Driven by multiple factors, the medium and heavy truck industry is expected to end the current fiscal with highest-ever total volumes of more than three lakh units and a significant increase in tonnage value.
The industry’s previous highest annual volumes were 299,234 units, achieved in 2011-12.
Record sales
During the 11-month period of this fiscal, the medium and heavy truck segment has achieved total volumes of 263,754 units, which is higher than the total sales of 255,267 units in 2016-17. Over the past three months, the industry has been clocking monthly volumes of about 34,000 units.
March is usually a strong month for commercial vehicle sales. Some pre-buying is also expected ahead of the implementation of AIS 140 regulation (vehicle tracking device related norms) from next fiscal, which will lead to increase in prices of trucks.
The industry is expecting to generate good volumes during this month, pushing the total volumes past the 3-lakh mark by the end of March 31.
“A combination of factors has been helping the industry maintain healthy momentum in sales this fiscal. The significant part of this growth is the increasing demand for higher tonnage trucks, mainly due to stricter implementation of overloading norms in some States,” said a top official of a leading truck and bus company.
Industry analysts also highlighted that the implementation of trailer code in Rajasthan spurred some ‘pre-buying’ demand, while strict vigilance on overloading of trucks in Uttar Pradesh, Rajasthan, and Haryana helped healthy retail sales of trucks, particularly higher-tonnage trucks.
Icra’s Senior Vice-President Subrata Ray pointed out that M&HCV sales grew by 19 per cent in volume terms and 33 per cent in tonnage terms during 11-month period of this fiscal, on account of stronger demand for heavy trucks (25 tonne plus) and tippers.
No price hike
“There has been no price hike till date in the quarter ending March 2018, apart from a price increase of ₹40,000-45,000 towards complying with the regulatory requirement of having air blowers in all new CVs as a standard fitment,” according to a report by Motilal Oswal Securities.
Tata Motors manages to maintain more than 50 per cent share despite growing competitive pressures during the 11-month period. It had a share of 51 per cent, down from 52 per cent a year ago. Ashok Leyland managed to improve its share by 100 bps to 33.6 per cent. VE Commercial Vehicles maintained its share at 11 per cent.