Sales of medium and heavy commercial vehicles (MHCV) may surpass the peak sales of 4.19 lakh units achieved in 2018-19 in the current financial year, industry insiders believe.
Speaking to Business Standard, Sanjeev Kumar, president – MHCV, Ashok Leyland, said that the first quarter sales growth is currently around 8 per cent, driven by demand for buses.
“Large state transport corporations, which had not bought buses for almost two years, have now started placing orders. The budgets are available, and they are trying to replace the fleet,” Kumar said.
He further added, “We will see some growth this year too. Numbers need to be seen in the perspective of the base. MHCV peak was 4.19 lakh units in 2018-19. But if we achieve single-digit growth over last year, when the industry sold close to 4 lakh units, then we will also surpass the peak sales of FY19.”
Ashok Leyland posted an 8 per cent growth in MHCV sales in Q1FY25 to 26,214 units. In July, however, its domestic MHCV sales growth declined by 14 per cent to 7,685 units. For the April-July period, the company has still managed to grow by 2 per cent in MHCV sales.
In FY23, the MHCV segment saw robust growth in wholesale dispatches, jumping by 49 per cent from 2.4 lakh units in 2021-22 to 3.59 lakh units in 2022-23.
Analysts had predicted an overall contraction in the MHCV segment in FY25. ICRA, for example, noted in a report this year that MHCV volumes are expected to contract by 4-7 per cent year-on-year, given the high base effect and the impact of general elections on infrastructure activities in the first few months. The haulage sub-segment within the MHCV segment saw a 6 per cent decline in FY24, and tipper volumes remained flat. However, the tractor-trailers sub-segment posted a 19 per cent growth.
Overall, commercial vehicle (CV) sales, contrary to expectations of a downturn, have fared reasonably well in the first quarter (Q1) of 2024-25 (FY25), especially in the medium and heavy commercial vehicle (MHCV) and bus segments. The top four players — Tata Motors, Mahindra & Mahindra, Ashok Leyland, and Volvo Eicher Commercial Vehicles (VECV) — together sold over 150,454 units of medium to heavy trucks and buses between April and June 2024, registering a 7.2 per cent growth.
Girish Wagh, executive director at Tata Motors, said in July, “Tata Motors’ CV domestic sales at 87,615 units in Q1FY25 were around 7 per cent higher than in Q1 of 2023-24 (FY24). Additionally, sales in June 2024 were 3 per cent higher compared to May 2024.” Wagh added that the MHCV segment led the growth with around a 10 per cent rise in Q1FY25 sales volumes versus Q1FY24.
While heavy CV demand held up well, market sentiment remained positive in the medium CV segment, with demand increasing in e-commerce, automotive aggregates, and liquefied petroleum gas segments.
“The CV passenger business continues its robust post-pandemic recovery, with school and staff transportation segments growing 39 per cent during the quarter,” he added.
First Published: Aug 16 2024 | 6:39 PM IST
