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New auto battleground: military, luxury vehicles

Asia Motor Works and M&M pose headaches for major players such as Tata Motors and Ashok Leyland in the Rs 2,500-cr defence vehicle biz. Manu P Toms reports.

autos Updated: Jan 13, 2012 21:31 IST
Manu P Toms

Niche automobile markets such as defence vehicles and inter-city luxury coaches have become the latest battleground in India.


New players Asia Motor Works (AMW) and Mahindra and Mahindra are raising the pitch for established companies such as Tata Motors and Ashok Leyland in the Rs 2,500-crore a year defence vehicle business, and Tata Motors, Isuzu and AMW pushing the older companies, Volvo and Mercedes Benz, in the fledgling Rs 1000 crore inter-city luxury coach segment.

For 2012, the army has a requirement of 1,400 light armour vehicles, 1,200 light protected patrol vehicles and 1,600 infantry mobility vehicles — which translate into a Rs 2,500 crore market approximately. “For the next five years demand from the defence sector will be steady. It may even increase,” said Ashish Chandra, marketing head of AMW’s recently-floated defence vehicles division.

Mahindra Defence Systems has entered the fray with mine-protected vehicles and light combat vehicles that it is making at its Faridabad facility. Ashok Leyland, a well-entrenched player in this segment, has till date supplied more than 65,000 Stallion trucks to the army. Tatas have supplied around 25,000 vehicles to the defence forces.

In the luxury coach segment, SML Isuzu (formerly Swaraj Mazda Ltd) has started selling its 47-seater LT 134. The vehicle is priced 15-20% lower than Volvo and Mercedes models, and Isuzu hopes to capture a quarter of the 1,000 unit-market. “This fiscal we have already sold 200 units,” said LM Sharma, chief manager, marketing, SML Isuzu.

AMW’s luxury coach Magnus, showcased at the Auto Expo, will hit the market in nine months. It will be priced lower than Volvo and Mercedes Benz buses.