Tough times not yet over for Indian MHCV sector

Tags: News
The medium and heavy commercial vehicle segment is likely to face challenging times for some time as there are no significant signs of recovery and demand bottoming out, warns experts and industry representatives. However, LCV segment is seen maintaining its strong growth and make up for the decline in MHCV segment.

“The past nine months have been a challenging period particularly for MHCV segment. The segment will struggle for some more time and the market will remain sluggish for two-three quarters,” Kapil Arora, partner — automotive practice, Ernst & Young India, said.

“While deregulation of diesel prices will make the industry less dependent on subsidies, it is likely to create demand uncertainty in the short-term as truck owners and manufacturers adjust to the new normal,” he said adding the long-term growth potential of the CV segment is conditional on the economy accelerating back to 7-8 per cent GDP growth per annum and the government expediting policies that foster infrastructure development and support the growth of manufacturing sector.

Medium and heavy truck segment reported a decline of 24 per cent at 180,565 units during the first 10 month period of current financial year, according to Siam.

A Ramasubramanian, president, Asia MotorWorks said CV market is driven by less than 3.5 tonnes segment (small commercial vehicle), while MHCV volumes have been hit due to poor coal and iron ore mining activities and fall in the length of road development work. During the first 10 months of the financial year, demand has bottomed out to the lowest levels. “Opening up of mines operations and smooth implementation of GST will pave the way for improving our transport system. India has the expensive trucking transport system despite having the cheapest trucks in the world,” he added.

Philippe Divry, managing director of Volvo India said signs of global truck market bottoming out have been seen while it is yet to be visible in India. It should happen in India sooner as India needs highly efficient transport system. “More players coming to India is nothing but a global trend as in any big CV market there will be 6-10 players fighting for each one’s share and customer segments. We are confident about India’s future in CV industry,” he added.

balachandarg@mydigitalfc.com

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