The commercial vehicle segment has been hit quite hard. Commercial vehicles are the base of the Indian economy, and the segment has been impacted due to higher interest rates and the lack of finance to buy vehicles. In fact, the industry and its players had set some ambitious targets at the beginning of the previous financial year. Ashok Leyland was hoping to cross the 100,000-unit mark, Eicher was planning well over 30,000 units. All plans came crashing, and there was no softening of the interest which the industry was desperately hoping.
In fact, the RBI has further hiked CRR to combat inflation. As a result the interest rates on vehicle finance are expected to go up further. Increase in steel prices and other input costs have forced manufacturers to raise the prices of their models. All this will continue to have an adverse impact on the commercial vehicle industry in the current year as well. Tata Motors has announced 3.5% hike in prices of truck and bus models. Ashok Leyland hiked prices of its vehicle just before the budget in the last week of February.
In the year just ended (2007-08) sales of commercial vehicle increased marginally by 4.07 per cent YoY to 486,817 units. The medium and heavy commercial vehicles segment declined by 1.66 per cent to touch 270,994 units in 2007-08 compared to 275,556 units in 2006-07. This is in spite of a robust 34.72 per cent growth in the passenger carriers sector segment at 33,086 units. However, goods carriers declined by 5.88 per cent to 232,339 units.
Market leader Tata Motors ended the year with cumulative sales of 313,371 units in the commercial vehicles in the domestic market, an increase of five per cent over last year, also the highest ever. M&HCV cumulative sales were 166,037 units, while LCV sales for the period were 147,334 units. The LCV sales include the Tata Ace and the newly launched products like the Magic and the Winger. The sub-one tonner LCV segment continues to do well, taking away a large share of business from the three-wheeler segment.
Ashok Leyland closed the year with a sale of 83,309 vehicles. Sales in the domestic M&HCV segment touched 76,023 units and exports were up 21 per cent at 7,286 vehicles. Total production for the year was 84,006 compared to 83,558 last fiscal. The company’s bus segment has done well, with domestic sales close to 17,500 units in the domestic market and another 4,700 units sold in the export market.
Eicher Motors' sales during 2007-08 rose by 6.25 per cent at 29,827 units compared to 28,072 units in the previous fiscal. Its total domestic sales during the last fiscal stood at 27,611 units as against 26,072 units in the year ago period.
Exports of the company also increased to 2,216 units in 2007-08 from 2,000 units in 2006-07, the company said.
The segment which is affected the most is the multi-axle truck segment (Max mass 16.2 - 25 tonnes), which has dropped significantly for both Tata Motors and Ashok Leyland. Domestic sales of Tata Motors dropped from 77,415 units in 2006-07 to 69,125 units last year, and for Ashok Leyland the numbers have dropped from 41,902 to 35,633.
Despite the downturn, the Indian commercial vehicle market is already hotting up with a host of joint ventures taking shape. The Daimler-Hero venture for manufacturing commercial vehicles was finalised in April. The JV is expected to start commercial production in 2010. The company is planning to produce light, medium and heavy commercial vehicles in the Indian market.
The Volvo-Eicher JV signed in December last is in the process of finalising the terms of agreement. MAN, Europe's third-biggest maker of trucks and buses, in a JV with Force Motors, has started commercial production, and this year will see the company getting more aggressive in all product segments.
American truck major Navistar has tied up with Mahindra & Mahindra to produce medium and heavy duty trucks for the Indian market. This project will also launch its new range of products in the Indian market in the current financial year.
On the LCV front, Nissan Motors has tied up with Chennai-based Ashok Leyland to produce light commercial vehicles and mini-trucks for the Indian market.
Considering the fact that economic fundamentals remain strong, the long-term growth prospects for the commercial vehicle industry remain positive. As for the current year, uncertainties persist.
In fact, the RBI has further hiked CRR to combat inflation. As a result the interest rates on vehicle finance are expected to go up further. Increase in steel prices and other input costs have forced manufacturers to raise the prices of their models. All this will continue to have an adverse impact on the commercial vehicle industry in the current year as well. Tata Motors has announced 3.5% hike in prices of truck and bus models. Ashok Leyland hiked prices of its vehicle just before the budget in the last week of February.
In the year just ended (2007-08) sales of commercial vehicle increased marginally by 4.07 per cent YoY to 486,817 units. The medium and heavy commercial vehicles segment declined by 1.66 per cent to touch 270,994 units in 2007-08 compared to 275,556 units in 2006-07. This is in spite of a robust 34.72 per cent growth in the passenger carriers sector segment at 33,086 units. However, goods carriers declined by 5.88 per cent to 232,339 units.
Market leader Tata Motors ended the year with cumulative sales of 313,371 units in the commercial vehicles in the domestic market, an increase of five per cent over last year, also the highest ever. M&HCV cumulative sales were 166,037 units, while LCV sales for the period were 147,334 units. The LCV sales include the Tata Ace and the newly launched products like the Magic and the Winger. The sub-one tonner LCV segment continues to do well, taking away a large share of business from the three-wheeler segment.
Ashok Leyland closed the year with a sale of 83,309 vehicles. Sales in the domestic M&HCV segment touched 76,023 units and exports were up 21 per cent at 7,286 vehicles. Total production for the year was 84,006 compared to 83,558 last fiscal. The company’s bus segment has done well, with domestic sales close to 17,500 units in the domestic market and another 4,700 units sold in the export market.
Eicher Motors' sales during 2007-08 rose by 6.25 per cent at 29,827 units compared to 28,072 units in the previous fiscal. Its total domestic sales during the last fiscal stood at 27,611 units as against 26,072 units in the year ago period.
Exports of the company also increased to 2,216 units in 2007-08 from 2,000 units in 2006-07, the company said.
The segment which is affected the most is the multi-axle truck segment (Max mass 16.2 - 25 tonnes), which has dropped significantly for both Tata Motors and Ashok Leyland. Domestic sales of Tata Motors dropped from 77,415 units in 2006-07 to 69,125 units last year, and for Ashok Leyland the numbers have dropped from 41,902 to 35,633.
Despite the downturn, the Indian commercial vehicle market is already hotting up with a host of joint ventures taking shape. The Daimler-Hero venture for manufacturing commercial vehicles was finalised in April. The JV is expected to start commercial production in 2010. The company is planning to produce light, medium and heavy commercial vehicles in the Indian market.
The Volvo-Eicher JV signed in December last is in the process of finalising the terms of agreement. MAN, Europe's third-biggest maker of trucks and buses, in a JV with Force Motors, has started commercial production, and this year will see the company getting more aggressive in all product segments.
American truck major Navistar has tied up with Mahindra & Mahindra to produce medium and heavy duty trucks for the Indian market. This project will also launch its new range of products in the Indian market in the current financial year.
On the LCV front, Nissan Motors has tied up with Chennai-based Ashok Leyland to produce light commercial vehicles and mini-trucks for the Indian market.
Considering the fact that economic fundamentals remain strong, the long-term growth prospects for the commercial vehicle industry remain positive. As for the current year, uncertainties persist.
