India Transport Portal Newsletter - March, 2014

A month in the India Transport Sector (No 34) March, 2014
1
Copyright India Transport Portal. Edited by Digital Bizzline Ltd. All rights reserved

ROAD BUILDING REVIVAL OFFERS HOPE FOR INDIA
INFRASTRUCTURE OVERHAUL
Faced with failure, the government has now moved
away from the PPP system and brought about
several drastic changes in policy. Seventy per cent
of the funding required for building the 5695 miles of
the roads which are in the planning stages, will now be
provided by the government.
More information on ITP

DEDICATED FREIGHT CORRIDOR PROJECT ON ITS WAY
The Dedicated Freight Corridor project has been
initiated to ensure hassle-free, quick operations of
freight trains that will bring ultimately higher results in
productivity.

NHAI LAND ACQUISITION UP 51%
In the first part of 2013-2014, the NHAI stepped up its
land acquisition activity. It has thus acquired 51%
more land during this period than it had at the same
time the previous year.

CHINA, INDIA TRADE THROUGH ROADS CAN REDUCE COSTS:
REPORT
A Chinese daily journal has put forth the opinion that
India and China would benefit from opening up a
trade route via the Nathula pass in Sikkim. The report
admits that peace in the border areas is a
prerequisite for such trade.

WE NEED TO FOCUS ON MORE SUSTAINABLE MEANS OF
MOBILITY AKSHIMA TEJAS GHATE THE ENERGY AND
RESOURCES INSTITUTE (TERI)
Ms. Akshima Tejas Ghate is an urban environmental
planner and has been academically trained to
carry out urban, transportation and environmental
planning.

Out of the 25 projects which were bid in 2013,
several projects, (mostly BOT and toll projects)
have not received any single bid. The MORTH
failed to award the Eastern Peripheral
Expressway and two other road projects: the
Delhi-Meerut Expressway and the Mumbai-
Vadodara Expressway will also fail to meet their
deadlines. Road developers are becoming
more cautious because of the traffic slowing
on the national highways. Banks are also
reluctant to lend to the road infrastructure
market. Land acquisition issues are also
hampering road construction.

However, as we all know, road traffic forecasts
are impressive. India is the second most
populous country, growing at 18 million per
year and will overcome China by 2030. The
Indian middle class is 250-300 million and will
reach 600 million by 2030. New truck sales will
grow by an extra 60% for the current decade
300, 000 per year to reach 8 million by 2020.
There is a blatant need of transportation
infrastructure. Roads carry 90% of passenger
traffic and 65% of freight traffic. So yes, of
course, there is a need to build roads.

In December 2013, Virendra Mhaiskar,
chairman of Indias largest construction firm IRB
Infrastructure Developers Ltd. was urging the
government to offer up new highways for
bidding. AM Muralidharan, president, Volvo
Construction Equipment, also stated that the
demand for road building equipment was
promising.

So it is time to get some facts regarding the
National Highways Development Project. India
Transport Portal is pleased to offer you its latest
research research on road construction. With
our road data special consultant Abhishek
Srivastava, we gathered hundreds of statistics
in order to create an easy to understand road
construction infographics. Stretches
completed, under implementation, balanced
for award, road construction pace, NHAI
fundings, you will find all the detailed data in
our brand new document. Stay tuned on India
Transport Portal!

INFRASTRUCTURE
EDITORIAL

2

INDIAN CARS: BETTER THAN NEW?
Even as the market for new cars in India tumbles, the
market for used cars has not only retained its
performance, but also recorded steady growth.
April July 2013 has seen an increase of 22 25 %.
The contributors to this trend are not merely seen in the rural
areas, or for low-priced cars, but also in the luxury car
segment.

RURAL SALES BOOST AUTO INDUSTRY REVIVAL IN INDIA
A high demand and vehicle sales in rural India
have boosted hopes of a turnaround in the
automobile sector. In the past two years, the auto
industry has been on a prolonged slump in urban
parts.

AUTO INDUSTRY LINES UP HEAVY INVESTMENTS TO DEVELOP
NEW PRODUCTS
Despite it being one of the most competitive
markets in the world, the auto industry in India has
been going through a prolonged slump. Therefore
most automobile manufacturers in the country are
not looking at expanding their capacity.

GOVERNMENT MAY SOON MAKE CAR RECALL MANDATORY
FOR VEHICLES WITH MANUFACTURING DEFECTS
The increase in car recall in India has raised a red
flag among government agencies which are now
mulling legislation to secure the customers
interests. This concern is justified as it comes on the
heels of recalls by Nissan, Honda, Ford, Renault and
Chevrolet.

COMMERCIAL VEHICLE SALES SET TO HIT 1.6 MILLION MARK
BY 2017, ACCORDING TO REPORT
Sales of commercial vehicles in India are
expected to rise to 1.6 million units in 2016-17,
according to a report by Ernst & Young Global
Limited and its member firms (EY). This would mean
an estimated growth in sales of 15 percent each
year from 2012, where the number of sold units stood at 0.8
million.

NEW SUPERFAST TRAIN LAUNCHED
Disappointed with the
poor services of the
India Railways, the
affluent classes
increasingly turned to airline
companies instead. However, the rise
in fuel prices, coupled with the
challenges that some airlines are
facing, has opened up the field for
the railways once again and they
now look poised to take full
advantage of the opportunity. The
railways are working at continually
improving their services to woo the
affluent customers with improved
services and trains. The latest offering
is the 22110 LTT NZM AC superfast
express.
More information in ITP

GUJARAT FLOATS AN SPV TO
IMPROVE RAIL CONNECTIVITY
Vibrant Gujarat,
popularly known as the
Jewel of the West,
showed an impressive
growth of 9.6 percent
from 20002012 and outshone all
other Indian states. Not intending to
rest on its laurels, the state intends to
pump more money into developing
the infrastructure sector. The Gujarat
government set up a special purpose
vehicle (SPV) for the rail sector, to
improve connectivity between the
industrial hotspots in the state.

AUTO MARKET RAILWAYS

3

MITSUBISHI MOVES TO FORGE LINKS WITH RENAULT-NISSAN
ALLIANCE
Joining a long established tradition of car-makers
who link forces to improve performance and
outreach to consumers, the hitherto reticent
Japanese company Mitsubishi has declared its
intention to ally with the Renault- Nissan pair. In
doing so, Mitsubishi has strengthened its relationship with
Nissan, a collaboration with which it manufactures the Kei
small cars for Japan. The two will now take the relationship
further and manufacture small cars for global consumption.
Mitsubishi has also declared its intention to launch two new
sedans which will be based on Renault produced sedans.

MAHINDRA & MAHINDRA LOOKS TO RESTRUCTURE AGAIN
From April 2014 onwards, the Two-Wheeler division
of the company will be merged with the
Automotive and Farm Equipment Sectors (AFS)
under the purview of Pawan Goenka, Executive
Director of M & M. Goenka, while talking to The
Financial Express said, The two-wheeler business, which was
earlier independent, will now be brought under the AFS
umbrella. Rajan Wadhera, who has a background in
commercial vehicles, will manage MTBL and Nalin Mehta
(MTBL MD & CEO) will report to him. Two-wheelers will be
looked after by Rajesh Jejurikar.

ASHOK LEYLAND STILE MPV LAUNCHED AT $12 000
Ashok Leyland, which has traditionally been
involved in the manufacturing of commercial
vehicles has recently launched the Stile which
allowed it to break into the passenger vehicle
segment. Manufactured in Ashok Leylands
partner company Nissans factory in Chennai, the Stile is a
rebadged car. It resembles the Nissan Evalia which was
launched in India in the year 2012. The company has
reworked the car to ensure that it has a distinct appearance.
The grille, bumper and headlights have been refashioned,
and the rear-windows have been made to slide. The car is
fitted with brand new fifteen inch alloy wheels.

FAURECIA TO INCREASE
INVESTMENT IN ITS CHENNAI
FACILITY
In mid-2013, a new
Chennai plant was
set up. It covers
nearly 8.56 acres
with improved
employee facilities. $5 033 480 were
invested into the new FECT plant,
which supplies Renault-Nissan,
Hyundai and Ford. The company
wants to double this by mid-2015.
From 300 car sets, the company plans
to go to 600 car sets per day. The
company will also manufacture
Fords left hand drive interior systems
for export purposes. Dilip K Bogawat,
engineering director (India and
Thailand) said, This is a global
programme launched in Brazil, India,
Russia and Thailand from where
EcoSport SUVs are or would be made.
The Chennai plant can cater for all of
EcoSports specific requirements
globally.

MRF WINNING BATTLE FOR
DOMESTIC TYRE MARKET
Along with a diversified
product range, MRF is one
of the most recognized
brands in India and has a
wide distribution network.
G Chokkalingam, managing director
& chief investment officer, Centrum
Wealth Management, says this plays
a key role in the tyre manufacturers
success: "MRF has a strong brand
loyalty in the replacement market
that enables it to charge a premium
over peers. It gets nearly three-fourths
of its revenues from the replacement
market that is more profitable."

CAR MANUFACTURERS

OEM

4

BMW, AUDI AND MERCEDESS DUAL STRATEGY: PRODUCE
MORE LOCALLY, IMPORT HIGHER-END MODELS
BMW, Audi and Mercedes are German car
makers who are engaged in the production of
luxury cars. Their fluctuating fortunes on the
Indian markets have necessitated a review of
their strategy in the sub-continent. All these
companies are now pursuing a dual strategy. They plan to
produce several models locally, thereby lowering cost of
production, and enabling them to offer a competitive price.
At the same time, in order to retain the exclusivity of a luxury
brand, they plan to import new models. The three brands
together are poised to launch as many as twelve new
models in India.

BMW INDIA SEES GROWTH BACK ONLY BY MID-2014
In 2010, BMW took over from Mercedes Benz as
the leading luxury car manufacturer in India, by
winning over 40% of the market share. The then
president of BMW India, Peter Kronschnabl said,
"Now more than ever, we see that the number
one position in the market is not everything. But, the future
belongs to India and if you want to benefit from the
dynamics of the Indian market later, you need to act today.
[]." Three years on, and in the midst of the longest and most
dismal downturns in the automobile sector in India, BMW has
stuck to its guns, refusing to compromise on the quality or
price of its cars, and refusing to give up hope that the
automobile sector will bounce back.

AUDI STARTS PRODUCTION OF Q3 MODEL IN INDIA
After having launched the Audi Q3 in India, the
company was compelled to close bookings a
mere five days after starting. Only five hundred
units were made available for sale in India. This
constraint emerged due to a global slowdown in
production. In spite of the limited release, Audi has registered
good performance in India. Sales have increased by 19% in
spite of the slowdown in the car segment. Encouraged by
the response of Indian consumers, Audi has decided to
produce the Q3 model in India.


India Transport Portal is the leading
independent hub on indian
transportation (road safety, fuel
savings, carbon emissions,
transportation infrastructure,
sustainable transportation etc.).
India Transport Portal is edited by
Digital Bizzline Ltd. a UK based press
agency recently launched by a
group of freelance journalists.
Digital Bizzline Ltd. is registered at the
Companies House UK: 07301455
contact@indiatransportportal.com

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India Transport Portal Newsletter - March, 2014

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A month in the India Transport Sector (No 34) March, 2014

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