Daimler India Commercial Vehicles (DICV) is bullish about the market’s transition to BS-VI and its prospects in the new emission era. Mr. Rajaram Krishnamurthy, Vice President (Marketing and Sales), DICV, opens up on the subject.
Excerpts:
DICV’s readiness for BS-VI
For us the transition to BS-VI has been quite smooth and we will lead this transition just as we did in BS-IV. In terms of readiness, we recently received the first BS-VI vehicle readiness homologation certificate for our 5528TT model. We are also utilizing our know how and experience from our global platforms for BS-VI which gives us an added advantage and takes us ahead of the curve. We will further challenge our own leadership position in fuel efficiency with our BS-VI trucks towards new benchmark.
Our in-house R&D center gives us the advantage in customizing platforms for local duty cycle and usage patterns. We have been able to maintain a high localization rate of 80%. Since our inception, BharatBenz has been manufacturing electronically-controlled engines and customers can fully rely on our experience of this SCR technology which we offered in BS-IV in the last 3 years and with a global experience of eight years in BS-VI.
We have been closely working with our suppliers to be able to maintain the timelines, ensuring cost competitiveness for BharatBenz and allow for extensive testing to deliver the best total-cost-of-ownership for our customers. We are already testing our products in India and various other geographies.
We are aggressively expanding our touchpoints and will touch points to 250 outlets by this year end and target to 350 in the next two to three years. Our service technicians will be fully trained to cater to the technical changes pertaining to the BS-VI requirement.
Cost implications
While a lot has been spoken about the cost increase in post BS-VI, it is important to understand as to why BS-VI is required for our country. 10 BS-VI trucks produce the emission that one BS-III truck produces. In NOX terms, 12 BS-VI trucks produce the emission that one BS-III truck makes. The one’s who understand this and the value of our trucks and will continue to buy them. If today the environment awareness is high, it is tomorrow’s generation that will benefit from a cleaner, greener environment.
BS-VI will certainly add a significant portion to the material cost of the truck. That is a fact, our target continues to be on offering our products at a competitive price. With our BS-VI truck will set new benchmark with total-cost-of-ownership. We will share more details closer to the market launch.
In addition, fleet operators can use technology to lower costs and improve efficiencies. Fleet management solution will change the way customers interact with their truck and provide more insight on the performance of the vehicles. This will help in better fuel management, route planning, load matching and dispatching and hence receive better ROI. This will help fleet operators in optimizing their resources and will enable them to deliver best performance.
Challenges
Introduction of an adequate scrappage policy plays a vital role, in order to remove the most polluting trucks from Indian roads with the BS-VI transition. Good incentives to be offered for replacement of old trucks with new modern trucks. No other single measure will give the same, much-needed benefit to people and the environment as quickly as an intelligent scrappage scheme. The government should step in and catalyze this for better air quality.
Another issue would be the availability of BS-VI-compliant fuel pan-India at the same time. The oil refineries need to upgrade their facilities to enable production of cleaner fuel. Again, this would lead to an increase in the existing fuel prices. Another factor would be the easy availability of AdBlue.
Fright rates could increase as result of trucks getting costlier with BS-VI. Customers will need to understand the positive impact of BS-VI on the environment.
Opportunities
The long-term fundamentals of the economy are strong especially in M&HCVs BS-VI trucks. Going forward, trucks will have more electronic components and this will open the door for futuristic technologies. This in turn will increase the vendor base for newer components. The transition to BS-VI will also lead to an increase in our exports market opportunities. We can target to increase our presence or enter newer markets where such norms already exist or are going to be introduced in near future.
Outlook
I am not bullish on pre-buy and the effect remains indefinable; it’s like a ketchup bottle, we don’t know how much will come and when will it come, if at all. Fleet operators have excess capacity and cargo demand is down by 20% to 25%. Overall, we expect the medium and heavy truck market to perform lower than that of last year with a drop of 13-15% in the total industry volume.