Volvo Eicher Commercial Vehicles Ltd (VECV) unveiled an electric light truck at the inaugural edition of Bharat Global Mobility Expo in January 2024. It was the only commercial vehicle manufacturer to unveil a new product. What it was not, was the only commercial vehicle manufacturer to display an alternative fuel technology vehicle. 

If the passenger vehicles are witnessing the influx of new technologies in the alternative fuel technology domain and in ADAS, commercial vehicles (CVs) are quickly catching up. They too are attracting a lot of investment in technology to ensure a lower TCO and higher uptime. A look at the CVs that were launched in the post pandemic period and it would be clear that a lot of new technology on emissions, performance, efficiency, comfort and safety side has gone into CVs. 

CVs also performed very well in terms of sales in the post pandemic period, albeit with a lower base level. They may not have attained the peak of 201-12, their performance was not lacking in lustre either. Segments such as buses showed a smart recovery from a very low base during the pandemic period. In FY2022-23, commercial vehicles recorded a growth of 34 percent with sales of 9,62,000 units as compared to the sale of 7,16,000 units in FY2021-22.

In the 2023 calendar year, 9,78,385 commercial vehicles were sold, marking a single digit growth figure. In the third quarter of FY2023-24, commercial vehicles recorded a growth of 3.5 percent with the sale of 2,35,167 units. While the SIAM President Vinod Aggarwal may have termed the performance in terms of sale of the auto industry as satisfactory, some analysts and observers have began expressing that a slowdown is on the way. 

Leading ‘ratings’ organistion Crisil has mentioned in its recent report that revenue growth of CV makers will moderate to between five and seven percent in the next fiscal despite the operating margins being steady and the realisation being better. 

With stable commodity prices, the moderation of between five to seven percent – against an estimated growth of nine percent in FY2023-24 – is likely be because of a hike in vehicle prices. What is ironic is that the growth moderation is expected to take place despite higher average realisations on the back of better growth in M&HCVs and stable raw material (especially steel, iron and aluminium) price.

With operating margins expected to be a good 10-11 percent in the next fiscal, Crisil’s study of four commercial vehicle manufacturers accounting for over 70 percent of the market share is indicative of a certain moderation in the commercial vehicle space. 

M&HCV demand is contingent upon activity in key end-user infrastructure related sectors — roads, real estate, mining and construction, besides transportation and replacement demand. LCV demand, on the other hand, is dependent on last-mile connectivity and e-commerce players.

The Crisil report takes into consideration the four CV makers that account for over 70 percent of the market share. It states that a vital factor that will lead to growth moderation will be an increase of vehicle prices. 

Says Anuj Sethi, Senior Director, CRISIL Ratings, “Revenue growth of CV makers will be driven by higher realisations next fiscal. We expect domestic revenue growth for M&HCVs to lower to 2-3 percent (~ 5 percent this fiscal), and this too will largely be driven by demand for buses. The likelihood of brief slowdown in infrastructure spending owing to general elections and continuing high interest rates shall impact overall M&HCV growth. Demand for LCVs is seen subdued this fiscal due to high-base effect and moderation in spends by e-commerce players. A similar trend is expected next fiscal as well.”

Domestic sales, accounting for over 90 percent of total volume, are expected to inch closer to the previous peak of ~10 lakh units seen in fiscal 2019. Export volume, however, will continue to be sluggish due to continuing inflationary headwinds and economic slowdown in key markets such as Sri Lanka, Africa, and Latin America.

This fiscal operating margin is seen reaching pre-pandemic peaks of ~10 percent, supported by price hikes to offset higher cost of compliance on emission norms, better realisations due to increased sales of M&HCVs and stable raw material prices. This trend is expected to be sustained next fiscal too. That said, in the event of continued sluggishness in sale volumes, discounts offered by CV makers may increase, and partially impact operating margins.

Ashok Leyland, the Indian flagship of Hinduja Group and the country’s leading commercial vehicle manufacturer, signed a memorandum of understanding (MoU) with Indian Bank to provide finance facilities for its M&HCV dealers.

Through the cooperation, Ashok Leyland's M&HCV dealers will have easier access to finance solutions, enabling them to improve company operations and effectively manage their working capital. Dealers may grow their operations with ease thanks to Indian Bank's customised financing alternatives, which offer better liquidity, quicker loan approvals and competitive interest rates. This partnership underscores Ashok Leyland's dedication to empowering its dealer network and promoting sustainable growth in the commercial vehicle sector by guaranteeing increased financial flexibility.

C Neelakantan, Head of Treasury and Direct Taxation at Ashok Leyland, and Saurabh Dalmia, Head of Cash Management at Indian Bank, signed the MoU in the presence of Madhavi Deshmukh, National Sales Head of MHCV at Ashok Leyland, Ashutosh Choudhury, Executive Director, Roopali Singh, DGM-CMS Vertical, and Munash Dalal, AGM-CMS Vertical, who were representatives from Indian Bank.

Balaji K M, CFO, Ashok Leyland, said, “Ashok Leyland is delighted to partner with Indian Bank to offer customised finance solutions to our valued M&HCV dealers. With Indian Bank’s expansive network of 5,880 branches across India, we can cater to our dealers in every region. This strategic partnership will strengthen Ashok Leyland's market position. We remain committed to delivering exceptional experiences to our customers.”

Madhavi Deshmukh, National Sales Head – MHCV, Ashok Leyland, said, “The strategic collaboration with Indian Bank will deliver exceptional financing solutions to our valued dealers, extending our market reach and reinforcing our commitment to innovation and partner success. This partnership will provide tailored financing solutions designed to meet the unique requirements of our dealers. We remain dedicated to fostering long-lasting relationship with our dealer network.”

Ashutosh Choudhury, Executive Director, Indian Bank, said, “Indian Bank is pleased to partner with Ashok Leyland to provide their dealers seamless and tailored financing solutions. This collaboration reaffirms our commitment to supporting the diverse financial requirements of businesses in the commercial vehicle sector. With Indian Bank’s best-in-class processes, we are confident that more dealers will benefit from this partnership, enabling them to scale their operations and drive business growth.”

Ashok Leyland, a leading commercial vehicle manufacturer, has inaugurated its 22nd Light Commercial Vehicles (LCV) dealership in Uttar Pradesh. The new 3S facility located in Chunar, Mirzapur will further strengthen the company’s presence in North India.

The company’s LCV portfolio includes Saathi, Dost, Bada Dost, Partner and MiTR targeted for a wide range of customers and applications.

Viplav Shah, Head – LCV Business, Ashok Leyland, said, “Recognising immense potential of Uttar Pradesh as a key market for us, we are thrilled to strengthen our presence in the region. Our new dealership in Chunar (Mirzapur) would go a long way in reinforcing our presence in the state. The phenomenal success of our ‘Dost’, ‘Bada Dost,’ and the new ‘Saathi’ range underscores the robustness of our products - thanks to their best-in-class mileage, superior performance, and higher payloads. We take immense pride in our exceptional service retention levels, with nearly 70% of our customers returning to our dealer workshops even beyond the warranty period. This new dealership marks yet another milestone in our journey to provide the best possible experience to our valued customers.”

Ashok Leyland, one of the country’s leading commercial vehicle manufacturers, has signed a Memorandum of Understanding (MoU) with Nagaland Rural Bank for a strategic vehicle financing partnership. The partnership will see Ashok Leyland get access to customised financial solutions from Nagaland Rural Bank.

The MoU was signed by C Neelakantan, Head -Treasury and Direct Taxation, Ashok Leyland and Velayutham Sadhasivam, Chairman, Nagaland Rural Bank.

Balaji K M, CFO, Ashok Leyland, said, “At Ashok Leyland, we are dedicated to continuously enhancing customer experience and delivering greater value in our products and services. Nagaland Rural Bank is a regional rural bank with a strong presence in the state. With this partnership in place, our customers in the region will have access to comprehensive financing solutions with specially curated easy repayment plans”.

Sanjeev Kumar, President – MHCV, Ashok Leyland, said, “Ashok Leyland is looking forward to collaborating with Nagaland Rural Bank to offer our customers highly attractive financing solutions. This strategic partnership not only strengthens our market presence but also reinforces our commitment to innovation and customer success. With cutting-edge technology and industry-leading total cost of ownership, our products are designed to drive profitability and value for our customers. We remain steadfast in our commitment to deliver exceptional customer experience and build long lasting relationships.”

Velayutham Sadhasivam added, “Nagaland Rural Bank is delighted to collaborate with Ashok Leyland to provide seamless vehicle financing solutions. This partnership underscores our commitment to meeting the diverse financial needs of commercial vehicle customers across the state. We are confident that this alliance will help us expand our reach and offer customized financing options, fostering the growth of businesses in the commercial vehicle sector.”

Eicher Trucks & Buses, a business unit of VE Commercial Vehicles, has announced that it successfully hosted the second Woman Transporters Delegation at its Bhopal plant.

The event saw women leaders in the transport industry exchange ideas, share insights and explore new business opportunities. The discussion revolved around a wide range of topics such as digitisation, alternative fuels and intelligent mobility solutions that provide challenges and opportunities.

The women leaders were given an exclusive tour of Eicher’s Bhopal plant, an interactive session with VECV Executive Management and test drive experience.

Vinod Aggarwal, MD & CEO, VECV, said, “At Eicher Trucks and Buses, we firmly believe that inclusivity and diversity strengthen businesses and drives growth. Technology and digital solutions are transforming the industry, making businesses smarter and more efficient. While we are taking steps to improve diversity and inclusion internally through initiatives like an all-woman assembly line in Bhopal, we thank you for working with us to foster innovative approaches in the commercial vehicle industry."

Bhagwan K Bindiganavile, EVP, Strategic Planning, Brand & Communications, VECV, added, “The Indian CV industry is transforming rapidly, guided by Prime Minister Narendra Modi’s vision of Seven Cs for mobility solutions: Common, Connected, Convenient, Congestion-free, Charged, Clean and Cutting-edge. We appreciated the women leaders focus on balancing the new technologies making logistics more efficient with a people-first approach.”

SS Gill, Chief Commercial Officer, VECV; B Srinivas, COO, Eicher Trucks and Buses; Ramesh Rajagopalan, EVP, Customer Service, Retail Excellence and Network Development and Vimal Mulchandani, EVP- Manufacturing Operation, Eicher Trucks & Buses & Volvo Buses also engaged with the women transporters delegation.