CHENNAI: The sharp decline in the value of the rupee has helped boost the profitability of Daimler India Commercial Vehicles (DICV) thanks to increased export earnings.
According to a top company official, the Indian truck subsidiary of the German automobile major, which has been in the Indian market for a year now, is stepping on the gas in terms of localisation to neutralise the currency pinch on imported parts.
Marc Llistosella, MD & CEO, DICV, said: "Thanks to the currency slide, our export earnings have gone up which has helped improve our profitability. However there's a flip side to the currency issue. Right now our trucks have 15% imported parts which is hurting us and we have to increase local content quickly. But thanks to the currency, our cost and quality proposition in the world market is huge both for completely built units as well as for global sourcing of parts," he said.
DICV is part of Daimler Trucks Asia, under which it has charted out an aggressive export strategy. "In export markets, DICV- built trucks are being sold under the Fuso brand with only 26 parts changed," said Llistosella. "The currency helps but only because the product is accepted. Currency windfalls come and go but you can't build a business on that. For India the deceleration in the rupee is also an opportunity. For us our entire business case and export plan was calculated on an exchange rate fixed three years ago. Imagine what it means in today's calculations. But it only works on the back of localisation," he said.
Source:-timesofindia.indiatimes.com
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