Indian Railways to transport half of Maruti Suzuki's finished vehicles by 2030

Jun 3, 2019   Supply Chain

A senior government official has confirmed that Indian automotive giant Maruti Suzuki (MSIL) is all set to transport at least 50% of its vehicles via Indian Railways by 2030.

He said that MSIL has drawn up a plan, based on which at least 50% of its finished vehicles will be transported through the railways.

 

In 2018, Maruti Suzuki sold a total of 1.75 million vehicles in India, which means that we are looking at over 800,000 cars being transported by Indian railways, a sharp increase from the 500,000 that it had transported using the rail route in the last four years. 

 

R C Bhargava, Chairman at MSIL, said: “For the last four years, we were trying to use the railways more as a transportation medium. For that, we were pushing for more rail sidings, for easier loading and unloading.” 

 

But Maruti Suzuki isn’t the only player that Indian Railways is counting on to improve its numbers; several key automotive players such as  the Society for Indian Automobile Manufacturers, Hyundai Motor, Tata Motors and other automotive logistics providers have been approached by them to increase its automotive share in the coming decade.

 

Railway is a preferred transportation medium for most automotive giants, both domestically as well as overseas. While the cost for transporting cars by rail is much lower than on roads, it also ensures that these companies maintain a lower carbon footprint - an added perk given the industry’s recent focus on achieving their sustainability goals.

 

That said, in the domestic market, automotive players tend to decrease their reliance on the rail network as the chances of damage are quite high. 

 

According to Bhargava, 50% may not be realistic figure, a larger share of Maruti Suzuki cars may be transported by the railways by the end of 2030.

 

A few service providers, including APL Vascor and Adani Logistics have got licences for automobile transport. It is expected that more players will come under India's automobile freight train operator (AFTO) scheme. Indian Railways is making efforts to encourage more private investment in the sector.

 

The state owned railway operator had ordered 20-car carrier rakes last year. Indian Railways will also be setting up additional hubs dedicated to finished vehicle logistics. Currently two auto rail hubs are operational, one in Walajabad in Southern India and the other in Farukhnagar, Northen India.

  

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