Automakers Increasingly Catching More Trains to Decarbonise Auto Supply Chain, Improve Logistics Efficiency

Recent technological advancement has helped catapult India to the second spot globally for automobile transportation via railways. While the US maintains the top position, moving 75 lakh vehicles through rail networks each year, Germany holds the third spot with an annual volume of 6 lakh cars transported by rail. This global ranking has encouraged major automotive OEMs in India to significantly increase their reliance on rail-based logistics.

Keeping up with the trend and in a bid to decarbonise auto supply chains, Hyundai Motor India Limited has significantly expanded its rail freight operations over the past five years. The automaker currently transports over 25 per cent of its total vehicle dispatches via railways, the a top company executive told ACKO Drive.

“Currently, approximately 27 per cent of HMIL’s total vehicle dispatches are transported by rail. Between FY2021 and FY2025, our rail dispatch volumes have grown by nearly 109 per cent, underscoring our dedication to improving logistics efficiency and promoting sustainable mobility. This shift has contributed to a cumulative reduction of 73,307 tons of CO₂ emissions in the last five years," said Tarun Garg, Director & COO, Hyundai Motor India Limited.

"As the government of India continues to enhance rail infrastructure through dedicated freight corridors and modern, energy-efficient rolling stock that enable faster movement of goods, HMIL remains committed to leveraging rail freight to optimise logistics operations and reduce long-term emissions," Garg added.

Maruti Suzuki Deploys 40+ Double Deck Wagons

Hyundai is not alone in embracing rail logistics as a strategic medium of its distribution network; India's largest carmaker Maruti Suzuki has also invested heavily in rail infrastructure to support its vast dealer network across the country, deploying advanced wagon technology to increase efficiency.

"Maruti Suzuki utilises a combination of over 40 double deck wagons (capacity 270 cars/rake) along with single deck wagons (capacity 125 cars/ rake) in vehicle dispatches to its 21 transportation hubs connecting over 600 cities. In addition to environmental benefits, the in-plant railway siding is a scalable model and allows for flexibility in planning vehicles dispatches as per market demand and seasonal demands," a Maruti Suzuki spokesperson told ACKO Drive.

Earlier this month, Maruti Suzuki India Limited hit a historic first by becoming the first automobile manufacturer to deliver vehicles to the Kashmir valley through railway transportation. 

The homegrown automaker added: "For longer routes exceeding 1,500 km, rail transport proves more economical than road. On average, vehicle dispatches from Chennai via rail reach destinations such as Delhi and Ludhiana within 7–9 days, and Guwahati within 8–10 days, striking an effective balance between cost and operational efficiency across our logistics network.”

In fact, Maruti Suzuki was the first automobile company to start using the rail mode for transport of vehicles in India over 10 years ago with an aim to foster green logistics and reduce carbon emissions and ease road congestion. Rail dispatches contributed 24.4 per cent of Maruti Suzuki’s total vehicle dispatches in FY2024-25. The OEM dispatched approximately 0.52 million vehicles via Indian Railways in FY2024-25.

Limited Availability of Trailers

Mahindra & Mahindra is also reporting a notable uptick in the proportion of vehicles moved by train -- a trend expected to continue as the sector seeks to navigate supply chain constraints. However, it is is also grappling with a significant logistics bottleneck due to the limited availability of railway trailers that is a roadblock for vehicle transportation across the sector. 

This infrastructure challenge has prompted manufacturers such as Mahindra & Mahindra to intensify their collaboration with Indian Railways for additional train capacity. However, the move has provided some relief but not a complete solution. 

"As an industry, there's only a limited number of trailers which are available for us to transport vehicles. So obviously we are at the point where there is constraint on the entire industry on railers itself. So we're doing a bunch of things to work on it.  Of course, one of the things is we get more trains. So this is something we will closely with the Indian Railways to get more trains for us to transport vehicles as a way of getting it out. So that has relieved some of the stress as well.  But this continues to be a constraint for the entire industry," said Nalinikanth Gollagunta, CEO, Automotive Sector, Mahindra & Mahindra.

Asked how many vehicles the OEM transports via rail, Gollagunta said: "Yeah, so it is something if I don't have the exact figures in front of me, and there also varies from market to market.  But definitely the proportion of trains has increased for us. And that will continue to happen over a period of time. But of course, in the interim, they've got additional support on the railways to get more trains."

India's Rail Freight Transformation

It is pertinent to note that rail networks captured merely 1.5 per cent of India's automotive logistics during 2013-14. The situation has improved substantially over the following decade. This year, nearly one in four vehicles distributed across India travelled by rail, highlighting an 18-fold expansion in the auto sector's rail freight penetration.