Tata faces "Heat" from Daimler, Volvo as India Paves its roads
Created 02/09/2010, 10:26:55 am - Updated on 02/16/2010, 12:25:32 pm
Tata Faces ‘Heat’ From Daimler, Volvo as India Paves Its Roads
February 08, 2010, 10:05 PM EST
By Subramaniam Sharma
Feb. 9 (Bloomberg) -- India’s aim to pave 20 kilometers of highway a day for the next five years is stoking demand for heavy trucks to carry freight, and overseas makers Daimler AG and Volvo AB are jockeying to challenge dominant Tata Motors Ltd.
Asia’s third-biggest economy is spending about $53 billion to build and upgrade 54,454 kilometers (33,836 miles) of highway. The roads carrying 65 percent of India’s cargo are plagued by single lanes and irregular surfaces, slowing trucks to an average speed of about 20 kilometers per hour, a 2009 study said.
Improvements begun in 2000 for the “Golden Quadrilateral” project linking New Delhi and Mumbai triggered a shift from trucks weighing less than 16 tons to those weighing up to 49 tons, a segment where sales grew 8 percent from April to December. Volvo, Tata Motors and Mahindra Navistar Automotives Ltd. featured heavy trucks at the Delhi Auto Show in January.
“The highways rollout is giving these new players an opportunity that did not exist earlier,” said Viswanathan Vasudevan, who helps manage $300 million in funds, including India truck makers, at Aquarius Investment Advisors Pte Ltd. in Singapore. “They see a better possibility of making money and this is because of the Golden Quadrilateral and the transport system becoming better in India.”
Daimler Factory
The world’s largest truck maker, Daimler AG, is building a factory in Chennai that will start production end 2010.
