Economy

Truck rentals dip 27% in April on local lockdowns

Our Bureau New Delhi | Updated on May 04, 2021

With production activity and movement hit, IFTRT sees tepid rentals for 2 quarters

As local lockdowns hit production activity, truck rentals on trunk routes plummeted 18-27 per cent in April over March, according to data from the Indian Foundation of Transport Research and Training (IFTRT).

There was a 35-40 per cent slump in the factory output due to production cuts and closures in many States triggered by the second wave of the Covid pandemic, SP Singh, Senior Fellow and Co-ordinator, IFTRT, New Delhi, said in a note.

Also, there was a 10-15 per cent drop in arrivals of fruits and vegetables in mandis. All this kept almost 40 per cent of the 1.4 million medium and heavy commercial vehicles that have national permit and 2.5 million trucks with inter-state permits under-utilised resulting in a financial crisis for fleet owners and stress on repayment of loans, said IFTRT.

CV sales hit, too

The IFTRT projected that truck rentals and sales will remain tepid for the current quarter, and most likely, for the next as well.

“As of now, there is no specific financial package for MSMEs in trade and manufacturing,” said IFTRT. “The road transport business, which depends on trade, commerce, industry and agriculture, and made up mainly of (90 per cent) small truck owners has been the hardest hit, observed the transport research outfit, based on analysis of 75 key truck and trade centres in the country.

Consumer spending for discretionary items has dropped sharply in Tier-1/2/3 cities. Also, rural demand remained subdued despite the spending in the ongoing marriage season. This has affected the sentiment in the goods transport business leading to a drop in orders for medium and heavy commercial vehicles by 50-60 per cent.

“This was the month when diesel prices were on hold by the oil marketing companies though the international crude oil prices firmed up,” said IFTRT. Coincidentally, the month also saw elections being held in various States in India, it added.

Financial crisis

The IFTRT said that the record GST collection in March was more due to the stringent enforcement and the rise in the prices of inputs and finished items rather than any jump in production volumes.

 

With truckers ability to repay loans affected, the All India Motor Transport Congress (AIMTC), in a letter sent to the Prime Minister Narendra Modi, sought a moratorium on EMIs, relaxation of the bank non-performing-asset NPA norms, and halting seizure of vehicles.

The AIMTC also asked the Prime Minister to ensure that government departments, public sector units and large companies make early payment to transporters for their services. It also sought extension of validity of comprehensive motor insurance (paid before April 1, 2020) till at least October 31, 2021.

 

 

Published on May 03, 2021

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