If the current growth in commercial vehicle sales continues, the sector could rescale or near the FY19 peak in two years, at half the time taken for the first ascent.

The demand will coincide with the general elections in 2024. The previous general election year — 2019 — saw CV sales cross the one-million mark.

Lowest in a decade, CV volumes in FY21, at 5.68 lakh units, were only better than the FY10 figure of 5.31 lakh. With the final quarter of FY22 underway, the CV segment is expected to end the year with over 6 lakh units.

Ageing fleets, steady rise in freight rates, improving truck utilisation, strong demand from e-commerce players and sustained demand from infrastructure companies will help push demand for commercial vehicles, particularly trucks.

Overall truck utilisation in the country is estimated to have improved to 45-50 per cent; in some segments it has exceeded 85 per cent. As recently as Q1 this year, trucks were idling 10 days a month.

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“After the peak in FY19 we saw two consecutive years of decline. Starting this year, we anticipate the reversal of the curve. We will see growth every year at least till the general elections. Whether the next peak will be the same as FY19 or not is difficult to predict, but it will be closer or slightly lower,” Jalaj Gupta, Business Head (commercial vehicles unit), Mahindra & Mahindra, said. 

As per Society of Indian Automobile Manufacturers (SIAM) data, domestic CV sales climbed 30 per cent to 4,66,763 units in the April to December period this year, as against 3,58,203 units the same period last year. While last year’s comparable data is on a low base, the double-digit growth this year is a result of a strong fundamental demand, say market experts.

“Since June 2021, post the second Covid-19 wave, freight rates for trucks gradually gained momentum along with improving utilisation levels. Rate decline in November was led by a major cut in diesel excise duty by about 10 per cent. We believe, in Jan-Feb ’22, led by the third Covid-19 wave disruptions, the industry revival would witness a pause, before demand recovery starts again,” said ICICI Securities.

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