last year and total sales of Daimler trucks in 2013 was 6,500 units.

On reports of whether Daimler India truck business was financially "sick", Llistosella said. "There is a potential risk (of becoming financially sick). But there is no risk for the Indian operation".

"You should check Crisil ratings. We have triple AAA (Crisil ratings). In 2013 we made revenues of Euro 10.5 billion. We have treasuries in Germany and Singapore",he said.

He said in the first five years of setting up greenfield manufacturing plant, the company invests and does not achieve break-even. "In 2015-16, we want to achieve break-even from this unit (Chennai plant). It will be world-class at that time", he said.

He explained that the operational expenses of the company has accumulated.

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