Domestic CV sales drop 20.2% in FY '14: ICRA

Domestic CV sales drop 20.2% in FY '14: ICRA

Sales of domestic commercial vehicles declined 20.2 per cent in 2013-14 due to the economic slowdown and weak consumer sentiment, ICRA said in a survey.

Almost 6.33 lakh vehicles, including light, medium and heavy commercial vehicles, were sold during FY14.

"The domestic commercial vehicle industry is currently going through one of its longest down cycles in recent periods. Having witnessed a decline of 2 per cent in FY13, the industry volumes have contracted by a sharp 20.2 per cent in 2013-14," the rating agency said.

The slowing economy and weak consumer sentiment have had a trickle-down impact on demand for LCVs or passenger cars, which shrunk 17.7 per cent during the financial year compared with steady growth in the segment over the past several years.

Demand for medium and heavy commercial vehicles declined 25.2 per cent in 2013-14, which was lower than the industry size in 2010-11.
ICRA, however, believes the industry could see some revival in the second half of 2014-15.

“Given the low base and some replacement demand owing to ageing existing fleets, M&HCV sales are likely to show some recovery from H2 of fiscal 2015 onwards.”
Similarly, driven by certain structurally favourable factors, the LCV segment's growth prospects over the medium term remain intact, the survey said.