With improving truck freight rates and steady growth in monthly sales of trucks, it appears that the medium and heavy commercial vehicle (M&HCV) goods segment is getting into stable growth path. The industry hopes to end the current fiscal with a single digit growth in total volumes.
The latest good news was the growth in truck freights by 4-5 per cent on truck routes in September (as against 2-3 per cent drop in August), mostly driven by agri-cargo and increased output from small and medium manufacturers.
Though the light commercial vehicle (LCV) category remains in the negative growth lane, the M&HCV goods segment (7.5-49 tonne) has been showing steady recovery. The segment has been showing positive growth in the past four months. While the latest data are awaited, the M&HCV goods segment posted 20.4 per cent growth in volumes in August, thereby, leading to a flat sales growth at 69,650 plus units for the April-August, 2014, period.
“We are positive about full recovery. We should see the impact of lot of actions initiated by the government at the ground level soon. While tractor-trailers and multi-axle vehicles have been reporting positive growth, the 16-tonne segment is still in the negative lane. We hope to see recovery in all categories including LCV in the next 6-12 months,” Vinod Aggarwal, Chief Executive Officer, VE Commercial Vehicle, told this correspondent.
Surjit Arora of Prabhudas Lilladher, a financial services firm, stated that there was optimism in the truck freight market and fleet owners were adding multi-axle trailers to their fleet as their corporate clients are insisting on providing young-age fleet as a pre-condition to awarding 3-4 years contracts. He expected the M&HCV goods segment to report 6-8 per cent growth this fiscal.
ICRA expects the growth in the M&HCV segment to be around 2-3 per cent in volume terms — the extent of improvement could be higher if other segments also start seeing improvement in sales volumes.
S. P. Singh of Indian Foundation of Transport Research and Training pointed out that with vanishing under-recovery burden on diesel, falling international crude oil prices would augur well for the trucking industry. Also, the government’s proposed plan to cut diesel price by Rs.2.50-3 a litre would also bring a lot of stability in the road transport sector, he added.
