The year 2020 was replete with challenges but the dawn of 2021 brings the seeds of hope and optimism. For the Indian commercial vehicle segment, the automotive barometer of the economy, faced the brunt of the lockdowns and demand crunch amid the overall downturn. But December 2020 has brought some cheer to CV makers.
Cumulative commercial vehicle wholesales last month totalled 59,741 units, which is 4 percent lower compared to December 2019 but 2 percent higher compared to November 2020. A close look at company-wise sales reveals strong demand for medium and heavy commercial vehicles (M&HCVs) with the country’s two largest CV OEMs – Tata Motors and Ashok Leyland – seeing an average 38% growth.
CV market leader Tata Motors reported sales of 29,885 CVs, which is 5% lower YoY, but 14% higher compared to November 2020. The company continues to see consistent demand in the small CV cargo and pickup segment, while a strong rebound in the M&HCV and I&LCV segments further helped the OEM see steady growth.
Commenting on the December performance, Girish Wagh, president, Commercial Vehicles Business Unit, Tata Motors said, “Tata Motors’ commercial vehicle domestic sales in Q3FY21 at 82,155 units was 48% higher than the previous quarter and recovered to be broadly in line with Q3 FY2020 (-3.5%). M&HCVs and ILCVs led the recovery, growing by 10% and 7% respectively over Q3 FY2020, with higher demand in infrastructure including road construction, mining and e-commerce. The offtake continued to be higher than retail to support sequential month on month growth in retail while ensuring healthy inventory levels in the pipeline. We continue to monitor and work on the supply chain to improve availability, especially of electronic components, which impacted the output at the end of Q3.”
Ashok Leyland, India’s second-largest CV maker, witnessed a strong pickup in demand for its M&HCV truck and LCV range. With schools being shut and a number of offices continuing to with the Work From Home dynamic, the demand for buses continues to remain muted. The company sold 11,857 CVs, which was a growth of 14% YoY, and 22% higher than November 2020.
Mahindra & Mahindra sold 13,930 CVs (-13% YoY), which was 27% lower compared to November 2020. The only exception was its M&HCV range, which grew 14% month-on-month albeit a low base. According to Veejay Nakra, CEO, Automotive Division, Mahindra & Mahindra “Our overall sales have been affected due to the continuing supply chain challenges related to the constantly changing global environment, more specifically the supply shortage of micro-processors (semiconductors) used in Electronic Control Unit (ECUs). Demand continues to remain strong even after the festive season and as we get into the new year.”
Meanwhile, VE Commercial Vehicles continues to see steady growth. The company sold 4,069 units in the domestic market, which was 8% lower YoY, but an uptick of 32 percent over November 2020.
With the phase-wise Covid-19 vaccine expected to be rolled out in the coming weeks, market sentiment is expected to further help elevate overall domestic automotive sales. This will also see the CV industry do its bit for the country, transporting the vaccine if specialised transport vehicles across the country.