0
The sales of domestic commercial vehicles (CVs) could take longer to recover than expected, despite the improving macro-economic indicators such as index of industrial production (IIP), output of core industries and fuel consumption. This is primarily due to the spare capacities created in the system, driven by the peak sales achieved during FY18-19 and implementation of revised axle load norms coupled with reduced fleet utilisation, says a research note.
In the report, India Ratings and Research (Ind-Ra) says, Medium & heavy commercial vehicle (MHCV) sales could decline by 35%-45% year on year (yoy) in FY20-21, though light commercial vehicles (LCV) sales decline is likely to be contained within 20%-25% yoy. In FY21-22, the industry could see sales growth in double digits, especially due to the low base of FY20-21. Nevertheless, the industry could revive earlier if an assertive scrappage policy is introduced timely.
Excess truck fleet capacity to extend medium and heavy truck segment recovery cycle: India Ratings
SECTIONS
Excess truck fleet capacity to extend medium and heavy truck segment recovery cycle: India RatingsET Bureau
Last Updated: Dec 28, 2020, 12:45 PM IST
Share
Synopsis
The rating agency says while medium & heavy commercial vehicle (MHCV) sales are unlikely to recover before fourth quarter of next financial year, that of the light commercial vehicles (LCVs) have started to recover as they provide the last mile connectivity and because of increased e-commerce activities.
During April-September 2020, the CV sales volumes declined 56% yoy, with a steeper decline of 76% recorded in MHCVs, due to excess system capacity and lower fleet utilisation.
Indian auto industry poised for stronger growth in 2021-22: Study orissapost.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from orissapost.com Daily Mail and Mail on Sunday newspapers.
The Indian auto industry is expected to see stronger growth in 2021-22, after recovering from the devastating effects of the COVID-19 pandemic, with electric vehicle sales, especially two-wheleers, also likely to see positive movements, according to Nomura Research Institute Consulting & Solutions India. However, in the personal vehicles segment, the levels reached in 2018-19 would be reached only in 2023-24, it added. In 2018-19, passenger vehicle sales rose 2.7 per cent to 33,77,436 units from 32,88,581 units in 2017-18, according to the Society of Indian Automobile Manufacturers (SIAM). After the devastating effects of the COVID-19 pandemic, it is expected that the auto industry will see stronger growth in 2021-22, Ashim Sharma, partner and group head (business performance improvement consulting-auto, engineering and logistics) at NRI Consulting & Solutions India, said.
Indian automakers fear container shortage to hit parts supply, output business-standard.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from business-standard.com Daily Mail and Mail on Sunday newspapers.