Demonetization After Effects: CV Sales Down in December Again

The year 2016 has definitely been a bag of surprises for truck and bus makers in India. And all of these surprises have not been positive for the trucking community in India. Though many trends, events and developments have hit the commercial vehicle sales hard, demonetization of INR 1000 and 500 notes has played the biggest role in bringing the CV sales down.

Demonetization’s after effects were clearly visible from the very next week of the announcement. Truck and bus sales were plunging like sinking ships in November 2016. Brands were praying for December 2016 to be good in terms of sales, but the month instead has not been generous for CV makers in India. While some of them managed to keep a hold on the number of sales somehow, others clearly were not able to withstand the aftermath of the ban on INR 1000 and INR 500 old currency notes. Here is an analysis of brand wise sales performance in December.

Mahindra & Mahindra

Thanks to the Bolero Pick-Up range, Mahindra has managed to sail through the demonetization storm, at least in the game of numbers. The CV brand sold a total of 14,154 commercial buses, trucks and pickups in 2016 which is 1689 units more than the 12,465 CVs sold in December 2015. And the majority of these were pickups and mini trucks.

Pickup sales had a major contribution in Mahindra’s December commercial vehicle sales numbers, thus pushing the brand ahead of others. Kudos to Mahindra for its triumph in the pickups and mini-trucks category, however Mahindra is nowhere close to the leaders in the M&HCV segment.

Tata Motors

While the heavyweight champion has been able to grab an order worth 400 crores from the Indian Defence Forces this year, it might still be losing from the consumer end. Tata Motors sold 2,349 less buses and trucks in December 2016 (24,998) than what the brand had sold in December 2015 (27,347).

It is evidently clear from the numbers that the champion has started to lose some weightage in the heat of the competition. To market itself in a better way, the brand's commercial vehicle wing has roped in Akshay Kumar to be the brand ambassador. We hope Khiladi Kumar brings in luck for Tata Motors and its line of products.

VECV

VECV, the collaboration between two auto giants Eicher and Volvo, was also not able to keep itself safe from the blizzard caused by demonetization in December 2016. VECV was only able to sell 3,246 trucks and buses in December 2016, a figure 863 units short of what the duo had sold in December 2015 (4,109).

A decline in total number of exported trucks and buses in the month of December 2016 is also a cause of concern for the CV maker.

Ashok Leyland

Ashok Leyland was the sole survivor who had maintained a growth curve in the number of truck and bus sales in November 2016. But this time, the brand failed to prove its mettle against demonetization.

This home grown bus and truck manufacturer managed to sell only 10,731 commercial vehicles in comparison to 4,109 buses and trucks it has sold in December 2015. The number is 1423 buses and trucks less of the December 2016 sales figures.

Conclusion

CV sales are not expected to pick up for a few more weeks. But the time after January’s third week might just be equivalent to ‘striking gold’ for CV manufacturers in India. Truckers and transporters are eagerly waiting for the cash flow to become normal as BS-IV and mandatory AC norms kick in from April 1, 2016. And once that happens, truck prices are guaranteed to go up.