Poised for growth
The Indian market for tipper trucks is primarily dependent on infrastructure construction and the mineral extraction industry. At present, there are increasing opportunities generated by the rising coal mining segment in the country and the economy bounce-back after the downfall due to the pandemic, coupled with the growing trends in the change in GST implementation and the growing transition in the Bharat Stage standards.
Over the years, India as a nation has observed significant increase in the number of infrastructures, along with several major construction projects, which are in the ongoing developmental phase.
As of now, with more focus on alternate energy, the Government is planning to increase coal mining in the country, which will create a direct demand for tipper trucks in the coming years. This increased domestic output of coal will reduce the dependency on imports. Moreover, as coal mining is increasing, the demand for tipper trucks will increase as it is responsible for transporting the coal to nearby destinations from the mines. Coal India plans to transport coal by road. As a matter of fact, various mines are located in remote areas of the states and cannot be connected via railways.
Additionally, several road construction projects such as the Golden Quadrilateral and Pradhan Mantri Grameen Sadak Yojana, coupled with the irrigation, quarry, and the growing need for transporting high volumes of aggregates are some of the factors anticipated to drive the growth of the India tipper truck market. Additionally, significant demand for multi-axle trucks and the rising government expenditure on urban infrastructure projects along with the emergence of fuel-efficient tipper trucks to prevent growing pollution levels are some of the major factors driving the growth of the Indian tipper truck market.
The average market for the tippers segment in India is approximately 60,000 units per annum comprising all segments. The Indian tipper truck market stood at $1.65 billion in 2019 and is projected to grow at a CAGR of over 11 per cent during 2019-2024 to reach $3.1 billion by 2024, owing to the increasing number of infrastructure projects and availability of easy financing options offered by financial institutions. Based on tonnage carrying capacity, tipper trucks are categorised into light (2 tonne-16 tonne), medium (16 tonne-31 tonne) and large (31 tonne-55 tonne) tipper trucks. Analysing the trend of the past few years, the medium tipper truck segment is continuing to witness high demand among end-users on account of its application in a variety of tasks.
Said Jalaj Gupta, CV Business Head, Mahindra Construction Equipment, “As the mining equipment/heavy-duty truck industry is directly linked to the economy, the unexpected fall in GDP growth to -23.9 per cent last to last year indicates that a full-fledged recovery in M&HCV sales is unlikely in the short-run. In general, the downcycle of M&HCV tippers stretches for 9 to 10 quarters. With the coinciding of the COVID-19 outbreak and the disrupted supply chains, experts reckon that the downcycle phase might expand to 12-18 quarters this time.
Speaking on the key growth drivers of trucks and tippers, Gupta added, “Ease of Mining ban or being lifted and surge in coal mining, increase in road construction activity pan India, real estate getting back on track, irrigation projects surge, and power projects in execution mode are key growth drivers.”
At present, the recovery is predicted on an expected pick-up in construction activities, fleet utilisation and private consumption. The industry is expecting to see some offtake in volumes in the forthcoming period led by the release of government contracts and catching up on mining and construction activities.
Gagandeep Singh Gandhok, Senior Vice President – HD Truck Business, Volvo Eicher Commercial Vehicles, said, “Coal production recorded a growth in the last two months, compared to the same period last year, which is very encouraging for the tipper market. We see that the coal requirement is picking up now. The manufacturing segment is driving more demand and the coal requirement will move up in the coming months. Also in the commercial coal mining, out of 38 mines put on auction, 19 have successfully auctioned. All these together will help the mining segment to grow. In the construction segment, the government is investing heavily in infrastructure with around 5,700 km length of national highway projects being awarded in the past seven months as compared to some 3,000 km last year. Various expressways coming up in the country will also provide a major impetus to the construction industry as of now. This year construction has already reached almost 90 per cent of last year. All these developments are fuelling the growth of the tipper market in the country as these megaprojects will attract huge requirement of construction equipment including tippers.”
Speaking on the progressing market for tipper trucks and dump trucks, Sanjay Saraswat, Head – MHCV, Ashok Leyland, had this to say: “The tipper market is projected to grow at a good pace over the next few years, owing to the increasing number of infrastructure projects and availability of easy financing options offered by financial institutions.”
He added, “The key growth drivers of tippers and dump trucks are the road works, irrigation projects, and mining. We are expecting a normal growth and close to about 30 per cent for a complete year when compared to the last year.”
Rajaram Krishnamurthy, VP — Marketing, Sales and Customer Service, Daimler India Commercial Vehicles, said, “A healthy mix of construction activities, especially affordable housing and de-regulation of the mining sector with proactive private participation are reviving demand for the tippers segment. There is a strong uptick in demand for the long-haul segment of cement-steel besides, the sustained demand from e-commerce and construction space. Overall, we expect the heavy truck market in India to grow by more than 60 per cent in 2021, followed by 30 to 40 per cent growth in 2022 before stabilising to 15-20 per cent growth in 2023 and 2024. The market is on the recovery path after three down-cycles in the last 10 years.
“The primary segments that drive the demand for tipper and dump trucks in India are the construction and mineral extraction industries. The increasing activity in construction, real estate, and infrastructure that generate payload continues to boost demand for the segment,” he added.
Said Gupta, “Significant engine technology changes including improvements in engine combustion and calibration, increased injection and cylinder pressures, NOx and PM after-treatment solutions and transitioning to electronic controls has resulted in increased vehicle cost and has impacted the end customer price, BS6 regulatory requirements need significant validation and ATS functioning is greatly impacted by the duty cycle. Special applications for which BS4 variants were applicable are now being revisited w.r.t BS6 variants for ATS functionality is slow duty cycles, Fire tender, etc.; and remaining vehicle variant availability apart from the lead models as BS6 validation takes a significant amount of time for end-to-end trials.”
Said Gandhok, “A major step in this direction is the setting up of Uptime Centre to provide connected service to our customers. Since this August, all our trucks are connected with the Uptime Centre at Pithampur, which is an industry-first initiative. If the truck is under break- down, the Uptime Centre can take control, diagnose and help the customer resolve the issues in the least possible time. We have used this innovative technology to support our customers. We also provide adequate training to our customers on new technologies through a programme called vehicle introduction programme (VIP). Before handing over the truck to the customer or the driver, we make sure that the driver, the owner, or the fleet manager understand all the functionalities of the truck.”
“The technology trends in tippers and dump trucks are increasing day by day. Our range of trucks comes with a unique modular system that is profitable for the customers by having higher productivity, safety, and efficiency-enhancing features. In general, customers look for better-operating efficiency in terms of payloads, capacity, mileage, and enhanced driving comfort. So, all the new technology is revolving around these,” said Saraswat.
Said Krishnamurthy, “Telematics is one technology that is certainly reshaping the trucking industry and BharatBenz’s ‘Truckonnect’ is an excellent example of this. A telematics solution based on Daimler’s global platform ‘Truckonnect’ is provided as a standard feature in all BharatBenz trucks. Truckonnect lets customers remotely monitor all key performance indicators including utilisation, fuel and Adblue consumption, fleet health, and driver behavior. With this, fleet managers can optimise driver performance, increase fuel efficiency, and reduce downtime.”
Saraswat said, “The trucking industry along with the other sectors has been changing. In the trucking industry, ‘Driver’ plays a crucial role, likewise, the BS 6 engine too plays a crucial role. A lot of training and understanding are required. The BS 6 engine is sensitive to correct fuel and maintaining the quality of diesel exhaust fuel (DEF) is a challenge in itself.”
“We strongly believe the challenges we are seeing lately are short to medium-term challenges and India offers a huge potential for growth as economic revival happens and the CV market matures in its dynamics, efficiency, and business models,” added Krishnamurthy.
Said Gupta, “Road construction and mining is an intensely time-consuming process. Ensuring vehicles operate up to 22 to 23 hours per day is the key to profitability. Identification of the right product to suit the operations ensures the right beginning. Post start of operations maintaining the vehicle is of paramount importance. We offer comprehensive AMC and other customised aftermarket services to suit the operating requirement of customers. We offer onsite support to customers and ensure 98 percent plus uptime of tippers at the site. We are in process of setting up more exclusive parts retail outlets – MPARTS Plazas to ensure fair-priced original genuine parts availability pan India.
Tata DLT tippers and tip trailers are made for rough usage in construction and mining areas. We have also developed various capacity rock bodies for mining applications. Moreover, to provide better solutions and more payloads we have specially designed a lighter range of tippers where operators can enjoy 500-800 kg more payloads. In the case of tip trailers, customers can get the added payload of 600 kg to 1,000 kg depending upon cubic capacity or size. The extra payload can increase revenue by reducing the number of trips. Till now Tata DLT was known for its trailers’ range of products, but it’s a firm start in the tippers segment (rigid and trailer) with the same Tata brand assurance of quality and reliability.
Impact of emission norms
The government is increasingly focusing on higher standards of emissions, fuel efficiency, and sustainability through initiatives like the transition to BSVI, the recently announced scrappage policy, and the PLI scheme. We believe that the effectiveness of the recently announced initiatives will largely depend on the joint effort by the government and industry.
For instance, the government’s push for a circular economy via the scrappage policy will aid the recovery of the commercial vehicle industry by boosting fresh demand. Incentives for scrapping old vehicles, along with swift actions to create necessary infrastructure are key to getting higher-polluting vehicles off Indian roads.
Said Krishnamurthy, “To understand the impact of these initiatives better, I will cite the example of the BSVI regulation that was announced last year. DICV was well-prepared and ready for the BSVI transition, as we unveiled the BSVI trucks and buses range in January last year. The transition has been smooth for us, as we sold all of our BSIV trucks before the April deadline. The market has absorbed the price well and many customers understood it. It’s no secret that the new portfolio has helped us capture a much larger share of the market.”
Said Saraswat, “At Ashok Leyland, we looked at new emission norms as an opportunity to develop the AVTR range of trucks. Our new range of engines have higher horsepower and we have moved towards better power to weight ratio. This migration to new emission norms has benefitted our customers with better total cost of ownership, ergonomic comfort for the drivers, thereby driving demand.”