May 2021 saw sales of commercial vehicles crash to 20,001 units, 47 percent lower than the preceding month.
With the second wave of Covid-19 spreading its reach in rural India, most states went in for lockdowns which brought economic activity to a screeching halt. The biggest casualty in the process was the CV segment.
In addition, availability of funds, low-capacity utilisation in M&HCVs and revised axle load norm continue to dog purchase decisions for many customers. On the flip side, the growth in home deliveries is the best piece of news for pickups. This will also mean a fillip to electric mobility which is seen as the best bet for last-mile connectivity in cities.
Tata Motors sold 9,371 units, down 35 percent from April 2021. In the case of Ashok Leyland, numbers plummeted 66 percent to 2,738 units from the preceding month. With the double whammy of weak demand and lockdown in the states where its plants are located, the Chennai-headquartered company has announced that its plants will be operational for only 10 days in June.
Mahindra & Mahindra's tally was 7,236 units, a fall of 49 percent from 14,104 units in April 2021. The company’s sub-2-tonne LCV segment was unsurprisingly the only segment to report positive growth. “We are seeing strong growth momentum for our entire product portfolio. With the cases coming and gradual reopening of markets, we foresee strong demand rebound,” said Veejay Nakra, CEO, Automotive Division.
VE Commercial Vehicles did a little better reporting sales of 656 units in May, down 58 percent from 1,555 units in April 2021. Clearly, the CV industry faces tough times ahead with high diesel prices only adding fuel to the fire. Yesterday, the first fuel price hike of June saw diesel cost Rs 92.69 a litre in Mumbai. Diesel prices have increased by Rs 4.50 a litre through 17 hikes in 26 days and by Rs 27.50 a litre since BS VI kicked in from April 2020.
Observers believe the real revival could only begin gradually from September but even this will depend on the Centre pumping in more money into the economy apart from an aggressive vaccination drive to keep the third wave of the pandemic at bay.