Commercial vehicle (CV) sales, especially medium and heavy trucks are expected to improve in the second half (H2) of the year after heat waves and heavy rains in most parts of the country, said an industry top official.
“At the beginning of the year, most of the research agencies were saying that the first half (H1) would be very negative. Some people were even suggesting that the industry would de-grow by as much as 15 per cent and the reason was mainly around elections. Everybody was convinced about the fundamentals around that time,” Shenu Agarwal, Managing Director and Chief Executive Officer, Ashok Leyland told businessline recently.
He said that the elections didn’t have a very big bearing on the industry, but July and August have not faired well. One reason is the rain, after heatwaves, etc in the initial part of the year which has a little bit of a negative effect, and now the rains have been continuing for an extensive period.
Weather impact
“The rains have stopped all activities. The mines are all flooded, the construction projects are all stopped, and a lot of trucks are lying idle just because there is no movement happening...after the formation of the new government things have been a little bit slow pace in terms of all the construction/ infrastructure activities. But, we are very convinced that it is in process and we will see a lot of activities from now,” he said.
According to research firm ICRA in its recent report, the domestic CV industry’s wholesale volumes may witness a nominal year-on-year (y-o-y) growth of 0-3 per cent in the current fiscal (FY2025), against the earlier estimated decline of 4-7 per cent.
This follows a better-than-expected volume growth in the first four months of FY25 and expectations of a marginal uptick in demand in H2 of the fiscal, it said adding that FY25 will be the second consecutive year of muted growth after a one per cent and three per cent YoY growth in wholesale and retail sales, respectively, in FY24.
“H2 will be quite good because the temporary factors would fade away, and also we know that last year the H2 had a lower base because the industry growth was not there in H2 last year. So, given all these we are very positive about the industry, not just for H2, but for the whole year,” Agarwal also said.
According to the Society of Indian Automobile Manufacturers (SIAM), the total CV domestic sales in the April-June quarter grew by 3.5 per cent y-o-y to 2,24,209 units compared with 2,16,550 units in the corresponding quarter last year. In the January-March quarter, it had declined by 3.8 per cent y-o-y to 2,68,294 units as compared with 2,78,878 units in the same period the previous year.