India's commercial vehicle sales volume likely to grow in 14-19% range owing to recovery from Covid-19
- IBEF
- November 7, 2022
According to research released by Fitch Ratings, India's commercial vehicle (CV) sales volume is likely to expand in the mid-(14-17) to high (18-19)-teens over the next several years. The category is predicted to rise because of a 26% rebound in the fiscal year ending March 2022 (FY22) from the Covid-19 pandemic-hit FY21.
According to the analysis, despite its lesser percentage of overall CV volume prior to the pandemic, an increase in the passenger CV category, which saw a greater pandemic impact due to travel restrictions and the suspension of school and workplace commutes, is also anticipated. After the effect of the second wave of the Covid-19 epidemic in the first quarter of the fiscal year 2022, India's swift and broad-based economic recovery has helped boost CV sales (1QFY22). CV volumes in the first half of the fiscal year 2022-2023 (H1FY23) hit 450,000, up 21% from the pre-pandemic level in the H1FY20, according to statistics from industry group Siam.
Recovering economic activity levels and increased infrastructure expenditure in the government's budget have aided in improving CV fleet utilisation rates. According to the research, this is seen by growing freight prices and improved fleet operator profitability since H1FY22. These factors, together with better financing availability, have boosted purchasing mood in recent quarters, resulting in a recovery of replacement demand.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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