Small and large fleet buyers are buying fully-built versions of trucks and buses directly from the manufacturers instead of buying only the chassis
Tata Motors and Ashok Leyland have reported a steady rise in demand for fully-built vehicles over the last several months, signaling a shift in buyer preference that is now in line with the international trend.
Small and large fleet buyers are buying fully-built versions of trucks and buses directly from manufacturers, instead of buying chassis to be fitted later with a vehicle body. Fully-built vehicles are customized to the buyer's preference and are sold in ready-made condition.
As buying fully-built vehicles from a manufacturer is more expensive, fleet operators had refrained from it to cut costs. The cost of buying a body from a third party for tankers, trailers and refrigerated vans can be anywhere between Rs 100,000-500,000, cheaper than buying from a manufacturer.
But with the government being in favour of stricter legislation for commercial vehicles, especially for those using the dense highway networks, manufacturers are witnessing a shift in buying patterns.
"More of our customers want to buy factory built cabins than before. The intermediate commercial vehicle (ICV) segment of 7.5-15 tonne and the tippers are now sold as fully built vehicles but the long haul vehicles which are the multi-axle and tractor trailer those were generally sold with just the chassis. Now we are seeing buyers are preferring cabins and also many are buying containers. The e-commerce and auto parts providers were those who used to build their own containers," said Anuj Kathuria, President, Global Trucks, Ashok Leyland, in an interview to Moneycontrol.
Recently, Baba Ramdev-promoted Patanjali Ayurved placed a Rs 60 crore order for the purchase of 200 fully-built trucks worth Rs 30 lakh each. "Most of the major fleet operators are going in for fully built vehicles," said Kathuria.
For the Chennai-based Ashok Leyland, which is India’s third largest commercial vehicle maker, around 90 percent of ICV and tipper sales are of fully-built units. Similarly, more than 80 percent of Tata Motors' sales of vehicles in the same segment are of fully-built ones.
CV market leader Tata Motors recently-launched the Signa and Ultra range of fully-built trucks having tipper and container models. "The focus is shifting towards fully built vehicles and we are prepared for it," said a senior executive at Tata Motors.
Building of truck bodies in India is largely controlled by the unorganized sector, including fly-by-night operators who provide little or no accountability in the event of an accident. Often, materials of sub-standard quality or those not sanctioned by the regulatory authority are used.
"After GST, everybody has come under the tax net. So definitely customers appreciate the quality we can deliver as compared to the unorganized players. We offer warranty on the structure. It takes a month for the body builders to put a body on the chassis. We are offering a complete and ready to drive vehicle," Kathuria said.
