Carmakers got a clearer view of the obstacles that prevent them from distributing more cars by rail in India during discussions at the Automotive Logistics India Conference last week in Mumbai. A representative from the Indian Railways (IR) told delegates that there were cost, dimension and network constraints to increasing the number of vehicles moved by rail. “Investment costs to change our dimensions are prohibitive, and will not be driven by the automotive industry,” admitted IR’s Sanjay Goel, Director of Freight Marketing and Passenger Service.
But managers from top Indian carmakers Maruti Suzuki, Tata Motors and Mahindra and Mahindra declared their commitment to work more closely  with the industry to make the mode more viable. Prem K Verma, CEO of TML Distribution, Tata’s subsidiary for outbound, told Goel and delegates that the previous day  he had been in meetings with Indian Railways for “preliminary discussions” about using rail for Nano distribution from the plant under construction in Gujarat. While there were no guarantees that agreements would be reached, he said: “That should let the IR know that we are damn serious about using rail.”
Currently, rail represents less than two per cent of vehicles distributed in India, particularly low considering the large size of the Indian subcontinent (in North America and Europe the figure is 70 per cent and 30 per cent, respectively). Further, India’s underdeveloped infrastructure and fragmented system of road tolls and state taxes lead to many delays on the roads. According to one estimate at the conference, there are 73 tolls on the road between Delhi and Chennai.
Investment levels in automotive rail are low because it represents but a tiny fraction of IR’s revenue: 30 crore ($6.1m) versus 50,000 crore ($10.2 billion) annually for other freight, according to Goel. “So you see where it stands,” he said. “But nevertheless, this is a segment that we want to grow.”
Automotive traffic is constrained by a lack of equipment. The IR has less than ten trains running that carry cars, and many of the wagons have not been designed to fit different varieties of vehicles. Many of the wagons in use today are renovated coach cars designed for Maruti Suzuki 20 years ago; recent trials with double deckers were also designed on behalf of Maruti.
Verma suggested that the IR needs to work with all of the OEMs, particularly to design wagons and service. Later, in roundtable discussions, a table of OEMs and service providers agreed to organise an industry-wide initiative through SIAM (Society of Indian Automotive Manufacturers) that would bring together all players to draw up a viable business plan and list of requirements to present to Indian Railways.
There are also height restrictions of bridges and electricity lines. Goel noted that vehicle flows are unbalanced, running mainly north to south, which raises the cost of transport per car. “We know that in the south there is Hyundai, and volumes are high, but it never transports cars by rail,” he said. “We have tried to balance loads by sourcing tractors. The efforts are not lacking.”