Mahindra & Mahindra, which will enter the US market at the end of this year with the first Indian-built vehicles to be sold there, has told Automotive Logistics that it is likely to ship its vehicles by ro-ro.
“We have not yet finalised whether it will be container or ro-ro, but chances are that it will be ro-ro,” said Chandrakant R. Kadam, Mahindra’s Deputy General Manager, Logistics and Planning, International Operations. “We are in discussions with several shipping lines.”
Ro-ro carriers are obviously keen to capture the potential new business, particularly in a market that otherwise has few new opportunities this year. John Felitto, Executive Vice President, Deputy Head of Region Americas for ro-ro carrier and service provider Wallenius Wilhelmsen Logistics (WWL), believes that the diesel engine pick-up truck should not be moved by container. “Because this is a newcomer to the market, they will need a provider who can do more than ocean, but also the logistics and processing,” he says.
Currently, there is only a limited amount of ro-ro traffic out of India, and to the US it is mainly small volumes of “high-and-heavy” agricultural and construction equipment, according to Felitto. Mahindra has sold tractors in the US since 1994, mainly commercial-sized for small farmers and lawns, as opposed to the industrial-sized combines that are often transported by ro-ro. Nevertheless, Kadam said that Mahindra is exploring the potential for combining the trucks with tractors for export by ro-ro. “Currently, all the tractors go the US in containers, but we are definitely looking to combine them with trucks by ro-ro, although plans are not yet final,” he said.
Kadam said that vehicles would likely be shipped to the east coast from the Port of Mumbai, which is 100km from Mahindra’s plant. But he also raised the possibility of using India’s first dedicated car terminal at the Port of Mundra in the western state of Gujarat. “We are open to Mundra if the costs are right,” he said.
Mahindra, together with its dedicated US importer, Global Vehicles USA, had at one point planned to assemble the trucks from knock-down kits in Ohio. But with the sale of new vehicles in the US at their lowest point in decades, it will import finished vehicles from India despite the 25% import duty. Following the pick-up truck this year, it will import SUVs in 2010.
Xavier Begviristain, Vice President of Marketing for Global Vehicles, told Automotive Logistics that the 330 dealers which have so far agreed to sell the vehicles will order the trucks from India on a “pull” system beginning in May for sale by the end of the year.
“Vehicles will be ordered by dealers and then built [in India],” he said. “The pull system will help us in this market. We’re not looking to sell hundreds of thousands of vehicles, but instead we want slow and steady growth.”