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Manu P. Toms

Mumbai, Jan. 23 German automaker Daimler AG is exploring the option of launching its vehicle financing arm, Daimler Financial Services, in India.

The company has been around for over a decade in the country, since the time it launched its car joint venture with Tata Motors. Today, it has moved on to trucks and buses and is now gearing up for its new 60:40 joint venture for commercial vehicles with the Hero group, Daimler Hero, due to go on stream by end-2010.

The financial services arm makes sense in a scenario when sales of trucks and buses are facing their biggest challenge ever in recent times with the economic slowdown.

“Financing is one aspect which we are actively looking into and we are evaluating the prospects of our own arm,” said Mr Suhas Kadlaskar, Director, Corporate Affairs, Mercedes-Benz India, said.

The company’s progress in the commercial vehicle space so far has been encouraging though numbers are little to write home about. Sales of the Actros heavy truck (used in mining and iron ore belts) have grown 53 per cent to touch 240 units since its launch in 2007. Daimler also produced 16 inter-city luxury buses over the last four months. The Daimler Hero plant near Chennai will kick off with an initial capacity of 70,000 units annually. The products to roll out will include a wide range from light commercial vehicles to 49-tonner trucks. According to top sources, the project is on schedule and has not been impacted by the global downturn.

“We want financing options for our prospective customers in place by the time we launch our products in the market. Daimler Financial Services is obviously one of the options,” he said. Daimler Hero will also have to reckon with similar strategies from potential competitors such as Man-Force, Volvo-Eicher and Ashok Leyland-Nissan.

More Stories on : Outlook | Cars | NBFCs

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