Monsoon in India set to spike commercial vehicles sales; here’s how

Sales of medium and heavy commercial vehicles (M&HCV), which were doing well in FY16, may lose pace in the next three to four months due to a delayed monsoon, less agricultural output, increase in diesel prices and decreasing truck rentals.

In first two months of the current fiscal year, the growth in the M&HCV segment has fallen to 21.49% y-o-y to 48,466 units as a result of diminishing replacement demand. In FY 16,M&HCV volumes had grown by 29.91% to 3,02,373 units when compared to 2,32,755 units in FY 15 on the back of increasing activity in the mining, infrastructure and manufacturing sector. According to the market experts, most of the demand came from the replacement of old vehicles by the fleet owners.

“Initially there may be some challenges but we will see reasonable growth in the sales of the heavy and medium vehicles in the current financial year on the back of increased spending on infrastructure from the government and increase in mining activity. Though it will be difficult to match the growth of the last fiscal year in the segment,” said Kumar Kandaswamy, Partner, Delloitte.

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