On Backdrop of Union Budget 2016, Indian Commercial Vehicle Industry Expected to Surge Upward
Published On Mar 04, 2016
The Union Budget 2016-17 may have disappointed the passenger vehicle segment in India with a slight increase in tax, but the fiscal budget has spawned new prospects for the commercial vehicle Industry. The union finance minister, Mr. Arun Jaitley announced the 2016-17 budget with a focus on developing rural infrastructure, while allocating INR 97,000 crore for roads and highways in the country which will eventually benefit the commercial vehicle players in India.
A day after the bill was passed in the parliament, Indian automobile manufacturers hailed the budget. The industry has been thriving off late, and all major brands reported exceeding sales figures for the month of February 2016 on a year-on-year basis. This includes industry giants such as Tata Motors, Ashok Leyland, Mahindra & Mahindra along with VE Commercial Vehicles.
"The bright spot in the overall vehicles sales continues to be commercial vehicles due to replacement demand and also because fleet operators are buying ahead of stringent BS IV norms which will be applicable from April 1, 2017," said Mr. Abdul Majeed, an expert in the automobile sector.
Compared to February 2015, Tata Motors reported an overall commercial vehicle growth of 15 percent and VE Commercial Vehicles registered a humongous 57.3 percent increase in its volumes.
India's largest utility vehicles maker M&M sold about 13864 units last month, as compared to 11945 units registered in the same period for 2015.
"At Mahindra we are happy to have achieved an overall growth of 16 percent during February, 2016 on the back of strong performance by our range of passenger and commercial vehicles," said Mr. Pravin Shah, President and Chief Executive (automotive), M&M.
Now, with hopes for the GST bill passage growing, the CV segment foresees eminent prospects in the near year.