Swaraj Baggonkar Moneycontrol News
Lack of follow-up clarity on the new axle load norms announced by the government has left truck manufacturers undecided over moving their production processes to suit the new norms.
Manufacturers said they have experienced a dip in retail offtake after the announcement as customers have opted to wait for some clarity on the matter.
PB Balaji, Group CFO, Tata Motors said, “There is a lot of confusion in the market and therefore it is very difficult to read the environment. People tend to avoid buying because of such a confusion. It is fair to say that this quarter I am expecting a temporary impact of this and it should reverse later because the intrinsic demand is pretty high.”
The Ministry for Road Transport and Highways headed by union minister Nitin Gadkari announced last month that trucks that are more than 16 tonne be allowed to carry 15-20 percent more weight than normal. This is a change for the first time in 35 years as the load carrying norms were last revised in 1983.
There is confusion on whether the new norms would encompass the existing vehicles that are running on the roads or only those which are yet to be sold or both. With an increase of 20 percent in carrying capacity a truck fleet operator can manage with fewer trucks than earlier thought necessary.
For instance if the government allows 20 percent more load on new vehicles, a buyer who had earlier planned for six trucks with 25 tonne capacity will be able to make do with five trucks.
“There is no clarity on the matter ever since the news broke out. The vehicles will have to be reconfigured to be able to carry the extra load. The tyres will have to be different and more powerful, the engine may have to be retuned. All this would be doable if the norms are for the unsold inventory. But if it is for those trucks which are already on the road then it brings with it a whole set of new challenges”, said a senior executive of Mahindra & Mahindra.
Manufacturers, meanwhile, are preparing for shifting product development and manufacturing processes to avoid any delay once the norms are implemented.
“We are working closely with the authorities and SIAM to ensure those area are clarified. At the same time we are responding with speed to ensure that new vehicles are getting ready for the new regime of axle loads”, added Balaji.
Besides changes production planning companies will have to modify products as well.
“We have done a complete analysis of our portfolio and we know the impact on each of them. It impacts the whole system of a vehicle be it braking, powertrain cabin, noise, wheels, readiness for BS-VI. It is a pretty large impact that we have to factor in. Tippers may not be impacted because they are overloaded already. We have to reengineer these vehicles, validate them and recertify them and we are working on them on a war footing. It should have the ARAI certification for safety”, Balaji added.
A report from ICRA said, “The government's decision to increase truck axle load will effectively increase the load carrying capacity in the system and adversely impacted CV sales in the near-term. However, the impact would be limited as overloading has been a common phenomenon in India. Furthermore, certain segments of road transportation such as auto-carriers, consumer durables, containerized cargo would not be impacted by change in axle load norms as these remain constrained by volumetric dimensions”.
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