Undeterred by price rise, CV sales likely to set a new record in FY24

Buoyed by improving highway infrastructure, demand for buses has grown by more than 35%. Overcrowded trains are also adding to the growing road-based transport

Commercial vehicle (CV) sales are likely to reach an all-time high in the financial year 2023-24 (FY24), The Economic Times (ET) has reported. Commercial vehicle sales are considered a representation of economic activity. The jump in sales is likely to bring record-breaking revenue for companies such as Tata Motors, Ashok Leyland, and VE Commercial Vehicles (VECV), the company that makes Eicher-branded trucks. VECV is a joint venture between the Volvo Group and Eicher Motors.

The ET report said that more costly, heavy-duty vehicles are leading the sales as the government continues to spend on expanding road infrastructure. The report said that FY24 sales are expected to surpass the previous record of 1,007,311 units in the pre-Covid year of FY19. However, the revenue is likely to go up 30 per cent compared with FY19, the ET report said.

Higher demand for heavy-duty trucks

Commercial vehicles have become more expensive due to the more stringent emission norms imposed by the government. The growing demand for higher payload capacity trucks augments the rise in sales. Both of these factors are contributing to higher per-unit revenue.

Sales of heavy-duty trucks with the capacity to carry more freight have grown in healthy double digits. At 15 per cent in the first seven months of the ongoing financial year, the report cited Society of Indian Automobile Manufacturers (SIAM), Vinod Aggarwal as saying.

Demand for buses

Buoyed by the improving road and highway infrastructure, the demand for buses has also grown by more than 35 per cent. Overcrowded trains and a scarcity of reserved seats in the railways have also added to the growing road-based transport.

Executive chairman of Ashok Leyland, Dheeraj Hinduja told ET, "We do think that the industry will hit a new peak and surpass the previous one. The next six months look very promising."

Talking about the rising prices of commercial vehicles, Dheeraj Hinduja said, "To be sure, prices have gone up. But fleet operators are also wanting to replace their older vehicles with more fuel-efficient, newer ones with higher carrying capacity," Hinduja was quoted as saying in the ET report. This change in sales mix will help the industry touch a new high revenue-wise, he added.