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THE MOTORBUS TRADE IN INDIA TO-DAY.

14th December 1926
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Page 50, 14th December 1926 — THE MOTORBUS TRADE IN INDIA TO-DAY.
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Which of the following most accurately describes the problem?

A Survey of the Reasons which Lead to the Prevailing Demand for a Very

Cheap Chassis.

By Our Bombay Correspondent.

BRITISH manufacturers of motor vehicles, and particularly makers of commercial and passenger. chassis, have been disappointed in India as a market in the last four or five years, and I am quite sure it is correct to say that most of them do not know why India is such a poor market. It will confuse them still further to learn that there are thousands of motoromnibuses in India and such a network of services that it would be possbble for an Indian to cross his country from Bombay to Calcutta by motorbus. Statistics of imports, from the Customs records, explain this point, for they show us that whereas in the year ending March, 1924, there were 1,044 commercial motor chassis imported into India, with an average landed value per chassis of £185, in the year ending March, 1926, there were 4,853 chassis imported, with an average value per chassis of £140. In other words, the market is in the hands of the Americans. Indeed, out of the 4,853 chassis imported in the year ending March, 1926, 2,014 were from America, 2,391 from Canada, only 338 from Great Britain, and 110 from other countries. It must here be explained that in these figures the imports of chassis by Government for the Army in India are not included. Numbers of British lorries are in Army service, particularly in the North-West Frontier Province.

We arrive at the situation-that, in India, there are thousands of light American buses in operation and that the English makers cannot at present get even a minor share of the market. And if we ..remain down in the ports of Bombay and Calcutta at our office desks, even we who know India find it difficult to understand the position. But if we tour the country, and particularly if we tour the country by road, we find out the reason for the regrettable state of affairs. The writer has just returned to Bombay after a tour in Central India in a small air-cooled Rover ear, and feels that at last he has come to understand in some measure the position of the Indian market.

It is fundamentally this: that the proprietors of -omnibuses in India at the present time are, for the most part, illiterate village people of very limited means who do not know how to calculate their receipts and expenditure. They think they are working at a profit when, actually, they are working at a loss. Their castings are seriously wrong. The greatest mistake they are making is in setting aside nothing for depreciation and interest. These things they do not understand. Naturally enough, people of this class cannot believe that a more expensive vehicle might be a better investment in the long run. It is a phase through which the omnibus business in India must inevitably pass, and passenger carrying will probably come eventually into the hands of a saner class of people. Let me describe the condition of things as it is to-day in many a village of 100 or 200 huts 15 or 20 miles from the main line of the Great Indian Peninsula Ittti/way. Yt.ars ago the village people tilled the land and raised cattle and goats, and the bullock car satisfied all their transport needs. As the small town on the railway line develops, there arises a demand for minsport between village and town. Some 30 miles on the other side of the village is a station on a less important branch line, so that a 50-mile service from the branch line to the main line becomes a business proposition. A young Hindu villager who has worked in the town and learned to drive a Ford car sees the possibility of a bus service. He borrows money from moneylenders (on the security of his father's establishment IF. the village) and the rate of interest is about 50 per cent per annum! He pays one-third deposit to the nearest agent for one of the cheapest American 10-cwt., 15-ewt. or 1-ton chassis, and obtains an 8-seater or 16seater bus on a hire-purchase agreement, the balance to he paid in 12 equal monthly instalments. These hirepurchase agreements are not financed by the mptor agent, but by big limited companies with travelling inspectors, and they are not too keen to scrutinize nor reluctant to accept eases, provided there be a guarantor who is a •property owner and a person of good repute in the village.

The man starts his bus service reckoning that he must make enough money each month to pay the interest and part of the principal to the money-lender, the hire-purchase instalment and the cost of petrol and oil. He may earmark something for depreciation on tyres. With no competition he makes excellent profits, but he is usually improvident, thinking that the good days have come to stay. Competition soon sets in, however, and fare-cutting starts at once. Each owner-driver then comes down to accepting a fare which just covers his money-lender's monthly demand for interest, the hirepurchase instalment, petrol and oil, and a bare living for himself. Still he thinks he Is paying his way. He does not realize that soon he must face outlay for new tyres and mechanical replacements. Above all, lie does not realize that one day the bus will be worn out, leaving 'kith with no assets and still in debt to the money-lender. ' He overloads his Vehicle. He uses spurious oil, blended by petty merchants in the ports and sold at half the prices of the recognized brands. Sometimes the competing bus owners agree upon minimum fares to prevent further rate-cutting, but the association always breaks down by reason of the infidelity of one or two of them. This is so in Indian bazaars, no matter what line of business it is that we may consider. The present village-to-village omnibus fares are absurdly cheap and the poorest peasants are riding in buses to market.

Now, this phase of the bus business in India is of quite recent development. The import statistics show that American truck chassis have only come into the country in really large numbers in the past three years, and it is during this period that the light bus business has made Such great strides. It seems clear to me that when the 1924 buses become incapable of further Service they will leave a batch of disillusioned debtors spread over the country, and when the 1925 buses follow suit (in about 1929) another and much larger batch will be "repenting at leisure." And then we ought to see the trade slowly entering upon a healthier phase.

If the more expensive English vehicle is found to be more economical in the long run in England. then it is my belief that in time it will prove its merit in India. But, until the Indian bus operator Commences to calculate his budget on paper instead of roughly in his mind, until he keeps books of accounts, until he learns to allow for depreciation of his vehicles, he will not realize that the British one-tonner is a better investment than the American 15-cwt. chassis with a oneton load. In the meantime nothing can be done (except perhaps the withdrawal of hire-purchase facilities) to save him. No one can start a service on scientific lines in competition with him while he is charging such absurdly low fares. The English manufacturer must wait a year or two for any marked improvement.

In the meantime, the English manufacturer must realize two things. The first is that the price difference between the American and the English car or com mercial motor is not so great in England as it is in India. The price of the American vehicle shipped to England is augmented by boxing, freight and a big import duty, whilst nothing has to be added to the exworks price of the English vehicle selling in England.

But when the two vehicles are shipped to India, the boxing, freight and the import duty into India (on cars 30 per cent., commercial motors 15 per cent.) are the same for each. Thus, the cheapness of the American vehicle becomes far more pronounced in India.

The second thing which English manufacturers must realize is that India's roads and bridges call for a small vehicle, the one-tonner (16-seater) being about the largest model suitable for average up-country omnibus work. At present this is the smallest model made in England and many of the most prominent makers do not market a one-ton model at all.

With regard to special requirements for India, these are very simple. A high ground clearance is essential.

For cool running in tropical heat, an efficient and fool proof lubrication system and a big radiator capacity are called for. Carburetter and magneto must be mounted high for fording rivers. Springs must be stronger than those in use in England. High-pressure pneumatics are the most suitable tyres. In the less important details big petrol tanks with large filling orifices (to-permit cleaning), bumpers for stray cattle, and gear (or chain) drive to fan and dynamo may be mentioned. Body requirements need not be dealt with, as the very sim plest type of body is what is required and Indian carpenters are making these very satisfactorily. The suns of the bullock-cart makers are producing them.

A feature of the Indian market which, even with a more experienced and more educated class of bult operator, will always be an influence against the advancement of the trade in British vehicles Is the very limited spending capacity of the Indian. Even with the knowledge that a British vehicle would be a better investment, many a bus operator (of the owner-driver kind) will be quite incapable of paying the difference in price. Operating from centres where there is capital available, this class of man will be unwise to enter the business against the small company that can run a fleet of British vehicles. But in the districts far from the railway, where capital is not available, the village-to-village services will remain in the hands of the owner-drivers, who will compete with each other on a level, using the cheaper American vehicle, until by amalgamation and extension the companies in the towns drive them off the roads. It has to be remembered that the difference in price between the American and the British chassis in India is not a small one—the British chassis at present costs more than double the price of the American. Can this difference be reduced? After all, In 1923 the average landed cost of the English commercial motors imported into India was three-and-ahalf times that of the American vehicle! In this respect I cannot do better than draw attention to the following statistics of commercial vehicle imports into India, albeit they have already been published in The Commercial Motor.

Tags

Organisations: Army in India
Locations: Bombay, Calcutta

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