Truck makers ramp up capacity eyeing infra boost
NEWDELHI: Truck makers are preparing to boost production, encouraged by the government’s proposal to raise allocation for infrastructure by more than ₹1 lakh crore for the year starting April 1, two people aware of the matter said.
India’s top three truck makers—tata Motors Ltd, Ashok Leyland Ltd and Volvo Eicher Commercial Vehicles Ltd— have asked their suppliers to ramp up capacity, anticipating an increase in demand for trucks and tippers which are used for road-building, transportation and mining.
Truck makers are hoping that the increased spending on infrastructure by the government will translate into rising demand for their products. Total expenditure on infrastructure for the next fiscal is expected to rise 21% to ₹5.97 lakh crore from ₹4.94 lakh crore for 2017-18, according to budget estimates. A substantial part of that allocation will fund India’s ambitious Bharatmala road project, which aims to link about 75% of India’s districts through a network of highways. Tata Motors has asked its engine supplier Cummins India Ltd to increase monthly supply of engines to 20,000 units from an average of 14,000-16,000 units that it now supplies to India’s largest truck maker, one of the two people cited above said, requesting anonymity.
“This would also include exports but the main focus will be the domestic market,” the person said.
A Tata Motors spokesperson said that the company has been experiencing an increase in demand for medium and heavy commercial vehicles (M&HCV). “We are aligning our production with the increasing demand,” he said.
Demand in the commercial vehicle segment has started to look up after the implementation of overloading rules, barring trucks from carrying loads beyond prescribed limits. The BS VI emission norms that will come into effect from 2020 will also create replacement demand, the executives cited earlier said.
Sales of commercial vehicles rose 10.45% to 257,001 units in the 10 months ended 31 January. This has prompted Society of Indian Automobile Manufacturers to raise its FY18 forecast for M&HCV sales to 13% from 5-6% projected at the beginning of the fiscal year.