The recent announcement that Indian carmakers are seeking to bolster their stagnating domestic sales with increased exports of finished vehicles faced an immediate problem last week as a nationwide trucker strike escalated to include port operatives and oil workers.
The action, which lasted eight days, hit both the public and commercial sectors, with freight traffic serving both domestic and overseas movements affected. Between 20-25 billion rupees ($410-512m) worth of export goods are reported to have been affected resulting in the cancellation of export orders in some cases. The percentage of automotive loss is not yet known but Rajinder Singh, President of the All India Inter State Lorry Owner’s Association, confirmed that the automotive industry was “very badly affected” by the action. He said the full impact would not be revealed until negotiations were concluded.
Mundra port, which is developing a major auto terminal with WWL and NYK, was amongst those particularly affected by the strike.
Maruti Suzuki, Hyundai Motors India and Bajaj Auto (amongst others) are all now looking at the export market to rescue growth as local domestic sales slow down.
Hyundai Motors India was aiming at domestic sales to account for more than 50 per cent of its total production but has since revised this target and expects that figure to be met by overseas sales. The company, it is claimed, already accounts for 67 per cent of exports from India. However, moving finished units of the i10 model from the company’s factory in Chennai to the port was hampered by striking freight operatives who were demanding cheaper diesel, tyres and exemption from road tolls. Up to six million trucks were off the road in India at the height of the action.
In his letter to India’s Prime Minister Dr Man Mohan Singhji last December, Mr Singh was eager to highlight the economic restrictions on the transport industry and called for the Prime Minister to consider issues that included the price of diesel, reduced loan costs for transport providers and an exemption from toll taxes.
On Friday the President of the All India Motor Transport Congress, Charan Singh Lohara, was arrested under the Essential Services Maintenance Act, along with and Secretary, S Venugopal, and 30 other national members.
Up to 50,000 public sector employees in the oil industry joined the strike for three days last Wednesday and 3,000 more truckers at the country’s ports were expected to join the strike yesterday when its suspension was announced following a meeting between the government and the All India Motor Transport Congress union. Transport minister TR Baalu announced that a panel headed by the transport secretary would look into the truckers’ demands and the Government is considering a reduction of up to Rs 5 per litre in petrol, Rs 3 a litre in diesel and Rs 25 per LPG cylinder prices.