With truck sales in fast lane, more players drive in

At least three new commercial vehicle makers are circling India, including Foton Motor Group of China, PACCAR of the US and Russian firm Ural, even as Germany’s Daimler continues to edge closer to beginning production despite having broken off with the Hero Group earlier on.

The surge of interest in the country is based on expectations that the market will continue to post scorching growth as it did last fiscal, with demand for trucks and buses rising.

Of all the prospective entrants, the most serious appears to be Foton, which began making enquiries at the Auto Expo this year. Since then, it has held extensive discussions with vendors and is believed to be keen to begin manufacturing here.

According to two people familiar with the development, Foton should begin production of an entire range of trucks — from the sub-one tonne Tata Ace variety to 25 tonners —- by early 2012.
“Foton officials have held initial discussions with vendors through ACMA. They are assessing the market and seem to be very keen to begin operations,” a parts supplier said.

A state-owned listed company in China, Foton claims to be the number one CV manufacturer in Asia and is headquartered in Changping district, Beijing. It sells trucks and passenger vehicles in 90 countries across the world. It has also begun a hunt for a seasoned Indian CV industry professional to head its Indian operations.

US giant PACCAR is also eyeing the Indian market. PACCAR claims to be a global technology leader in the design, manufacture and customer support of premium light, medium and heavy-duty trucks under the Kenworth, Peterbilt and DAF brand names.
Indian clutch maker Setco Automotive already supplies to PACCAR in the UK.

Going by Harish Sheth, Setco’s chairman and managing director, “they have evinced interest in entering India.”

Another industry consultant also confirmed PACCAR’s interest.
On its part, Ural India, which is a collaboration between Russia and India, is believed to have a tie-up with Chinese company FAW for launching small cars and buses in India. It has established a facility in Haldia, West Bengal for the purpose but it could not be ascertained if bus production has actually begun.

As for Daimler’s plans, a parts’ supplier said the German truck maker is plodding ahead with its plans despite the breakup with the Hero Group some time back. “Production should begin by the last quarter 2011-12 on a modest scale at their Chennai facility. Even during the fourth year of production, annual numbers would be just 12,000 units.”

The foreign automakers’ interest in setting up base in India doesn’t surprise experts, given the growth potential of the market.
“With a sharp drop in sales in 2009, the Indian commercial vehicle market is forecasted to grow at a fast pace over the next few years. We expect a 40% growth in 2010 sales, benefiting from pent-up demand and low base effect, and expect the market to double by 2015,” Deepesh Rathore, India MD of Global Automotive Group said.