India is set to become a global hub for both the Automotive and Shipping Industry, even as domestic demand for automotive commercial vehicles is set to cross 10 lakh units by 2017, besides the government planning expenditure of Rs 795 crore on electric and hybrid vehicles alongside plans to start 10,000 truck-driving training schools across the country. The commercial vehicles industry is quite an intense one in India and, in the past few years, its inherent cyclicity has prolonged more than usual, throwing numerous challenges at the players who instead choose to view its tremendous potential, said Anant Geete, Union Minister for Heavy Industries, in his keynote speech at the first
With different types of vehicles being manufactured and launched in the country in line with the Prime Minister Narendra Modi’s “Make in India” campaign, Geete said this campaign would be even more successful if both government and industry worked together as India’s economy is tied up with the automobile industry, which is a job-oriented industry that meets the needs of the country’s huge population. Therefore it is necessary that not only the automobile industry but also others related to it such as auto component suppliers and even truck drivers etc. come forward with proposals and solutions to their problems so that the ministry could endeavour to act upon it at the earliest, he said.
Pointing out that Anders Grundstromer, MD, SCANIA had described India as having a huge potential to become a “Global Automotive Hub,” the minister noted that 80 per cent to 85 per cent of commercial vehicles are being manufactured by Indian companies like Tata Motors and Ashok Leyland – emphasising that the country’s industries needed to be protected and encouraged towards progress while also ensuring compliance towards being environment-friendly through “Clean and Green” efforts.
He said the government’s emphasis is also on electricity-driven vehicles, for which it had
sanctioned Rs 795 crores as part of the National Electric Mobility Mission Plan (NEMMP) 2020, which is expected to witness expenditure of between Rs 13,000 crore to Rs 14,000 crore over the next five to six years. The NEMMP 2020, whose principal objectives are national energy security, energy security, mitigation of the adverse impact of vehicles on the environment and growth of domestic manufacturing capabilities, was approved by the National Council for Electric Mobility (NCEM) on August 29, 2012, where it sets the vision, lays the targets and provides the joint government-industry vision for realising the huge potential that exists for full range of efficient and
environment-friendly electric vehicle (including hybrids) technologies by 2020.
The country also needed to look at other sources of energy for vehicles like biogas etc. as the number of mega cities coming up in India – many of them “Smart Cities” – kept increasing and transportation there included buses running on diesel fuel, which needed to be done away with through use of battery-operated vehicles to avoid atmospheric pollution and thus have clean air cities. “There is no doubt that battery-operated vehicles costs are high, but when mobile phones first came to India, their costs were high too but came down later over time. So also the costs of battery-operated vehicles will drop in later stages. Solar power too was expensive but has now become cheaper,” he said, adding that the government will subsidise the costs of such battery-operated buses. With 50 per cent of London’s buses being built by an Indian company – Ashok Leyland, Indian companies could do the same for the country too, he said.
“While our country’s biggest problem is our ‘population’, the world’s biggest ‘resources’ are in India and using them properly is our job and responsibility. I urge the Automobile Industry to bring me a concrete proposal as the government has responsibility for both the industry and consumer. In this responsibility, we will be opening seven centres throughout India for using technology and research to train vehicle drivers. In foreign countries, there is dignity of labour where even drivers are greatly respected for their jobs and the same should be here,” he said while replying to a question that in the “Make in India” campaign, the Truck Industry is not getting enough encouragement or incentive for exports – that more than incentive, the government focus was on making such exports measures stronger.
Pointing out that the commercial vehicles sector has been neglected so far but his presence at this conclave underlined the fact that the government wanted to support the industry, Geete said, “India has tremendous potential in the Commercial Vehicles Segment and we need to feed this potential by working in union with the manufacturers, where – I assure you – that they will get all the support possible from the government.” The government is also stepping in the “green” direction and has already approved Rs 795 crore for electric and hybrid vehicles, while eventually Rs 14,000 crore will be spent on alternate fuel vehicles, Geete added.
Nitin Gadkari, Union Minister, Road Transport, Highways and Shipping, who addressed the Conclave in a video message, touched upon various new government policies and schemes, while stating that the 22 per cent shortage of drivers is planned to be met by the government through opening of about 10,000 truck driving schools across the country, alongside developing water transport with surface transport. Besides this, the focus was more on getting the basics in place for vehicle drivers as shortage of truck drivers has been a big concern in the industry and this needed to be addressed, he said, adding that the ministry has been trying to bring in laws that will extend Insurance and Provident Fund benefits to the drivers, besides efforts also being made to ensure that these drivers have fixed working hours.
“Where the new Motor Vehicles Act is concerned, the government has studied its applications in USA, Japan, Canada in regard to e-tests, awareness, enforcement etc. Our top priority is also for inland waterways and coastal travel projects and there are five waterways in India which have been okayed by the government. We are presently completing 20 km of roads per day and – in the next two years – look to completing 30 km of road daily as our policy is to reduce costs and time while also ensuring good quality of roads,” Gadkari said.
R Ramakrishnan, Senior VP, Commercial Vehicles, Tata Motors, said that the Auto Industry globally grew at a Compound Annual Growth Rate (CAGR) of six per cent amounting to around $25 billion last year and from 2007 to 2010, the market in India for medium and heavy trucks increased by more than 15 per cent, with light commercial vehicles up 57 per cent and 10 per cent of it going outside the country in exports. “Bus demand has also soared as the most popular means of transportation in large inner cities. Two factors assure rising demand for commercial vehicles and, in particular, for heavy trucks in India. The construction sector will continue to experience dynamic growth, and the road network will be substantially improved. Already, the Indian government has introduced a state program for upgrading and building roads and strengthening harbor connections. National highways, which comprise only about two per cent of the road network but carry 40 per cent of the
traffic, will be particularly important. By connecting more rural areas to the road network, the need for commercial vehicles outside large metropolitan areas will also rise,” he added.
However, the automobile industry is faced with several challenges which included new vehicles being forced to meet safety and emission norms, even as old vehicles continued plying on the roads, he said while noting that improving fleet efficiency alongside controlling emissions is needed even though new vehicles are far more efficient than those on the streets. Besides, India is less penetrated by vehicular transportation where rural areas are concerned and there is a need for greatly enhancing private transportation in this regard while also increasing the number of skilled vehicle drivers alongside increasing respect and encouragement for this level of jobs, he added.
Describing India as a multiple-hub market, V G Ramakrishna, MD, South Asia, Frost and Sullivan, said India was emerging as an export hub to key hotspots including ASEAN, Middle East and African markets, besides also gradually being known as a major, high-quality, low-cost manufacturing hub at a time when increasing labour rates in China were further supporting moves towards India. Despite a sharp decline in last five years across the CV sector, the influx of policy initiatives had helped in reviving growth in manufacturing and infrastructure, which was positive news for the CV segment, he said, “The domestic demand for commercial vehicles will cross the 10 lakh units mark by 2017 as lower crude oil prices is helping the commercial vehicle industry to grow. Improved cash inflows can kickstart fleet replacement.”
On the shipping side too, India is set to become a “Global Shipping Transhipment Hub”, according to Ramesh S Ramakrishnan, CMD, Shreyas Shipping and Logistics Ltd. India’s coastal cargo shipping movement and carrying capacity is huge enough to make the country a “Global Transhipment Hub” and needs to be calculated, despite sea cargo capacity in India – compared to neighbouring China – being less than seven per cent with only heavy cargo movement being more because it cannot be accommodated by road and rail, he said.