Tata Motors, Mahindra & Mahindra and other auto majors that manufacture buses are looking at higher sales following the recent Government announcement for buying fleet of 10,000 buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
The total project cost was around Rs 6,300 crore and the estimated additional central assistance was about Rs 4,450 crore, the Cabinet Committee on Economic Affairs said earlier this week.
Companies such as Tata Motors, Ashok Leyland and Volvo Eicher Commercial Vehicles, which had met the demand of the Government for a similar number of buses in the first phase, are set to enter the fray this time as well.
“JNNURM phase-I has helped modernise public transportation across the country and drive greater adoption. This is a step in the right direction towards further improving public transport systems.
It will also provide an impetus to the commercial vehicle industry, which is currently facing a downturn,” Ravi Pisharody, Executive Director - Commercial Vehicles, Tata Motors, told Business Line.
The company had supplied over 4,000 buses across various states through JNNURM in the previous phase, he said. A similar number was supplied by Ashok Leyland across various states.
Mahindra & Mahindra, which could not participate in the earlier phase as it was only for bigger and low-floor buses, is expected to supply its small buses this time, especially for hilly regions. The company manufactures only light commercial buses right now.
“In the previous phase, light commercial buses were not covered, but now some of the funds are allocated for such buses as well, so we will supply some of our buses,” said Nalin Mehta, Managing Director and Chief Executive Officer, Mahindra Trucks & Buses.
He said the company had supplied 70 buses to Chhatisgarh three months ago on the state’s special demand.
The companies as well as industry body Society of Indian Automobile Manufacturers (SIAM) feel the implementation of the scheme should start immediately, as the industry is going through a tough phase.
“If the scheme has to have a major financial impact this financial year, it should be rolled out in the next two-three weeks itself,” Pisharody of Tata Motors said.
It would then ensure its implementation, which entailed some lead time coordination between the various city administrators, state governments and central ministries before orders were placed on manufacturers, he said.
“We hope it would be done faster so that the rollout of buses happens over the next few months.
“Then we expect commercial vehicles’ sales will improve and see some growth as the industry is going through a turbulence right now,” said Vishnu Mathur, Director General, SIAM.