Following a bumpy ride with the effects of demonetisation, the medium and heavy commercial vehicle (M&HCV) industry is looking for growth in Q4 of this fiscal, helped by pre-buying ahead of the new emissions regime.

With the currency ban, sales of M&HCVs plunged 25-30 per cent in November and December. (December anyway is not the best period for truck sales as buyers tend to wait for model year changes.)

Even as the industry began to pad up for post-monsoon demand — after a small blip in sales due to uncertainty over the GST impact on truck prices — demonetisation came in and spoiled the show.

Rentals recover

However, industry representatives said things started improving from mid-December.

Mirroring that, truck rentals on key routes saw a recovery of 18-20 per cent after witnessing an unprecedented fall of 25-30 per cent in November as a fallout of demonetisation.

BS IV emission norms come into effect on April 1. From then, only BS IV trucks will be available for sale, and this is expected to spur sales.

“Now, there is no confusion relating to price in the post-GST period as rates have been indicated. Truckers only need to decide whether they want to buy BS III or BS IV vehicles,” Gopal Mahadevan, CFO, Ashok Leyland, told BusinessLine .

“In the BS IV regime, prices will be ₹50,000-1,00,000 higher per truck, depending on the tonnage. So, I hope, there will be pre-buying and Q4 will be better.”

SP Singh, Convenor of the Indian Foundation of Transport Research and Training, concurred with this view. Apart from higher prices, truckers also fear BS IV vehicles may come with poor after-sale service, he added.

Industry analysts feel the worst phase of demonetisation has passed.

“Cash is key to this industry — long-haul truck drivers, who do 10-day-long trips, have to carry cash,” said an auto analyst at a brokerage firm. “So, the cash crunch crippled their operations. But, they appear to be finding ways to operate with less cash now.”

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