Tamil Nadu Finds Industry Favour And DICV Turns 10

In an upfront interaction, Satyakam Arya, Chairman of CII, Tamil Nadu State Council and MD & CEO at Daimler India Commercial Vehicles speaks to Ashish Bhatia on Tamil Nadu finding industry favour and contributing to India's economic growth rate. He also hails a successful decade of operations in India.

- Ashish Bhatia

Where do you see the demand revival coming from?

The market slowed down because of the slowing GDP growth, and that's now coming back on its feet. This is leading to new demand and the movement of freight, and therefore demand for trucks. The second important aspect is, that in 2019 itself, the market had started to slow down. First due to the transition to BSVI, and then due to Covid-19. So it's been three years which is a very long period of fleets not being replaced. Now, when GDP is relatively growing healthier, there is an increased demand for the movement of goods. All the fleet owners are coming back and buying new trucks. This is one major dimension which is rolling out in front of us.

The second dimension, which we will see, going forward, and will impact the CV industry is the scrappage policy. The policy has been rolled out but as the infrastructure grows, this includes the scrappage centres and the testing centres, it will have a good impetus on the demand by way of fleet replacement. The third important dimension is regulations. After transition to Bharat Stage VI, we are gearing up for the OBD II, safety regulations are lined up and these will also influence the industry going forward.

The other standalone dimension is the infrastructure as a whole in itself. We have seen the government investing aggressively in infrastructure. Whether it's the express highways or the multimodal logistics parks. These will have an impact in the medium- to long-term. People will prefer trucks which can do higher speeds which translates to higher horsepower for a better Turn Around Time (TAT), and lower Total Cost of Operations (TCO). It will mean that the entire product portfolio will shift in this direction. With multimodal logistics parks coming up across the country, we will see a sharper differentiation between light-duty, medium-duty and heavy-duty trucks which at present is not at par with global benchmarks.