Few single markets face greater change over the next decade than India. Despite the course alterations that will result from the popular votes for Brexit and Trump in the UK and the US respectively, and the political uncertainty in key European markets, it is India – one of the world’s fastest-growing economies – that awaits a number of policy implementations sure to change the very structure of this rapidly evolving market.
Already at 1.31 billion, by 2027 India’s population will be the largest in the world, at over 1.4 billion. Growth means urbanisation, and urbanisation requires ‘stuff’. As small villages develop into large, and as people move from rural to urban locations, so demand for ‘stuff’ will increase. Great news for truck fleets, and the OEMs who supply those stuff-hauling fleets; but the changes to trucking in India over the next decade will be seismic in proportion. Just about the only certainty is that ‘Trucking India’ in 2027 will look very different from its 2017 ancestor.
To picture how different the two will be, consider how much Trucking India has changed over the last decade. In that period, the market has made serious contenders of BharatBenz, Scania, Volvo and Asia Motor Works (AMW), each posing a considerable threat to the established, dominant domestic players.
Change is already under way: India’s truck industry is now working towards a nationwide rollout of Bharat IV (BS IV), an emissions standard equivalent to Euro IV. The Indian government recently brought forward by several years the rollout of BS VI, leapfrogging BS V. That’s huge – it took Europe a decade to switch from Euro IV to VI, yet in India, OEMs are expected to make the grade in just four years. A major challenge for vehicle manufacturers – and a major opportunity for suppliers.
The Indian government recently brought forward the rollout of Bharat VI, leapfrogging Bharat V. That’s huge – it took Europe a decade to switch from Euro IV to VI, yet in India, OEMs are expected to make the grade in just four years
Assuming it is (finally!) implemented in April 2017, the long-awaited Goods and Services Tax will, in 2027, have been in place for a decade. GST is expected to free up long-distance road routes currently broken up by lengthy state border crossings; with trucks able to travel the length of the country comes the need for trucks that can make such journeys, built for greater power and greater speed. India is known for its unusually low-powered trucks and high number of two-axled CVs – there’s a gap in the market right there.
And the market itself will look very different; currently still dominated by the domestics, it’s easy to envisage a much greater role for the aforementioned global truck manufacturers that already have a secure foothold in the market – other interested OEMs such as Hyundai, which has its eyes on HD trucking in India. Those overseas OEMs are used to running big rigs to increasingly stringent fuel economy and emissions regulations. All that’s needed to support increased speed and power is appropriate infrastructure, and in India, that means massive investment.
That’s not to suggest that India’s government is trying to make life difficult for vehicle manufacturers; indeed, accelerating growth in vehicle manufacturing is at the heart of Make In India, the heavily-promoted local investment strategy that encompasses all sectors. For the automotive industry, that includes the second iteration of the government’s Automotive Mission Plan, AMP II, which by 2026 aims to make India’s automotive industry one of the Top 3 worldwide, increase automotive exports to 35-40% of production, increase the industry’s GDP contribution to over 12%, and create 65 million automotive industry-related jobs.
What, then, can India’s truckers expect in 2027?
AMP II will have drawn to a close, with key metrics highlighting its success or failure; and regardless of how successful the rollout will have been, BS VI will be in place. Big international fleets will be running long-distance lines, and the OEMs will have seen the benefits of equipping their trucks with state-of-the-art connectivity and adapting their networks for full service package offerings.
India’s truck of 2027? Bigger, better, faster, stronger, connected and more efficient than today
Clearly, to navigate the choppy waters of the next decade, stakeholders need a detailed schedule and strategy. India is a nation increasingly accustomed to a government that throws up surprises – a surgical strike demonetisation policy here, a registration plate-based capital city diesel car ban there, a truck age ban, the promotion of local diesel engine production, the cancellation of diesel subsidies, an acceleration of emissions norms. That the business community is prepared to accept – or is resigned to – not knowing what the government might deliver next, highlights the challenge.
As for what the government of 2027 might look like, it’s difficult to call; for Narendra Modi – a leader who likes to get things done – to still be in post, aged 77, he would have had to survive the current and highly divisive demonetisation strategy; he would need to have made it into a third term; and, of course, he would need to have the inclination and motivation to carry on.
India’s truck of 2027? Bigger, better, faster, stronger, connected and more efficient than today – that’s for sure. Just don’t go expecting too much technological development; reality prevails in India, and the harsh reality is that Trucking India already faces enormous change. Look elsewhere for electrification and autonomous driving – such technology remains many decades away from the on- and off-ramps of National Highway 27, 44, 48…
This article appeared in the Q1 2017 issue of Automotive Megatrends Magazine.