Record-Breaking Sales of Commercial Vehicles Expected in FY24, Fuelled by Infrastructure Spending and Increased Freight Movement
Sales of commercial vehicles in India are projected to reach an all-time high in Fiscal Year 2024, driven by extensive government investment in infrastructure and a surge in freight transportation. This trend is expected to bring record revenue for leading companies like Tata Motors, Ashok Leyland, and VE Commercial Vehicles. The demand for heavy-duty vehicles has surged due to stricter emission norms and the need for trucks with higher payload capacities, contributing to increased per-unit revenue.
Vinod Aggarwal, President of the Society of Indian Automobile Manufacturers (SIAM) and CEO/Managing Director of VE Commercial Vehicles (VECV), a joint venture between the Volvo Group and Eicher Motors, revealed that sales of heavy-duty trucks, capable of carrying greater amounts of freight, have grown by a healthy double-digit percentage. In the first seven months of the year alone, the sales of heavy-duty trucks rose by 15%. Aggarwal further explained that the industry’s overall load carrying capacity has increased due to the shift towards larger trucks. As a result, the industry is anticipated to surpass its previous peak and achieve unprecedented sales figures this fiscal year.
The demand for buses has also seen a remarkable surge of more than 35% during this period. Improved highways have played a significant role in boosting the preference for road travel over crowded train journeys. With better infrastructure and connectivity, people are opting for buses as a reliable means of transportation.
Dheeraj Hinduja, Executive Chairman of Ashok Leyland, expressed confidence in the industry’s momentum, stating, We believe that we will reach new heights and surpass the previous records. The next six months look very promising. This optimism is supported by several factors, including high infrastructure spending projected at Rs 143 lakh crore until 2030, replacement demand, and growth in the domestic economy. The Reserve Bank of India also predicts a 6.5% growth rate for the current fiscal year.
Notably, fleet operators are not deterred by the increased prices of vehicles. Instead, they are eager to replace their older fleets with newer, more fuel-efficient vehicles that offer higher carrying capacities. This change in the sales mix is expected to contribute to higher revenues for the industry.
As of the end of October, the industry had shipped a total of 604,975 trucks and buses, surpassing the sales figures of 962,468 units achieved in the entirety of Fiscal Year 2023 and the 592,686 units sold during the corresponding period last year.
Leading truck manufacturers in the country, including Tata Motors, Ashok Leyland, and VECV, are confident that the upward trajectory will continue. They remain optimistic about the sustained demand for commercial vehicles, driven by substantial infrastructure spending, replacement demand, and a growing domestic economy.
In conclusion, the commercial vehicle industry in India is poised for record-breaking sales in Fiscal Year 2024. The combination of increased infrastructure spending, stricter emission norms, higher freight movement, and the preference for road travel has bolstered demand for commercial vehicles. This surge in demand is expected to contribute to a significant revenue increase. With a positive outlook for the industry and a favorable economic environment, the future looks promising for commercial vehicle manufacturers and the Indian economy as a whole.