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Tuesday, September 27, 2011

Mining ban to impact tipper demand in Karnataka

Tuesday, 27 Sep 2011

BS reported that the ban on illegal mining in Karnataka is adversely impacting the sales of trucks and tippers. Manufacturers such as Ashok Leyland, India second biggest truck maker and VE Commercial Vehicles are expecting a hit on retail offtake of trucks if the Supreme Court ban on mining is not lifted.

Already, demand for tippers in the ban-effected mining areas of Bellary, Chitradurga and Tumkur have been on a downtrend for the last few weeks. These trucks which are utilised by large fleet owners are used ferry the ore from mines to the ports.

Mr Somnath Bhattacharjee president Volvo Trucks India and executive vice-president said “Of course, stoppage of work will have a demand glut. I won’t be able to put a specific number to it now, but would definitely have an impact on the demand for tippers, as this is one of the areas where they are consumed.”

According to industry players about 9,500-10,000 tippers are sold every year in iron ore producing states like Karnataka and Goa. With such mines increasingly coming under the scanner of authorities, vehicle makers fear demand for tippers in Goa too will come under pressure.

Mr K Sridharan CFO of Ashok Leyland said "We would not be able to comment at this moment specifically on the impact of the mining ban on demand for trucks which serve such sectors. But if the ban continues it will certainly have an impact."

Chennai based Ashok Leyland signalling a broader slowdown in overall demand for commercial vehicles marked a dip of 4.6% in sales of medium and heavy commercial vehicles of last month to 4,584 units as against 4,796 units sold in the same month a year ago. The company does not provide classification according to the type of vehicle.

(sourced from BS)

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