Maruti Suzuki looking at transporting more vehicles via railways to cut down costs and reduce emissions

The country’s leading carmaker Maruti Suzuki is looking at transporting more vehicles it makes via railways to cut down costs and reduce emissions in line with the government’s push towards clean mobile solutions.

The company, along with joint-venture partners, has invested over Rs 1081 crore to commission the country’s first in-plant railway siding at its manufacturing facility in Gujarat, which was inaugurated by Prime Minister Narendra Modi Tuesday. Maruti Suzuki plans to set up similar facilities in Manesar and Kharkhoda (Haryana).

Overall, the company said it plans to substantially increase the proportion of cars it transports via railways as it doubles production to 4 million units per annum by 2030, from a little over 21% currently.

Rahul Bharti, executive officer (corporate affairs) at Maruti Suzuki, said, over the past few years the company has been undertaking several measures to increase focus on green logistics. “We have been increasing by 100,000 units the number of vehicles transported via railways the past couple of years. But this will go up substantially in the coming years, as we double production capacity to 4 million units per annum by the end of the decade.”

Over a fifth of all passenger vehicles produced in the country are now transported through railways, a five-fold increase from 4.5% in FY18. Apart from a reduction in overall logistics costs, railways offer convenience of efficiently transporting multiple batches of vehicles while helping meet sustainability targets, said industry stakeholders.

Railway transportation allows automakers to reach faraway destinations in half the time taken via road. With destination terminals at Agartala and Silchar, vehicles can reach locations in North-east India in 8 days, which otherwise would take twice the time.

Maruti Suzuki itself has dispatched 409,000 vehicles through railways till February FY24 - the highest in a fiscal year. This is an increase of nearly 22% over 335,000 vehicles transported via rail in all of last fiscal.

To achieve this goal, the company is adopting practices like enhancing dispatches to shorter distances, increase in use of the available railway rakes and increased use of digitalization in planning for dispatches.

Apart from Maruti Suzuki, Transport Corporation of India (TCI), APL Vascor, Adani NYK, IVC Logistics and Joshi Konoike have also secured AFTO (Automobile Freight Transport Operator) licences to cash in on the potential in the space

While road freight rates have been on a rise with a pick up in economic activity and a steep hike in fuel prices, rail freight rates have relatively remained stable since the Indian Railways unveiled the Automobile Freight Transport Operator (AFTO) policy in 2013.

“One rake can in one run can transport 270 cars, which equals trips required to be taken by 40 trucks. In one run, one rake can help save fossil fuel required for travelling 64,000 km”, Bharti added.

Maruti Suzuki is India’s first automobile manufacturer to obtain AFTO license in 2013, which allows the company to fabricate and operate high speed, high capacity auto-wagon rakes on the Indian Railways
network. The company has 40 railway rakes, with a capacity of 300+ vehicles per rake. Maruti Suzuki has cumulatively transported more 1.8 million vehicles in the last nine years.