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Auto slowdown: Daimler’s CV sales slip 36% in 2019, sees worst market share in 5 years

Market share of Daimler in the over 9 tonne category slipped slightly to 5.8 percent in 2019 from 6 percent clocked in 2018

February 26, 2020 / 03:09 PM IST

Daimler India Commercial Vehicles (DICV), the German manufacturer of BharatBenz range of trucks and buses, saw its volumes plummet 36 percent to 14,474 units in 2019 as the need to exhaust its BS-IV stocks and general slowdown hit demand.

Retail sales at 15,196 units was down 29 percent year-on-year.

Its market share in the over 9 tonne category slipped slightly to 5.8 percent in 2019 from 6 percent clocked in 2018. As per its own submission, this is its worst market share for the company in five years.

While DICV’s market share (9.1 percent) peaked in 2017, it saw its best ever sales (22,532 units) in 2018.

Due to implementation of new axle load norms, which led to creation of excess capacity in the market and tighter lending norms by banks and NBFCs, the commercial vehicle industry suffered its worst breakdown in years.

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With the shift to Bharat Stage-VI emission norms from April 1, companies are being forced to get rid of their BS-IV stock as it will become obsolete soon.

The company attributed the fall in sales to "change in accounting method and not any change in our performance."

So, how does it see 2020 pan out? Satyakam Arya, its MD and CEO, in an earlier interview to Moneycontrol said, "We are expecting a 10 percent contraction in sales in 2020 due to BS-VI implementation. As per our discussions with fleet owners, there is 25 percent excess capacity in the market. There will be some advanced buying in Q1 (January-March) CY20 to avoid the BS-VI hike. Its only in Q3 and Q4 that we expect some recovery and a full recovery in 2021.”

Even as the Chennai-based DICV is gearing up to launch BS-VI compliant trucks and buses in FY21, it was the only company in India to offer BS-V compliant trucks although the government never made it mandatory.

DICV is present only in the medium and heavy duty segment. The company competes head-on with Tata Motors, Mahindra & Mahindra (M&M), Ashok Leyland and VE Commercial Vehicles in different segments.

Globally, Daimler Trucks sold 4.87 lakh units in 2019, down 4 percent YoY. The company’s Asia sales fell 13 percent to 1.38 lakh units. India’s share in the Asia basket slipped to 11 percent during 2019 from 13.4 percent.

Since its entry in India in 2012, BharatBenz has clocked domestic and export sales of over 100,000 and 30,000 units, respectively.

On January 27, DICV unveiled a range of trucks and buses upgraded to BS-VI emission norms. Sale of these commercial vehicles will kickstart after April 1 when the government ensures availability of BS-VI fuel.

The company has also warned of a 10-15 percent price hike due to the changeover.

In related news, the management said DICV will be expanding its touch points to 300 by December-end from 237 at present and prepare for over three dozen new variant launches during the year.
Swaraj Baggonkar
first published: Feb 26, 2020 10:08 am

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