After sustained accelerated growth of around 40 percent in the first five months of the ongoing fiscal year, commercial vehicle sales appear to be moderating. Nonetheless, numbers from four leading CV OEMs reveal strong double-digit growth of 23 percent year on year.
What is enabling continued demand for CV manufacturers is the sustained infrastructure spend on the part of the government, improving demand from the logistics sector and intra- and inter-city transportation. If there is any slowdown, then both the medium and heavy commercial vehicle and light commercial vehicle segments remain resilient to that.
Also, the increase in axle load limit, announced in July for HCVs, has not dampened the growth as there is still strong demand for tippers, tractor trailers and trucks carrying voluminous goods. The focus on building highways across the country, construction activities and government focus on job creation through infra spending augur well for the CV sector in the election year. The industry is well on its course to record yet another year of robust growth.
How the OEMs fared
CV market leader Tata Motors sold 46,169 units in September 2018, up by 26 percent YoY (September 2017: 36,678). Its M&HCV truck sales grew by a strong 32 percent to 16,239 units, while ILCV numbers remained strong with sales of 5,465 units, and growing 23 percent YoY. The cargo SCVs and pickups together witnessed sale of 19,846 units (+ 27%); this higher growth is led by SCV Cargo (<1 ton payload) along with growth in the e-commerce sector as also the evolution of the hub-and-spoke model and the growing rural consumption, which are all driving small vehicle demand for last-mile connectivity operations. Tata Motors also sold 4,619 commercial passenger carriers (buses) (+6%), helped by sales in the STU and ambulance segments.
Ashok Leyland sold a total of 19,373 units, which constitutes YoY growth of 26 percent (September 2017: 15,371). While the company sold 14,232 M&HCVs (+21%), LCVs recorded a healthy 44 percent YoY growth at 5,141 units sold (September 2017: 3,566). The past month saw the company bag handsome bus orders from Bangladesh.
Mahindra & Mahindra's overall CV sales rose 19 percent to 22,917 units (September 17: 19,203). Its M&HCV sales, at 1,064 units, saw demand moderating at 20 percent (September 2017: 884). The below-3.5T GVW segment was up 19 percent YoY, at 21,223 units (September 2017: 17,803), while those in the above-3.5T GVW segment registered growth of 22 percent with sales of 630 units (September 2017: 516).
VE Commercial Vehicles also recorded strong growth – 5,685 units up by 11.8% (September 2017: 5,084 units).
All put together, the CV segment continues to drive along in growth lane with few impediments expected this fiscal.
Also read: Two-wheeler OEMs clock strong numbers in September
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