The used truck market in the country is expected to maintain its growth momentum despite the increase in prices of pre-owned vehicles, according to Umesh G Revankar, Executive Vice-Chairman, Shriram Finance Ltd.
Less availability of vehicles and continuing increase in prices of new trucks are reported to be the key factors for growth and price hikes in the used truck market.
Over the past two years, prices for all types of used commercial vehicles, whether BS IV or BS VI, have increased 25-30 per cent due to insufficient supply. The subdued sales during 2019-22 have resulted in a shortage of supply in the used truck market.
With new vehicle prices still on the rise, the used truck market is experiencing significant traction, and prices for used vehicles are expected to remain strong. “The prices may not go up like last year. There will be some correction compared with FY24,” Revankar told businessline.
The current batch of new trucks (comprising last-year and one-year-old vehicles) will be available after a few years in the pre-owned segment This could potentially drive sustained growth in the used vehicle segment.
12% growth
Shriram Finance, a dominant player in the used truck market, has guided 12 per cent growth in its commercial vehicle loan portfolio for FY25 after recording about 15 per cent growth in FY24.
Currently, the used truck market is primarily served by NBFCs such as Shriram Finance, Sundaram Finance, Cholamandalam Investment & Finance, Indostar Capital Finance, among others.
Besides the traditional players such as Tata Motors and Ashok Leyland, the new entrants such as Daimler India Commercial Vehicles (DICV) are also aggressively focusing on the pre-owned truck market to spur new truck sales.
In a recent interaction with businessline, Satyamkam Arya, Managing Director and CEO, DICV, indicated that about 15 per cent of its new BharatBenz truck sales were enabled by the used truck programme.
While the growth outlook for the used truck market is bright, sales of new trucks during the first half of this fiscal are likely to be flat when compared with the same period of FY24 due to General Elections and associated developments. However, the second half may see strong traction in new truck sales, said Revankar.