India Truck Sales Expected to Slow

May 3, 2012

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Commercial vehicle sales in India will slow down this year as weak economic activity and higher vehicle prices continue, reports the Times of India.

Commercial vehicle sales had grown by 18% last fiscal year but are expected to barely reach growth rate this year, due to an unimpressive demand for medium- and heavy-duty vehicles.

"We expect the heavy commercial vehicle segment to grow by a single digit this fiscal," says Pawan Goenka, automotive division president at Mahindra & Mahindra, which has a joint venture with Navistar, as reported in the Times.

A 2% increase in excise duty and 3% special duty on vehicles with bodies are installed outside a manufacturer's factory (by local vendors) have raised prices. Most companies, including market leader Tata Motors, have passed on the higher prices to consumers, and this move is expected to keep the demand low. Tata Motors has hiked commercial vehicle prices by 2% to 5% percent.

For medium- and heavy-duty vehicles, The Society of Indian Automobile Manufacturers has forecasted a growth 5% to 7% for 2012-13. It expects the light vehicle category to grow at a faster pace at 14% to 16%, albeit slower than last fiscal year.

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