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Heavy truck sales rise after 30 months, signal recovery in India’s economic growth

Car, two-wheelers continue to rebound ahead of festive season.

New Delhi | Published: September 10, 2014 9:21:52 pm
Medium and heavy truck volumes in August have risen after 30 months. (Reuters) Medium and heavy truck volumes in August have risen after 30 months. (Reuters)

In another sign of improving economic conditions, medium and heavy truck volumes in August have risen after 30 months with a strong 20% growth to 14,273 units both on the back of increasing mining activities and freight movement, and a very low base of the previous year. The last time the segment saw growth was in February 2012.

With bus sales down 26%, volume growth for the overall medium and heavy commercial vehicle (M&HCV) segment (includes passenger buses and trucks) was lower at 10% to 16,955 units. However, bus sales are also expected to shoot up over the next few months with both Tata Motors and Ashok Leyland winning large orders of 2,700 units and 4,000 units from various states under the JNNURM-II scheme.

Vishnu Mathur, director-general of the Society of Indian Automobile Manufacturers said, “There are three main reasons for improved M&HCV sales, that some mining activity like for iron ore is back, infrastructure projects are picking up pace and freight movement has also increased with better rates”.

He added, “Volume improvement has been seen over the past few months, but a lot more is needed and the recover will be slow. The good thing is that diesel prices are not expected to go up further and the past increases have now been absorbed”.

Overall CV segment sales fell 5.6% to 48,473 units on the back of a 12% drop in Light commercial vehicles (LCV) sales to 31,518 units. LCVs, a high volume segment where Tata Motors’ Ace is the leader and Maruti Suzuki is expected to launch its own product next year, is yet to see a revival.

Tata Motors, the largest player in CVs, posted a 14% drop to 23,006 units in the month while Ashok Leyland and Mahindra saw an 11% and 4.4% jump, respectively.

Car sales, and the overall passenger vehicle (PV) segment, continued on the revival track that started in May this year on the back of multiple new launches and improving consumer sentiments. Just ahead of the festive season when demand usually shoots up (the festive season ends with Diwali in October), August car volumes rose 15% to 1.53 lakh units and the overall PV segment by 12.5% to 2.13 lakh units. Utility vehicle sales were also up 18% to 46,501 units.

“We are hoping the festive season will be good, especially since the last two years were not as great,” said Mathur. This year, around 20 new car launches and facelift are slated for the August-October period. Market leader Maruti has already launched its Ciaz sedan, while Tata Motors has launched the Zest compact sedan, Hyundai the new i20 and Honda the Mobilio MPV. Few more launches like the Fiat Avventura crossover, Tata Bolt hatchback are on their way.

In August, Maruti Suzuki’s volumes were up 29%, while Hyundai and Honda saw a 19% and 88% jump. However, Tata Motors’ PV volumes were down 25% and Mahindra was lower by 15%.

Two-wheelers also had a strong run with 19% growth to 13.45 lakh units – scooters did especially well with a 30% jump, while bike sales rose 14%. Market leader Hero MotoCorp saw a 19% rise, while Honda saw a 27% jump and TVS 48.5%. Bajaj, however, saw a 9% drop in sales.

fe Bureau | The Financial Express

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