Even though growth seems to be moderating for the commercial vehicle (CV) sector, particularly M&HCVs, in India, the sector has notched a new landmark – a million-plus sales in the domestic market in 2018. This is the first time that this milestone has been notched for a calendar year.
Between January-December 2018, a total of 1,005,380 CVs were sold, notching year-on-year growth of 27 percent and making India one of the fastest-growing CV markets globally. The growth comes on the back of strong demand for both the medium and heavy commercial vehicles (M&HCVs) and light commercial vehicles (LCVs) which grew by 23 and 30 percent respectively. The growth rate would have been better if not for some growth inhibitors in the last two to three months of CY2018 like the revised axle load norms, high diesel prices, a liquidity crunch and poor market and consumer sentiment.
It may be recollected that the overall CV sector in FY2018 touched all-time high sales of 856,453 units (+20%) after seeing marginal 4 percent growth in FY2017. In the ongoing fiscal’s (FY2019) first nine months, overall CV sales at 723,262 units are up 26 percent. This could have been better but given the current growth rate, the sector is likely to cross the million unit mark the first time ever in any fiscal year.
Importantly during FY2018, the M&HCV sector clocked total sales of 395,753 units, closing in on the 400,000 unit mark, perhaps the second highest after China. While the bus segment remains under stress and almost-flat growth, the goods carrier segment – the barometer of economic activities in the country – remains strong with total sales of 357,369 units, registering a strong 26 percent growth.
The M&HCV segment has seen a good uptick due to superior growth in the overall economy, higher infrastructure spend by the government, especially on-road and highway construction. This has translated into robust demand for the tipper market. Similarly, the LCV market – both pickups and small CVs – is benefiting from demand from growing satellite cities, booming e-commerce, increasing rural connectivity and higher last-mile delivery. LCV sales crossed the 600,000 units mark in the calendar year, clocking handsome 30 percent YoY growth.
TATA MOTORS REMAINS ON TOP
The higher level of industry growth in CY2018 is clearly reflected in buoyant OEM sales. Market leader Tata Motors, the sole full CV player, maintains its stranglehold with sales of 448,629 units for a market share of 45 percent. However, the company is aggressively fighting competition in the M&HCV segment to retain its leadership status. Tata Motors is tops in the LCV segment too but a hard-driving Mahindra & Mahindra, which is the second-largest player in the overall CV market with 25 percent market. What is helping M&M is the sustained demand for its popular Bolero range of pickups, particularly from semi-urban markets, is keeping it on its toes. Mahindra Truck & Bus, which recently launched the Blazo X HCV, the company is aspiring for the No. 3 position in the M&HCV segment.
Mahindra & Mahindra and Tata Motors are fighting a pitched battle in the small CV market with their Bolero pickup (left) and Ace product range.
Chennai-based Ashok Leyland, the second largest player in the M&HCV segment, sold a total of 183,889 units in 2018 for a total market share of 18 percent. Over the past couple of years, Ashok Leyland has been gaining substantial market share in the M&HCV segment from the market leader with its new heavy-duty trucks. Now it is looking to expand its base in the LCV segment where the Dost, its sole SCV, is a popular product. The company is now aggressively tapping the LCV segments with a product offensive to become a full CV player.
VE Commercial Vehicles, another player with strong ambition, sold 63,662 units in 2018 for a market share of six percent. The company has already hit peak production capacity at the Pithampur plant and has invested in a greenfield facility near Bhopal to expand capacities. Force Motors with its strong presence in the commercial passenger segment with the Traveller range of LCVs sold a total of 21,409 units to become the fifth largest player in the overall CV segments with a market share of 2.1 percent.
MARUTI SUPER CARRY MAKES SMART GAINS
Maruti Suzuki India, which entered the CV segment with its small CV the Supper Carry, has gained market share in 2018. Sales of the Super Carry averaged 1,705 units each month albeit the company would have liked a better number. Its sales of 20,469 units in 2018 gives it a market share of 2 percent to become the sixth largest player in the segment. SML Isuzu, which operates in the limited intermediate commercial vehicle market, sold 12,597 units in the year for a marginal market share of 1.2 percent.