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Trucks outperform CV industry with 28 pc growth

11/05/2018 | Author: Autoguide | 0 Comments Back To Home   < Previous News   |   Next news >

ICRA Report

The trucks segment (HCV) outperformed the CV industry with 28 per cent growth in FY2018 driven by healthy demand from end-user industries, according to a new ICRA report. The CV sector has ended the year on a strong note with volume growth of 20 per cent in FY18 as compared to FY2017.
For the trucks segment, the demand of the vehicles came from industries like automobiles, container traffic and bulk materials. Commenting on it, Mr Subrata Ray, Sr. Group V-P, Corporate Sector ratings, ICRA, said, “While on-going economic recovery supported higher demand for CVs, a factor that also played an important role was stricter implementation of overloading norms over the past 12-18 months across many of the North Indian states including Uttar Pradesh, Rajasthan, Punjab and parts of the Madhya Pradesh.”
According to ICRA, the industry has been gradually witnessing a greater preference for higher tonnage trucks over the past decade. The demand has gradually shifted from 16T to 25T and is further shifting in favour of 31T and 37T trucks. In particular, sales of 37T segment has witnessed sharp jump in sales, due to increasing preference for higher tonnage trucks. 
Capacity addition (in tonnage terms) in the system outpaced volume growth and grew by 30 per cent compared to 19 per cent increase in M&HCV (Truck) sales in FY2018. The share of 35T and above segment has increased to 63 per cent in FY2018 from 19 per cent (FY2013) and the average tonnage of trucks in India has improved considerably from 15T in FY2009 to 20T during FY2018, the ICRA report stated. 
This trend has been supported primarily by superior economics of higher tonnage models, improving road infrastructure, dearth of experienced drivers and stricter implementation of overloading norms, the report stated. 
According to ICRA, post GST, the trend towards consolidation has already begun across most of the consumer-oriented sectors like FMCG, consumer durables, pharmaceuticals, building materials and other allied sectors. This trend is likely to drive greater use of heavy duty trucks.  The consolidation of warehouses would also provide a further fillip to HCV sales as it is expected to lead to higher amounts of goods to be moved between manufacturing location and warehouse, which will lead to increased demand for higher tonnage vehicles.
“Going forward, these factors will continue to drive demand for heavy duty trucks and mirror market structure of more mature markets like US and Europe,” Mr Ray added. 

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