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Priyanka Vyas

New Delhi, Jan. 6 Commercial vehicle companies and component suppliers expect it would take about six months before they can see any major revival in business.

The Government’s second fiscal package aimed at infrastructure spending is expected to increase the demand for trucks.

But with record low sales, industry players say that it would take a few months before the benefit of the Government’s measures translates into sales.

“The depreciation benefit will have a quicker impact on sales. But by the time demand starts generating through infrastructure spending, it could be around six months,” Mr Prakash Telang, Executive Director, Tata Motors, the country’s largest commercial vehicle producer, told Business Line.

Similarly, in a statement this week, the Managing Director of Ashok Leyland, Mr R. Seshasayee, said that while he expected the package to have a positive impact on sales, it would be with a time lag.

Both the companies control over 80 per cent of the domestic commercial vehicle market.

Last month, Tata Motors commercial vehicle sales were down by over 50 per cent. Ashok Leyland’s overall commercial vehicles sales were down 63 per cent in December.

Sales have fallen sharply due to lack of freight movement with a fall in industrial production.

A top executive with Eicher Motors admitted the difficulty in gauging the precise timeframe by when sales could pick up.

“It is difficult to say when the impact of the recent measures would trickle down to sales. We hope sales should pick up with all the positive signals that the Government has sent,” said Mr Vinod Aggarwal, Chief Financial Officer, Eicher Motors.

Shriram Transport Finance, a major player in commercial vehicle finance, has said that while demand has been moderate in rural and semi-rural areas due to transportation of agriculture commodities, in the urban areas, lack of industrial activity has taken a major hit on the demand for new trucks.

“Movement of goods in rural and semi-rural areas has not been so sharply affected. But demand from large fleet operators in the urban areas would not change dramatically in the absence of a revival in industrial production and import-export of goods,” said Mr R. Sridhar, Managing Director, Shriram Transport Finance.

More Stories on : HCV/LCV/Tractors | Outlook | Tata Motors Ltd

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