A top industry executive said he expects commercial vehicle (CV) sales, especially of medium and heavy trucks, to improve in the second half of the year after scorching heat and heavy rains in most parts of the country.
“Earlier this year, most research agencies had said that the first half (H1) would be very negative. Some had suggested that the industry would see slower growth by as much as 15 per cent, mainly due to the elections. Everyone was sure about the fundamentals then,” said Shenu Agarwal, managing director and chief executive officer, Ashok Leyland. Business Line recently.
He said the election didn’t have a huge impact on the industry, but July and August didn’t go well, partly because we had rain at the start of the year after a heatwave and that had a bit of a negative impact, and now we’re experiencing a long period of rain.
Weather effects
“The rains have brought all activities to a halt. All mines are flooded, all construction projects have come to a halt and many trucks are lying motionless due to lack of movement… After the formation of the new government, the pace of all construction/infrastructure activities has slowed down a bit. But we are confident that it is underway and we will start seeing a lot of activity from now on,” he said.
According to a recent report by research firm ICRA, the domestic commercial vehicle industry’s wholesale volumes are expected to grow nominally at 0-3 per cent year-on-year in the current fiscal (FY2025) against an earlier forecast of a decline of 4-7 per cent.
This follows better-than-expected volume growth in the first four months of FY25 and expectations of a slight increase in demand in the second half of the fiscal, the company said, adding that FY25 will mark the second consecutive year of slower growth after FY24, when wholesale and retail sales grew 1 per cent and 3 per cent year-on-year, respectively.
“The second half of the year is going to be quite strong as some of the one-off factors fade away. We also know that last year, the second half was off a lower base as there was no industry growth in the second half of the year. So, taking all this into account, we are very positive on the industry not just for the second half but for the whole year,” Agarwal said.
According to the Society of Indian Automobile Manufacturers (SIAM), total domestic commercial vehicle sales in the April-June period rose 3.5% to 224,209 units from 216,550 units in the same period last year. Sales in the January-March period fell 3.8% to 268,294 units from 278,878 units in the same period last year.
