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Has the demand for tippers been affected by GST and BS-IV?  Find out!

Has the demand for tippers been affected by GST and BS-IV? Find out!

01 Sep 2017 Long Read
Industry voices differ on the size of the tipper market but speak in unison of growing sales.

India's annual demand for tippers has been steadily growing over the past few years to currently stand at roughly 60,000 units, according to Anuj Kathuria, President, Global Trucks, Ashok Leyland. 'High-demand tippers are those in the 6 x 4 25-tonne capacity segment.'

Tipper sales in India at 27,918 units in FY 2016-17 grew by 24 per cent over the previous year, says Rajesh Kaul, Head, Sales and Marketing, Medium and Heavy Commercial Vehicles, Tata Motors. 'Tata Motors enjoyed half of the tipper market in Q1 of FY2017-18.' Kaul reckons most buyers demand tippers in the 25-tonne segment. Hilly states and smaller mines or mines with narrow roads require 16-tonne tippers.

'In FY 2016-17, multi-axle tipper sales crossed 40,000 units, with demand being largely driven by multi-axle 25-tonne and 31-tonne models,' says RC Mangal, Senior Vice President-Sales & Marketing, Truck and Bus Division, Mahindra & Mahindra. 'We offer 25-tonne and 31-tonne tippers in rock body, box body and customised body variants.'

'Buyers from the construction segment mostly demand tippers of 16-tonne to 18-tonne capacity,' says Sudhir Chaudhary, General Manager, Sales, Hyva India. 'Demand for mid-sized tippers is increasing as more road construction projects get underway.'

Evolving demand
In future, Kaul expects to see a surge in higher tonnage points between 31 tonne to 49 tonne in keeping with the trend towards higher tonnage point vehicles as a result of India moving towards the rated load regime. To cater to this need, Tata Motors has introduced a new range of high mileage tippers in the 25 tonne and 31 tonne categories.

'Tippers are usually viable and suited for short distances but with the lead distance increasing of late because of the growing distance between raw materials and the point of usage, we are seeing a trend of higher tonnage tippers in operation,' says Mangal.

'Also, stricter overload restrictions are spurring the trend towards higher GVW vehicles.'

'We can see a clear trend towards higher-tonnage tippers (25 tonne and 31 tonne),' says Rajaram Krishnamurthy, Vice President, Domestic Sales, Product Management & Network, Daimler India Commercial Vehicles. BharatBenz introduced its all-new heavy-duty truck range, including tipper models, earlier this year.

Demand drivers
Road construction, smart cities, SEZ projects and other infrastructure projects have been major contributors of growth in the tipper segment, as per Kaul. 'Mining in Odisha, Jharkhand, Karnataka, Andhra Pradesh and Telangana is expected to add to the demand after the monsoon.'

Mining is driving the demand for tippers in Odisha, Chhattisgarh, Jharkhand and Telangana while quarries are driving sales in Rajasthan, according to Chaudhary. 'GST and BS-IV have been a dampener but we are seeing increased demand for tippers on account of road construction and allied activities; so overall, we expect tipper volumes to pick up and end the year flat,' predicts Mangal. 'We expect subdued demand from the mining sector to slowly pick up with most demand coming from Jharkhand, Odisha, Rajasthan and Karnataka.'

'Increased infrastructure development and high coal production are boosting demand for tippers,' adds Krishnamurthy.

Demand is impacted not by price but by infrastructure spends and mining industry performance, both of which are positive right now, reasons Kathuria. 'With the Union Government continuously increasing the per-day road construction target to speed up road development, possibly even doubling the target this year from the current 22 km, we expect growth in tippers and trucks. A new reality of construction in India today is environmental concerns that have pushed quarries and crushers outside cities; trucks now need to travel longer distances, which could also lead to interstate movement.'

With regard to the demand from the mining sector, Kathuria expects to see an increase in states such as Rajasthan, Madhya Pradesh, Andhra Pradesh, Odisha, Jharkhand and parts of Telengana and Karnataka after the removal of mining ban. Two of Ashok Leyland's new products are in its Value CT range and another falls in its premium range called Captain, and all these address coal mining and road construction which are buoyant at present.

GST + BS-IV impact
A borderless single India will be more helpful to trucks than tippers because trucks move interstate while tippers predominantly move through smaller lead distances, explains Kaul. 'We expect the average running of a truck to increase from 200-300 km per day closer to the European standard of 450-500 km per day.'

Despite seamless movement, Kaul does not expect market unification to adversely impact demand for vehicles. 'Investments in roads, smart cities, irrigation and other infrastructure will offset any contraction in demand owing to the free movements of goods,' he says. 'At the aggregate level, the heavy commercial vehicle industry will see a boom after this year's monsoon and the growth story should continue for the next two to three years.'

As envisaged in other industries, Kathuria expects the GST to have a positive impact on growth.

So far, the only impact of GST has been that in its immediate wake, some transporters postponed purchases seeking clarity on recent accounting, taxation and invoicing changes, says Kaul.

'Customers are currently circumspect owing to the substantial increase in the prices of BS-IV-compliant tippers, and are currently holding purchases owing to the monsoon as well as utilising existing fleets or purchasing used vehicles for the time being,' says Chaudhary.

The introduction of BS-IV regulatory norms has boosted the demand for second-hand vehicles, especially BS-III variants.

However, whereas second-hand trucks make the haulage business more viable, this trend has bypassed tippers, say sources, as tipper operations require reliability and uptime, parameters that can't be ascertained in second-hand vehicles. Price rationalisation within the next six months as well as new infrastructure projects kicking in should boost sales.

'We are already seeing things start to pick up, especially having passed on GST benefits to consumers by cutting prices across all commercial vehicle segments,' says Kaul. 'We are passing on GST benefits to our customers with MRP reductions from 0.4 up to 2.5 per cent, depending on the state and model,' says Krishnamurthy.
- Charu Bahri

Buyer's preference
'Normally, we use 25-tonne dumpers because these are permissible on city roads and flyovers, which are constructed for this load limit.' - Pramod Joshi, DGM Plant and Machinery, JMC Projects (India)

'We prefer using tippers of 40-tonne capacity for the speed and ease of transferring up to 20 cu m of earth in one load. A 40-tonne tipper helps us achieve one night shift target, moving 500-600 cu m at a metro and other infrastructure project site within city limits.'
- G Boopathi, Manager Civil, Heavy Civil Infrastructure IC, Larsen & Toubro

'In Indian conditions where mine activities are outsourced, small trucks are preferable to dumpers, despite trucks being designed for non-mining industries. This is mainly because dumpers can cost 25-30 per cent more than trucks to buy and run; for this reason, we find dumpers suitable only for transporting large volumes over short distances when the convenience of managing and loading fewer vehicles kicks in.'
- Balakoti Reddy, Senior Vice President, BGR Mining & Infra

What size Excavator should you use with your Dumper?
Irrespective of whether you use a truck or a dumper, its size has to match the size of the excavator deployed. 'We match a truck of 18 cu m capacity with a shovel of 2.3 cu m capacity, one of 26 cu m capacity with a shovel of 5 cu m capacity, a 35-40 cu m dumper would match a 10 cu m shovel and so on,' says Balakoti Reddy, Senior Vice President, BGR Mining & Infra.

- Sudhir Chaudhary, General Manager, Sales, Hyva India

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