Maruti Suzuki's car transportation through rail doubles in five years

Automaker's rail share of logistics rises to 17 per cent

Maruti Suzuki India Limited (Maruti Suzuki) transported over 3.2 lakh vehicles using Indian Railways in 2022, doubling its rail logistics volumes in a space of five years. 

The company transported 140,000 vehicles through railways in 2018.

The development marks the substantial shift in automobile supply chains from roadways to railways — the company’s share of rail in outbound logistics has risen to 17.1 per cent in the previous calendar year, which is over 4 percentage points higher than last year. 

The current volume is the highest-ever dispatch through the mode by Maruti Suzuki.

Hisashi Takeuchi, Managing Director & CEO, Maruti Suzuki India Limited said, “Aligned with the Government of India’s aim to reach net zero emissions by 2070, we have enhanced our efforts to reduce carbon footprint in our business operations. Our strategy to increase the use of rail mode in outbound logistics has resulted in dispatching a record 3.2 lakh vehicles using railways in CY2022. This has resulted in offsetting around 1,800 MT of CO2 emissions.”

The automaker has been able to save over 50 million litres of fuel during the year, aided by the modal shift in transportation, Takeuchi added. Among automobile manufacturers, the company has been at the forefront of the paradigm shift as India aims to move to greener supply chains relying increasingly on railways and waterways instead of roads.

Meanwhile, the national transporter has recognised the importance of capturing the automobile freight segment over the last decade as it stepped up its efforts to make the supply chain seamless for manufacturers. Currently, it is redesigning several automobile-carrying wagons to suit the needs of manufacturers better and capture the SUV segment.

With the onset of dedicated freight corridors, the railways has attempted to address the legacy issue of delayed deliveries due to low speed of trains. Currently, the average speed of goods trains on the railway network is still a little over 18 kilometres per hour, which the railways aims to improve further.

The share of Maruti Suzuki’s automobiles transported through railways was a meagre 5.1 per cent in 2013, and has seen steady growth since. “Going forward, we aim to further increase these numbers. For this, we are setting up dedicated railway sidings at our facilities in Haryana (Manesar) and Gujarat,” Takeuchi said.

Senior railways officials working on automobile freight told Business Standard that the national transporter’s Automobile Freight Train operator (AFTO) policy has provided significant impetus to these efforts. Under the policy, private parties can invest in automobile wagons for the transportation of their own units.

Under the national Rail Plan, the railways aims to increase its modal share in India’s cumulative logistics to 45 per cent, from the current 27 per cent. For this, the national transporter will not only need to augment its current volumes of existing commodities, but also diversify its freight basket to a gamut of finished goods. 

Commodities like coal and iron ore currently dominate the freight share of railways with over 60 per cent contribution to total loading.