In an indication that the worst is behind the truck industry, sales entered the positive growth lane in the third quarter ended December and, consequently, leading commercial vehicle makers Tata Motors, Ashok Leyland and VE Commercial Vehicles started 2021 with optimism.
With 20 per cent growth in its medium and heavy commercial vehicle (M&HCV) sales in December, country’s top truck-maker Tata Motors reported a positive growth of 7 per cent in its M&HCV volumes at 19,109 units in Q3 compared to 17,900 units in the corresponding period last year. Tata’s intermediate & light commercial vehicle segment also grew 10 per cent at 12,930 units in the quarter.
Tata Motors President, Commercial Vehicles Business Unit, Girish Wagh attributed the positive growth to higher demand from infrastructure activity and the e-commerce segment. The No 2 M&HCV player, Ashok Leyland, saw its December 2020 quarter sales grow 32 per cent at about 13,930 units.
“The demand has come back. But the growth has been led by intermediate commercial vehicle (5-16 tonne) and tippers, which are doing well. In December 2020, about 65 per cent of total truck industry volumes came from these two segments. Pick up in infra activity has been helping,” said Anuj Kathuria, Chief Operating Officer, Ashok Leyland.
VE Commercial Vehicles (VECV) has reported an increase of 11 per cent in its light and medium trucks at 7,897 units for the December quarter, while its heavy truck volumes grew 52 per cent at 2,494 units. “Since the confidence in the economy is coming back, replacements have started to happen. As a result of the government’s support in terms of clearance to a lot of infra projects, there is a good amount of buying happening for construction trucks, tippers, in particular. Things will only get better going forward,” Vinod Aggarwal, MD & CEO of VECV told BusinessLine.
With restart of infrastructure activity and improving construction activities in rural and urban locations, CV makers hope to sustain the sales momentum.
“Most indicators of freight suggest demand is almost back to pre-Covid levels. We expect 30-35 per cent growth in volumes over the next few months at an industry wide level, says Subrata Ray, Group Vice-President — Corporate Ratings, Icra.