Truck mak­ers ramp up ca­pac­ity eye­ing in­fra boost

Hindustan Times (Delhi) - - INDIAUNSEEN - Malya­ban Ghosh malya­ban.g@livemint.com

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.

In­dia’s top three truck mak­ers, Tata Mo­tors, Ashok Ley­land and Volvo Eicher Com­mer­cial Ve­hi­cles, are hop­ing that the in­creased spend­ing on in­fra­struc­ture by the gov­ern­ment will trans­late into ris­ing de­mand for their prod­ucts

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