Daimler Truck CEO warns of global isolation

Martin Daum, CEO, Daimler Truck

Martin Daum does not hide the fact that the world is under immense pressure at the moment, with each country focusing on itself to improve the lives of its people.

“It’s not good with war, taxation and mistrust that upset the balance and don’t help people,” board chairman Daimler Truck told a select team of reporters during of a recent round table in Chennai. In the process, it has also wreaked havoc on the automotive supply chain, with companies producing far less than is actually conceivable.

“Until 2019, we were working in a world where maybe some of it would come from India, China or South Africa. We used to make our engine blocks in South Africa, ship them to Germany for machining, then to Detroit and Mexico or Australia,” Daum explained, citing an ideal scenario of open borders.

At the end of the day, the goal was to have high-tech companies on board. “This is how a global world works together and benefits everyone even if there are common problems to solve,” he added. However, the two years of pandemic followed by geopolitical tensions have only created silos within the planet which, in turn, have disrupted supplies like never before.

As a result, companies like Daimler Truck (and many other car manufacturers) felt the pressure and sales figures ended up being well below “normal average”. Daum’s comments were in line with what he said at the company’s annual general meeting in June this year.

“Globalization is currently being challenged from many sides. I caution against simply accepting this. Open borders, unhindered exchange of goods, and a global division of labor have brought great prosperity to the world’s population over the past few years and decades. We must preserve these achievements,” he made the point then.

Strategic direction on electricity and hydrogen

On the issue of zero emissions, Daum clarified during the Chennai round table that this was an objective which required “the real evolution”, that which boiled down to the production, transport and distribution of ‘electricity. “If you’re using power from a coal-fired power plant, you’re actually eating the planet. I have no idea the answer in India, but in the United States and Europe, the evolution of our production of Electricity remains a challenge,” he said.

Fuel Cell Powered Mercedes-Benz GenH2 Truck
Mercedes-Benz GenH2 fuel cell truck (Source: Daimler Truck).

The challenge was to store and transport the energy, which meant that hydrogen remained the best choice. According to Daum, diesel had another 10 to 15 years of relevance and Daimler Truck would continue to invest in the technology. “We have the best heavy-duty diesel engines in the world,” he said.

Battery electric is also an option and partnerships with CATL of China will be leveraged for this in the future. It is much more expensive and this is an important fact to consider since 50% of the cost of a truck is the powertrain. There is no cheaper Indian battery at the moment and electric axles etc. will only increase the cost.

Daimler Truck is optimistic about hydrogen because it can be used in fuel cells and then electric. It can be burned, and engines can comfortably handle H2 combustion. From Daum’s perspective, natural gas was a no-no because it adds as much carbon dioxide as diesel due to methane slip. Given this reality, a highly efficient diesel engine is better than natural gas.

Satyakam Arya, managing director and CEO of Daimler India Commercial Vehicles, said fuel choices in the subcontinent are driven primarily by currency conservation imperatives. India still imports 40% of its gas needs, which is still significantly lower than crude. Crude, in fact, is twice as much at 80%.

Satyakam Arya, MD and CEO, DICV
Arya said India has not reached a stage where it can predict stable adoption of gas in commercial vehicles.

“We haven’t reached a stage where we can predict stable adoption of gas in commercial vehicles,” Arya said. After all, CNG usage was high until recently, but when its prices skyrocketed, customers switched back to diesel. “Technology bets cannot be made in this uncertain price environment. Our strategy is electricity and hydrogen – which will also be accessible to this market – and if we see a stable price environment for gas, we will take then a call,” he reiterated.

Daum also said at the June AGM that Daimler Truck was confident that its trucks and buses would not be exclusively powered by batteries in the future, but also by hydrogen-based fuel cells. According to him, for the energy transition to succeed, Europe must be able to import, transport and store green energy – and the medium that makes this possible is hydrogen.

The Indian market remains small

Returning to the Chennai meeting, Daum said he was pleased with what the Indian operations, led by the BharatBenz brand, had achieved over the past decade thanks to an “incredible team” who were doing tremendous work for others. Daimler units. “We are doing a tremendous job on exports,” he added while acknowledging that technological development had been rapid in India, especially in terms of security.

The downside, however, was that Daimler’s optimistic estimates of the commercial vehicle market developing faster had not materialized and volumes still lagged. Sophisticated trucks should have been accepted faster, but the market size “has been small with slow growth”. Overall, India is a stable player in Asia and Daimler Truck sees a lot of technology exchanges here, in Japan and in Europe.

Arya made it clear that market share was not the only criteria for BharatBenz, and cutting the cake into different segments would in fact show that it was doing well and had even gained substantial share in some regions. “The issue comes down to the value we will provide. We have built a solid foundation over the past decade in India and now that the market is on track, we are ready. We will play a significant role in the transport sector. “, did he declare.

Daum added that safety, reliability and efficiency were the main navigators for the company’s participation in the individual truck segments. Beyond that, it was important to focus on cleaner emissions. “If carbon is going to harm our planet, the long-term problems will be far too costly and the consequences aren’t worth it,” he said.

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