Pune: After clocking about 25 per cent growth for the first nine months of FY2019, the commercial vehicle (CV) market, the barometer of the Indian economy, has slowed down.
All commercial vehicle manufacturers have reported negative sales in medium and heavy commercial vehicle while light commercial vehicle sales are growing in higher single digits, according monthly sales data released by companies.
Automobile analysts said slowing down of the overall economic activity, high interest rates, and the effect of implementation of revised axle load norms, slowing industrial output and declining IIP growth index dampened buyer sentiments.
"The domestic CV sales continued to remain tepid during February 2019 in line with expectation," Shamsher Dewan, vice president and sector head - corporate ratings at ICRA told Financial Chronicle.
Lower demand because of revised axle load norms, high-base effect and overall subdued consumer environment contributed to lower sales, he pointed out.
"We expect this trend to continue in the near-term as industry inventory levels adjust. The demand environment will improve gradually in FY2020 on back of pre-buying and continued traction from construction sector," Dewan said.
Sales at dominant market leader Tata Motors fell 5 per cent with sales of 39,111 units in February 2019 as against 41,222 units sold in the same month last year.
After January's single-digit drop, the M&HCV truck segment came under pressure declining by 18 per cent in February to 12,437 units compared with 15,241 units last year.
The I&LCVs are up by a marginal 4 per cent, selling 4,810 units. The cargo SCVs and pickups registered a growth of 9 per cent to 17,417 units, while the commercial passenger carrier (bus) segment saw sales of 4,240 units (-18 per cent) as the segment has been impacted due to the slowdown in the procurement of buses by state transport undertakings and the permits for private hiring.
"The market continues to exhibit subdued demand on the back of high interest rates, lagged effect of the implementation of revised axle load norms, slowing economic activity, resulting in decline of 5 per cent in CV sales volume," Girish Wagh, president, commercial vehicles at Tata Motors said.
He said the M&HCV segment declined by 18 per cent but its new products introductions with increased axle load norms is gaining traction as customers are seeing the clear advantages of the superior operating economics.
The tipper sales also strongly grew by 21 per cent, the I&LCV truck segment grew by 4 per cent. The SCV cargo and pickup segment was back on the growth track this month, up by 9 per cent over last year, while CV passenger dropped by 18 per cent, Wagh said.
Sales were also flat at rival brand Ashok Leyland last month which sold 18,245 units compared with 18,181 units sold last year.
Its M&HCVs remained sluggish by de-growing 3 per cent with a total sale of 13,291 units, while the LCVs maintained double-digit growth of 11 per cent year-on-year growth at 4,954 units as against 4,455 units sold last year.
However, sales at Mahindra & Mahindra increased just by 1 per cent to 21,154 units compared with 20,946 units sold last year.
Just like the other manufacturers, Mahindra's M&HCV sales were down by 17 per cent with 821 units sold. The below-3.5T GVW segment was up by just 2 per cent year-on-year, selling 19,647 units while those in the above-3.5T GVW segment declined by 8 per cent to 821 units.
However, sales at VE Commercial Vehicles fell 8 per cent last month at 5,337 units compared with 5,783 units sold in the same month last year.
