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Volvo India joins chorus against used car imports

Janaki Murali

BANGALORE, Aug. 10

VOLVO India is the latest multinational to lend its name to the growing voices of manufacturers who have raised the issue of imported used vehicles after April 2001, when quantitative restrictions following the WTO guidelines will be removed.

Mr. Ravi Uppal, Managing Director of Volvo India, told Business Line, ``We do not support these imports. In India, we now have the local technology and many international companies have set up their bases providing the latest technology and solutions to their customers. Vehicles that are imported from outside will not be adapted to India and this will cause a mis-match with respect to our local needs and technology requirement.''

Volvo India, which manufacturers tractor-trailers for the Indian market, at its Hoskote plant near Bangalore, and also imports construction equipment and penta diesel engines, from its parent outfit, has targeted ``selling in 100s for the first few years and reaching its full capacity of 4,000 vehicles in the next three to five years. Its bus project, meanwhile, has yet to take off and the company has put up one Volvo bus to the Karnataka State Road Transport Corporation as a test case, which is mainly being utilised as a demo vehicle.

Although the parent company Volvo has access to used vehicles and import of used vehicles would not hit the company much, the Indian unit, however, has been making its vehicles to suit Indian conditions and Mr. Uppal says, ``We have no intention to impor t used vehicles.''

``Outside the country, the operating conditions and statutory conditions are different, but here the vehicles plying on the roads have been tropicalised. The performance of the imported vehicles will be different and service and spare parts for these veh icles will be difficult to obtain,'' he added.

According to him, ``a fleet owner who imports trucks will soon find that the rim and tyre size are different and that he has no spare ones to bank on. These vehicles will also be short of the cooling capacity for tropical climates. The fleet owner will a lso find that rear-axle ratios do not match the cruising speeds for Indian roads and that the axle and suspension is not specified for the local roads. Moreover, there will rarely be a case when one can procure a huge number of trucks with the same speci fication -- which means that support and maintenance of the trucks will not be easy. It will not be viable to effectively support such a variation and stock the necessary spares.''

Most manufacturers in India have already raised the issue of imported cars and other vehicles with the Union Government either individually or through the Society of Indian Automobile Manufacturers (SIAM). Manufacturers have been cautioning the Governmen t of a New Zealand or Sri Lanka kind of situation, where used car/other vehicle import flooded the market, taking the bottom out of the manufacturers business in these countries.

The SIAM report for 1999-2000 shows that the Medium and heavy vehicles had a good year with over 32 per cent growth in the sector. M and H commercial vehicles sold 1,11,195 units in 1999-2000 (83,668 in the previous year).