CV sales zoom in March, to take year's tally to record level

The commercial vehicle (CV) industry in India is set to create history. While numbers from the industry body are not out, it is estimated that total sales of CVs in the country would have been a little over 520,000 units in the just-concluded financial year (2009-10), the highest till date.

This compares to 3,84,122 units sold in 2008-09, a growth of 35.4 per cent. The CV market has various segments which include light commercial vehicles, trucks, buses and medium commercial vehicles.

Earlier, the highest-ever CV sales in India were in 2007-08, at 4,86,817 units.

According to the Society of Indian Automobile Manufacturers (Siam), 4,64,033 CVs were sold between April 2009 and February 2010. Tata Motors and Ashok Leyland, which sell 70 per cent of all CVs, together sold 52,584 units in March, taking total industry sales to 5,16,617 units.

Sales of Tata Motors, the largest CV manufacturer, went up by 49 per cent in March, at 43,285 units, as against 29,004 units in March 2009, Ashok Leyland posted growth of 110 per cent last month at 9,299 units, compared to 4,428 units in March last year.

In the interim Budget last year, Union finance minister Pranab Mukherjee had announced plans to buy around 15,000 new buses by June to improve urban transport in 63 cities under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Subsequently, Tata Motors bagged orders for 5,800 units and Ashok Leyland for roughly 4,900, apart from 2,500 buses ordered by Delhi Transport Corporation.

“Accelerated depreciation of 50 per cent on CVs, as part of the stimulus package announced by the Centre last year, has boosted their demand. Even the higher purchase of buses under JNNURM has been a major driving force behind the substantial growth in sales of CVs last year,” a Siam official said.

According to Abdul Majeed, analyst and partner, Price Waterhouse, “Apart from the normal growth, last year’s numbers are a reflection of the pent-up demand of 2008-09, when the industry had taken a hit in response to the global meltdown.”

“The low penetration levels and huge investments in the upcoming infrastructure projects will lead to double-digit growth in CVs even next year, if finance continues to be available and at affordable interest rates,” Majeed added.