Daimler India faces heavy net losses due to pandemic-induced slowdown

Daimler India Commercial Vehicles Pvt. Ltd., a subsidiary of German automotive corporation, Daimler AG has registered a net loss of over USD 57.2 million for the fiscal year ended March 2021, making it the fourth consecutive year that the company has remained in losses.

Notably, this year’s losses were four times higher than those incurred last year, primarily due to weak economic growth and the pandemic-induced lockdowns in the country.

As per the company’s filing with the Ministry of Corporate Affairs, revenue for the fiscal year 2021 dropped by 10% to approximately USD 711 million.

However, Daimler India Commercial Vehicles (DICV), witnessed operating profits for second consecutive year, as exports assisted in de-risking operations.

A DICV spokesperson mentioned that the Indian Commercial Vehicles industry has encountered many challenges from changing legislations, lockdowns, and disrupted supply chains, to escalating raw material prices over the past few years.

The spokesperson added that the company overcame these difficulties by innovating to reduce costs without compromising on quality, and by actively expanding the product portfolio to attract more customers. It continues to make substantial investments in R&D, digitalization, infrastructure, and service network expansion.

On the financial side, DICV accrued EBITDA (earnings before interest, tax, depreciation and amortization) in both fiscal years 2020 and 2021, despite the pandemic.

The spokesperson stated that DICV continues to be committed to the Indian market and is observing clear signs of revival in the economy. With rising demand and easing restrictions, the company expects even better results in the coming years.

The export order books of the company are full for the following six months, highlighting how DICV is emerging as a prominent export hub for Daimler’s global truck network.

While export sales do assist in balancing the gains and losses of the domestic market, DICV has further extended its scope to shared services for de-risking domestic operations.

Reviewing the financial year, the company’s directors’ report mentioned that the automotive industry was immensely impacted due to COVID-19 pandemic during Q1 of the year. However, the demand slowly recuperated during the second quarter and stabilized remarkably by the third quarter.

Source Credits: https://economictimes.indiatimes.com/industry/auto/auto-news/daimler-indias-losses-in-fy21-widen-amid-pandemic-woes/articleshow/87836535.cms