Bangalore: Global vehicle carrier specialists such as Höegh Autoliners AS, Wallenius Wilhelmsen Logistics AS (WWL) and NYK Line are rushing to enter the Indian auto logistics market to tap the country’s rapidly growing automobile exports.
Auto makers exported 1.53 million units of vehicles in the 12 months ended March, a 23.61% growth compared with the previous year.
Norwegian vehicle carrier operator Höegh Autoliners will start regular shipping services from India from July to carry automobiles for various customers, said the firm’s India representative, K. Gopinath.
Höegh Autoliners is a top global operator of vehicle transportation services, running around 70 pure car and truck carriers (PCTCs) on various routes for customers. The company is 67.5% owned by Norwegian shipping firm Leif Hoegh & Co., while the balance 37.5% is held by AP Moller-Maersk AS, the Danish shipping and oil conglomerate.
The company’s PCTCs made eight-nine calls at the Mumbai and Chennai ports in 2008 for carrying automobiles.
“From July, we will start regular services from these ports,” Gopinath said.
India is turning into an export hub for small and mini cars—a move that is being led by Japanese car maker Suzuki Motor Corp. and South Korea’s Hyundai Motor Co.
Currently, Mumbai and Chennai are the only two ports that have terminals to handle automobile exports. Pure car carriers (PCCs) operated by NYK Line, Mitsui OSK Lines (MOL) and K-Line, regularly call at these ports.
While Tata Motors Ltd, Suzuki, Ashok Leyland Ltd and Eicher Motors Ltd depend on the Mumbai facilities, owing to the port’s proximity to their factories, Hyundai and Ford Motor Co. export cars through Chennai port, because it is located close to their plants.
In October, Nissan Motor India Pvt. Ltd had signed an agreement with Union government-owned Ennore Port Ltd to export automobiles manufactured at its Oragadam plant near Chennai through the port.
In May, NYK Line (India) Ltd, the Indian unit of Nippon Yusen Kabushiki Kaisha Ltd, or NYK Line, Japan’s biggest shipping company by fleet size and revenues, signed a memorandum of understanding with state-owned Container Corp. of India Ltd (Concor) to establish a joint venture for the transport of automobiles over rail. Both companies will have a 50% stake in the new venture. NYK Line is also one of the biggest PCCs in the world.
A number of automobile manufacturers are scheduled to open or expand their businesses in India by 2010 in response to the rapid growth in demand for cars here. In the 12 months to March, 1.5 million cars and utility vehicles were sold in India, up 0.13% over the last year.
Analysts expect more cars to be sold in India this year compared with last.
Some of these companies that are setting up or expanding operations here are also looking at exports.
Apart from exports, car makers also feel the need to transport vehicles within the country.
NYK is entering India’s rail transport sector for moving automobiles to meet rising demand.
The Indian car transportation market is estimated at around 1.5 million units a year, according to an executive at Concor, who did not want to be identified.
The new venture will establish a hub-and-spoke network to provide rail services complemented by truck transport, thus allowing the company to satisfy expanding demand for automobile transport, NYK said in a statement
The two partners will soon begin trial services from Delhi and Chennai, followed by regular services from three other major areas (north, south, and west).
“The eventual goal is for rail transport for automobiles to occur through use of auto racks. But for the time being, the automobiles will be loaded into containers. One container can accommodate five-six small cars or four medium-sized cars, and up to 45 containers can be hauled at a time,” the NYK statement said.
Billionaire Gautam Adani-promoted Mundra Port and Special Economic Zone Ltd (MPSEZ) has teamed up with WWL and NYK Line to set up a multi-user dedicated automobile terminal at Mundra port, the country’s biggest private port, located off the western coast.
WWL, jointly owned by Swedish shipping firm Wallenius Lines AB and Oslo-listed Norwegian shipping group Wilh Wilhelmsen ASA, is a leading independent provider of global factory-to-dealer transport solutions for the automotive, agricultural and construction equipment industries. WWL operates around 65 PCTC and roll-on roll-off vessels.
“We want to turn Mundra port into a hub for automobile exports,” said Sandeep Mehta, chief executive officer, MPSEZ. MPSEZ has already signed up with Maruti Suzuki India Ltd for a Rs100 crore, 250,000- units-a-year car export terminal, dedicated exclusively for the Japanese car maker.
MPSEZ plans to raise car handling capacity at the terminal by an additional 400,000 units by 2010.
Shally Seth in Mumbai contributed to this story.