The Hindu Business Line : May sales remain dull for commercial vehicles

Bangalore, June 9 The economy witnessing a minor recovery, following the stimulus package, has failed to help the commercial vehicles’ sector, which continued dismal sales performance in May.

Government’s efforts in January to boost the commercial vehicles’ sector through an increase in depreciation allowance from 15 to 50 per cent and a 6 per cent reduction in excise duty on the purchase of new trucks have failed to stimulate the sector.

A 41.75 per cent slump in May sales of higher tonnage – five to 49 tonnes – vehicles, the apathy of bankers and auto finance companies to first-time buyers and payment delinquency had their impact on the weak sales, said the latest report of the Indian Foundation of Transport Training and Research (IFTTR).

The foundation said sales in the five-to-39-tonne category during FY 2009 saw a 38.69 per cent decline to 1.65 lakh trucks from 2.68 lakh units in the previous year.

Core sector plunge

The weak May sales in all but light commercial vehicles segment were not only due to the ongoing distortion in the economy but also because of the fragmentation in the freight service economy, resulting in oversupply of trucks, said IFTTR.

Sales in the five-to-49-tonne range, which reflects the health of the core sectors of the economy in terms of the cargo movement, plunged to 10,919 units in May this year compared with 18,743 in the same period last year.

The declining trend was also quite high in mid-range trucks.

A 63.6 per cent fall in sales of tipper trucks (16.2 tonnes and 25.2 tonnes categories) underlined the dismal demand caused by the virtual stoppage of work on majority of construction and infrastructure projects, which are the predominant users of the vehicles. During the month, light commercial vehicles segment, however, saw a modest increase by about 6 per cent at 2,290 units, an increase of 139 units.

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