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Automotive Product Finder Magazine | New loading norms transforming commercial vehicle axles market
New loading norms transforming commercial vehicle axles market
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Growing vehicle production, demand for comfort, and the need to reduce maintenance costs are the major drivers pushing the growth of the automotive axle market in India. According Amey Amanaji, the upcoming axle loading norms are expected to change the automotive axle industry landscape in the country.
In the automotive industry, axles are classified either with respect to their position (front and rear axle) or based on whether they are propelling the wheels (live or dead axle and tandem axle). The axle minimises the discomfort to the occupants and handles the increased torque requirements at varying speeds. It also helps to reduce the maintenance costs associated with various linkages and components. Tier I suppliers are continuously developing better technologies to build axles that are durable and efficient for new vehicle platforms with varied requirements.
According to MarketsandMarkets, the automotive axle market of India is projected to grow to 234,497.8 thousand units by 2021 at a CAGR of 5.43 per cent. Growing vehicle production, demand for comfort, and the need to reduce maintenance costs are the major drivers pushing the growth of the automotive axle market in the country. Because of the continuous advancements in technology and the increasing demand for all-wheel drive (AWD)/ four-wheel drive (4WD) vehicles, live axles category is estimated to dominate the Indian automotive industry by 2021.
Presently, the Indian passenger car industry is dominated by front wheel drive (front live axle - side shafts) vehicles, which has boosted with introduction of A & B segment SUVs (Brezza, S-Cross, Nexon, Creta, Ecosport, etc). On the other hand, top SUV/MUV models (like Bolero, Scorpio, Innova) are rear wheel drive (RWD) (rear live axle – side shafts); whereas, most of the light and heavy commerical vehicles are RWD (one or more rear live axles).
With the growing demand for AWD/4WD vehicles in SUV/MPV segment (Fortuner, Endeavour, Hexa, Compass) and heavy truck segment (HD trucks offered by Bharat Benz and Scania), the demand for live axles would be on the rise in the near future. Foreign OEMs have played a key role in introducing AWD/4WD systems in trucks and SUVs in India, thereby creating competiton for local OEMs. As a result, Indian SUV manufacturers (Mahindra & Mahindra and Tata) and heavy truck OEMs (Ashok Leyland and Tata) have started offering AWD/4WD systems in their vehicles, thus, creating more opportunities for live axle suppliers.
E-axle: New opportunity for axle suppliers
As the world is moving toward electric & hybrid vehicles, India has also launched Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) programme, which focuses on technology development, demand creation, pilot projects, and charging infrastructure. According to the National Automotive Board, till now 278 thousand units of electric vehicles have claimed incentives of worth Rs 343 billion. Such initiatives are expected to further boost the demand for electric two and four wheelers in India. This growing demand would bring huge opportunities for e-axle suppliers. E-axle is an electro-mechanical propulsion system contained in an axle structure housing an electric motor, the power electronics, and some form of gearing/differential.
Used in conjunction with a conventional ICE (internal combustion engine) or hybrid powertrain, an e-axle can add electric propulsion to an unpowered vehicle axle. India is expected to play a crucial role in the electric vehicle market in the years to come. India aims to have 30 per cent of vehicles as electric vehicles by 2030. The Ministry of Power has launched the National E-Mobility programme in India. As a part of this programme, OEMs have rolled out electric cars fleet including Mahindra e-Verito sedan and Tata Tigor EV. Energy Efficiency Services Limited (EESL), under the Ministry of Power, Government of India, had procured 10,000 e-vehicles in 2017 and had issued a new tender for 10,000 more e-vehicles to cater to the growing demand. This is expected to give a significant boost to the electric axle market in the country.
Impact of scrappage policy on axle industry
The Ministry of Road Transport and Highways has proposed vehicle scrappage policy aimed at facilitating the replacement of old, polluting, and fuel-guzzling vehicles with new efficient ones. According to this policy, vehicles older than 15 years were eligible for benefits under the scrappage scheme. But, the criteria have been revised with benefits being applicable to vehicles older than 20 years. The scheme would now come into effect from April 1, 2020, coinciding with the implementation of the BS-VI norms. However, according to MarketsandMarkets analysis, the scrappage policy of the Indian government is unlikely to have any significant impact on the automobile industry in terms of increased demand. Addtionally, the impact will mostly be confined to small and medium-duty CVs, as these would be the ones meeting the age criterion. Hence, the government’s scrappage policy for trucks will not have a significant impact on the axle market.
New truck axle loading regulation boosting demand
Currently, stringent norms on overloading have led to an increase in the per ton transportation cost of sand, stones, and other construction material. In response to such concern, the government has decided to implement new axle norms. As per the notification issued by the Road Transport and Highways Ministry, the maximum safe axle weight in a single axle vehicle with 2 tires has been changed from 7.5 ton to 7 ton. As per the norms, the maximum axle load could be increased by as much as 20–25 per cent. According to MarketsandMarkets analysis, the new axle loading norms announced by the government are expected to transform the landscape of the CV axle market in the country.
The increase in axle load would eventually mean more load allowed on existing axles, which would mean more load can be carried with fewer trucks. This would result in decreased truck sales in the coming years, provided the regulation is extended to old trucks too. Alternatively, the regulation can also change the product offerings by OEMs, especially, high tonnage trucks of 30T and above.
About the author
Amey Amanaji is the Associate Manager (Automotive & Transportation) of MarketsandMarkets. He has been associated with MarketsandMarkets for more than 6 years, sharing his skills in the automotive & transportation domain. He has worked in projects related to emerging technologies for industry analysis, go-to-market strategy, growth strategy, competitive landscape, and industry valuation. For details, contact Priyanka Tiwari on email: firstname.lastname@example.org
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