Rising Chinese subsidies hurting Indian electric bus makers, says Vinod Dasari

Government of China is providing ‘subsidy’ to electric bus manufacturers to price its products lower than Indian companies vying for state governments contracts, a top official from Ashok Leyland said.

Speaking exclusively to Moneycontrol Vinod Dasari, Managing Director, Ashok Leyland, said, “It will be difficult for us to compete when some other government is subsidising their company to come and compete in India. It seems like an unfair competition but we will do what we have to do.”

Chennai-based Ashok Leyland was one of the two final bidders for the lucrative deal to supply 25 electric buses of 9 meter type to Himachal Road Transport Corporation. The contract worth nearly Rs 48 crore was bagged by the Indo-Chinese joint venture company Goldstone Infratech based in Hyderabad.

“For 9 smart cities the funding to procure electric buses is subsidised upto 60 percent by the central government. So if I go and compete using Indian tax payers subsidy and some other company comes backed by some other government’s subsidy its very difficult to compete," added Dasari.

On being questioned further about the tough chances for Indian companies to bag such contracts in the future based on price Dasari, who has been the President of the Society of Indian Automobile Manufacturers (SIAM), said that price is not the only criteria for bagging such deals.

“We will have to deal with it. Bus industry is something which will not run only on price. There is also the maintenance part of it which runs for 6-7 years. And outside of China we are the world’s largest bus manufacturer. I will not ask for sops from our government to fight the Chinese, we will find a way to compete and we are confident of our technology," said Dasari.

Tata Motors, Ashok Leyland, Mahindra & Mahindra and JBM are some of the companies who are bidding for tenders floated by state governments and municipal corporations. At least 11 states including Maharashtra, Tamil Nadu, Andhra Pradesh, Himachal Pradesh and Karnataka have floated tenders to buy fully electric buses.

While Dasari declined naming any Chinese company, he said “I know in some instances the price which we quoted, the Chinese company quoted half.”

Last year BYD Auto Industry headquartered in Shannxi, China walked away with two prized contracts of supplying fully electric buses, which Tata Motors and Ashok Leyland were keenly bidding for.

BYD in partnership with Goldstone Infratech bagged the order for supplying 25 electric buses to Himachal Road Transport Corporation (HRTC) and six other buses to Brihanmumbai Electric Supply and Transport (BEST).

While the buses supplied to HRTC, which is a eBuzz K7 type, 9 meter, 25 seater vehicle, costed around Rs 1.91 crore each, the ones supplied to BEST in Mumbai were priced at Rs 1.61 crore of the same series.

As many as seven companies had shown interest in the HRTC order comprising supply of 25 electric buses along with chargers and annual maintenance contract. Mahindra & Mahindra, JBM Auto, Volmac Engg and EV Motors India had also bid for it.