M&HCV sales in India stick to the growth path in July

Carrying forward the momentum of the past 11 months, the medium and heavy commercial vehicle (M&HCV) segment registered positive sales numbers during the month.

All the major CV OEMs maintained a strong performance in the M&HCV segment, thanks to growing demand from the infrastructure sector and the opening up of the mining sector.

Sustained growth has yet to filter down to the beleaguered LCV segment but but Mahindra & Mahindra and Ashok Leyland have increased their LCV sales in July year on year; Tata Motors’ LCV sales however remain in negative territory. A proper recovery for LCVs looks to be around 6-8 months away as micro-economic factors have to improve and drive last-mile connectivity which is critical for LCV sales.  

Reporting on monthly truck rentals on key routes in the country, the Indian Foundation of Transport and Research and Training (IFTRT), says during July truck rentals dropped further by 2-3% on the back of  weak cargo offerings during the entire month. 

According to IFTRT, the mandatory addition of ABS (anti-locking braking system) and speed limiters in new trucks from October 1 this year will increase vehicle prices by 4-5%. Therefore, it is very likely that end-August and September 2015 will see a spurt of truck purchases by fleet owners to save on costs. 

Also fleet owners in the National Capital Region (NCR) are awaiting the National Green Tribunal’s  (NGT) order on banning the entry of 10-year-old diesel trucks in as a measure to improve deteriorating air quality. In case, NGT sticks with its April 7, 2015 order to ban these diesel trucks, there may be a further spurt in truck sales.

Tata Motors’ total sales of 24, 687 units in July were down 6% (July 2014: 26,089) but its M&HCVs posted double-digit growth of 21% with sales of 11,808 units (July 2014: 9,725). Its LCV sales were down 21% YoY at 12,879 units (July 2014: 16,364).

Ashok Leyland’s total sales were up 40% at 11,022 units sold (July 2014: 7,861) Its M&HCV sales of 8,803 units were a massive 53% increase over year-earlier sales (July 2014: 5,750). Its LCV numbers was up marginally at 5% growth with sales of 2,219 units (July 2014: 2,111 units).

Mahindra M&HCVs increased 11%; it sold 314 units in the month. (July 2014: 284 units). While the below 3.5 T GVW segment registered growth of 6%, it sold 11,230 units (July 2014-10,611 units). However, the above 3.5T GVW segment has recorded strong 37 % growth selling 604 units (July 2014-441 units).