ON THE REBOUND

COMMERCIAL VEHICLE MAJORS LIKE TATA MOTORS, ASHOK LEYLAND, VECV AND OTHERS ARE BETTING ON RECOVERY OF THE BUS SEGMENT, PENT-UP DEMAND AND CNG TO CROSS THE BRIDGE BETWEEN RECESSION AND RECOVERY

- PRERNA LIDHOO

EYE ON COMMERCIAL VEHICLES

• As infrastructure development projects pick up, and the logistics and e-commerce sectors grow, coupled with easing of financing options, companies are betting on a recovery
• Key headwinds for the sector include elevated commodity prices and rising fuel costs, which are impacting the cash flows of truck operators
• Vehicle prices have increased by over 20 per cent in the past 1518 months
• CV makers believe that buses are in the best position to go electric
• The next 2-3 years will be crucial for the CV segment to realize its true growth potential

29% DROP IN COMMERCIAL VEHICLE SALES IN FY20 TO 717,688 UNITS FROM 1 MILLION IN FY19

INDIA’S COMMERCIAL VEHICLE (CV) segment was already battling falling sales when the Covid-19 pandemic made it worse. In 2019-20, according to industry body the Society of Indian Automobile Manufacturers (SIAM), CV sales dropped 29 per cent to 717,688 units—from its peak of 1 million in FY19—because retail financing took a major hit and there was a transition from BS-IV emission norms to stricter BS-VI norms. In FY21, after the pandemic hit, CV sales plunged 21 per cent to 568,559 units. During the first nine months of FY22, sales improved to 531,702, compared to 388,497 in the corresponding period in FY21.