Truck rentals during May 2014 recovered by 4-5 per cent, said a Prabhudas Liladhar research report.

In May, dispatches from factories improved in FMCG, consumer durables and general merchandise sectors. Housing showed some signs of improvement with a pick-up in the housing construction activity in Tier-I and Tier-II cities.

April 2014 witnessed a drop in truck rentals by 4-5 per cent for a three-week delay in wheat procurement across several States and widespread damage in summer fruit and vegetable crops. On the other hand, May witnessed a reversal in the truck rentals on trunk routes.

Surjit Arora, reasearch anlayst (institutional equities), said the pace of decline in the medium and heavy commercial vehicles goods segment volumes eased to 8 per cent YoY in May against a 20 per cent decline in Q4FY14. Light commercial vehicle goods segment, however, dropped 19.7 per cent in last month. “Volumes in the industry truck sales (LCV & MHCV goods segment) de-grew by 20.5% due to lower cargo availability and slowdown in the LCV segment," the report said.

Fleet owners were now adding multi-axle trailers to their fleet as their corporate clients insisted on providing young-age fleet as a pre-condition to awarding 3-4 years’ transport contracts, the research report noted.

These trailers are mostly engaged in carrying bulk cargo and are also the preferred mode of moving equipment/machinery across project sites in various parts of the country.

Truck owners appear to be gearing up for fleet replacement ahead of resumption of stalled infrastructure projects. “Truck fleet assets have virtually become encumbrance-free and in turn, have stopped their monthly outgo of EMIs, resulting in decrease in the capital cost of owning truck assets”, Prabhudas Liladhar observed.

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