Truck sales rise 52% for the month of July

The sales of trucks have gone high around this season due to various reasons. The main reason is pegged to be higher demand due to our economy, which is currently buoyant. Another important reason the sales have experienced such spike, may be due to a very a different reason. Euro II standard trucks are estimated to go out of production soon around September 30th.

According to an Indian Foundation of Transport Research and Training (IFTRT) report, even after decreasing discount offers the sales of trucks have increased in various sectors of road transportation like manufacturing, import-export and agriculture. The problem that truckers are facing, is that the new Euro III and IV trucks may be definitely more expensive than the Euro II ones. So, in order to save money, truck owners and the related transportation companies are investing now in Euro II trucks. The highest increase has been seen in the 30-49 tonne multi-axle trailer category at about 2454 units.This is about an 85% increase in this category. The 25.2 to 31 tonne multi-axle category trails with an increase of about 61%. The last category, the 5-7.5 tonne, is seeing a significantly smaller share of the increase at 30%.

Another reason that might be also one of the reasons for the sales increase might be the introduction of a single composite fee of 15,000 INR for the National Permit. This has prompted the transportation service companies to upscale their business and buy more trucks. Truck rentals have also registered high sales last month. It is normally agreed that the monsoon season is a weak transportation phase but figures for this July have shown the opposite trend with a 2-3% increase in the rentals.

NHAI introduces tax free bonds to raise capital

The National Highway Authority of India has decided to float tax-free bonds to raise capital. The NHAI has received somewhat of a lacklustre response to its previous efforts in raising money through bonds. The association is pushing for tax-free bonds nonetheless. According to its estimates this new venture will raise Rs.6000 Cr. in capital.

The bonds will give a rate of interest of 8.5 per cent, significantly higher than its current 54EC tax free bonds that offer just 6 per cent. By introducing such incentives the NHAI believes that the response to this offer will be good and the necessary money will be raised.

Well, one can venture a guess as to the their motivation to introduce such a scheme. The Government has set itself an ambitious target of building 20 km of highway roads per day. The NHAI is the authority that has the responsibility to manage this target and see to it that the projects come to fruition. the time is running out for the the Government’s promise and concrete steps have to be taken. Hence the NHAI has proposed to float these bonds to raise the capital involved to meet this target.

Here is a look into NHAI’s previous efforts to raise money.NHAI raised Rs 500 cr. between April and June this fiscal through bonds. Last fiscal it raised Rs 1148 cr. through bonds and for this fiscal the authority hopes to raise Rs 2000 cr. from 54EC bonds. NHAI needs Rs 33,000 cr. for the execution of its targeted 12,000 km by 2013.

The NHAI is looking considerably upbeat about its new schemes, but financial experts beg to differ. According to them, the scheme should have a higher rate of return than what has been proposed. This is when people will be excited about the bonds and there may be a decent response

Source: Financial figures have been used from NDTV Profits website.

NH24 to get 8 lanes

It is a known fact that transporters face challenging situations when travelling towards Nainital and Corbett National Park due to bad roads and incredibly tough traffic conditions. NH- 24 which is the primary highway used when making this trip, is getting ready for an overhaul of big proportions. This is necessary since the Commonwealth Games are coming soon to Delhi and the traffic conditions could soon be much worse resulting in delays and optimisation problems.

Well , for starters the NH 24 will be upgraded to an 8 lane highway from the existing 4 lanes.The stretch that will be upgraded is from Ghaziabad border to Dasnia near Hapur.This stretch is proposed to be completed before this year is out. Well as many people who have taken this highway know that this is one of the busiest highway corridors in the country. This new overhaul will make strive to make this stretch almost traffic-signal free.


And the other unusual tidbit of information is that this upgraded stretch will be toll-free. This is very unlike earlier projects which have focused on better connectivity through roadways, the case in point being Delhi-Gurgaon expressway. This development has been discussed by Ministry Officials. They have explained the toll free status as reasonable because the majority of the traffic that uses this route is local. They expect traffic on this road to grow in view of increased occupancy in residential areas along NH-24. A top ministry official said that “This will be a cash contract project and we are hopeful of awarding it in the next one month. We have consciously decided not to follow the public private partnership (PPP) model. We felt that there would be strong opposition if we made it a toll road.”Ministry sources said the plan was conceived years ago but somehow did not take off. Ministry sources said two years back the daily traffic movement on this stretch was nearly 1.4 lakh passenger car units (PCUs). In the recent years, areas beyond Ghaziabad border have emerged as prime residential destination for people working in Delhi.A traffic survey by RITES in 2008 had shown that vehicular growth on this stretch had increased by almost 200% more than the highway’s carrying capacity.

Mr. Rakesh Kalra, MD, MNAL on the Indian trucking industry and more

CNBC TV 18 has recently aired an interesting panel discussion that it conducted with the top honchos of various companies which are propelling the nature and business of the Indian Transportation Sector. This panel discussion took place at The  Indian Road Transportation Awards 2010. This event was organised by CEAT. Mr. Rakesh Kalra, MD, Mahindra Navistar, was also one of the participants here. The discussion  was directed at the innovative new products by many companies, the impact they have had on the domestic market and key challenges faced by these companies. Mr.Kalra shed light upon how a joint venture such as Mahindra Navistar can improve the commercial transport industry. Watch the entire discussion in the video below.

Challenges involved in Indian Highway projects

No one will disagree that India is growing rapidly. But infrastructure is seemingly failing to catch up with it. This is primarily due to a unhealthy mix of poor planning  and execution.The National Highway Development Programme and its poor vision are one of the major factors in abysmal conditions of highway infrastructure.

Costing for an infrastructure project like highways is a huge task consisting of a plethora of things that have to be taken into account.These include construction costs and costs of financing the project.The large scale diversity of India and the variety of conditions in different places makes it difficult to meet all costs. Government help and funding are needed to ensure smooth sailing.This cost borne by the Government is called Viability Gap Funding (VGF).So setting the VGF level is crucial in this respect. The right amount of funding is the need for the hour because the ups or down in the funding may give large scale problems either for the project or the tax-paying public.

The National Highways Authority of India (NHAI) has increased the funding from 20% of the total project cost to 40%.This increase hurts the tax payers whose money goes into the project.The way things are organised, if the project fails, most of the responsibility rests with NHAI which puts it at a lot unnecessary risks. The question is: Where will NHAI get this money from in the case a project goes south?

USSR failed miserably at implementing similar policies. For all practical purposes, India still has a backbone of these policies. Spending more than your budget to get something done is inadvisable. Everyone knows that it is a huge risk on an individual level itself.Imagine the whole country being at the risk due to  pathetic policies implemented by the Government.We can all learn from the failure of the Socialist system and plan our country’s policies in a fool-proof way.

Mahindra Navistar MN25 Test Drive and Review

We promised you that the MN 25 and its variants will revolutionize the trucking standards in India. CNBC TV18 agrees. Their popular show Overdrive takes a clinical look at the MN25. And we must say, they are quite impressed by our offering.

Mr. Sandeep Srikanth, of CNBC TV18 test drives the MN25, and gives a glowing account of our new vehicle. For those who missed the review, you can catch the review here. If you believe that enough is enough and Ok is no longer Ok, see for yourself what the buzz is all about.

Mahindra Navistar rolls out their 100th truck from the MN 25 Series

Just a couple of weeks back, MNAL had rolled out its first MN 25 truck from its Chakan Plant near Pune. In no time has the company announced that the production figure has crossed 100^th mark. MN 25's Bharat Stage (BS) -II model is priced at Rs 14.99 lakh ex-showroom price. BS III version is also readily available while BS IV models will be available as per the customers' requirements.

Pawan Goenka, President, Automotive and Farm Equipment Sectors, M&M Limited said on the occasion, “The investment done for Mahindra Navistar trucks is Rs 1000 crore out of which Rs 350 crore was done for engine manufacturing while the remaining Rs 1300 crore was done on trucks. Work is in an advanced stage on the soon to be launched CNG variant. We have priced our product very aggressively and I think it is marginally higher than its competitors. Currently our installed capacity is 50,000 units for trucks.”

Even though auto sales numbers may be on the rise, the industry is facing a components shortage. Confirming this, Goenka added, "Whole of the auto industry is facing a component supply crunch in mainly three areas, tyres, casting and fuel injection equipment. The demand is soaring but the capacity cannot be increased quickly. Around 5-7 per cent of a decline in output has occurred because of this."

Mahindra Navistar also has plans to export the vehicles to the neighbouring countries, and some other as well, in the near future. According to the joint venture between M&M and Navistar, the trucks are for sale in all parts except North America including South America, Africa, Europe and Non-European countries and even designed for such markets. Mahindra Navistar is also looking forward to start producing left-hand drive trucks to suit the market and has planned to push the exports by the financial year of 2012. 

The other variants from the Mahindra Navistar fold like the MN 31, 40, 49 and Tipper will be launched in this financial year. Mahindra Navistar has already set up a customer-centric network of exclusive dealerships across the country for serving the customers better. Moreover, the already existing network will be deployed for servicing the customer needs. From the already existing network of 50 MNAL dealers which is to be scaled up to 150, 60 additional LCV dealers (light commercial vehicles), along with 400 outlets of RSAs (road side assistance) will be increased to 900 within a year's time. MNAL will also rope in 24x7 multi lingual in-house expertise and a panel of expert drivers, trainers and trouble shooters at our headquarters.