MUMBAI: Japan-based conglomerate NYK has established a joint venture (JV) with port owner Adani Group to capitalize on the rapid growth in India’s automotive trade.
NYK Auto Logistics (India) Pvt. Ltd. will provide rail logistics services for automobile transportation as the Indian light vehicle market grew 11.8 percent year to date through May, according to IHS Markit Automotive, which expects Indian car sales to expand 9 percent year over year in calendar 2018.
The NYK Auto Logistics-Adani Logistics venture appears to be a strategic progression from a 2008 deal under which the duo joined hands with Wallenius Wilhelmsen Lines of Norway to build a dedicated roll-on, roll-off (ro-ro) terminal at Mundra, Adani’s flagship cargo facility.
The announcement said the new collaboration comes as India’s automobile sector logs robust growth — registering a 16 percent increase during fiscal 2017-2018 — and as government authorities vigorously explore alternative, environment-friendly transport solutions to improve supply chain efficiency and reduce costs.
The statement said the JV unit plans to begin operations with six dedicated freight trains and as demand increases, it will add 25 trains over the next three years. It will also vie for Indian Railways’ “automobile freight train operator” status to jumpstart operations.
“This formidable association combines the strengths of individual parent companies, putting the JV in a very unique position,” Adani Group CEO Karan Adani said in a statement.
The announcement, however, did not comment on the fate of the previous ro-ro partnership deal. Officials at Adani Group were also reluctant to provide any further details, when contacted by RailNews.in.
“We would not like to comment as of now. We shall update soon,” officials told.
Naotaka Ishizawa, managing director of NYK Auto Logistics (India), said the rail venture with Adani Group will strengthen the company’s inland capabilities in the country through “a reliable association focusing on quality and visibility in the supply chain.”
With growing competition on India’s west coast region, Adani Group has been drumming up hinterland shippers’ support for Mundra, and the new rail venture is expected to play a part in that push. To that end, the port giant last year opened a large multimodal logistics park at Kila Raipur, near Ludhiana, a key inland point.
Statistics show terminals at Mundra together handled 376,998 TEU in May.
Ironically, NYK India operates a ro-ro terminal with APM Terminals at the Gujarat Pipavav Port, a rival to Mundra for container and bulk/liquid cargo. Several domestic and international automobile giants, including Ford, General Motors, Suzuki, and Tata Motors, are already using Pipavav for moving finished cars to global destinations from their production sites in Gujarat State.
Indian exports of automobiles and parts rose 23 percent year over year in the first quarter to $4.7 billion, while imports rose 29.7 percent to $1.5 billion, as total trade rose 24.6 percent to $6.2 billion, according to the Global Trade Atlas