Concerned with the congestion on the highways and increasing damages to cars while transportation, US car major Ford Motor Corp is mulling shipping its cars from its Chennai factory through the sea route to the western side of the country.
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The company is setting up a 2.4-lakh unit factory in Gujarat to be operational next year and said that moving vehicles through ships would be more efficient.
"Almost 99% of all cars in India today are transported through the road network. This is not very efficient," said Stephen Harley, executive director, global material planning and logistics, Ford Motor Corp. "In the US, the most predominant mode of transport is rail. In Europe, its through inland water system. Even in other emerging nations like China and Brazil, other modes are being developed. We need that in India too."
At present, India ranks high on logistic costs compared to other countries. Logistics and transportation in India accounts for almost 12-13% of the gross domestic product against the global average of 6-8%, mainly due to dependence on roads.
"This is quite high," Harley said. "We want clean, congestion-free ports and multi-modal transportation options. The lack of it limits India's possibilities compared to other countries like Brazil. Somebody is paying for this inefficiency and customers are bearing a part of it."
Companies such as Maruti and Hyundai also echoed its feelimgs.
The country's largest carmaker Maruti Suzuki India Ltd is in the advanced stages of setting up a 5-kilometer-long low-speed railway track connecting the Delhi-Ahmedabad line to its factory in Manesar.