Commercial vehicle industry volumes to see 7-10 pc growth
ROADS & HIGHWAYS

Commercial vehicle industry volumes to see 7-10 pc growth

According to rating agency Icra, the commercial vehicle market volume is anticipated to increase by 7 to 10% in the upcoming fiscal year. The expansion of e-commerce, back-to-school and office seasons, replacement demand, government infrastructure spending, and back-to-work scenarios would all contribute to the volume growth, it was underlined.

However, it added, the growth will slow from 24-26% in the current fiscal year.

Icra stated that the macroeconomic environment has improved, replacement demand has increased by 16% year over year, and the underlying industries such as steel, cement, mining, automobiles, and e-commerce have shown strong traction. These growth trends were evident in the third quarter of the current fiscal, according to wholesale dispatches.

It was highlighted that freight rates were still holding steady and that this, along with good freight availability, was sustaining fleet operator viability.

Medium and heavy commercial vehicles (M&HCV), light commercial vehicles (LCV), and buses all had broad-based growth patterns in the third quarter and the nine months that concluded on December 31, 2022, according to Icra.

Icra Assistant Vice President & Sector Head - Corporate Ratings Sruthi Thomas stated that "sales in the domestic CV industry continue to be propelled by multiple tailwinds including replacement of ageing vehicles, pick-up in mining, infrastructure, and construction activities, improvement in the overall macroeconomic environment, and healthy fleet utilisation levels resulting in improved fleet operator viability.

The increased capex spending of Rs 10 trillion in the Union Budget for 2023–24, which is further proof of the government's continuous emphasis on infrastructure development, bodes well for sustainable growth, particularly in the heavy truck category over the short term, she noted.

Icra anticipates that the CV OEMs' financial performance will also improve, driven by lower operating costs and a reduction in commodity prices. As a result, the combined operating profit margin of CV OEMs is anticipated to increase to 6% in FY2023 and further in the following fiscal year.

According to rating agency Icra, the commercial vehicle market volume is anticipated to increase by 7 to 10% in the upcoming fiscal year. The expansion of e-commerce, back-to-school and office seasons, replacement demand, government infrastructure spending, and back-to-work scenarios would all contribute to the volume growth, it was underlined. However, it added, the growth will slow from 24-26% in the current fiscal year. Icra stated that the macroeconomic environment has improved, replacement demand has increased by 16% year over year, and the underlying industries such as steel, cement, mining, automobiles, and e-commerce have shown strong traction. These growth trends were evident in the third quarter of the current fiscal, according to wholesale dispatches. It was highlighted that freight rates were still holding steady and that this, along with good freight availability, was sustaining fleet operator viability. Medium and heavy commercial vehicles (M&HCV), light commercial vehicles (LCV), and buses all had broad-based growth patterns in the third quarter and the nine months that concluded on December 31, 2022, according to Icra. Icra Assistant Vice President & Sector Head - Corporate Ratings Sruthi Thomas stated that sales in the domestic CV industry continue to be propelled by multiple tailwinds including replacement of ageing vehicles, pick-up in mining, infrastructure, and construction activities, improvement in the overall macroeconomic environment, and healthy fleet utilisation levels resulting in improved fleet operator viability. The increased capex spending of Rs 10 trillion in the Union Budget for 2023–24, which is further proof of the government's continuous emphasis on infrastructure development, bodes well for sustainable growth, particularly in the heavy truck category over the short term, she noted. Icra anticipates that the CV OEMs' financial performance will also improve, driven by lower operating costs and a reduction in commodity prices. As a result, the combined operating profit margin of CV OEMs is anticipated to increase to 6% in FY2023 and further in the following fiscal year.

Next Story
Infrastructure Urban

Infrastructure Opportunity Outlook by IMPACCT.Info

India’s infrastructure pipeline is witnessing dynamic activity across stages — from immediate bidding to future planning. IMPACCT segments these into three categories: Immediate, 3–6 Month, and Future Opportunities, enabling businesses to identify, prepare, and participate in high-value tenders and projects across sectors...To read the full article Click Here..

Next Story
Real Estate

Serene Communities, Prathima Group Invest Rs 4 billion in Hyderabad

Serene Communities by Columbia Pacific, India’s largest senior living operator, has partnered with Prathima Group to develop two senior living projects in Hyderabad, marking its entry into Telangana. The collaboration represents an investment of Rs 4 billion, combining Serene’s international expertise with Prathima’s local development experience. The first project, Serene BILVANI One, launched in Shankarpally, is Hyderabad’s first premium senior living community. Designed for independent and active ageing, it features senior-friendly architecture, barrier-free design, and wellness..

Next Story
Infrastructure Urban

India remains our most important market

Foundamental, the world’s leading venture capital platform focused on the project economy, has launched its third fund to strengthen its presence in India, APAC, and other global markets. Led by Berlin-based Managing Partners Shubhankar Bhattacharya and Patric Hellermann, Fund III aims for a final close by the end of 2025. In an exclusive interaction with CW, Bhattacharya shares insights on the fund’s mandate, India’s role in their strategy, and the opportunities they see in the construction-tech and project-based sectors. Can you briefly explain Fund III’s mandate and how In..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?