India's LCV Market Recovering from a Two-Year Low
Published On Apr 23, 2016
India's light commercial vehicle market is on the path of recovery from a two-year low. Although rate of progress appears slow, it is expected to pick-up by the end of this year. Over the last 12 months, government spends in the infrastructural sectors have gone up to a historical high. Also, improvement in e-retailing business across the country and positive signals about upcoming monsoon season are the driving factors of LCV segment towards recovery.
According to the industry sources, normal monsoon will help create strong agricultural freight demand during the kharif season. Thereby sales of LCVs will pick up by the end of this fiscal year. Over the past two years, LCV sector in India witnessed a negative growth due to lower demand, below normal monsoon and declining rural economy. On the other side, India's M&HCV segment is registering consistent growth over the past one and half years.
The LCV segment in India witnessed a sharp decline of 17 percent in the year 2014, followed by 11 percent in 2015. However, in 2016, the industry registered a marginal growth of 0.30 percent with 383,331 units sold, as compared to 383,193 units in 2015.
Industry's leading CV makers including Tata Motors, Ashok Leyland, and VE Commercial Vehicles have already witnessed a year-on-year growth in 2015-16 in the heavy duty truck segment. While in the 2-tonne mini-truck sector, Mahindra and Mahindra has registered significant growth by introducing a new mini truck, Mahindra Jeeto. In 2014-2015, Mahindra has sold about 27,843 units of small trucks posting a growth of 82 percent, while the likes of Tata Motors have suffered in the 2-tonne segment by losing over 10 percent of its market share to Mahindra Jeeto.