Home / Industry / Manufacturing /  Sales of trucks, buses pick up after 30 months

New Delhi: Sales of medium and heavy commercial vehicles (CVs) grew for the first time in 30 months in August, signalling improved economic activity in the country.

Sales of trucks and buses were up 9.61% to 16,955 units, compared with 15,468 units in August 2013. The segment last grew in February 2012 when it registered a growth of 5.53%.

Society Of Indian Automobile Manufacturers (Siam), the industry lobby body which released the data, however, remained cautious. It is too early to tag August figures as “recovery numbers", Siam director general Vishnu Mathur said in an interview.

“There is no doubt that the growth is coming back in the market. We have seen that with passenger cars in the last few months. But in the CV segment, it will be too early to say anything, though we have noticed negative numbers being pulled up," Mathur said.

Sales in the overall commercial vehicles segment—which also includes light commercial vehicles (LCVs)—however, continued to decline, albeit at a slower pace. Sales fell 5.59% to 48,473 units, compared with 51,344 units in August 2013, led by a 12.15% decline in the LCV segment.

Gross domestic product, the broadest measure of goods and services produced across the economy, grew at 5.7% in the three months ended 30 June, the highest in 10 quarters, against 4.6% in the March quarter, data showed on 29 August, driven by strong industrial recovery.

The Narendra Modi-led National Democratic Alliance (NDA) government has extended a duty relief of 3-6% across auto segments till 31 December. The industry is hoping this will get extended till the end of the year t

The government has announced measures to boost manufacturing and foreign direct investment, including in defence equipment, railways and insurance and has resisted pressure to reduce higher import duty on gold imposed by the United Progressive Alliance (UPA) government to curb import of the yellow metal.

Siam expects a U-shaped recovery in the automobile market rather than a V-shaped one seen in 2009-10, Mathur added. “Truck and freight movements have started looking up. States have started placing orders for buses. There is some improvement in mining activities," he said.

Hinduja Group flagship Ashok Leyland Ltd on Tuesday said it received orders for around 4,000 buses from state transport undertakings worth 1,500 crore.

Sales of passenger cars grew for the fourth month in a row to 153,768 units, up 15.16%, compared with 133,513 units in August 2013. To be sure, these are much below the blistering pace of March 2011, when sales grew 21.37% to a record 2,33,151 units. Sales of motorcycles also achieved double-digit growth of 14.45%, compared with 3.82% in August 2013.

Poor sales in the auto sector have hit the overall consumer durables segment, according to the economic survey for the year ended 31 March. “The consumer durables segment, in particular the automotive sector, in India is constrained by a limited domestic market owing to low per capita income," the survey had said.

Mathur said the industry has a lot of hope from the forthcoming festive season and there would be “brisk growth" but that would not mean that the “industry will get carried away by that".

According to rating agency Icra, the Indian passenger vehicle industry, which includes cars vans and utility vehicles, may grow 5-6% in 2014-15. The growth would be supported largely by customers looking to replace their existing vehicle, “as we expect demand generation from first-time buyers to continue to remain weak", Icra said in a report in August.

It added that as many of the cyclical variables have become less spiteful, the passenger vehicle industry is expected to revert to a compounded annual growth rate of 9-10% (domestic plus exports) over the medium term.

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