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The demand for commercial vehicles (CVs) is on track and growth will continue as demand is back mostly on the replacement side, though the sector is still lower than its peak time.
Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM) told businessline, “The overall demand for CVs is doing much better, even though we are still lower than the earlier peak levels. But, some of the segments within that are above the earlier peak levels. The demand is led by a lot of replacements, the pent-up replacement demands.”
Reasons for replacement demand
This is because the new trucks have been designed after BS6 or have been designed to carry the right payloads as per the new norms which were announced a few years back. They are much more productive and have better fuel efficiency. Therefore, it makes sense to replace the older trucks with the new trucks, Aggarwal explained.
He said with the better infrastructure, customers also need better/more powerful engines, which also requires replacement of older trucks. New-age customers, especially e-commerce companies, also have a lot of demand on productivity and require a specific type of trucks which can deliver goods quickly.
Also read: Difficult to reduce share of commercial vehicle loans: Shriram Finance chief
He added that the infrastructure investments in the country are also leading to increased demand for construction trucks and with better infrastructure, a lot of migration is needed.
“For example, in the tractors segment, there is a lot of migration happening in the tractor segment. Overall, I would say the CV segment is on the right track and the prospects of CV are also very good,” Aggarwal added.
SIAM data
According to the latest data shared by SIAM, total CV sales in the domestic market declined by 3.31 per cent year-on-year (y-o-y) to 2,17,046 units in the first quarter of this year as compared with 2,24,488 units in the corresponding period last year.
Production of the CVs also declined by 1.51 per cent y-o-y to 2,53,447 units during the April-June quarter as compared with 2,57,338 units in the same period last year.
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