The Hindu Business Line : Commercial vehicles cos cut tyre offtake projections

Kolkata. Oct. 28 In an indication of slowdown in production projections of commercial vehicles, major medium and heavy commercial vehicle manufacturers have reduced Original equipment (OE) tyre offtake projections by approximately 40-50 per cent during the current quarter, according to tyre industry sources.

While neither Ashok Leyland nor Tata Motors – the two largest players in the segment - confirm any major change in sales, production and OE off-take outlook, senior officials in two major tyre-manufacturing companies told Business Line that both the automakers indicated a downward revision in production projections in the near term.

“Tata Motors and Ashok Leyland have projected 40-50 per cent reduction in OE demand for tyres during the October-December quarter,” a senior official of a truck tyre major told Business Line, requesting not to be identified. Tata Motors denied any such development. Ashok Leyland did not answer queries.

The other players in the commercial vehicles segment are Swaraj Mazda, Asia Motors Works and Eicher Motors.

Sources in the tyre sector also confirm slowdown in the retail truck-bus tyre sales, indicating lesser activity in the road transport sector.

According to figures provided by the Society of Indian Automobile Manufacturers, medium and heavy commercial vehicle sales fell 1.5 per cent during April-September 2008 to 115,431 units from 117,268 units in the same period last year, while production fell marginally to 128,711 from 129,927 during the same period.

Sources in Exide Industries confirmed a slowdown in demand for batteries in the commercial vehicles segment.

Meanwhile, Indian Foundation for Transport Research and Training (IFTRT) – a Delhi based body – reports 30-40 per cent drop in commercial vehicle sales during the first three weeks of October.

In a recent press release issued , IFTRT said that commercial vehicles manufacturers and their dealers were saddled with nearly a month’s inventory of over 19000 vehicles till third week of this month.

The cargo offerings to the truck fleet has reportedly dropped by 15- 20 per cent and rentals dropped by 8-10 per cent during the peak festive season compared to last year.

According to IFTRT, the crisis led to loan repayment defaults by transporters. Approximately 6000 vehicles - purchased during last one year - were reportedly surrendered to the financing institutions.

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