Pickup sale surges amid lower demand for heavy trucks
Published On Nov 15, 2019
Despite the overall negative market sentiments, the demand for pickups sees an uptick. Growing last-mile delivery, higher consumption in urban areas, and the emergence of the hub-and-spoke model find more takers for pickups as they offer higher uptime and superior turn-around time.
The domestic automotive sector is facing the brunt of the slowdown for several months now. All segments of the automotive sector have massively declined with no clear sign of recovery in sight. The commercial vehicle segment which is directly linked to the underline economic activities of the country is not immune to this downturn.
The medium and heavy truck segment is the worst affected as demand for freight is weakening which saw the truck sale collapsing. Yet, there is a glimmer of hope in the small commercial vehicle segment wherein the demand for pickups has seen sharp recovery month-on-month. The pickup segment registered a total industry volume (TIV) of 26,304 units in October, down 4% YoY. However, this marginal drop is far better than over 19% and 25% fall in September and August 2019 respectively. The month-on-month sales also point towards a surge in demand, as lower TIV of 16,946 units in August and 21,250 units September, recorded a jump in October to 26,304 units thus far highest this year. In the April-October 2019 period, the TIV of pickups stands 1,45,543 units down 10%YoY.
GROWING SEGMENT
Consistent demand for the last-mile delivery in the urban and semi-urban areas, the e-commerce buoyancy and a sizable number of entrepreneurs entering this segment of transportation in India have given a positive flip to pickups. Besides this, Indian cities and urban landscape have undergone a fundamental change, as big cities become larger, the boundaries are expanding due to urbanisation, also the boom in suburban areas of Metro cities growing faster. All these changes are having an impact on the transportation sector as the need to carry bigger shipments with greater speed becomes paramount.
The restrictions on big trucks entry into the city limits during the day mean the last-mile delivery primarily is done on small vehicles. Pickups are the most suitable vehicles in both urban and semi-urban areas. Over the last 3-4 years, the pickups segment has registered a boom, growing bigger than the 2T mini truck segment, a clear shift of small trucks buyer towards pickups.
MAHINDRA BOLERO STRENGTHEN ITS GRIP
The shift in the buying pattern of customers attracts OEMs' attention towards any vehicle segment. The pickups cater by prominent OEMs including M&M, Tata Motors, Ashok Leyland, and Isuzu Motors India. There is intense competition underway to grab a bigger slice of this growing markets among OEMs.
M&M is an undisputed leader with a close to 70% market share in this segment with its popular Bolero range of pickups. Since the introduction of this revolutionary product, M&M has over the years sharpen its Bolero offering with distinct variants targeting various transport applications.
In October 2019, the TIV of pickups is 26,304 units, M&M with a total sale of 18,472 units emerged as a leader with a 70 percent market share. The company has a strong grip on this segment with multiple variants including Bolero Maxi Truck, Bolero single, and double cab, Bolero Camper, etc.
Eyeing a slice of this growing segment rival OEMs are also betting big with new pickups. Ashok Leyland which has only a small commercial vehicle the Dost has emerged as the second-largest player in the segment, with a total sale of 4,337 units in October with a market share of 14% market share. The company also introduced a few variants of Dost to caters to bigger customers operating in multiple applications.
Tata Motors is also aggressively trying to challenge the leaders in the segment with multiple products including Yodha and Xenon pickups and super Ace, etc. The firm sold 3,022 units in October with an 11% market share. Japanese OEMs, Isuzu Motors India, which has set-up a plant in India and a globally renowned brand in the pickup segment is also making inroads into this segment. At present, the company has a marginal presence in the segment with a focus on slightly premium customers and select applications. Yet, its sale is gradually increasing as the brand becomes more visible, and the company’s focus on expanding its presence across the country. Isuzu Motors sold a total of 390 units in October 2019 with a market share of little over 1%.
Some industry analysis points towards higher growth in India’s pickup segment as the economy continues to make rapid progress. Stay tuned!