Revival in economic activity, infra and rural demand pushes CV sales

Faster recovery seen with festive season ahead, though overall sales are likely to be lower, as Q1 was completely washed out

Commercial vehicle makers have started seeing uptick in sales following recovery in economic activity and revival of the infrastructure sector.

Tata Motors’ domestic commercial sales was flat on October 20 at 26,052 units as compared to 25,983 in October 2019 and 12 per cent up compared to September 2020 (23,245 units).

MHCV sales' grew by 9% to 5,033 units over September 2020 (4,606 units), and 3% over October 2019 (4,893 units), the first month registering growth over the previous year. CV exports in October 2020 were 45% higher than the previous month and 20% higher than October 2019.

Ashok Leyland's truck sales in October rose by 13 per cent to 3,762 units from 3,340 units in October 2019, even as bus sales dropped by 90 per cent to 119 units from 1,230 units. This led total M&HCV sales to report a 15 per cent drop in sales to 3,881 units in October 2020 from 4,570 units in the same month a year ago. Light commercial vehicle sales were up 11 per cent to 5,004 units from 4,509.

Anuj Kathuria, COO, Ashok Leyland, said month-on-month numbers were getting better. Demand is largely driven by the intermediate commercial vehicle (ICV) segment, which accounted for one fourth of the total industry volume (TIV) last year, but now it is one third, which is a big shift. Within ICV, smaller segments (10-11 tonne) or an extension of LCV, are growing faster.

With the monsoon behind and festive season ahead, there will be faster recovery, said Kathuria, who expects the fourth quarter to be than last year’s Q4. The year, as a whole, will definitely be lower compared to last year, since the first quarter was completely washed out, he added.

Vinod Aggarwal, MD & CEO, VE Commercial Vehicles said they are seeing high demand from niche segments such as construction, mining, agriculture and e-commerce. With this ongoing festive season, e-commerce is expected to soar further, which will turn up the requirements for LCVs and MCVs for faster inter and intra city deliveries.

"Also, the CV industry is driven by replacement demand and in the past two years, we have seen reduction in replacements. With the improvement in sentiments and positive outlook for the economy, replacement demand is expected to pick up," he said.

VECV recorded sales of 4,200 units this October as compared to 3,755 units in October 2019, recording growth of 11.9 per cent. This includes 4,130 units of Eicher branded trucks. Buses have recorded sales of 4,130 units in October 2020, as compared to 3,681 units in October 2019, representing a growth of 12.2 per cent.

In the domestic CV market, Eicher branded trucks & buses have recorded sales of 3,815 units in October 2020 as compared to 3,309 units in October 2019, representing a growth of 15.3 per cent.