India’s largest carmaker Maruti Suzuki (MSIL) has transported 178,000 cars through the Indian Railways in FY20, up 15 per cent over the previous year, and accounting for nearly 12 per cent of total sales of the company in the year.
The Gurgaon-based carmaker has dispatched over 670,000 cars through the Indian Railways in the past six years, witnessing a compound annual growth rate (CAGR) of over 18 per cent. The company was targeting transportation of at least half its cars via Indian Railways by 2030. The first dispatch of transporting cars on trains took place in March 2014.
The increased focus on using railways has helped the company offset nearly 3,000 million tonne (MT) of carbon dioxide emissions. In addition, over 100 million litres of precious fossil fuel was saved, as the Company could avoid over 100,000 truck trips on the National Highways because of the move.
Explaining the importance of railways as one of the important modes of transport, Kenichi Ayukawa, managing director and chief executive officer of Maruti Suzuki India said, “Considering the increasing volumes, our team felt the need for large scale logistics flow. We realised that not only for expansion but also for risk mitigation we have to look beyond road mode logistics.” The share of railways in the country’s automobile transportation business is less than 10 per cent.
To attract more interest from automobile majors, the railways had liberalised automobile freight train operator (AFTO) policy to encourage more private investment in special wagons in 2018. The registration fees for AFTO scheme was reduced from Rs 5 crore to Rs 3 crore, and a condition of a minimum procurement of three rakes under the scheme was also relaxed to one rake.
Maruti Suzuki is the first auto manufacturer in the country to obtain an Automobile Freight Train Operator (AFTO) licence. This allows private firms to fabricate and operate high speed, high capacity auto wagon rakes on the Indian Railway network. At present, Maruti Suzuki utilises five loading terminals (Gurgaon, Farukhnagar, Kathuwas, Patli and Detroj) and 13 destination terminals (Bangalore, Nagpur, Mumbai, Guwahati, Mundra Port, Indore, Kolkata, Chennai, Hyderabad, Ahmedabad, NCR, Siliguri and Agartala). With the addition of Agartala, the reach of rail mode has now been extended to far North East. It has helped to reduce the transportation time to these states by nearly half.