[S2!!!]

Railway Minister Suresh Prabhu has announced that the government will soon set up India's first rail automobile hub in Chennai. This announcement in the railway budget for 2016-17 is welcome news for the auto industry.

The announcement also includes the establishment of rail-side logistic parks and warehousing facilities in a private-public partnership. With the government providing the requisite logistical support, there seems to be a positive vibe amidst manufacturers as these steps are likely to enhance operational efficiencies and reduce transportation costs as well as time.

Chennai is commonly referred to as 'Detroit of the East' due to the number of automobile, two-wheeler and commercial vehicle manufacturing facilities in and around the region.

Maruti has been using rail transportation for over two decades now, and it contributes to less than 5% of its domestic sales (balance being taken care of by road transport). Hyundai moves about 1% of its domestic sales by rail. In 2014, the Indian Railways flagged off its first Flexi-Deck Train (read more). The capacity of this train is 20% greater than that of the regular rakes.

Later in 2014, as a result of a newly framed policy by the Indian Railways, car transportation began by railways in association with the private sector. This move generated a lot of interest among private companies to acquire rakes and register as auto freight transport operators. The Indian Railways would require approximately 100 rakes by 2020, even if it carries only one-fourth of the finished vehicles by rail.



*Image for representation only

Source: Autocar Professional
Image Source: TheRailzone

[girishglg]

Wonderful news about rail being promoted as a compelling transportation mode for autos.

Logically this could make the transportation cheaper and more importantly safer considering the vehicles may be subject to any road accident related damage arising out of our unruly highways.

Moreover the time to move the vehicles may be reduced if managed properly since the trucks are subjected to multiple stops at state border crossings.

[GTO]

For those interested in the topic - Link to a great discussion on railway transportation.

[RavenAvi]

The first batch of cars has rolled out today from India's first-ever rail auto hub located at Wallajabad railway station in Kancheepuram district, about 100 kms from Chennai.

The Southern Railways' train, carrying 124 Hyundai cars produced at the company's Sriperumbudur plant in 25 specially designed wagons, left for Changsari in Assam's Kamrup district, earlier in the evening today.

Southern Railway will earn Rs 16.37 lakhs from this trip.

Located 12km-40 km from manufacturing units of auto MNCs like Nissan, Hyundai and Ford in such areas as Oragadam, Sriperumbudur and Singaperumal Kovil, the hub is designed to help cars be driven on stone-paved tracks into the wagon.

It is expected to cater to more than one million cars annually produced in these areas and will also see trains bringing cars for distribution in Tamil Nadu and adjoining states.

Southern Railway, aiming to capture the export market through Chennai and Ennore ports, will use trains to transport cars to and from the two ports and hopes to increase freight earnings that are now just half its total earnings.

ET