Domestic CV sales drop 20% in FY14: ICRA
Sales of domestic commercial vehicles (CVs) declined 20.2% 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 CV industry is going through one of its longest down cycles.
Having witnessed a decline of two percent in FY13, the industry volumes have contracted by a sharp 20.2% in 2013-14,” the rating agency said.
Demand for medium and heavy commercial vehicles (M&HCV) declined 25.2% in FY14, which was lower than the industry size in FY11.
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 FY15 onwards. Similarly, driven by certain structurally favourable factors, the LCV segment’s growth prospects over the medium term remain intact,” it said.
The rating agency expects a sales decrease of 6-7% in FY15.
ICRA observed that despite the muted environment, original equipment manufacturers (OEMs) have sizable new model introduction plans over the near term.