Truck sales set to shift gears with Bharat Stage IV norms on horizon
1 min read 04 Jan 2017, 01:14 AM ISTTruck prices likely to rise after implementation of the new Bharat Stage IV emission norms from 1 April
Premium
Mumbai: Tata Motors Ltd expects sales of heavy duty trucks to advance at a brisk pace over the next few months even as the economy and the transport sector reel under the impact of demonetisation.
The boost will come from transporters advancing purchases to beat the price hike that would kick in from 1 April with the implementation of Bharat Stage IV (BS IV) emission norms, said Ravindra Pisharody, executive director, commercial vehicles, Tata Motors.
On average, the price of heavy duty trucks is expected to go up by Rs2 lakh from April, he said.
“I cannot imagine that a price-conscious segment like this (transport sector) will not advance purchases," Pisharody said, adding that given the impact of demonetisation, he cannot predict the extent by which sales would increase.
The government’s move to scrap high-value currency notes on 8 November created a severe cash crunch, prompting transporters to postpone purchases. As a result, sales of heavy duty vehicles, particularly those in the 16- to 49-tonne category, were dented in November and December.
ALSO READ: Demonetisation takes a toll on automobile sales in December
Sales of heavy duty trucks dropped 19% to 18,101 units in November from a year earlier, according to industry body Society of Indian Automobile Manufacturers.
Tata Motors’s commercial vehicles in the domestic market dropped 9% to 24,998 units from a year earlier in December, the company said on Monday.
Sales of other commercial vehicle makers have also been hit.
At Ashok Leyland Ltd, the second largest in the pecking order, sales fell 12% to 10,731 units, while at Volvo Eicher Commercial Vehicles Ltd, sales declined 20% to 4,048 units in December.
But Pisharody is optimistic. “December was better than November," he said, adding that with the cash crunch easing, the economy is expected to strengthen next year.
“In the next six months, we expect sales to be strong," he said, cautioning that the only prohibitive factor could be interest costs.
Tata Motors factories, currently operating at average 50-60% utilization levels, are preparing to increase production. “Seventy to 80% utilization is what we are gearing up for in the next quarter for the heavy duty trucks," Pisharody said.
