Indian carmaker Maruti Suzuki is limiting vehicle exports to 15% of its overall production and focusing more on the domestic Indian market, where the company expects car sales to double in the next five to six years.
But rather than representing a control on growth for those logistics providers supporting the carmaker’s movement of finished vehicles for export, which leave from the port of Mundra, the focus on the local market promises further opportunity, according to two suppliers.
Adani Logistics, which moves Maruti vehicles to the port by rail from its Gurgaon plant in Delhi, has already been in discussions with the carmaker for domestic routes, according to vice president of marketing and business development, Umesh Bhanot.
Since January this year Adani has been using an exterior loading cassette system for the containerised movement of the Maruti vehicles by rail from Kar-tainer International. The company has supplied 850 of its five-car cassettes for use by Adani to move Maruti’s vehicles to Mundra. The decision by Maruti to focus on the domestic market is also good news Kar-tainer, according to CEO Richard Cox.
“The reason that Maruti is limiting its exports is to try to supply the local market, which is growing at a tremendous rate. As our systems are currently tied to domestic movements the increase in this area is very good for our business,” Cox told Automotive Logistics News. “I anticipate that we will have approximately 2,500 systems in operation in India in the foreseeable future, purely for domestic transportation.”
Cox also said that, in conjunction with Adani, Kar-tainer was also looking beyond Maruti. “I see the Indian market being a very strategic one for us,” he added.
Maruti is eager to retain its market share in India, which is currently more than 50%, in the face of competition from rivals such as Nissan, Ford, Toyota and Volkswagen.
Its focus on the domestic market may help secure volumes with car sales in India expected to rise 12%-13% this financial year. Sales grew 35% during April-July 2010 to 734,969 cars.
However, as with other companies in the country, Maruti has been having to cope with a shortage in the supply of parts as suppliers have failed to keep pace with a 30% surge in Indian car sales this year. The company has waiting lists of as much as a month for its Swift and Dzire models and has now threatened to cut parts makers unable to pay for the expansion necessary to meet demand according to reports in the Indian press this week.
VW, Suzuki and Hyundai have also been forced to introduce waiting lists on some models as a dearth of batteries, engine castings and other parts forces a curtailment on production. Tata, meanwhile, is importing tyres from China after local component suppliers failed to keep up with demand.
Meanwhile, Nissan Motor India has increased production of its Micra small car to nearly double at 500 units per day at the Renault Nissan Automotive India plant near Chennai, in southern India to clear an order backlog for the model of around 2,500 cars.
