Multiple woes for commercial vehicle industry

Pune: The commercial vehicle (CV) industry, the barometer of Indian economy, has been facing a slowdown in demand and declining sales over the past two-three quarters primarily due to the economic slowdown and surplus capacity despite efficiency gains.

Moreover, the sharp slowdown in CV demand over the past two-three quarters has also been due to revision in axle load norms, tight liquidity situation, says the corporate rating agency, Icra.

While implementation of e-way bill has streamlined operations to some extent for the transporter community, with savings in time and paperwork reduction due to the digitization of processes and turned out to be positive for the truck operator, the resultant efficiency gain has contributed to an increase in capacity for the existing CV parc, leading to lower demand for new trucks.

Also, Icra says that the sharp slowdown in CV demand over the past 2-3 quarters has also been due to an overall economic slowdown resulting in lower freight availability.

The upward revision in axle load norms for Trucks (above 16T GVW), with effect from July 2018, resulted in almost 15-20 per cent increase in load-carrying capacity of fleet operators. This exerted pressure on freight rates.