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.
- motoring
- Scania
- India
- Silvio Munhoz
- Managing Director
Scania India Announces Silvio Munhoz As Its New MD
- by MT Bureau
- September 17, 2024
Scania India has appointed Silvio Munhoz as the new Managing Director, effective 1 September 2024. He succeeds Johan P. Schlyter.
Bringing decades of extensive experience in the automotive industry to his new role, Munhoz has held key positions such as Managing Director of Codema, and interim President and CEO of Scania Brazil.
He has, throughout his career, demonstrated a strong strategic vision, a customer-centric approach, and a deep commitment to sustainable innovation, driving success across multiple markets. His appointment marks a new chapter in Scania India's growth as the company continues to focus on delivering state-of-the-art transport solutions and reinforcing its sustainability initiatives in the region.
Under the leadership of Munhoz, Scania India continues to underline its commitment to provide complete solutions to the transport and energy industries.
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Softlink Global has introduced LogiBRAIN, a business intelligence tool poised to reshape the logistics landscape. It is supplementary to Logi-Sys, an integrated supply chain platform by the same company.
Tailored for the freight forwarding community by harnessing real-time data, the tool offers users precise and up-to-the-minute insights into shipments, costs and overall performance, which enables streamlined decision-making for crucial aspects such as routing, forecasting and inventory management.
The key features of LogiBRAIN include a dashboard that showcases essential metrics like monthly and branch performance, and performance by Line of Business (LOB). The tool also boasts of advanced filters that facilitate in-depth data analysis, enabling users to identify trends and anomalies and customisable reporting features cater to individual user requirements.
Amit Maheshwari, Founder, Softlink Global, said, "LogiBRAIN is more than just a tool – it's an innovation crafted to give businesses the competitive edge they seek. It empowers them with the ability to drive efficiency, reduce costs, and truly thrive in the dynamic landscape of logistics." "Extracting nuanced insights from massive data sets, LogiBRAIN is poised to be a game-changer for businesses of all sizes within the freight forwarding ecosystem. We're confident in its ability to serve as a valuable asset to our clientele," he added.
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Add Comment- motoring
- Truck
- Rentals
Truck Rentals Surge As Festive Season Approaches
- by MT Bureau
- September 06, 2024
Truck rentals continued their upward trend in August 2024, marking the second consecutive month of growth, as per the recent Shriram Mobility Bulletin.
The festive season’s approach, coupled with increased post-election activities, has significantly driven demand across various transportation routes. Fleet utilisation in the India-Bangladesh border region saw a significant improvement, rising to nearly 60 percent from the previous 40 percent.
The resumption of trade activities between India and Bangladesh has particularly increased truck rentals in the Kolkata-Guwahati-Kolkata route, registering the highest surge at 3.0 percent. The Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes also witnessed increases of 2.7 percent and 2.3 percent, respectively.
Apple harvest and poll bound activity pushed up freight rates in the Srinagar region. Freight rates rose by nearly 10 percent in August 2024 in this area. The Wayanad region experienced a rise in freight rates due to a reduced number of trucks, many of which are engaged in rehabilitation work.
Referring to the above development, YS Chakravarti, MD and CEO, Shriram Finance Ltd, said, "As the festive season approaches, companies across India are intensifying their efforts to boost production and supply, causing an uptick in truck rentals on key routes. The Srinagar area is particularly active due to the apple picking season and pre-election activities, which are driving up freight rates. Additionally, the reopening of trade at the India-Bangladesh border is leading to higher fleet usage in that region. However, the recent floods in Gujarat have led to logistical challenges. As we observe the situation, there is a cautious anticipation to see how quickly Andhra Pradesh and Telangana will recover from the devastating floods.”
Image for representative purpose only.
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Add Comment- New Appointments
- Commercial Vehicles
- Technology Development
Shenu Agarwal Appointed As MD And CEO Of Ashok Leyland
- by MT News
- December 08, 2022
Ashok Leyland announced today that Shenu Agarwal has been appointed as Managing Director and CEO of the company, with immediate effect. Assuming charge, Agarwal will drive the technology development, growth and future strategy for the company towards achieving the company’s vision to be among the top 10 commercial vehicle players globally. Ashok Leyland claims that Agarwal joins the company from Escorts Kubota Ltd, where he was President. He was Chief Executive for the agribusiness for more than seven years. According to Ashok Leyland, he is associated closely with the transformation of escorts into a leadership position by ushering in contemporary global standards of design, quality and manufacturing.
Dheeraj Hinduja, Executive Chairman, Ashok Leyland, said, “Shenu has a proven track record as a leader from a business conglomerate and is an all-rounder, having worked in different capacities in many disciplines. Our focus on reliability, ambition to achieve global scale and our constant pursuit of enhancing stakeholder value at Ashok Leyland all will get further strengthened with Shenu at the helm. I am optimistic that the company will carve new niches in the mobility sector soon under his stewardship and I wish him the very best for the future."
Sharing his thoughts on this new position, Agarwal said, “I am honoured and feel privileged to be part of Ashok Leyland, an institution with a rich 75-year legacy of pioneering technology leadership. I look forward to working closely with all the stakeholders and employees to help achieve in an accelerated manner Ashok Leyland’s vision to be among the top 10 CV manufacturers globally.”
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