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Commercial Vehicles hold 4% of the total market share of all vehicles sold in India. This is in comparison to a 13% market share for passenger vehicles, 3 percent for three wheelers and a massive 80 percent held by two-wheelers as of Oct 2019.
Tata Motors with its best-sellers like Ace,Ace Ex,Ace Zip followed by Mahindra`s Jayo and Optimo hold 89% share, cumulatively
The heavy truck market in India reached an all time high in FY 2019 when sales crossed 350,000 units, due to high replacement demand and continued govt infrastructure spending. But, by oct 2019 the demand has slowed down and all CV makers have registered ~20-45% decline in FY-20 so far. Falling freight rates and low freight availability are a cause of major concern among fleet operators.
Both rural and urban consumption are on decline in FY-20 and this has resulted in a severe slowdown in truck rental market in India.The truck manufacturers in India are adjusting their channel inventory, given the weak demand and phasing out of BS-IV vehicles by March 2020. Tata and Ashok Leyland plants are working at 50-60% of their monthly capacity in Oct 2019 and will likely to continue that way till Dec 2019.
Despite all headwinds in short term, we are bullish on India`s long term truck market prospects, given upcoming scrappage policy and growing list of infra projects.
Nov 2019-Daimler India Commercial vehicles unveiled the longest extended warranty(upto eight years or 800,000 kms) for all BSIV compliant heavy and medium duty trucks
Nov 2019– Ashok Leyland(#2 in M&HCVs in India) unveiled its entire range of BS VI compliant products- the first OEM to do so
Oct 2019– Daimler India commenced production of BS-VI-compliant heavy duty engines(OM 926) from its Chennai facility
Oct 2019– Mahindra Group’s truck and bus division announced that it will launch BS-VI compliant range of commercial vehicles, and rolled out a new variant of its Blazo truck in the 16-wheeler category. It also said that 80% of the parts will remain unchanged from the BS-IV variant