‘GST to benefit truck makers in long term’

‘To spur development of cold chains’

May 19, 2017 09:19 pm | Updated 11:24 pm IST - Hyderabad

The upcoming GST regime will eventually ease transportation, reduce turnaround time of vehicles and facilitate a hub and spoke model in goods distribution.

This would translate into more demand for custom-built, ready-to-use cargo carriers, including refrigerated vehicles, a senior executive of Ashok Leyland said.

“We expect the hub and spoke model to start maturing and goods moving to the right markets [with GST],” President-Global Trucks Anuj Kathuria said, the company was already working with customers to offer fully built solutions.

Speaking to the media at Ashok Leyland’s Zonal Conference showcasing future-ready products, he said with tolls and restrictions on movement set to go with GST, goods, particularly perishables, will be moved across longer distances.

In the next 2-3 years, it would contribute to development of cold chains, Mr. Kathuria added. The country’s second largest truck maker, which has got into supply of dry container mounted vehicles, for movement of white goods and to e-commerce firms, will foray into refrigerated vehicles (on tractor trailers)

GST implementation, along with the pre-buy of vehicles that happened in March with the phasing out of BS-III vehicles, can cause some uncertainty in the marketplace. Everything, however, should settle down and the second half should be much better, he replied to a query.

Factors that will fuel the growth, he said, were buoyancy in the construction and mining segment, with several infrastructure projects being implemented, the growing demand for trucks used to move LPG, cement and automobiles. Yet another contributing aspect will be the transport authorities clamping down on over dimensional and overloaded vehicles. “When vehicles are made to right size, that will also increase the demand [for trucks],” he explained.

Ashok Leyland, whose market share in medium and HCV trucks (7.5 tonne and more) grew from 23% to 33 % in last five years, looks to grow faster than the industry. In 2016-17, it sold about 1.10 lakh units, which included the 10,000 vehicles that were exported.

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