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Revival of Truck Market Attributed to Growing Infrastructure Activity

Published On Feb 17, 2016By Prashant Talreja

Due to a sudden boom in the truck market, it was viewed that increasing clean air enforcements were driving new truck sales. However, it is now evident that this was just one of the factors contributing to the resurgence in the truck market. Another core factor is the rising infrastructure and construction activity in the last few months. Up until September last year, it was merely the cargo vehicles that were participating high sales, but of late, sales of tippers and construction vehicles have also been surging, indicating a new pace in the construction sector.

Vinod Aggarwal, CEO of VE Commercial Vehicles, believes that the rising sales of haulage trucks have contributed to the revival of the M&HCV segment. “This component is now changing as infrastructure activity is picking up coupled with pre-buying and replacements,” he commented. Nalin Mehta, the managing director for Mahindra Trucks and Buses is optimistic about the present climate in the industry and says that things are “clearly more positive in the trucking community.” He believes that a major portion of the demand is coming from the replacement of old vehicles.

However, despite the sudden fervour in the market, some analysts view the scenario with a more cautious approach. Ravindra Pisharody from Tata Motors warns that the year following the sudden growth, 2017-18, would not be as exciting as this one, with the new BS IV norms forming a major component of disarray. He says, “The first half will be slow but the state of the economy is the key.”

Turbulences from the banking sector are also adding to the worries for the trucking market. Along with this is an increasing unstable global market, which has triggered concerns about a second recession. Other industry experts warn the demand for haulage trucks does not match the current situation. Excess production of haulage trucks casts an uncertainty to many at a time where core industries such as cement and steel are yet to recover, and when the agricultural production has still not reached a sufficient parameter.

Mr. Mehta from Mahindra retains some optimism with regard to the situation, but is concerned about the aggressive strategies employed by many manufacturers in the new environment, including increasing discounts.

To ward off risks of a fall in demand, some industry experts suggest imposing restrictions on the length of trucks that carry bikes and cars. “Once the restrictions are in place, there will be use of more trucks,” says Rajive Saharia from Ashok Leyland.

See Also:

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E-commerce Boom Increases Sales of Commercial Vehicle Makers

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