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Old 16th April 2012, 02:46   #46
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

these are the points i know about truck operators,

1)these trucks are overloaded over the specified limits most of the time, they get to transport more amount of goods at a relatively smaller fraction of Cost (Fuel Efficiency and maintenance) this is the reason why we have started seeing more 10-wheelers than 6-wheel trucks of late and even those trucks are over loaded.

2)the trucks are run on intentionally adulterated fuel read- kerosene added to lower fuel costs, they look at economics of the same, this is where the TML and AL score, although this adulteration leads to quicker engine overhauls, they are way cheaper to get a engine overhaul done and so this translates in to over all savings.

3)coming to tata trucks, their spares are the cheapest in the country(quality, reliability is just about adequate given the price), available off the shelf in most parts of India. This the reason and this is the courage given by Tata to the operators to send off goods even in those trucks that would like, need a re-haul any time real soon, the thing is they do these repairs/jugaads on route in case of a breakdown or a place away from the operator's place.

these points are in addition to the ones already mentioned in this thread.

it would be really interesting to see how BbenZ battles this, given their new entry, technological advanced engines and cost/availability of spares and maintenance.

this would also be interesting to see this because it was TATA's strategy that drove away players like the DCM-Toyota and others with their marketing strategies.



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E.g.: I am led to believe that Volvo tipper trucks - the type used to carry mined ore, return around 16 kmpl under full load.
really 16kmpl??? i was told the trucks TML & AL(6/10tyre) and rtc bussess give a fuel average of 5-6kmpl and the volvos give 2-3kmpl. that high is real news to me.

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Old 17th April 2012, 11:27   #47
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Now a days its all that Glitters, matters to the consumers.
No doubt, no truck operator bother about half n hour or an hour reaching of its cargo, but it does matters to the business men at the receiving or despatching end.
And what even matters more is that their goods are received in proper shape, as they're intended to be.

Even most of the bus operators also thought the same before the introduction of Volvo or Mercs or Isuzu buses, that who'll pay for the high rent of these buses especially since the buses are considered as Middle or Lower middle class way of commute.
But after their Introduction, the scenario is altogether changed & even Upper or Richer class of people can also be seen in those Super Deluxe buses.
Afterall, Their cars are either Maruti Suzuki, Honda, Toyota or Volkswagens, while the buses in which they travel are Mercs or Volvo.
which also elevated the feel of 'Status quo'.

So, the same is also expected to happen in Truck sector too, but it'll be a gradual change.
& the Proof of the latter which i'm seeing Is the increasing number of MAN & AMW trucks on our roads, specially in the areas where they're specialized, like Tippers, Trailers, etc.
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Old 17th April 2012, 18:42   #48
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

From that Forbes article - Daimler already invested Rs.4,400 crores in Bharat Benz. And appears to have their best man to lead. That's quite a commitment, and by far the best prepared outside entrant in trucks.

I guess their Indian team already went over many times on cheaper spares, spurious fuel, overload. Like someone said already here, we heard the virtues of roadside serviceability of Amby in the 80's. Perhaps time has come to breathe changes in truck sector too.

I can only think of Toyota Qualis. It had the same dis-advantages of serviceability, spurious fuel etc when it was launched. Look at the way it refuses to vanish even 7 years after it was phased out in 2005. Look at the way it earned respect among Cab drivers. Is it any less reliable than the Tata Sumo it faced as competition? Now, if only BharatBenz makes trucks like that!
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Old 18th April 2012, 02:12   #49
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Many reasons has been cited in this thread stating why Indian fleet owners will not choose to risk their capital outside the known world of Tata and Leyland.
I interact with some fleet owners frequently on work. Most of these reasons are true.

First objection that a BB salesman will face will be on the claimed fuel efficiency. His target customer will simply and flatly refuse to believe that these trucks can give 10% better average.
Nothing could be a decisive close here as average varies wildly for a gazillion factors and it is very very hard to decisively prove that there is an advantage.

Also, 99% is fleet owners operate on the basis of fixed advance to drivers. Fix advance includes all expenses of the trips from fuel to toll to bribe, everything. The rates of trip advance for GQ or such routes are pretty much non negotiable with the drivers.

So, even if fleet owner believes that the truck will return 10% higher average, his driver would not believe it. Or, in other words - he will not go on to the trips with a lesser advance than before.

Hence, even if the fleet owner is sold, sale will not happen.


However, there is another approach.

The whole transport industry of Maharashtra, and everywhere else, is suffering from acute driver shortage.

The reason for this shortage is -
Cleaner salary ranger between 2000 to 3500 per month. The advent of security guard profession have offered them a job which pays 4500 to 7000 and is significantly easier on their health.

So, cleaners are not graduating into drivers any more. Hence, no new drivers!

And that has endowed the existing drivers with some never seen before levels of leverage against the owners.

In my personal interactions with drivers, I have observed that they generally prefer comfort over discomfort. A lot of them will be far more attentive and positive about their jobs if the job wasn't so hard on health and mind.
They like AC, softer seats, less jerks, lighter steering.


So, if BB can target them with all their might and convince them that there is a better life inside the cabin of a Bharat Benz, we have got ourselves a game.
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Old 18th April 2012, 07:17   #50
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Spotted this Bharat-Benz being trucked.

Location: Davangere by-pass
When: Sunday evening, around 4.30-4.45 pm.

Forbes : The German Invasion of The Indian Trucking Sector-bbenz1.jpg

Truck(s) heading north, away from BLR & towards Hubli. Could not get pic of front because I was driving.
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Old 18th April 2012, 08:58   #51
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Quote:
Originally Posted by sen2009 View Post
In my personal interactions with drivers, I have observed that they generally prefer comfort over discomfort. A lot of them will be far more attentive and positive about their jobs if the job wasn't so hard on health and mind.
They like AC, softer seats, less jerks, lighter steering.
That is true. But i am not sure Fleet operators (owners) are willing to provide these to the drivers yet. I heard TM get lot of enquirers for a Non-ac version of Prima trucks. Owners think the drivers will mis-use the facilities provided.
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Old 18th April 2012, 15:01   #52
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Quote:
Originally Posted by sen2009 View Post

In my personal interactions with drivers, I have observed that they generally prefer comfort over discomfort. A lot of them will be far more attentive and positive about their jobs if the job wasn't so hard on health and mind.
They like AC, softer seats, less jerks, lighter steering.


So, if BB can target them with all their might and convince them that there is a better life inside the cabin of a Bharat Benz, we have got ourselves a game.
This is what happened in the advanced markets and is likely to happen in developing markets. Driver needs will become more relevant and merely cosmetically better looking trucks will not score high and cabin comfort, ergonomics and safety will become buying factors. For all those still swearing by the 'its serviceable at every roadside shop' factor - this is something to consider.
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Old 18th April 2012, 15:52   #53
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Quote:
Originally Posted by sen2009 View Post
The whole transport industry of Maharashtra, and everywhere else, is suffering from acute driver shortage.

The reason for this shortage is -
Cleaner salary ranger between 2000 to 3500 per month. The advent of security guard profession have offered them a job which pays 4500 to 7000 and is significantly easier on their health.

So, cleaners are not graduating into drivers any more. Hence, no new drivers!

.
This is an interesting thought process!
Do you really require a cleaner for normal operation? Can't you operate a truck with just the driver(s)? How is it done in other countires?
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Old 18th April 2012, 15:53   #54
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Quote:
Originally Posted by condor View Post
Spotted this Bharat-Benz being trucked.

Location: Davangere by-pass
When: Sunday evening, around 4.30-4.45 pm.

Truck(s) heading north, away from BLR & towards Hubli. Could not get pic of front because I was driving.
Interesting to see the BB truck use the same sub-standard tail light clusters that Tata has been using on its legacy trucks since the early 1980s. They come with sub-standard bulbs, provide poor illumination, have no reflector inside them and the wiring is not properly concealed. The bulb inside the tail light chamber (the small 10 W bulb, not the 21 W one) almost never works, often even in brand new vehicles.

Even the load body quality doesn't seem great.

I have my doubts if BB trucks will possess the same level of quality as Mercedes Benz. It seems it is not merely the power specs that have been Indianised but the quality has been compromised too. That's why MB is refraining from using the star logo and MB name on these trucks. They don't want to soil the brand's image.

By the way, why is the "BENZ" in BHARAT BENZ written in bold letters on the load body gate? First you choose an unknown brand name (BB), then you try to highlight the portion that's known. Confused thinking I'd say! You might as well name the truck Mercedes Benz then.

Last edited by directinjection : 18th April 2012 at 15:57.
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Old 18th April 2012, 16:05   #55
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Will not change scene as the Volvo buses changed.
Reason: In case of bus it is the customer who matters. He will prefer more comfortable and faster mode of transport.

In case of Trucks, sad to say, fleet owners do not care for the truck drivers. And that turns the whole concept of "AC cabin", "better seats" and "less fatigue" on its head.

If this is the selling point of Benz guys then good luck to them. They will need plenty of that.
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Old 19th April 2012, 02:46   #56
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Quote:
Originally Posted by ajman28 View Post
This is an interesting thought process!
Do you really require a cleaner for normal operation? Can't you operate a truck with just the driver(s)? How is it done in other countires?
It is possible to operate the truck with just the driver. Most of MH trucks are operating that way. But it is the norm and requirement for fitness to have a cleaner on board.
Plus, tyre change of a truck is quite an inhuman task for one pair of hands with no help. Especially so for loaded trailers.

So if one has a tubeless, and the truck can drive 30-40 KM to the next repair shop with the punctured tyre, 80% need of a cleaner will be obliterated. Most drivers can alone handle all other everyday situations comfortably.

Quote:
Originally Posted by Zed View Post
This is what happened in the advanced markets and is likely to happen in developing markets. Driver needs will become more relevant and merely cosmetically better looking trucks will not score high and cabin comfort, ergonomics and safety will become buying factors. For all those still swearing by the 'its serviceable at every roadside shop' factor - this is something to consider.

Quote:
Originally Posted by download2live View Post
Will not change scene as the Volvo buses changed.
Reason: In case of bus it is the customer who matters. He will prefer more comfortable and faster mode of transport.

In case of Trucks, sad to say, fleet owners do not care for the truck drivers. And that turns the whole concept of "AC cabin", "better seats" and "less fatigue" on its head.

If this is the selling point of Benz guys then good luck to them. They will need plenty of that.

Fleet owners are normally not that bad a people. Many of them will extend all niceties to their driver if it is not going to bankrupt them.


Most of the transport owner guys are quite normal type human beings. Mostly they are not monstrous by nature.
(Except for in the matter of clearing due payments. )

However, they operate in a cut throat market with big risk and small margin. Hence, they don't have the luxury of kindness.

If a 10% higher priced product, and 5-10% higher operating cost vehicle comes around from a reputable brand, many will buy it for getting stable and better quality drivers. Also, they appreciate brand glamour quite a lot.
Drivers also are mostly pretty decent people. They will treat a vehicle nice if he feel better in it and in turn will reduce on the OCD related to intractability.

Off Topic -
The sheer amount of cash they spend out of their modest income for decorating their trucks, especially if its new...
They do appreciate a better machine.

If properly targeted, they will respond.

Last edited by sen2009 : 19th April 2012 at 02:52.
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Old 12th May 2012, 01:07   #57
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

So what is expected to change in Indian National Highways in near future?What is Daimler expected to do?

- Come as a cyclone to hit Indian truck market.
- Backing on newly developed platform, power trains suiting to Indian conditions.
- Heavily criticizing the existing products and insisting that their products are highly fuel efficient and have high level of reliability.
- More confident due to very high level of localization.
- Strong and influencing brand to pull buyers.
- Extremely new set of network and channel partners who are equally aggressive.
- 24x7 service support along major highways.
- Good back up by Media and have very deep pockets to manage the high level of investments.

With all the above Bharat Benz wants a pie of 20% market share by 2020.So what is happening here?

The above mentioned points though are strong points of Bharat Benz, it's to be noted that, all these points were equally strong to Mahindra Navistar when they were launched some 2 years ago.

Remember they squarely targeted Tata and AL and highly criticized the existing products in all their media/TVC. Claimed they will offer fully built solutions as against the cowl/chassis option by TM/AL.They were equally confident of the product and from the day one they had a good number of dealer outlets. Those outlets were great to look with a uniform shade and pattern, displaying prominently their trucks. In fact their outlets were strategically located close/opposite to existing TM/AL outlets to have a easy view. All the home works were perfect with high media reception the products were rolled out.

So coming to 2012, they have just managed to sell less than 4000 trucks. Few dealers have already shifted over to competition. So what is the problem? Let's stop here and go to what Tata and AL are doing.

Before going deep, unlike car industry which saw foreign investments as early as late 90's, CV was little late. Also Tata and AL were the only two companies which dominated for several decades(Infact India is almost the only big market which had space only for two players unlike other countries which had 3/4 players), which means they have taken good time to mature in terms of product offering / product value. And when the International eyes fell on Indian shores, this part of industry was not as in the case of Hindustan Motors, Premier Automobiles Vs Daewoo(for time being kindly ignore the bankruptcy of Daewoo but only on initial products like Cielo, Matiz) Hyundai, Ford. They have gained immense potential over time, by expanding their technology reach by means of high level of internal learnings / overseas acquisition and along with technology partners. They are constantly changing and have shifted the market slowly and steadily towards the better part as and when they matured - this is to be read as offering higher power engines / fully built options / medium to high end products / higher load carried per KMPL (eg-higher GVW trucks like new 37T).
Another important aspect of AL/TM is, the entire industry was built from foundation by these two companies and due to this they have a very high level of customer loyalty. Both these brands are almost similar in product offering / reliability / pricing (of course without losing their individual identity) and hence they were not cannibalizing each other and grown independently and together now have a mammoth ~85% market share in this industry.

Also as highly criticized here, their trucks do not break down near hubli while going to Mumbai from Chennai. And just because they are slower it doesn't mean that they are not reliable. As a matter of fact they are reliable than most of Maruti's and Hyundai's. Their products are made by soiled hands with down to earth understanding of Indian truckers by all means. But yes, they are far from superior but not to the scale of poor/bad/worst.

Does this means that they will continue in the same way in near future?
Need not be. But the shift will happen slowly but in favor of whom?
Its to be understood,Similar to Bharat Benz, Mahindra, Man, Volvo Eicher, AMW will also be trying their level best to pull customers. The problem here is the rest of competition are equally aggressive and wanted to grab, even a small disruption in the sales. So BB will have to push really hard not only the biggies but also the smaller but certain competition.

Also going by the specification and product positioning, Bharat Benz has no much differentiation to their Indian peers (no faster reaching goods here,,plz). Power to weight ratio, engine capacity - infact at 6.4 litres, their OM906LA engines are nothing much bigger than 6BT's and H series. Infact these engines will be replaced by the respective companies to higher spec'd, better performing engines when the newer emission norms are nearing.

Also the important USP which is claimed by BB is, they will be 10% fuel efficient compared to TM/AL. This number seems to be an achievable target for passenger cars (infact we already have products with this level of difference in FE).
But here in trucks you are expected to give a FE of ~4.5 for a 31T truck with all the great skills of driving, terrains and of course with 50% over loading (here the band width varies from ~3.9 to ~5.2). And the products from these two companies are delivering their best, infact almost at the peak side. BB is heavily relying on its high level of electronics in the engine management system to be fuel efficient, which is yet to be realized. When this flips, Bharat Benz is likely to join Mahindra Navistar - Good looking giants not for sale only for show room.

Over and above if BB comes with extremely high FE and great value for their trucks, there will a faster shift towards them. But this is likely to bounce back towards TM/AL if they replies with the same answer - equivalent FE / higher reliable products. Reason, there will always be a faster reception / acceptance, when the traditional brand offers something which it missed earlier and gives after sometime later. Recall the vacant space Nokia left to competition in dual sim technology. But when the same was launched, it gained close to 20% market share outselling first movers like micromax, even though it came after some 2 years after competition.

Also for the next few years, the market (M&Hcv) is likely to have a single digit growth unlike the LCV's. So its not like you have space for everybody.Most of the companies mentioned here (but for the two biggies) are not making profits and are relying on their investment partners only. AMW have already gone to find Investment partner.So you should have to make reasonably good numbers to stay profitably and expand reasonably.

Finally going by all these theories(and IM Very HO), the days ahead will definitely be a not so easy, but a cold blooded battle to stay alive for all the companies - gaining momentum for newbies and continue momentum for Veterans.
(Thanks for reading a big post with out much of pics)
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Old 12th May 2012, 05:02   #58
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Thats an interesting take ashley. I do agree that the big two will certainly find ways and means to defend their turf. But you seem to underestimate..

1. Daimler's global footprint and understanding of emerging markets (MAN and Navistar are not in the same league) & their incredible breadth of products \ technologies.
2. Not to mention the the power of the brand itself. Many in this forum believe that the whole 'Brand' thinggy is a marketing phenomenon unleashed by DICV. Fact is even before the advent of DICV 'Benz' and 'Mercedes' (perhaps not Daimler) were well recognized names in the trucking sector - starting from premium fleet operators to OE \ spares dealers, customers served by the trucking industry, right down to the old time truck drivers & cleaners. Will brand awareness and related perceptions (German engineering \ technology \ heritage \ past links with Indian truck industry ) help DICV sell is a different question. But the fact of the matter is that Mercedes benz as a brand means a lot more than an MAN or Navistar ever will in the foreseeable future in India.
3. Customer Loyalty that is built over decades is not infallible. Any corporation that has customer loyalty as the foundation of its sales strategy without being backed up by benchmark products will find it increasingly hard to thrive in the competitive landscape set to unfold in the coming years. Same goes for market acceptance, market preferences and other phenomenon linked to demand - things that have remained constant for decades can changes swiftly and drastically. The very example that you quote - Nokia, is probably worthy of a case study on how quickly a market leader can loose the plot in the face of competition.

While I admire the philosophical view you take with regards to 'products made by soiled hands with down to earth understanding of Indian truckers' .. the customer will ultimately make his choice based on
- VFM 'what am i getting for what Im paying ?' - Technology benchmarks relevant to the market form an integral part of this equation.
- Pride of ownership (this is where the brand comes into play) is an influencing factor. Many of AL and TML customers have a deep rooted connection not just to the physical product but to the inanimate value and tradition that these two brands represent to the Indian CV market - so lets not underestimate the power of a brand.
- Base expectation (reliability, availability of spares and service, low operating costs & maintenance, good warranty terms)
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Old 12th May 2012, 10:09   #59
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

Zed, I have never underestimated Damiler at any time.
Also agree with you that Mercedes benz as a brand means a lot more than an MAN or Navistar.
But just look back how Mercedes Benz is performing aganist the Volvo in bus segment. They are not able to crack the market just with their brand. Infact this is a segment almost comparable to cars where the brand pull is high, as the passengers may have preference to travel with star.
But it did not happened and why?
Hope you understand all my points mentioned above are just for fruitful debate and discussion and I am not criticizing Daimler / BB by any means.

Last edited by Ashley2 : 12th May 2012 at 10:11.
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Old 12th May 2012, 10:12   #60
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Default Re: Forbes : The German Invasion of The Indian Trucking Sector

The last two posts show the power of this community. Two contrasting takes, brilliantly presented. Both have used the same brand "Nokia" to powerfully present their views, just shows how in a short span of time business dynamics change.

Bharat Benz has been making the right noise till now in their attempts to crack "The Last Frontier". This is going to be tougher than the challenge Volvo faced in cracking the Inter City Bus Market.

Both ALL & TM are better off from their experiences of fighting for market pie after Volvo's entry. This would help them in making it more difficult for Bharat Benz to crack the Truck market.

I also feel if ALL & TM are not proactive in their thinking the market would leave them standing far behind.
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