BharatBenz heavy duty trucks on the assembly line at the Daimler India Commercial Vehicles plant in Oragadam near Chennai.
German truck and bus maker Daimler India Commercial Vehicles (DICV) is planning to ramp up production capacity in two stages as the Oragadam plant is operating in full swing, said MD & CEO Satyakam Arya.
“Currently, both production lines are operating at 100% capacity in two shifts,” he said during an interaction. “We are producing 36,000 vehicles per annum against the annual installed capacity of 72,000 units,” he added.
Over the next few months, production capacity will be increased by 39% to 50,000 units by debottlenecking the production line and ramping up supply chain. “This will not lead to any major capex,” Mr. Arya said.
“The enhanced capacity will be sufficient for us until 2025. Thereafter, we will take a call depending on the market growth rate,” he said.
However, Mr. Arya was cautious in his forecast as he expects the market demand for trucks and buses in 2024 either to be flat or decrease slightly as it is an election year.
During CY2022, DICV posted 37% growth in revenue and 25% in sales volumes.
“The first five months of CY2023 have been good due to greater activity in freight movement, huge investment in infrastructure development, the economy doing well and exports volume having picked up well,” the CEO said. “We are growing on the same lines and would be above the market curve,” he added.
Quoting reports, he said the medium and heavy commercial vehicles (M&HCV) segment saw a peak in 2018 by selling 3.8 lakh units. In 2020, this came down to 1 lakh units and recovered to 2.4 lakh units in 2021 and 2.8 lakh units in 2022, respectively.
“This year, we expect the market to hit 3.3 lakh units. Going forward, it will grow by single digit and in seven years’ time it is poised to grow at a CAGR of 6-7% and in line with GDP growth, it will hit the half-a-million mark,” he said.
To a question on alternative fuel powered vehicles, he said DICV was working on both electric and hydrogen. While EV is best suited for intercity operations (LCVs and buses), hydrogen is suited for long haul (trucks).
He also said with a view to providing fuel efficiency and best-in-class product to customers, DICV had upgraded the horsepower of heavy duty trucks in the entire BharatBenz range from 280 to 320 and 230 to 260.
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