COMMERCIAL VEHICLES

  LOW-FLOOR MAKERS DELAY BUS SUPPLY INDEFINITELY
 

  The long wait for low floor buses - AC and non-AC on your route will continue; thanks to the persistent delay in delivery of the same by supplier firms.

According to sources, heavy vehicle makers Tata Motors and Ashok Leyland have not been able to deliver low floor buses till date although the first lot was expected to arrive as early as in April. Representatives of both companies have been summoned by the Delhi Government to explain the delay. Also, sources said, other options are being looked into for speedy arrangement of modern buses.

We have called for a meeting of the officials of the two companies to discuss the issue. The meeting will be held after next week, said Rakesh Mehta, Chief Secretary, Delhi Government. He did not comment on whether the Government would go for other companies to ensure speedy arrangement of the buses. Sources, however, said that the Delhi Integrated Multi-Model Transit System (DIMTS) has been asked to explore other options.

About 1,000 low floor buses are running on different routes in the Capital. By April, the Government had planned to have a thousand or more additional buses. But the responsible companies have failed and the Government may look for other options in case there is no further assurance from them on the matter in the meeting to be held soon. DIMTS has been intimated on this, an official said.

The Delhi Government, as part of a fleet modernisation program, had placed an order with Ashok Leyland for 875 low floor buses worth 4.8 billion Indian rupees. Supply of 350 air-conditioned and 525 non-air-conditioned buses was expected by mid-2009. Similarly, Tata Motors were supposed to supply both the AC and non-AC low floor buses, though unsuccessfully.

Both Tata and Ashok Leyland have taken the contract to supply modernised buses in 21 other cities of the country under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). In Delhi, the Government has plans to introduce a total of about 11,000 modern buses - 6,000 from Government funding and the rest through private players before the Commonwealth Games 2010 and phase out Blueline buses.

The air-conditioned low floor buses are a boon for commuters in this summer season. The Government should urgently bring in more such buses. At present, only few routes and mostly those falling on the Bus Rapid Transit (BRT) corridor have got these buses and the number is less. Even the green coloured buses are plying on select routes, said Neha Malhotra, a resident of Defence Colony. She said that the timings of the AC buses are also not fixed. The AC and non-AC green colour modern buses are getting popular for daily travelers. People prefer these busses in comparison to blue line or old DTC buses. These buses have tubeless tyres to ensure no flat tyre problems. New buses have pneumatic doors.

Taking cognisance of accidents due to Blueline buses, the High Court in October 2007 directed the Government to frame new guidelines and phase out all Blueline buses from the city roads.

 

 

M&M S US PLAN ON TRACK

 

 

New Delhi: Undeterred by plummeting vehicle sales in the US, Mahindra and Mahindra Ltd is pushing ahead with plans to launch its two- and four-door pickup trucks in the worlds biggest market for such vehicles by December.

 

A pickup truck is a vehicle with an open top rear cargo area and front-seating cab area for the driver.

 

All these plans remain unchanged for the very simple reason that the value proposition we have actually becomes stronger in the current situation, says Pawan Goenka, president of the automotive sector at M&M, as the firm is called in short. In fact, I wish we could launch sooner. Right now is the time to go in.

 

The pickup trucks will be based on the same platformassembly line, engine and transmission technology, chassis and other infrastructureas the one M&M developed and uses for its Scorpio sport utility vehicles (SUV).

 

Goenka, who says the pickup trucks will be competitively priced, points to what is expected to be M&Ms main selling point in the US: top-of-the-line diesel technology, which is seen as green and would deliver higher mileage. Unlike India, most small trucks in the US are primarily petrol driven.

 

M&M, which already sells tractors in the US, also plans to launch its SUVs about a year after the pickups.

 

Tapping the recession-hit American market, where vehicle monthly sales have plunged at least 35% since September, is going to be a significant challenge for the company. Its worked hard to get environmental clearances and has modified its pickups significantlybrakes, airbags, stylingfor the US launch.

 

Without referring to the amount spent on developing the Scorpio-based pickup trucks for the US, Goenka said a company needs to spend around 50% over the cost of developing a platform in India for such an offering in North America.

 

M&M spent Rs550 crore on the Scorpio platform.

 

The turmoil in the US is helping M&M because there are several dealerships available on the cheap. Global Vehicles USA Inc., a Georgia firm that will distribute the Indian firms vehicles in the US, has already lined up 334 dealers.

 

John Perez, chief executive of Global Vehicles, says each franchise has put up $195,000, or nearly Rs1 crore, for parts, training mechanics and salespeople and advertising.

 

Global Vehicles, which has put $65 million into the venture so far, plans to add another $30 million in marketing costs. Perez says he plans to take Mahindras pickups and display them at football games, school events and hunting tournaments. His first-year target: to sell 25,000 trucks in the first year. That works out to seven or eight trucks per dealer per month, which is attainable, he says.

 

In partnering with Global Vehicles, M&M has been able to save significantly on costs. If Mahindra were to build a ground-up full-fledged dealer network across 50 states and major population centres, the set-up costs would be between $800 million and $1 billion, says Vikas Sehgal, partner at consulting firm Booz and Co.

 

For now, M&M will import pickups into the US as completely built units at a 25% duty from India. While Goenka declined to say when it would be viable for the firm to assemble them in the US, Perez believes it will be once sales cross 50,000 units a yeara tiny sliver of the two million such trucks sold in that country.

 

In the past, new entrants to the US market had an uphill ride for many years.

A lot will depend on the pricing strategy and how much marketing they do, says Rakesh Batra, national automotive leader at Ernst and Young, a consulting firm.

 

Batra points to Hyundai Motor Co., whose sales languished in the US for many years until the Korean firm decided to offer a 10-year warranty. Sales at Hyundai in the US fell only 13% last month, compared with 30% declines for both Ford Motor Co. and General Motors Corp., according to Motorintelligence.com, a website monitoring the global auto industry.

 

 

VE COMMERCIAL VEHICLES' APRIL SALES FALL BY 22.73%

 

 

New Delhi: Auto maker VE Commercial Vehicles on Saturday reported a 22.73 per cent decline in its total sales of Eicher trucks and buses in April at 1,547 units as against 2,002 units in the same month last year.

 

Its domestic sales also decreased by 24.72 per cent to 1,401 units compared to 1,861 units in the same period a year ago, the company said in a statement. Exports during the month stood at 146 units compared to 141 units last year, up 3.55 per cent.

 

Sales of light commercial vehicles in the Indian market during the month fell by 27.84 per cent to 1,024 units, the same stood at 1,419 units in April, 2008. Heavy commercial vehicle sales also recorded a slump of 59.47 per cent at 77 units as against 19 0 units in April last year, it added.