Troubles in India's mining sector have had an unintended casualty - the segment of highly specialized off-road trucks used in deep mining. The sale of these trucks - costing around Rs. 1 crore apiece and manufactured only by foreign firms such as Volvo, Mercedes Benz and Scania - dropped from 1,200 units in 2011 to 760 in 2012, according to industry sources.
After reaching a peak of 1,300 units in 2010, sale of heavy duty trucks with over 500 horsepower gradually decelerated as coal and iron ore mining in various parts of the country slowed down following a host of issues.
Mining in resource rich states such as Orissa, Karnataka and Goa came almost to a standstill following illegalities and environmental issues while controversies surrounding allocations paralysed the sector. "We hope this year will be better. The trend is changing," said V Sivakumar, director, sales at Scania Commercial Vehicles India.
Scania holds around 13% of this niche market which is dominated by Volvo, commanding a 67% marketshare. Actros brand of Mercedes Benz holds a 20% marketshare. The firms import completely built units or assemble knocked down units in India.
Despite the slump, Volvo, Mercedes and Scania are expanding their manufacturing capability in India. Mercedes Benz shifted Actros production to its full-fledged Chennai facility while Scania's Bangalore plant will be fully operational in the second half of the year.
Not just the upper end of the truck market, but the entire industry suffered last year because of the slow movement of goods resulting from a manufacturing slowdown.
The mass market heavy truck segment dominated by Tata Motors and Ashok Leyland declined 26%.