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Self Analysis using Market Segmentation approach developed by me. Only for academic purpose only and not for commercial use. Source of information related to Daimler: Bharatbenz' official communication available on internet, Internet, Self Analysis.
Citation preview
A Brief Report on:
Daimler India Commercial Vehicles “Bharat Benz”
For Academic Purpose Only. Not for any commercial use
Source: Internet
Agenda
Agenda: • Daimler Platforms for India • Definitions – for understanding customer segments • Customer Segments Targeted by Daimler – Light Duty Trucks (ICV) • Customer Segments Targeted by Daimler – Heavy Duty Trucks (HDT) • Customer Segments Targeted by Daimler – Tippers • Daimler Key strategies for Indian Market • SWOT Analysis of Daimler India Commercial Vehicles. • Daimler India Pricing Strategy • Daimler India – Fuso Update
For Academic Purpose Only. Not for any commercial use
Source: Internet
Premium Segment MB India
Heavy Duty Trucks (HDT)
Medium Duty Trucks (MDT)
Light Duty Trucks (LDT)
Actros 8x4 Tipper
GVW 6 – 16 t
Bharat Benz
Fuso
-bas
ed
GVW >25T
MB
Tru
ck –
bas
ed
Localized
Daimler Platforms for India
Localized
CKD
For Academic Purpose Only. Not for any commercial use
Source: Internet
Definitions
KBF – Key Buying Factors
Extent of
loading
Rated
Load (=
GVW)
Moderate
Overload
(upto 30%
of GVW)
High
Overload
(upto 60%
of GVW)
Extreme
Overload
(> 60% of
GVW)
Haulage
Distance
(One way)
Very Short
(upto 100
km)
Short
(100-250
km)
Medium
(250 - 700
km)
Long (>
700 km)
Driving
Speed
Low Speed
(upto 40
kmph)
Medium
Speed (40-
60 kmph)
High
Speed (>60
kmph)
Fleet Size OD (1
vehicle)
OND (2-4
vehicles)
SFO (5-
10
vehicles)
MFO (11-25
vehicles)
and LFO (>
25 vehicles)
Business
Sourcing
Market
Load
Contract Captive
Captive = Owns vehicle and transportation is means for doing primary business Market Load = Stands in the market / stand / yard / Transport Nagar to get business (directly from single customer), transportation is primary business Contract = Transportation provided through long term service agreement, transportation primary business
Usage Characteristics User Characteristics
Definitions for understanding Customer Segments Targeted by Daimler India Commercial Vehicles
For Academic Purpose Only. Not for any commercial use
Source: Internet
Customer Segments Targeted by DICV – Light Duty Trucks (ICV)
(40%)
Industry Size:
65000 (CY
2011)
Segment Characteristics Future Outlook Segment
60%
Rated Load
Over Load
40%
Economy \Strider\ Price
Minimiser
Performance Seeker \ Zipper
Progressive
Economy \Strider\ Price
Minimiser
Work Horse \ Striver \ Load
Maximiser
Performance Seeker \ Zipper
(15%)
(5%)
(10%)
(2%)
(28%)
2016 2020 2025
(40%)
(8%)
(17%)
(4%)
(7%)
(26%)
62%
38%
(37%)
(5%)
(22%)
(5%)
(11%)
(20%)
70%
30%
(32%)
(3%)
(28%)
(6%)
(20%)
(11%)
80%
20%
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO,MFO
Market Load
More Fuel Economy Medium, Long Haul Contract
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO,MFO
Market Load
More Fuel Economy Medium, Long Haul Contract
KBF's Usage Customer
Type Source of Business
Turn around Time High Speed
MFO, LFO
Contract, Captive
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's Usage Customer
Type Source of Business
Turn around Time High Speed
MFO, LFO
Contract, Captive
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's Usage Customer
Type Source of Business
Overload Capacity Medium Speed OD,OND, SFO,MFO
Market Load
Sturdiness Medium Haul
Reliability
Strong Engine (HP)
KBF's Usage Customer
Type Source of Business
Safety & Comfort Medium Speed MFO,LFO
Contract Captive Style Medium, Long Haul
Overload Rated Load
Upto 10% of Overload on GVW is not considered in Moderate Overload
Customer Segments Targeted by Daimler - LDT
Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better. For Academic Purpose Only. Not for any commercial use
Source: Internet
Customer Segments Targeted by DICV – Heavy Duty Trucks (HDT)
(55%)
Overload Rated Load
Rigid
80%
Rated Load
Over Load
20%
Economy \Strider\ Price
Minimiser
Performance Seeker \ Zipper
Progressive
Economy \Strider\ Price
Minimiser
Work Horse \ Striver \ Load
Maximiser
Performance Seeker \ Zipper
(20%)
(5%)
(8%)
(2%)
(10%)
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO,MFO, LFO
Market Load
More Fuel Economy Medium, Long Haul Contract
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO
Market Load More Fuel Economy Medium, Long Haul
KBF's Usage Customer
Type Source of Business
Turn around Time High Speed MFO, LFO
Contract, Captive
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's Usage Customer
Type Source of Business
Turn around Time High Speed MFO, LFO
Contract, Captive
Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's Usage Customer
Type Source of Business
Overload Capacity Medium Speed OD,OND, SFO,MFO, LFO
Market Load, Contract
Sturdiness Medium, Short, Long haul
Reliability
Strong Engine (HP)
KBF's Usage Customer
Type Source of Business
Safety & Comfort Medium & High Speed
MFO,LFO
Contract
Style Medium, Long Haul
Segment Characteristics Future Outlook Segment
Customer Segments Targeted by Daimler - HDT
2016 2020 2025
Dat
a n
eed
s to
be
add
ed
Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better. For Academic Purpose Only. Not for any commercial use
Source: Internet
Customer Segments Targeted by DICV – Tippers
(3%)
Overload Rated Load
Tipper
Segment Characteristics Segment
5%
Rated Load
Over Load
95%
Economy \Strider\ Price
Minimiser
Performance Seeker \ Zipper
Progressive
Work Horse \ Striver \ Load
Maximiser
(1%)
(1%)
(55%)
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO,MFO, LFO
Market Load
More Fuel Economy Medium, Long Haul Contract
KBF's Usage Customer
Type Source of Business
Low Acquisition Price Medium Speed OD,OND, SFO
Market Load More Fuel Economy Medium, Long Haul
KBF's Usage Customer
Type Source of Business
Turn around Time High Speed MFO, LFO
Contract Pick Up & Acceleration Medium, Long Haul
Ease of Driving
KBF's Usage Customer
Type Source of Business
Overload Capacity Medium Speed OD,OND, SFO,MFO, LFO
Market Load, Contract
Sturdiness Medium, Long haul
Reliability
Strong Engine (HP)
KBF's Usage Customer
Type Source of Business
Safety & Comfort Medium, High Speed
MFO,LFO
Contract
Style Medium, Long Haul
Economy \Strider\ Price
Minimiser (40%)
Future Outlook
Customer Segments Targeted by Daimler - Tippers
Source: Self Analysis. Pl refer for my Market Segmentation file to understand it better.
2016 2020 2025
Dat
a n
eed
s to
be
add
ed
For Academic Purpose Only. Not for any commercial use
Source: Internet
Daimler Key Strategies for Indian Market
3 key strategies of Bharat Benz to establish itself in the Indian CV space:
• Aggressive target pricing so as to compete effectively with entrenched competitors like Tata Motors and Ashok Leyland
• Focus on Customer Service from the beginning to differentiate with the existing CV majors and establish its brand
• Placing products in the ‘new middle market’ which are just about 5-10% costlier but with high-end features and higher HP engines (for faster turnaround time) – unlike Tata Prima, Volvo FH etc. which comes in at a very high premium pricing (almost 2-3 times of the basic / conventional CV range)
Emergence of a ‘new middle market’ – where Bharat Benz plans to establish itself
Source: Internet Price Ranges have changed, only for reference to show the relative price positioning
Rs 1.5 to 1.8 MINR
Rs 1.8 to 2.2 MINR
Rs 3.0 to 4.5 MINR
For Academic Purpose Only. Not for any commercial use
Source: Internet
SWOT Analysis of Daimler India Commercial Vehicles
SWOT Analysis for Daimler India Commercial Vehicles
Strengths: • ‘Benz’ brand recall among many sections of the
Indian market – make Bharat Benz easy to establish itself
• Aggressive pricing may allow it to compete meaningfully with entrenched players • Backed by global technology • Changing paradigm – with customers willing to
experiment may support its entry in the Indian market
• Leverage the export potential along with domestic volumes.
Opportunities: • Upgrading the Indian CV operators by creating the
new-middle market through provision of global technology at a marginally premium priced products
• Participation in one of the world’s largest CV market • Daimler can get a strong foothold in the rapidly
growing Indian CV market • Export to various countries.
Weaknesses: • Lack of Indian market experience and knowledge • Unproven products given that they are tweaked for
the Indian market • Lack of strong and established sales and service
network • India operations have been built from scratch, with
no readily available global blueprint for help
Threats: • Execution risk – Current Capacity: 70000,
Investment: 700 Million Euros. Daimler must ensure that all the elements of its strategy must get well executed. Else, its bold attempt can prove to be a big setback which may floor Daimler for a long period of time
• Timely aggression from the Indian CV players.
SWOT Analysis
(Daimler India Commercial
Vehicles)
Source:Internet
For Academic Purpose Only. Not for any commercial use
Source: Internet
Daimler India – Pricing Strategy
Pricing Strategy – Global trucks at local prices
Daimler plans to price its ‘BharatBenz’ trucks just about 5-10% expensive than the existing truck models in the market of that of Tata and Ashok Leyland. Some of the pointers to this aggressive pricing strategy may be as following
• Higher localization (85%) from the beginning – at local prices o Local manufacturing of engines – contract & in-house o In-house manufacturing of frames, axles, sheet metal parts etc. o Local procurement of most of the components – with a large vendor base (~50%) located within a 50 km
distance of the mother plant in Chennai. o Will also act a shield against currency fluctuations
• Huge tax benefits – Full-fledged manufacturing in India helps in reducing taxes o Customs duty for imported FBU o Customs duty for imports of SKD kits o Excise tax for locally manufactured trucks (including engines and other aggregates)
• No-frill / Stripped down versions of their existing models – Mercedes-Benz Axor and Fuso Canter products. Basically, Daimler would provide a no-frill products without features such as AC, power windows etc.
• Additional revenue stream – test track as a ‘Profit Centre’, i.e. it will lend out the test track to others even to its component vendors and non-core competitors which will help in augmenting its revenues, although it may not be a major revenue earner
Source: Internet
For Academic Purpose Only. Not for any commercial use
Source: Internet
Daimler India – Fuso Update
Fuso Update:
Daimler Trucks Asia exports first FUSO Trucks “Made in India”
• The Daimler commercial vehicles subsidiaries Mitsubishi Fuso Truck and Bus Corporation (MFTBC) and Daimler India Commercial Vehicles (DICV) are working side by side on achieving the joint unit sales target of 290,000 commercial vehicles until the year 2020.
• Under the umbrella of Daimler Trucks Asia, MFTBC is now going a step further together with DICV: With a view to boosting the presence in the growth markets and tapping into further sales potential, the two companies are going forward with an integrated product portfolio for greater variant diversity and an optimized production network with the truck plants in Kawasaki, Japan, and Chennai, India, as the main production hubs.
• In addition to producing BharatBenz trucks for India, since May 2013, DICV is also making FUSO trucks for selected export markets in Asia and Africa.
• By the end of the year, Bangladesh, Zambia, Tanzania, Uganda and Brunei will also be supplied with state-of-the-art trucks under the FUSO brand from India.
• The successive roll-out in the growth markets of Indonesia, Thailand, Malaysia, Malawi, Zimbabwe, Mozambique, Mauritius and the Seychelles is planned for the year 2014.
• The new, medium-duty and heavy-duty FUSO models are based on the same technical Daimler Trucks product platform as the BharatBenz trucks. This enables the production of both truck brands under one roof.
Source: Daimler Investor Relations Release June 2013
For Academic Purpose Only. Not for any commercial use
Source: Internet
Thank you …