Why Japan’s Kyokuto is Doubling Down on India’s Commercial Vehicle Surge

Standing amidst the gleaming robotic welding arms and high-precision laser cutters of what is now South Asia’s largest trailer manufacturing facility, MC Bantwal, Managing Director of Satrac, remembers a time when the stakes were considerably lower.

About 25 years ago, in a modest unit in Bengaluru, Bantwal launched SATRAC Engineering with an initial investment of just Rs 2-3 lakh. Coming from a family of oncologists and physicians in Mangalore, he was the outlier who chose business over medicine. His first products weren't the sophisticated missile carriers or high-capacity tippers seen today; they were simple agricultural trailers built for local farmers.

"We took over a small unit and were making small tractor trailers for four or five years," Bantwal recalled, on the sidelines of the inauguration of the company’s new flagship plant in Sriperumbudur, near Chennai. "Then the company branched out to the trucks bodies and  trailers  and  we realized that the segment was so unorganized, and to a large extent, it still is. We thought, why don’t we change it?"

That vision has culminated in a $100 million (roughly Rs 900 crore) investment commitment from Satrac’s Japanese parent company, Kyokuto Kaihatsu Kogyo Co., Ltd., which acquired 100% of the firm in 2020. The Sriperumbudur facility, which the company claims is the most technologically advanced of its kind in the region, marks the beginning of a seven-year expansion plan designed to capitalize on India’s maturing commercial vehicle (CV) and mining industries.

Breaking the ‘Jugaad’ Cycle

For decades, the Indian trucking industry has been plagued by a "jugaad" or "makeshift" philosophy. In the commercial vehicle world, an organized player is a rarity. While major manufacturers like Daimler or Tata Motors or Volvo Eicher produce the chassis; the frame, engine, and wheels, the body or trailer (the part that actually carries the cargo) is often built by local, unorganized workshops.

The numbers provide a perspective. The total addressable market for the segments in which Satrac operate, including trailers, tippers, and cargo bodies is valued at a staggering Rs 30,000 crores, out of which just about Rs 2,000 crore worth of orders are serviced by organized sector.

Bantwal pulls no punches when describing the risks of this fragmented market. He points to "death machines" built in scrapyards using substandard materials and salvaged parts that lack structural integrity. "The brakes are bad it will not stop. It can break; the cargo can fall out," he said. "As a country, we need to wake up to that".

As per Bantwal, Satrac’s strategy is to supply vehicles engineered for a low Total Cost of Ownership (TCO), a metric closely tracked by the mining and logistics industries. He added that Satrac’s trailers are lighter and more durable—all supported by a pan India after sales service. 

Turning Point

The inauguration of the Chennai plant comes at a critical juncture. After a year of flat growth driven by capacity constraints at their original Bengaluru facilities and fluctuating commodity prices, the company is bracing for a "peak" in the next 24 months.

"Last year we did close to Rs 550 crores, and with this new plant, we are targeting Rs 1,000 crores in the next two years," Bantwal noted. The Sriperumbudur plant alone currently could produce 800 units a month, with plans to ramp up to 1,200 units within two years following an additional Rs 70 to 80 crore investment in full automation.

The expansion is not stopping in Tamil Nadu. The seven-year roadmap includes establishing four additional manufacturing units, with a new facility planned approximately every 24 to 30 months. The specific locations have already been scouted to ensure proximity to key industrial corridors and major customers:
• Jamshedpur: To serve the massive steel and mining belt and maintain proximity to major client Tata Motors.
• Gujarat (near Gandhidham): A strategic hub to target the Western markets and Rajasthan.
• Pune: To tap into the automotive and logistics heartland of Maharashtra.
• Bengaluru: A high-tech replacement plant to modernize their original base of operations.

Blue-Chip Alliances and the Defense Dividend

Satrac’s rise is underpinned by its deep integration with the giants of the commercial vehicle world. Its largest customers include Tata Motors and Daimler India Commercial Vehicles (BharatBenz), followed by  likes of  Ashok Leyland, Volvo, Scania, and Mahindra. In the retail logistics sector, it supplies specialized trailers to TCI, VRL, and Delivery, recently providing the latter with its first "road train". Apart from Satrac, Black Diamond Motors and Kailash Vahn Pvt Ltd are other major players operating in the organized market.

However, some of the company’s most sophisticated engineering is hidden in plain sight within the Defense sector. While currently a small portion of revenue (approximately Rs 30-35 crores), it is a high-margin focus area. Satrac manufactures the mobile superstructures for the Akash missile systems, as well as precision tracking and surveillance units for IAI and many more private defence equipment manufacturers. 

"We don’t supply the electronics, but we supply the entire superstructure, the mobile units that require precision alignment and must operate in temperatures as low as minus 40 degrees," Bantwal explained. 

The Next Frontier

Looking toward 2035, Satrac is leveraging the expertise of its Japanese parent, Kyokuto, to enter the urban waste management and recycling vertical. Japan possesses one of the world’s most advanced recycling ecosystems, and Satrac plans to roll out a similar end-to-end collection and sorting system in India within a year.

The market for mechanized garbage collection is estimated at Rs 1,500 crores, and as Indian cities struggle with waste, the company sees a massive opening for small compactors and large dumpsters that can be mounted on commercial vehicle chassis. "Right now, we (India as a country) are not managing garbage very well," Bantwal said. "We want to address the entire chain, from collection to final recycling"

With a $100 million war chest and a roadmap stretching to 2035, the company is now firmly in the driver’s seat of South Asia’s commercial vehicle revolution. However, things will not be easy as the unorganized market is huge and remains attractive due to lower cost it offers to the fleet operators.