Volvo India readies long-haul truck strategy before GST

95% of its truck sales comes from mining

Awaiting the government’s expected move to implement the Goods and Services Tax (GST) regime in July, Swedish automotive giant Volvo is pushing plans to grow in India’s long-haul trucking space.

Talking to DH about the company’s vision, Volvo India Managing Director Kamal Bali said, “In terms of long-haul trucks, we are very bullish going forward. The advantage that a Volvo truck could provide for long-haul applications is yet to be realised due to current interstate border controls. With the GST coming in, we are likely to have a ‘borderless India’. The movement of a truck from one point to another will become seamless, as there will be no time wastage or stoppage on the way.”

Today, on average, a truck covers only 200-300 km a day, but once the GST kicks in, it can roughly do 800 km a day, and Bali said that Volvo is ready with trucks to tap this trend.

Long-haul trucks are large heavy-duty vehicles of 15 tonnes and above, catering to a multitude of applications from cargo, haulage to tractor-trailers, carrying goods and supplies over long distances. While the sector has seen many players, Volvo is yet to begin selling these trucks in a big way, with 95% of its truck sales coming from the mining demand.

“Selling long-haul trucks in a big way will take time. But they’re already on the assembly line, and will be made at our Hoskote plant,” Bali said, adding that the company’s long-haul stable includes FM, FH, and FMX ranges.

Even as GST does get implemented come July, dedicated freight corridors are already coming up across India — Delhi-Mumbai, Chennai-Bengaluru, and Amritsar-Kolkata, among others.

“Along these corridors will commence multi-modal transportation, including trucking, and they will also allow free movement of cargo, thereby reducing burden on other roads. That is where the right power-to-weight ratio is required, and that is what we offer, with better efficiency and productivity,” Bali added.

Referring to current trends in the long-haul space, he reflected, “The market will grow with the need for improved logistics. Currently, logistics costs in India are very high, at almost 13% of the GDP being spent on it, against the global average of 8%.

This 5% excess translates to a cost of over $100 billion a year, with its burden being not only split between the producer and distributor, but cascading onto the end-customer. It’s a huge waste for which the GST and improved long-haul mobility will act as a game-changer.”