The commercial vehicle industry is continuing to see a smart growth trajectory,especially in the Heavy Commercial Vehicle (HCV) segment thanks to the robust infrastructure growth driving demand for newer sets of wheels.
Sign Up to get access to the Financial Express Exclusive and Premium Stories.Register NowAlready have a account? Sign in
In fact, one may get a different view of the industry if the data is just looked upon at a macro level. The reality is quite different when analysing the segment-wise performance.
The market leader Tata Motors reported a flat growth with sales of 32,668 units, compared to 32,954 units for the same period last year. The company saw an uptick in demand across segments barring the SCV Cargro and Pickup.
Commenting on the company’s performance Girish Wagh, Executive Director, Tata Motors demand said that the demand was seen on the back of the government’s infrastructure initiatives, expansion in core industries, and sustained growth in e-commerce. The passenger commercial vehicles segment continued to register consistent post-pandemic recovery with the rise in sales. The YoY growth trend witnessed during past quarters paused in Q3FY24 on account of the higher base effect, the impact of elections held across 5 states, and the post-festive seasonal slowdown in rural consumption.
He expects that the demand to improve in Q4FY24 across most segments of the CV industry due to the Government’s continuing thrust on infrastructure development, the promising growth outlook of the economy, and the company’s demand-pull initiatives.
Mahindra & Mahindra witnessed its December sales register an 11 percent degrowth, owing to the drop in LCV sales. The company sold 17,888 CVs, compared to 20,080 for the same period last year.
Ashok Leyland reported wholesales of 15,323 units, which was 10 percent lower than the sales of 17,112 units in December last year. Barring the demand for buses, the company reported drop in sales for M&HCV Trucks and LCVs.
Volvo Eicher Commercial Vehicles (VECV) benefited from demand for the HD-truck and bus segment. Unlike the past, the company has been a bit more aggressive in introducing niche products in the country, which has helped it drive new business opportunities. It was the only OEM to see an overall positive growth of 12 percent, albeit a low-year-ago base, with sales of 7,468 units.
COMMERCIAL VEHICLE SALES IN INDIACompany and SegmentDec ’23Dec ’22Change (in units)Change (in %)9M FY ’249M FY ’23Change (in %)YoYYoYYoYTata MotorsHCV Trucks11,19910,1781,02110%84,79474,67814%ILMCV Trucks5,6755,2554208%42,21547,820-12%Passenger Carriers3,0602,69436614%29,07124,17120%SCV Cargo and Pickup12,73414,827-2,093-14%117,058134,503-13%Total32,66832,954-286-1%273,138281,172-3%Mahindra & MahindraLCV 3.5T + M&HCV2,3718791,492170%18,5716,532184%Total17,88820,080-2,192-11%195,574183,7276%Ashok LeylandM&HCV Trucks8,37910,069-1,690-17%70,26769,6501%M&HCV Bus1,723133039330%11,2166,83864%LCV5,2215,713-492-9%48,68247,7772%Total15,32317,112-1,789-10%130,165124,2655%Volvo Eicher CV7,4686,67179712%55,40947,97415%Total73,34776,817-3,470-5%654,286637,1383%Source: Company reports.
Q3 and 9-month sales performance
The performance of the commercial vehicle industry, especially the sales of M&HCV trucks is often considered the barometer of a country’s economic activity.
Going by the data for the Q3 and the 9 months of FY2024, it is safe to say that the CV industry continues to be a shining light for the Indian automotive industry.
In Q3, the overall CV volumes were up 3 percent with sales of 220,893 units, compared to 213,690 units for the same period last year. Barring Ashok Leyland which saw an almost flat decline, all OEMs reported a positive growth. The key takeaway was that the HCV segment and bus segment have grown leaps and bounds over the quarters with the future outlook continuing to be positive.
Q1 ‘FY24Q1 FY ’23Change (in %)Q1 ‘FY24Q1 FY ’23Change (in %)Q1 ‘FY24Q1 FY ’23Change (in %)Tata MotorsHCV Trucks24,76922,8269%30,36924,22725%29,65627,6257%ILMCV Trucks10,32116,998-39%16,48316,730-1%15,41114,0929%Passenger Carriers10,7459,63711%10,6228,04032%7,7046,49419%SCV Cargo and Pickup36,39046,242-21%41,70444,768-7%38,96443,493-10%Total82,22595,703-14%99,17893,7656%91,73591,7040.03%Mahindra & MahindraLCV 3.5T + M&HCV3,3201,95370%3,0832,25537%4,2462,32483%Total61,25258,9824%68,50864,0947%65,81460,6519%Ashok LeylandM&HCV Trucks21,20921,1470.30%25,65223,27510%23,40625,228-7%M&HCV Bus3,0771,59393%4,2952,20095%3,8443,04526%LCV14,82114,3843%16,99817,0400%16,86316,3533%Total39,10737,1245%46,94542,51510%44,11344,626-1%Volvo Eicher CV18,24515,38319%17,48814,51920%19,23116,70915%Total200,829207,192-3%232,119214,8938%220,893213,6903%Source: Company reports
On the other hand, for the first 9-months of FY2024, the sales came at 654,286 units, compared to 637,138 units for the same period last year. Barring Tata Motors’ all OEMs reported positive growth in their overall sales volumes.
Vinod Aggarwal, President, of the Society of Indian Automobile Manufacturers (SIAM) and CEO, of Volvo Eicher Commercial Vehicles (VECV) told Financial Express Online, that while the “peak volumes for the HCV segment was last attained in FY2018-19, this fiscal, the industry would be very close to the same and next year it could set a new record”.
His confidence stems on the back of three key factors – continued infrastructure growth, replacement demand, and overall economic growth.
When queried about a slowdown in the LCV segment, he said that it was due to the high-base effect, and not necessarily a slowdown, as the segment probably attained its peak last year.