Mahindra Navistar eyes 20k buses per year from Zaheerabad


After rolling out the 5000th truck from its Chakan plant, Mahindra Navistar Automobiles Ltd (MNAL), the commercial vehicles (CV) joint venture between India's Mahindra Group and International Truck and Engine Corporation ( the operating company of Navistar), has embarked on an expansion drive.

The company plans to scale up production of LCV load and mini-buses at its Zaheerabad plant to 20,000 units per year as well as ramp up the Chakan plant to produce 50,000 trucks per annum within the next three years.

"We plan to take our bus production from 11,000 per annum now to 20,000 per year within three years time", Nalin Mehta, managing director, MNAL said here today adding that the company enjoys a leading position in 30-40 seater light commercial vehicle (LCV) bus segment in the country.

It makes buses that cater to the school segment and for corporates to ferry executives at its Zaheerabad plant near Hyderabad.

"We have a 12 per cent market share in the segment nationally", Mehta added. The scale up would not require any additional investment at the plant, he informed.

As for the heavy commercial vehicle (HCV) trucks segment, MNAL is in the process of investing Rs 300 crore at its Chakan plant near Pune to ramp up the production capacity to 50,000 trucks per annum within the next three years. "We have already invested around Rs 750 crore at the Chakan plant and have a sanction of Rs 1050 crore. The paint shop is already equipped to roll out 50,000 trucks per annum working in three shifts. The rest of the shops would to scaled up soon", Mehta told Business Standard adding that MNAL now makes 500 trucks per month (6000 trucks per annum) at the Chakan plant.

The HCV trucks segment has been clocking a 8-10 per cent growth per annum, barring the months of April and May this year, when the industry witnessed negative sales figures.

"We see the situation improving from September onwards. In the longrun, the industry will continue to clock a compounded annual growth rate (CAGR) of 8-10 per cent as the freight index is not showing any signs of dipping. MNAL targets to match the industry growth rate", Mehta said.

Meanwhile, upbeat from garnering a 3.4 per cent national market share in the trucking space in FY12, MNAL is now looking at tapping the exports market, starting with the SAARC (South Asian Association for Regional Cooperation) countries in the coming four-five months.

With a view to increase market penetration, MNAL has also lined up a slew of launches in FY13.

The company is looking to offer integrated solutions for the trucking industry and is coming up with MN 25 tonne RMC (Ready Mix Concrete) for the construction industry, MN 25 & 31 tonne bulker variant for the cement industry, MN31 tonne tipper for carriage of coal and also MN 25 & 31 tonne refrigerator vans for the food processing industry.

Mahindra Navistar has also started testing a couple of trucks that have been customised for the South African market. "We will start with a 16 tonner and then come up with a 25 tonner for the South African market. We also plan to enter the SAARC countries within the next four to five months. We do not need a new product for the SAARC market", Mehta informed.