New Delhi: Sales rose for the first time in over a year at the Indian joint venture of Eicher Motors and Sweden’s Volvo during July, data showed on Tuesday, with improved industrial activity in the economy.
Commercial vehicle sales have plunged in India on slow economic activity. Sales between April and June are down 13% on year, following a 22% decline in the 2008-09 fiscal year, industry data shows.
But analysts have cited a raft of optimistic economic data to forecast a recovery in sales in the world’s fifth-largest truck market from September onwards, with growth returning in the 2010-11 fiscal year.
“There is going to be a strong recovery in the second half (from) improving IIP numbers and freight rates,” Vaishali Jajoo, autos analyst at Angel Broking, said, forecasting “low single- digit growth” for 2009-10 sales.
Both the IIP, the index of industrial output and manufacturing activity rose in May, the second successive expansion. The Indian economy is also seen growing at 7% in 2009-10, above the 6.7% seen a year ago.
VE Commercial Vehicles, the joint venture, sold 1,769 Eicher-branded trucks and buses during July in India, a rise of 5% over the year-ago month, it said in a statement. The last rise was in June 2008, when sales rose an annual 7%.
Total sales, including exports, rose 14% to 2,112 units, the firm said.
Eicher is a tiny player in the Indian commercial vehicles segment, which clocked sales of 111,136 units between April and June.
On Monday, India’s top truck and bus maker Tata Motors reported a 23% rise in domestic sales of commercial vehicles in July.
By 12:14 pm, shares in Eicher Motors were 2.1% higher at Rs398, edging past the 1.2% rise in the sector index. The broader market was flat.
Shares in the firm, which the market values at around Rs10.5 billion, have risen by two-thirds so far this year, below the sector index’s 147% surge, but above the Mumbai market’s 64% increase.