In another grim reminder of the ongoing economic gloomy scenario prevailing in the country, the sales of heavy and medium commercial vehicles (H & MCVs) excluding buses has more than halved in August 2019 as compared to the same period a year ago, as per the data released by automobile manufacturers. Sale of H & MCVs are considered a key barometer of economic scenario. India’s GDP grew by only 5.0% in the Apr-Jun’19 quarter with the manufacturing sector growing at an abysmal 0.6%.
Overall volume at India’s 4 leading commercial vehicle manufacturers (Tata Motors, Ashok Leyland, Volvo Eicher and Mahindra & Mahindra) fell by 59.5% year-on-year. Tata Motors, market leader in the category, saw sales nose diving by 58% while Ashok Leyland, which manufactures high tonnage vehicles, suffered a 70% drop in Aug’19 sales on y-o-y comparison. With TML and Ashok Leyland accounting for 7 out of every 10 trucks sold in India, such drastic drop has hit the sector hard. Volvo Eicher, the no. 3 player, was marginally better off with a 41.7% drop in sales, while M & M commercial vehicles division sales fell by 69%. In the last one month, commercial vehicle manufacturers have been offering discounts up to the tune of 8-9 lacs per vehicle. However, early trend seems to suggest that this is also not working.
Both Ashok Leyland and TML have resorted to production shutdown to cope with problem of piling unsold stock. The CV manufacturers are now pinning their hopes on the coming festive season and pre-buying necessitated by implementation of BSVI norms in April, 2020.