Indian CV industry: Post-pandemic outlook

In the new normal scenario that the commercial vehicle industry in India is currently facing, there will be many changes, opines Rajesh Khanna, CEO, RACE Innovations (P) Ltd.

The Indian commercial vehicle (CV) industry, pummelled by an unforeseen pandemic, is now pressing players to extreme levels. It’s of paramount importance to the stake-holders to embrace and gear up to handle the wind of change in scenarios where old norms and fundamentals are getting reframed. The CV industry is poised to have a series of new entrants gaining undue momentum, consolidation of old players, setting up a higher degree of global standards, competitiveness in the product offerings, all of which will prime the industry to handle massive global and domestic pent-up demands.

Stakeholders are currently facing various changes and challenges such as government-linked policies reforms, infrastructural push on the anvil to stimulate demand, tiding over the supply chain crisis, cash flow concerns and resources’ availability. Scrapping policy implementation, electric vehicles deployment with infrastructure implementation programs under FAME II subsidy scheme, systems to monitor vehicles loaded in excess than capacity (overloading), production-linked incentives, anticipated budget plan in 2021 with tax reduction SOPs across automotive products, incentivising purchase of non-polluting vehicle, special packages or provision to create financial support facilitation in small, medium and large-scale players to recuperate much quicker than anticipated are the other contributing factors.

Market Scenario

The overall CV volumes between FY 2019-20 recorded sales of 7,17,688 units including trucks, trailers and buses and are estimated to dip by 25-27% for FY 2020-21 with estimated sales of 5,23,329 units. Bus and coach segmental sales are heavily battered with anticipated drop of around 70% compared to previous year’s sale units, Medium and heavy-duty truck segment sales are expected to de-grow up to 35-38%, tractor-trailer segment sales’ de-growth may be up to 60% while light duty trucks’ segment sales de-growth would be 12-15% compared to the FY 2019-20 sales numbers, respectively.