For a more accurate analysis, one must look at the medium and heavy duty commercial vehicles (M&HCVs) alone, where nearly 85% of the market is cornered by the two players. Tata Motors’ sales grew 116% in this segment to 12,507 units, which includes trucks and buses. Ashok Leyland’s numbers, too, tell the same story. Sales were up 136% to 4,189 units over the year-ago period.

Analysts’ consensus is that the stimulus package and the low base effect all played in to boost demand. Sales during the last three months of 2008 were very badly hit. For example, Tata Motors’ sales were down 60% in November 2008 compared with the previous corresponding period.

But look at the month-on-month performance and the companies present a divergent trend. While Tata Motors’ sales grew 5%, that of Ashok Leyland fell by nearly 14% over October. In fact, the contraction was mainly due to a 21% drop in truck sales. Analysts attribute the fall in Leyland numbers to lower freight movement in the south and lower growth in the tipper (32-tonne) segment.

Growth in the coming quarters depends on several factors. For one, there could be an increase in prices of commercial vehicles in early 2010, due to rising input costs.

Graphics: Ahmed Raza Khan / Mint

Of course, both firms are yet to execute the pending orders for buses under the Jawaharlal Nehru National Urban Renewal Mission scheme for state transport undertakings. While the exact numbers for Tata Motors are not known, Ashok Leyland has so far supplied around 1,100 of the 5,700 buses and the balance will reflect in the fourth quarter of 2010. According to a company executive, the delay is because the buses are to be delivered in a fully-built condition unlike the usual case when only the chassis is supplied.

The next four months could see an upward trend for the two companies. Thereafter, a possible firming up of interest rates, adverse changes in the stimulus package, and budgetary allocations towards public transport spend will show the road ahead. If anything, a higher economic growth rate is needed to offset the possible adverse developments.

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