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Apr 12, 2012, 11.52 AM | Source: Forbes India

The German invasion of the Indian trucking sector

Daimler is getting ready for a full frontal attack to corner large segments of the Indian truck market, but incumbent Tata Motors isn't going to be a pushover

The German invasion of the Indian trucking sector
Ashish K Mishra/ Forbes India

Daimler is getting ready for a full frontal attack to corner large segments of the Indian truck market, but incumbent Tata Motors isn't going to be a pushover

It’s a pity editorial policy doesn’t allow un-parliamentary language. If it did, this story would be a more colourful one because Marc Llistosella (pronounced List-o-say-a) is a colourful character prone to slip often into equally colourful language. But that’s the only way he knows to be. That is also why he now has a mandate from Daimler’s headquarters at Stuttgart in Germany to put up a good fight, however bloody it gets, with Tata Motors and Ashok Leyland .

80% of all trucks sold in India are built by them. Anybody who’s tried to take this duopoly on, has until now, lost to their might. And that includes trucking majors from across the world like Volvo, MAN, and Scania. The American Navistar reckoned partnering with a local company would get it a toehold in the market, which is why it chose to partner with Mahindra. But in the two years it’s been in business, it’s managed to sell just about 1,500 vehicles.

And this market is made of fleet owners who have risen from the grassroots to create large businesses. They know how to run their trucks and make money, but they don’t care two hoots about a global or local brand. “Every MNC came in with an advanced technology perspective, but failed to deliver on the price, financing options for the buyer and point of contact, which is sales and service,” says Deepesh Rathore, managing director, IHS Automotive, a global consulting firm.

The problem is compounded, he says, by the fact that every failed attempt by an MNC adds to fear in the minds of fleet operators. You pay big money to buy a fancy truck, take the risk of switching from a Tata or Leyland and find the company has exited the market.

To put things in perspective, last year, 2.70 lakh medium and heavy commercial vehicles were lapped up by Indians. This is expected to double by 2020. It’s the kind of party nobody wants to miss, but nobody has been able to capitalise on. That these kind of explosive numbers would happen in India was obvious to Llistosella way back in 2005 when he was asked to be part of a team that would identify new markets for the company. By then, he’d moved up the ranks at Daimler, a USD 142 billion company, by saving the company USD 132 million by cutting costs and improving efficiencies.

But Llistosella likes a good fight. So the first time he got beaten up as a kid, he swore it would never happen to him again. Aged eight, he started to learn judo. By 12, he’d graduated to Shotokan karate. And at 18, he took up kickboxing, which he practices to date. “I was a street fighter in Barcelona,” he says, where his father hails from. “I know how to fight…but if you feel you’re doing the right thing, and can be proud of it, tears come into your eyes. Not when you go to a press conference and you’re asked questions about a company with big b***, lots of market share and making a lot of money.”

His bosses know that as well - that when it comes to a fight, he will put up a good one. And if things go according to his ridiculously meticulous plans, he can change the landscape of the Indian trucking business. In fact, that’s how he landed the job at Daimler many years ago. Until then, his background was a chequered one. He’d walked out of an investment banking job at CommerzBank because “they were only interested in selling their products, not making their customers rich”; he’d tried to set up a venture capital firm of his own. But that fizzled out in two years. And he finally knocked on Daimler’s doors.

The folks there could see the young man had fire in his belly. That said, they were sceptical as well. So they made him an offer: Start out in the boondocks as a salesman. If he did well, they’d hire him. Until then, he’d have to work for free. “I asked, work for free? Who do you think you are?” Llistosella recalls.

The amused folks at the other end of the table told him he ought to be thankful they were making him an offer in the first place. And that all he knew was banking; for good measure, they rubbed it in - they told him he’d make a hash of the job. And that’s why they weren’t willing to take a chance or pay him a dime. An incensed Llistosella, just 28 then, took the job, “…and in two years I sold like hell. I sold everything to everybody. You know what? They asked me to stop being a salesman and come to headquarters.”

By his own account, he hated being at the headquarters. “That wasn’t where the party was…So in 2006, it was not them who told me to do this thing in India. I said India is the next market and we have to be there.” Headquarters caved in to his relentless demands and Llistosella moved to Chennai. Daimler India Commercial Vehicles, a subsidiary wholly owned by Daimler was founded a few years later, and launched Bharat Benz last year.


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