Truck-maker Daimler India Commercial Vehicles will start manufacturing buses from its facility near Chennai by the second quarter of 2015.
The company laid the foundation stone for the ₹425-crore (€50 million) factory on Thursday, adjacent to its truck-manufacturing plant at Oragadam, an industrial suburb of Chennai. Daimler India, the subsidiary of Daimler of Germany, is consolidating its entire truck and bus manufacturing operations in India with this plant.
The factory with a capacity of about 1,500 buses a year will make Mercedes-Benz rear-engine luxury buses and Bharat Benz front engine buses for the ‘volume market’ catering to intra-city transport, school and staff buses.
The company has also entered into a supplier arrangement with Wrightbus of Northern Ireland to build the bus body for the Bharat Benz range.
Addressing the foundation stone laying ceremony, Marc Llisotella, Managing Director and CEO, Daimler India, said the company launched Bharat Benz, a new brand of trucks in April 2012 and has over 14 variants in the market.
The company hopes to replicate its success with trucks with the bus brand.
Wolfgang Bernhard, Daimler AG Board Member in charge of trucks and buses, said the 28-acre facility at the truck factory complex will make nine tonnes to 16-tonne and heavier category multi-axle buses. Daimler India will also export the buses and chassis to Africa and South-East Asia, beginning with Indonesia.
The company will use the Bharat Benz dealership network to market the buses in India.
Hartmut Schick, Head, Daimler Buses and CEO, EvoBus GmbH, said Daimler India will supply the Bharat Benz chassis to Wrightbus to build the complete bus.
The international bus body building company has the flexibility and speed for this operation.
Mercedes Benz chassis will be built at the new factory and the engines imported from Brazil. Daimler will build the high-end Mercedes-Benz buses itself.
India and China are key markets for Daimler. With an annual demand of about 40,000 buses, India’s market is half that of China.
But with a population matching China, the growth potential is huge, he said.