1. Automotive Logistics Current Indian Scenario M M Singh Chief Mentor Maruti Suzuki India Ltd. SIAM Automotive Logistics Conclave

2. Background... 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2009 AMP

3. Developing common understanding between OEMs Collaborative effortConsolidation Improvement in logistics infrastructure RailwaysRoad & Ports Promoting best logistics practices Engagement with global logistics companies Pilot projects Industry joined hands to take on the logistics challenge

4. 1/17/2015SIAM Automotive Logistics Conclave  Automotive Mission Plan - AMP 2016 put Auto Industry on Fast Growth Track  Industry Focus on Customer Delight through Faster Deliveries; Factory Fresh Quality  Logistics had its own challenges Congestion Emissions Fuel Cost Driver Scarcity Background...

5. Logistics Industry Structure Fragmented Small Players Dependence on Road 90% of Transporters having less than US$ 0.2 million turnover 75% of Transporters having just 1 truck 70% - Road 30% - Railways Auto sector 98% - Road Just 2% Rail Small and fragmented logistics cos. could not invest to upgrade logistics performance Structure of Logistics Industry

6. Logistics Bottlenecks Average Truck Speed low High Freight cost Delays at check points High turnaround time at Ports Deficiencies in logistics infrastructure causing 1 to 2% cost disadvantage to Auto Industry Deficiencies in logistics infrastructure causing 1 to 2% cost disadvantage to Auto Industry Fall out for Auto Industry

7. Major Initiatives Inbound Logistics Improvement in Truck fill rates – higher asset utilization – Improvement in Packaging – Consolidation Outbound Logistics Development of Ports and RORO terminals Multi-modal Logistics : Road, Rail, Coastal 1/17/2015SIAM Automotive Logistics Conclave

8. “Development of Export Infrastructure at Mundra Port” Mundra Port “India emerging as a hub of small/ compact cars manufacturing for global markets”

9. 1/17/2015SIAM Automotive Logistics Conclave 3 Cars4 Cars5 cars Small cars in Container (40 feet High Cube) Now 5 small cars per container High capacity Use of Ramps/ Frames Cost reduction in Double Stack mode Not dependent on Auto return load Automobiles in Container Trains ….

10. Multi-modal Logistics systems  Rail mode could supplement Road mode Challenges : Railways carrying bulk and heavy cargo – Coal, Iron-Ore, POL etc. Automobiles being light and voluminous misfit in the freight structure – Rail freight 20~40% more than Road freight Very limited availability of Rail infrastructure to suit Automobiles – Wagons, Terminals 1/17/2015SIAM Automotive Logistics Conclave

11. 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Transformation in 5 years…

12. Increase in dispatch volumes Increase in fleet size Variation in fuel price Change in distribution model – Direct to Hub- Spoke Development of Rail mode 1/17/2015SIAM Automotive Logistics Conclave Vehicles in millions Increase in dispatch volumes Number of carriers NMGs 125 Cars IR Fixed Deck: 265 Cars Flexi-Deck: 318 Cars Development in Rail Mode Carriers in millions

13. Rail mode - Breaking the ice… 1/17/2015SIAM Automotive Logistics Conclave  Close interaction with IR and Active support from Railway Board and RDSO resulted in :  New Policies Automobile Freight Train Operator Policy (AFTO) Auto-Hub Private Freight Terminal  New Wagons Double deck; adjustable height Higher Capacity, Speed  New Tariff Freight structure for BCACBM Rake

14. 1/17/2015SIAM Automotive Logistics Conclave MSIL pioneered new Auto- Wagon Development 5 th March 2014 : Flag-Off of India’s First Flexi-Deck Rake 2011- Design Conceptualization 2012- Prototype Development & Trials

15. 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Current Scenario…

16. Additional Private Rakes are in operations Total Carrying Capacity : 1 lac+ veh./yr Higher Capacity Auto-Wagon Design and drop in Diesel price made Rail freight competitive to Road Government is considering – taxation reforms : favorable to inter-state logistics – Technological interventions to curtail wait at tolls and state borders – Enforcing CMV regulations – Size and Weight Rationalization of diesel prices 1/17/2015SIAM Automotive Logistics Conclave Radical shift in Logistics Equation….

17. 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Preparing for future…

18. 1/17/2015SIAM Automotive Logistics Conclave AMP 2026 - Draft  Vision 2026 envisages a 3.5x growth in volumes for Indian Auto industry  Aggregate revenue to increase by 5x to hit $300bn  Vision 2026 will enable the Indian auto industry to:  Contribute around 13% to GDP  Generation additional 100 million jobs  Attract more than US$ 80 bn in investments Source : IMACS

19. Automobile Market Scenario Will road infrastructure be able to cater the impending 300% increase in automobile carriers ? Multi-Modal solution is inevitable Will road infrastructure be able to cater the impending 300% increase in automobile carriers ? Multi-Modal solution is inevitable Source : IMACS

20. Multimodal Logistics (Road + Rail) Rail may carry 50% of increased volumes Logistics Share of Business – Road : 65% Rail : 35% Source : IMACS

21. Auto logistics by Rail : Next Level  Pertinent Indian Railways Policies  Comprehensive Wagon designs  Auto friendly Rail Terminals  First and Last mile connectivity  Innovative Technology for efficient operations 1/17/2015SIAM Automotive Logistics Conclave

22. All stake-holders to collaborate IR OEMs LSPs Wagon Designer, Mfr. 1/17/2015SIAM Automotive Logistics Conclave Indian Railways OEMs Logistics Service Providers Wagon Designer, Mfr.

23. Expectations from Indian Railways  Policies for faster clearances – Wagon Designs – Speed – Routes  Policies / Mechanism for operational efficiency – Route fixation – Time table – Higher priority to high speed Auto-Freight trains  Capacity Increase – Dedicated Freight Tracks – Locomotives – Crew – Maintenance facilities  Creation of Auto handling terminals at key destinations  Technology – Tracking and Monitoring  Competitive Freight Structure 1/17/2015SIAM Automotive Logistics Conclave Indian Railways

24. Expectations from Wagon Designers, Manufacturers  Design innovations for Further flexibility : Vehicle mix (Cars, SUVs, MUVs, 2W etc.) Operational ease Minimal maintenance  Reduction in lead times Design to Prototype to Customer  Manufacturing excellence Innovative techniques / skills – Fabrication, Welding, Painting  Manufacturing with robust quality systems Process Quality Product Quality 1/17/2015SIAM Automotive Logistics Conclave Wagon Designer, Mfr.

25. Expectations from OEMs 1/17/2015SIAM Automotive Logistics Conclave  Unified approach for developing multi-modal logistics (MML)  Devise distribution model to suit MML Eg. Hub and Spoke  Endorse innovative systems  Support development of key infrastructure Design Investment OEMs

26. Expectations from Logistics Service Providers 1/17/2015SIAM Automotive Logistics Conclave  Develop multi-modal capabilities  Imbibing highly efficient operating systems  Inculcate culture of Safety  Develop skilled and motivated workforce  Affinity to investment Infrastructure Technology  Costing with Long term perspective Logistics Service Providers

27. Typical Auto Handling Rail Terminal  Unhindered approach and connectivity to main roads  Horizontally straight and vertically leveled tracks for Rake placement  Area for interim parking of automobiles. Paved, Marked, Gated  Area for loading / unloading of Auto carriers for first / last mile.  Provision for Adequate Lighting Isolation of Over Head Traction (OHT) Inspection / Maintenance of Rakes Minneapolis, USA

28. Logistics Vision  Clean  Green  Fast  Safe  Economical Let us together strive to achieve higher goals… 1/17/2015SIAM Automotive Logistics Conclave

29. Thank you 1/17/2015SIAM Automotive Logistics Conclave