Truck rentals stay lacklustre in Feb due to lower infra sector demand

Truck rentals remained lacklustre in February due to lower demand from the infrastructure sector. 

While select routes, such as Delhi-Kolkata-Delhi, saw a 1.3 per cent increase, and Bengaluru-Mumbai-Bengaluru rose by 1.6 per cent, others like Delhi-Hyderabad-Delhi dropped by 1.1 per cent on a month-on-month (M-o-M) basis, said the Shriram Mobility Bulletin released on Saturday. 

The All India Motor Transport Congress (AIMTC) raised concerns over the government’s draft notification, which proposes increased renewal charges for registration and fitness certificates. 

Small fleet operators fear this move could further strain their financial viability. The dip in truck rentals is accompanied by a slowdown in vehicle sales across all segments, as buyers delayed purchases, awaiting new fiscal-year discounts in March-April. 

On a M-o-M basis, sales of motor cars declined by 37 per cent, while agricultural trailers and tractors dropped by 30 per cent and 31 per cent, respectively. 

Sales in the commercial vehicle segment also took a hit, with goods carriers falling by 18 per cent, three-wheelers (goods) declining by 10 per cent, and commercial tractors dropping by 17 per cent.  

The electric vehicle (EV) market, continued to witness declining sales. In February, EV two-wheeler sales plunged 28 per cent and EV car sales tumbled by 34 per cent M-o-M. 

The only outlier in the sector was E-rickshaws with carts, which recorded an 11 per cent growth, reflecting continued demand for last-mile connectivity solutions. 

The sluggish demand across sectors was also reflected in fuel consumption patterns. The drop in petrol and diesel consumption in February coupled with flat FASTag transaction volumes and values indicate reduced movement of goods and passengers resulting in a slowdown in road transport and logistics activity. 

The dip in vehicle sales and transportation demand highlights broader economic uncertainties, as businesses remain cautious ahead of the new financial year.

 

Y S Chakravarti, managing director (MD) and chief executive officer (CEO), Shriram Finance, said, "The demand for trucks in February was lacklustre. The impact of the rate cut by Reserve Bank of India (RBI) is yet to percolate down to borrowers totally as interest rate resets are underway. With FY25 end coming, the expectation is that manufacturers across locations may move goods to commercial hubs, thus increasing trucking activity. For two wheelers, with OBD II B Emission norms kicking in from April 1, manufacturers will likely clear all vehicle stocks that do not conform to the new regulations." 

Despite these challenges, optimism remains for March, as FY25-end business activity is expected to drive higher fleet utilisation and sales. With dispatches picking up and dealers offering discounts, the market could witness a recovery in demand across vehicle segments. 

The government’s increased focus on infrastructure spending in the upcoming financial year is also expected to boost commercial vehicle sales and freight movement.