The BharatBenz as an Example of Frugal Automotive Products

Innovation Path in the Frugal Product Development

[Background] [Objectives] [Proposed Methodology] [Relevant Readings]

A project of:

• Institute of Technology and Innovation Management (TIM @TUHH)

Project team: Rajnish Tiwari, Katharina Kalogerakis and Deepak Prakash Bhanu Prakash

Start: November 2015

Proposed duration: Three months

Project status: Cancelled.

Keywords: Automotive; Automobile; Coomercial Vehicles; Open Innovation; Open Global Innovation Networks; OGIN; Frugal Innovation; Innovation Path; Innovation Trajectories; India; Bharat Benz

Schlüsselwörter: Automobilindustrie; Kraftfahrzeuge; Nutzfahrzeuge; Offenen Globale Innovationsnetzwerke; Frugale Innovation; Innovationspfade; Indien; Bharat Benz

Background

In January 2012, Daimler India Commercial Vehicles (DICV), the wholly-owned subsidiary of Daimler AG in India, launched a truck named "BharatBenz" in India. The name signified both a connection to India (Bharat is the Hindi name of the country) and to Daimler Benz, to capture the positive brand image of the mother concern. The product, that has been introduced in the market, with the intention to take up the cost-based competition in India should probably also signal a certain distance to the original mother brand, since, according to one report, "Daimler is offering the trucks at nearly half the price of comparable trucks in Europe" (Athavale, 2013). The truck seems to be a very good example of frugal innovations in the sense of "affordable excellence" targeted at a group of price-sensitive customer that also needs robust and rugged products.

Figure 1: BharatBenz Medium Duty Truck 914
Photo: wikimedia commons, retrieved: 06.12.2015

Reports also suggest that Daimler sources almost 85% of components from local and global suppliers based in India and that "more than 400 suppliers have been involved as a part of this venture" (Athavale, 2013). Therewith it seems to be a reasonable assumption for an investigation that the availability of a qualified and sufficiently large base of local suppliers played an important role in the development of a frugal truck (see, e.g. Tiwari and Herstatt, 2014). While anecdotal evidence is available on the role of suppliers in creation of frugal passenger vehicles like the Tata Nano and small commercial vehicles such as the Tata Ace, so far, little is known about the systematic involvement of domestically-based suppliers in the creation of a large, frugal commercial vehicle in an emerging market by a global manufacturer like the Daimler AG.

Objectives

The objective of the present study is to generate insights on the role of the suppliers and a supportive eco-system in creating promising frugal solutions that fit the crietria of "affordable excellence". The study will primarily focus on the example of the BharatBenz and seek to achieve the following objectives:

• To understand the role of frugal innovation in the commercial vehicles industry, especially in the Indian context
• To understand the product "frugality" by the means of comparison between trucks manufactured by Daimler in Europe and in India
• To characterize the various Innovations and their dimensions (such as type, degree of novelty etc.) carried out by DICV during the development of BharatBenz
• To understand the role of the supply chain in the innovation process

Proposed Methodology

The study will begin with an in-depth desk research in order to obtain knowledge about how automotive companies operate during product development stage and to waht extent and in what respects the suppliers are (pro-actively) involved in the innovation process.

As a next stept an in-depth case study will be prepared of the BharatBenz based on publically available sources. Once the preliminary data is obtained, a questionnaire for the expert interviews shall be prepared and interviews conducted with relevant experts. The data will be validated by talks withs independent experts.

Relevant Readings

• Athavale, A. (2013): "Reusing to Recreate", in: Techtalk at KPIT Cummins, Vol.6, Issue 2 (April-June), KPIT Cummins Infosystems Ltd, pp. 27-29.
• Tiwari, R. and Herstatt, C. (2014): Aiming Big with Small Cars: Emergence of a Lead Market in India, Heidelberg: Springer.

[ For any enquiries, please contact Rajnish Tiwari ]

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