Truck makers are increasingly moving into selling fully-built trucks, building their own bodies or outsourcing it to suppliers.
“We are in talks with Ashok Leyland to build the body for refrigerated vans for their trucks. We hope to get into a similar agreement with Tata Motors,” said Ajay Gupta, chief executive officer, Commercial Engineers & Body Builders Co. Ltd, or Cebbco, a truck body building company. “So far the truck makers have not been selling the fully-built refrigerated vans and it is for the first time that they will be doing it,” he added.
Cebbco is investing Rs15 crore for a plant to build truck bodies made of layers of gel coat, resin and fibreglass. With the rise in organized retail, the company is expecting the market for refrigerated trucks to grow to 4,000 in the next two years from 500-800 trucks annually now.
It isn’t just refrigerated trucks. Fully-built vehicles are becoming the norm in other specialized segments such as tippers, trailers and tankers.
The latest entrant in heavy commercial vehicle in India, Asia Motor Works Ltd, is selling all its trucks fully built.
“The industry is slowly moving into providing fully-built vehicles. It is helping not only the buyers but also the drivers who are getting company-built cabins that are much safer and comfortable,” said Anirudh Bhuwalka, managing director and chief executive officer, Asia Motor Works. The company, which started selling its trucks roughly a year and a half ago, aims to sell 5,000 heavy trucks in 2007-08.
The trend of selling fully-built trucks has been more apparent for application-based trucks where body-building costs are higher. The cost of building the body for tankers, tippers, trailers and refrigerated vans are Rs1 lakh, Rs2 lakh, Rs5-6 lakh and Rs4-5 lakh, respectively.
“We do it especially for application-based trucks such as tippers, trailers and tankers,” said Kumar Lalit, head, fully-built vehicle division, Tata Motors Ltd. “We continue to sell chassis to customers on which they get the body built from body builders.”
The shift will also help buyers get financing on complete vehicles instead of only the chassis. It usually takes 30-60 days for a buyer to get a separate body built and it is also not easy to get loan on the body as the builders are often in the unorganized sector.
An industry estimate puts the current proportion of fully-built vehicles sold by truck manufacturers at 20%.
According to R.C. Mangal, vice-president, marketing, Asia Motor Works, this is set to grow as legislation mandating manufacturers to build safety cabins for drivers is in the pipeline.