New Delhi: Truckmakers expect a recent recovery in sales to pick up in 2010, powered by accelerating industrial activity and improving consumer financing.
Market leader Tata Motors, Ashok Leyland and Volvo forecast strong growth at the auto show in New Delhi, riding on expectations for an 8% expansion in the economy in 2009-10 and a faster clip in the following year.
Sales of trucks and buses, linked to economic activity, have risen 12.4% in the first eight months to November of the current fiscal year from a 22% fall in 2008-09 and firms expect the momentum to get stronger.
Also Read Delhi Auto Expo full coverage
“At least over the next 12 months, I can see it continues to be strong,” Ravi Pisharody, head of Tata Motors’ commercial vehicles unit, told reporters.
Ashok Leyland, the second-largest firm in the sector, said it would clock double-digit growth in 2010-11, after selling over 63,000 units in the current year to March, a third more than in 2008/09.
Volvo’s India truck unit chief, Somnath Bhattacharjee, said the industry could see sales growing 20% in 2010, and his firm would likely outperform.
Some of the spurt in sales was fuelled by cuts in factory gate taxes in late 2008 and early 2009, but Tata’s Pisharody said Asia’s third-largest economy’s buoyancy was now strong enough to support the sector’s growth even if the cuts were reversed.
But Ashok Leyland managing director R. Seshasayee said any premature tightening of credit could put back the clock and dent the momentum.
Rising commodity prices is a headwind for the truckmakers.
Tata, which raised prices of some models by 1% this month, would have to think about raising prices again if commodity prices go up significantly, Pisharody said.
Seshasayee said his firm would raise prices by March. Volvo has already raised some prices by 3-5%, Bhattacharjee said.
Commercial vehicle sales in India have reached 304,000 units between April and November, compared with 384,000 in the whole of 2008-09.
The country’s top utility vehicles and tractor maker, Mahindra & Mahindra, this week unveiled its first range of trucks from its joint venture with Navistar International, which it will start selling from March.
Daimler, the world’s top truckmaker, also launched vehicles for India during the autoshow.