“OEMs and freight transporters need stronger financial support”, Satyakam Arya, Daimler India CV’s

The BharatBenz brand, even as it becomes more visible on the roads in India, is also looked upto for the pedigree and technology access it has. To that extent, the company behind it, Daimler India Commercial Vehicles Pvt Limited (DICV),. faces a tough ask to lead the changes needed to clean up the commercial transportation sector in India. We spoke to Satyakam Arya, Managing Director and CEO, on the firm’s progress so far and future plans.

Q. How does DICV target to be carbon neutral by 2025 compared with the parent firm’s global pledges?

Satyakam Arya: DICV is determined to fostering a sustainable future, envisioning a world free of harmful emissions. Since the beginning of our manufacturing plant in Chennai, we have systematically implemented sustainability initiatives at every level. Our efforts so far have already helped us reach 75% CO₂ neutrality in our plant. We plan to push this to 100% by 2025 by more than doubling the amount of captive solar power generated along with buying wind-based power and bagasse-based green cogeneration. We are working towards making our entire value chain CO2 neutral by 2047, increase the green cover density of our plant by at least 10% by 2025, reduce energy consumption of our production shop by at least 8% by 2025, reduce water consumption by 30% and aiming for 100% water self-reliance at the plant by 2025.

Q. Can you highlight the biggest initiatives taken to meet these goals, especially on the issue of energy use and efficiency?

Satyakam Arya: At the recent Conference of Parties (COP26) in Glasgow, India pledged to increase its installed renewable energy capacity to 500 GW and reduce carbon emissions by 1 billion tonnes by 2030, as well as achieve ‘net-zero emissions’ by 2070. DICV is consciously moving forward along a roadmap that helps tackle this climate change while spurring economic growth. With the vision of “Reduce, Recycle and Reuse”, DICV’s sustainable efforts have been successful in achieving three key green production targets in just four years. Our recycling ratio has improved to 99% with the use of 80% renewable energy in our manufacturing facility.

We have also embraced the concept of re-using hazardous waste by using it as an alternative fuel in external cement factories, which reduced 450 tons of CO2. We have successfully managed to increase the renewable energy share (Wind, Solar & Cogen) by 90% of green power.

Even our production shop at DICV is committed to the “Green Production Target” to reduce 1% of the absolute energy consumption each year. With the target to escalate energy efficiency to 100%, our team at Manufacturing Engineering Daimler Trucks conducted an energy consumption study within powertrain production plants to identify all installed equipment with high-energy consumption.

To reduce our carbon footprint, we’ve increased the utilization of renewable energy. Along with increasing the amount of captive solar power generated, we plan to use wind-based power and bagasse-based green cogeneration. Additionally, we have a storage pond that holds more than 60,000 kiloliters. The plant itself is home to more than 17,000 trees and adheres to strict reuse/reduce/replace policies.

Q. What is the share of the value chain in your overall carbon footprint currently?

Satyakam Arya: Since the start our business operations in 2012, we have been integrating the usage of renewable energy resources across the value chain. We started with 1000 panels to generate 0.3 MW in 2012 and gradually increased the solar power capacity to 0.8 MW in 2015. A significant expansion was made in 2016 when we added an additional 2.5 MW of renewable power.

Currently, we are in the process of installing close to 5000 panels and adding 1.3 MW to the existing capacity in 2022. With this, we aim to generate 4.6 MW from our solar photovoltaic plant, while reducing around 4500 tons of carbon footprints every year. 

Q. Key DICV global, India numbers/exports. 

Satyakam Arya: Ever since the inception of BharatBenz brand in 2012, DICV has put over 120,000 commercial vehicles on domestic roads. We have exported over 45,000 vehicles, 9000 CKD kits and 200 million parts to over 60 countries. DICV takes pride in making India a global hub for developing and manufacturing world-class commercial vehicles for the world. 

Q. For your actual BharatBenz vehicles, do you foresee any major changes by 2025? And the outlook by 2030 for the CV market in terms of changes we should expect?

Satyakam Arya: The Indian CV industry is expected to witness strong growth driven by infrastructure push, e-commerce growth and rural demand in the coming years. An increase in demand for the e-commerce segment will lead to growth in small, light, and intermediate CVs. In the medium and heavy commercial vehicle category, tippers will continue to be in demand due to infrastructure projects. The CV industry will bounce back with healthy growth in FY22/23, driven by additional demand in vaccine distribution, fuel container, and cold chain segments. Overall, the next five years will be an exciting period, and we feel very confident to make the best out of it and to continue to lead the market in terms of technology and transformation, while at the same time going for healthy and profitable growth.

Being part of the global powerhouse of Daimler Truck, DICV has full access to a vast array of state-of-the-art technologies. We have a strong R&D team locally that tailors existing innovations to fit the Indian need of ‘more for less’ while maintaining quality standards. We have had a head start in Digitalization and integration of smart connected features. We have a clear plan for a digitally transformed business in the next 3-4 years and are working towards the most digitally advanced technologies to be infused in our BharatBenz products by 2025.  

Q. What policy measures and other initiatives could help lower the overall footprint of the CV segment?

Satyakam Arya: We believe that the introduction of the vehicle scrappage policy will benefit the sector by helping create replacement demand in the market and providing much-needed support for greener, safer, and more efficient vehicles to make a positive impact in society. Aside from having a positive impact on demand and helping the environment, the scrappage policy proposes another benefit; “Safety”. Older vehicles with poor maintenance and lesser safety and comfort features are a hindrance to road safety.

However, it is important to note that for the scrappage policy to be seamlessly implemented, we should have a comprehensive plan in terms of removing ELV (End of life vehicles) from the road. OEMs and freight transporters need stronger financial support. Until old fleet vehicles are off the road, the benefits of implementation of BSVI vehicles will not be fully leveraged.

The Indian government is working on several other initiatives to revive the economy following the pandemic, including the acceleration of several infrastructure projects, which is expected to aid in the recovery of the commercial vehicle industry. Overall, the scrappage policy and infrastructure spending are expected to trigger demand for the MHCV segment.