M&HCV market to remain flat in FY'17: Tata Motors

Commercial vehicle makers are likely to report a good year-on-year growth for the current month of March 2017. Pre-buying to avoid higher acquisition costs due to new emission technologies to meet BS IV norms would be the driver.

However, the medium and heavy commercial vehicle (M&HCV) segment is unlikely to see growth on an annual basis during FY'17. Ravi Pisharody, executive director (commercial vehicles), Tata Motors, expects the total industry volume "will be close to last year (FY'16)". Last year, sales (wholesale) of M&HCVs in the domestic market stood at 302,000 units (Trucks: 258,488, Buses: 44,000), or a growth of 30 percent over FY'15. "It's not been a bad year, just that it's been unpredictable," says Pisharody.

The tipper segment is currently driving medium and heavy truck sales, while weak demand for long-haul cargo trucks is a worry for Tata Motors. According to the company, the demonetisation drive took away the steam from the market "for at least three months". For a few weeks after the announcement of the demonitisation drive on November 8, operators in the cargo segment were "completely paralysed" as they depend largely on cash for regular operations of trucks. This led to companies cut down production of trucks. The impact has largely gone away but for the M&HCV market's drive to be stable again, it may take another six months or so. "After BS IV and GST (implementation), it may a bit uncertain. But after that I really expect the market to be quite strong for the next two, two-and-a-half years," says Pisharody.