Within a week after Diwali, truck rentals on key routes registered a significant drop of 4% to 5% due to a slump in cargo offerings from the manufacturing sector, except cement, FMCG and steady arrival of fruits and vegetables into APMCs.
Despite record discounts and soft auto finance schemes, M&HCV goods segment declined by 17.7% for the April-October period. Truck rentals increased by 3% to 4% during pre-Diwali period.
?The October and mid-November period (Pre-Diwali) saw a jump in rentals and increased fleet utilisation by 10% to 15% due to the festival season and consumer spending.
It also saw 15% to 20% increase in the arrival of fresh fruit and vegetables in the APMCs and diversion of truck fleet to intra-state operations to meet the transport requirement of paddy procurement in the country,? said Prabhudas Lilladher.
However, the gains of October and pre-Diwali period in November have been negated away in the post-Diwali period within one week (November 14-20) as truck rentals have dropped in this period by 4% to 5% as consumer demand has slumped. At the same time, post Diwali, the despatches of goods were lower by 10% to 15% in comparison to the October-November period. Now, the only support of cargo offerings is coming from fruit and vegetables, cement, FMCG, pharmaceutical items, while the demand for the other manufacturing products across the spectrum, particularly SME units, is dwindling.
According to an analyst, the truck business has been still lower by 10% to 12% over the same period last year and it would be too early and far-fetched to relate the present upswing to the larger economic recovery. Although, at the end of September, the truckers were able to pass on the increased cost of diesel price hike of R5/litre by way of 5% to 6% jump in rentals in that month.
There is strong possibility that if the situation does not improve by way of government actions to boost its expenditure and demand, the rentals may face a further slide in the coming weeks.
