CV sales recovery unlikely for next 2 qtrs: Volvo India

The domestic commercial vehicles manufacturers are likely to end the current fiscal with a decline of 25-30% cumulatively due to the ongoing economic slowdown.

The industry, however, is witnessing some green shoots of recovery and it will be more visible in the next two quarters.

"The recovery in CV sales is possible only in the second half of the calendar 2020 and a complete bounce back from the current levels towards the end of fiscal 2020-21," Kamal Bali, President & Managing Director, Volvo Group, India told DH.

During the fiscal ended March 2019, the commercial vehicle industry had seen a combined sale of one million vehicles, showing a growth of 17.5% over the previous year. However, during the current fiscal, the manufacturers are facing a massive drop in sales owing to the economic slowdown. Delay in the allocation of road and other infrastructure projects is seen as the biggest impediment in the sales of commercial vehicles.

Bali believes that the declining sales trend would continue for the next one or two quarters due to the slowdown and transition to BS-VI emission standards.

"The slump in CV sales became prominent after the introduction of GST. "The turnaround time for trucks on highways has considerably reduced as well as vehicles are now allowed to carry extra load. All these combined together resulted in the decline of CV sales", Bali explained.

He said green shoots of recovery are now visible and the industry will recover post-second quarter of next fiscal. However, he said Volvo India has bucked the trend and managed to arrest the slide in sales and unlike its peers, the decline in sales will be in single-digit percentage for the company, he said.

“Actually, we were planning for a higher growth during the current fiscal. But that did not happen. There is a mild decline in our sale, and we will perform better than the industry,” Bali said.

The company continues to be bullish on India as a market and the company is hoping to witness better days with the government announcing Rs 102 lakh crore infrastructure spend in the next five years. “This will create demand for trucks. The year 2020 will witness stabilization and the growth will follow the year after,” he added.

The company has scaled down its operations at its factory in Bengaluru and operating only one shift instead of one and a half shift earlier due to the slump in sales, Bali detailed.