Small truck sales zoom with double-digit growth

G Balachandar Chennai | Updated on January 09, 2018

The small commercial vehicle segment (SCV), consisting of of the sub-3.5 tonne vehicles, has resumed its strong growth after a decline in the past three years.

Growth in replacement demand, improved financing and recovery in rural demand have aided the growth in sales of SCVs.

During April-October 2017 period, total SCV sales grew by 19 per cent at 218,602 units when compared with 183,611 units in the year-ago period. In this, mini-trucks (Tata Ace segment) grew by 22 per cent at 80,150 units (65,700 units), while pick-ups (above 1-tonne payload vehicles) reported a growth of 17 per cent at 138,452 units (117,911 units).

“The LCV business has been doing well and we will be expanding the product range. We will be increasing the total payload of the vehicle since there is growth today,” said Gopal Mahadevan, Chief Financial Officer, Ashok Leyland.

Pawan Goenka, Managing Director of Mahindra & Mahindra also said during company’s recent results conference call that its Jeeto (mini truck) and Bolero Maxi Truck (pick up vehicle) were doing well. “Both the products are running full capacity and the company has chalked out plans to adding capacity for the same,” he indicated. “First of all the LCV segment started seeing recovery after a lag of almost 12-15 months in comparison to bigger trucks in FY2016 and in addition to that the replacement demands have also started picking up because of the improving financing environment,” said Subrata Ray, Senior Group Vice President, Icra.

Also, investments in e-commerce segment are driving demand for last mile transportation requirements and accordingly small commercial vehicles. These factors along with the favourable monsoon and a better crop harvest have supported demand recovery from the rural areas as well, which is a fairly sizeable market for small trucks. The SCV segment is expected to grow in the range of 14-16 per cent in volume terms in the current fiscal.

Industry analysts also said competition is intensifying in the small truck category. Isuzu Motors and Maruti Suzuki are some of the recent entrants and they are likely to scale up their position.

Meanwhile, pick-up segment continues to grow faster than sub-1 tonne mini-truck category. While more product launches expected in the pick-up category in the coming months, Tata Motors, a leader in the mini-truck category, has managed to boost the volumes of mini-trucks with the roll-out new variants.

Published on December 04, 2017

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