After Good Growth in SCV Segment, LCV Market Surges Ahead to Recovery
Published On May 19, 2016
Stakeholders in the light commercial vehicle (LCV) segment can now heave a sigh of relief. After a long-continuing decline, the LCV market is witnessing gradual and sustained growth since the past few months following the footsteps of the small commercial vehicle (SCV) segment.
The growth trend in the LCV sector started from the fourth quarter of 2015-16 after going downhill since the past two years. Last month, the LCV sales stood at 30,320 units, recording an encouraging 14 percent increase in volume as compared 26,595 units sold in April 2015.
Confirming the growth, Ravindra Kundu, executive vice-president and business head (vehicle finance) of Cholamandalam Investment and Finance Company, said that after two years of decline, SCV sales numbers started rising for the first time only in the last quarter followed by the LCV segment and though the growth journey was small, LCVs did hit the double digit numbers recently.
Market experts predict that the LCV segment will grow around 12 to 13 percent this fiscal year. One of the reasons is a favourable monsoon forecast this year that will lead to good activity in the rural and semi-urban markets (and thus, result in a high demand for LCVs) replacement-led demand, pre-buying (prior to the implementation of BS-IV emission norms in India by April 2017) and recovery in demand from consumption-driven areas.
Nevertheless, unlike the pickup segment which is currently tasting a premium flavor thanks to customer preferences for superior vehicles (such as Isuzu D-Max), share for premium LCVs will not increase in the near future. This can be attributed to the utility driven, price differential and cost-conscious customer segment in India. However, in a global scenario, premium LCVs are quite popular in developed markets which have a considerable customer base for such vehicles.