Truck tie-up
June 19, 2011
On an icy test track in the Russian region of Tatarstan, half a dozen Mercedes-Benz trucks make their rounds. Out on the real Russian roads however, few of them can be seen. Barely 1,500 new Mercedes trucks were sold in Russia in 2010.
However, Michael, a professional driver employed by Mercedes, says the vehicles have got exactly what it takes to succeed in Eastern Europe and Central Asia.
"They cope with of the lack of technical service in the remote regions, with inexperienced truck drivers and even with temperatures of minus 40-50 degrees," he says.
Teaming up against risk
The test track is located in the industrial town of Naberezhnye Chelny, about 2,000 kilometers away from Moscow. German manufacturer Daimler recently opened a small production plant for Mercedes trucks there. It chose the remote city because it is home to Russian truck builder Kamaz, with whom Daimler has been cooperating on the Russian market since the end of 2008.
Daimler originally considered moving into the Russian market by itself. "But doing it all by yourself means that you have to bear all the risks alone, too," explains Boris Billich, chief executive of Mercedes-Benz Trucks Vostok - the joint venture between Kamaz and Daimler that is also Russia's main importer of Mercedes trucks.
Win-win deal
Kamaz is best known internationally among motorsport enthusiasts as a regular participant in the truck category of the Dakar Rally, the famous off-road endurance race.
In Russia, however, Kamaz is a household name that has led the commercial vehicle market for years. Reasonably low prices and high durability has made its trucks a bestseller in the other former Soviet republics and a number of Arabic states too.
Kamaz's wide dealer network in these regions was one of the main factors that convinced Daimler to join forces with the Russian manufacturer.
In return, Kamaz hopes to catch up to the world market standard. "The cooperation with Daimler will give us access to new technologies for our own production," says Kamaz spokesperson Oleg Afanasyev.
Rough ride
A brief inspection of one of Kamaz's many huge production halls in Naberezhnye Chelny shows that a technical overhaul is long overdue.
Many of the Soviet-era machines on the assembly line are almost as old as their operators – many of whom are middle-aged women wearing colorful headscarves.
The last couple of years haven't been easy for Kamaz, making investments in new facilities difficult. The financial crisis saw demand for the commercial vehicles drop by startling 80 percent.
Kamaz had to lay off 1,500 of its 45,000 workers and reduce shifts for the rest. It would have been much worse if the Russian government hadn't helped out with subsidies. Roughly one third of Naberezhnye Chelny's 500,000 inhabitants depend on Kamaz for their livelihoods.
Axles and engines
According to the Russian market research bureau Avtostat 80 percent of the 5.3 million commercial vehicles registered in Russia are older than 10 years.
"Russia will be one the biggest European markets for trucks soon, maybe the biggest," says Billich from Mercedes-Benz Trucks Vostok. .
The next project will be the joint construction of truck axles using Daimler technology in Naberezhnye Chelny – axles that would also be used in Kamaz models. The two companies are also in early talks about joint engine development.
In return Daimler wants to gain more influence over its Russian partner. It already has a representative on the Kamaz board and a 15 percent share in the company – a stake that's likely to increase as long as the Russian market shows signs of growth.
Author: Mareike Aden, Naberezhnye Chelny
Editor: Sam Edmonds