Demonetization to Hamper Truck Sales in the Country
Published On Nov 24, 2016
Ratings agency ICRA has predicted some bad forecasts for the Indian CV manufacturers. The agency has said that the demonetization move made by the Indian Government is going to negatively impact the overall trucks sales in the country.
ICRA believes most fleet owners will postpone their truck buying plans owing to the cash crunch in the country. The agency has also reported a sharp decline of 15-30 per cent in truck sales in the country.
"Market load operators have hit the most owing to high reliance on cash-based transactions to meet trip expenses. Freight rates have not moved in line with recovery in diesel prices owing to low cargo availability and have risen by 7-9 percent” said ICRA in a statement.
Both CV dealers and financers are finding the times tough for reaching target sales for the ongoing quarter. People planning to buy trucks are also facing difficulties in terms of making down payments. It can also be noted here that most truck bodies are developed by independent body makers who usually charge cash from the customers.
BS-IV norms kick in from April 1, 2017, and the prices of new norm compliant trucks are bound to go up. Fleet owners and other people who were planning to buy new trucks before the application of new norm, have already postponed the same because of the demonetization scheme.
Truck sales in India had just started to look promising after fairing poor in the last few months. It is estimated that the next few months are going to be very tough on the Indian transport industry.