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M&HCV Sales Fall in July After Steady Growth

Published On Aug 16, 2016By Lisa Pradhan

The previous month witnessed a significant decline in sales of medium and heavy commercial vehicles (M&HCVs) after almost two years of growth. However, sales of light commercial vehicles (LCVs) are seeing an upward surge since the past few months. Insiders from the industry are not losing hope and are optimistic that a growing infrastructure and construction industry will positively affect the sales of M&HCVs.

After a minimal growth in June thus year, sales of heavy vehicles in July 2016 were 21,307 units as compared to 23,061 units in July 2015, thus depicting a decline by 7.61 percent. Sales numbers had peaked since the previous two years, depicting a good upward surge by 30 percent in FY2015-16 with sales of 302,373 units (as compared to 232,755 units in FY2014-15). Comparing sales of bus and trucks, the latter saw higher sales numbers with more than 32 percent YoY growth.

M&HCV sales started reviving in August 2014 registering a 9 percent YoY after declining sales in FY2013 and FY2014.

Throwing more light on the current scenario, S P Singh, senior fellow, Indian Foundation of Transport Research and Training, said, “The decline in M&HCV sales has been due to various reason as micro-economic indicators are still weak and transporters are wary of buying of new trucks as large fleets are currently under-utilised in the market.”

However, experts believe that the overall sales in FY2016-17 will display a growth of 10 to 12 percent owing to several factors. Truck sales will rise due to replacement demand, sale of tippers will surge due to improvement in mining and construction segments and fleet owners will buy trucks in advance before the increase in prices after implementation of BS IV by April 2017.

In an interview with Autocar Professional, Ravi Pisharody, Executive Director, Commercial Vehicles, Tata Motors, said, “The overall economy is doing fine but the consumer goods sector is not doing well. We are seeing a strong uptick in the infrastructure and construction side. Road construction is definitely moving, yet mass retail has yet not picked up.”

Although the present market looks gloomy, there are still chances of major revival of the commercial vehicle industry. A good monsoon will bring in better agricultural produce, plus demand for FMCG due to a festival season, the optimism over the GST bill and higher spending ability after the 7th pay commission is implemented may help the trucking industry gain back momentum soon.

Contrary to M&HCV sales, LCV sales are consistently rising since the past couple of months. Last month, LCV sales peaked by 6.31 percent, helping the CV industry sustain a 0.11 percent YoY growth and hence preventing the CV sector from reporting negative numbers.

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