Increase in demand for commercial vehicles

New Delhi Industry executives said commercial vehicle sales are likely to improve from August as fleet operators are likely to complete purchases during the festive season.

Fleet operators were delaying replacement or addition of their existing fleet due to high fuel and commodity prices, but now with the effect of stabilization of commodity prices, especially steel, prices of commercial vehicles in the second quarter of this fiscal. growth is expected to stop. He said to boost the demand for vehicles.

Commercial vehicle sales for the June quarter (Q1FY23) stood at 225,000 units, slightly lower than the peak volume of 230,000 units seen in the June quarter of FY19, but the recovery in the Medium and Heavy Commercial Vehicles segment (M&HCV) was 76,000 units. But it was slow. According to industry body, Society of Indian Automobile Manufacturers (SIAM), compared to 89,000 units in the same quarter in FY19.

“Commercial vehicle registrations have been in the zone of negative 4-5% growth from 2019 levels for the past few months. We expect August to be at a similar level. We see strong customer inquiries and interest, but the conversion rate is low, and we expect this to improve in a month or two as fleet operators make up their minds. We expect growth from the festive months of September-October. But fleet operators are in a positive mindset and are coming for inquiries,” said Federation of Automobile Dealers Association (FADA) president Vinkesh Gulati.

“The growth forecast for M&HCV for this financial year is over 15%. On the ground too, we see a lot of traction across all categories of our products. We expect the demand for this segment to remain strong for the next few quarters. We face some hurdles in the form of inflationary pressures and interest costs. But India is doing very well on an estimated 6.5-7% GDP growth. Dheeraj Hinduja, executive chairman, Ashok Leyland, said, “With those types of growth rates, we should see a strong, sustained rebound of first quarter demand for M&HCV. We are looking forward to the benefits of declining commodity prices during the second quarter.” will see. .”

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According to Gopal Mahadevan, chief financial officer, Ashok Leyland, steel prices were still higher in the first quarter of FY13 than in the fourth quarter of FY12. CV manufacturers, like their peers, took a series of price hikes to pass on higher raw material costs to customers.

“We are also seeing rapid improvement in the bus segment as the Covid-19 scenario recedes. We expect most of the schools, colleges, institutions, offices, intercity and long distance transport to open up, which will further contribute to the volume growth.”

The bus segment for rival Tata Motors also staged a strong recovery, posting a 60% increase in March quarter volumes due to the reopening of schools and replacement of buses. “Sales of commercial vehicles are poised to grow on the back of a strong recovery in the bus segment due to increasing infrastructure activity, demand for last mile mobility and rising demand for public transport. The supply position continues to improve. Tata Motors said, “We are cautious on demand, but are keeping a close watch on interest rates and transporter profits.”

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