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Automotive Product Finder Magazine | Indian commercial vehicle industry sales slowed down in second half of fy2019
Indian commercial vehicle industry sales slowed down in second half of fy2019
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The Indian commercial vehicle industry sales has slowed down over the latter second half of FY2019, reeling under multiple headwinds, which have continued into the current fiscal as well, according to ICRA. Nevertheless, the robust growth during the first few months of the fiscal supported the overall growth during the year, with the domestic industry volumes expanding 18 per cent during the year.
The slowdown in growth during second half of FY2019 was led by the M&HCV (Truck) segment, which contracted during the period. Sruthi Thomas, Senior Analyst, ICRA Ratings, informed, “The road transportation sector is currently facing over-capacity, partially contributed by revision in load carrying norms in July 2018, which resulted in a 15-20 per cent increase in capacity of CV parc, and partially by GST implementation and the resultant improvement in turnaround time. Furthermore, the strong growth in CV sales over the past two years outpaced the underlying freight generation, leading to surplus capacity.”
In addition to the impact of revised axle load norms, the impact of slowing economy and tight liquidity in the NBFC space is also contributing to weak sales.
“With the slowing economic growth and flat freight rates, the earnings of fleet operators have come under pressure in recent months. This coupled with the ongoing liquidity crisis in the NBFC sector, have turned financiers cautious on lending to the goods carrier segment, thereby impacting their financing avenues,” added Thomas.
ICRA maintains it stable outlook for the domestic CV industry, expecting it to grow in the range of 7-9 per cent during FY2020.
Indian Commercial Vehicle
Commercial Vehicle Industry
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