LCV market to see double digit growth in FY22

The LCV segment sold around 36,000 units in FY20 which decreased to 30,000 units in FY21 but after an initial decline in FY22, in the last two months there has been a recovery with a 10-15% growth in sales expected in FY22.

By:September 16, 2021 7:46 AM
Mahindra Furio 7 Cargo

Volumes in the light commercial vehicle (LCV) truck segment is all set to bounce back in FY22 with a double digit growth, riding on the back of demand from e-commerce, parcel services, FMCG, poultry, construction and cold storage segments. “The industry has bounced back. We will see a pretty strong comeback,” Veejay Nakra,  chief executive officer, automotive sector, Mahindra & Mahindra, said.

The small commercial vehicle segment recovered faster while the other segments have recovered in the last three months with the HCV segment coming back very strongly, Nakra said. However, the passenger and bus segment was still waiting for a buoyancy in the market, he said. The LCV segment sold around 36,000 units in FY20 which decreased to 30,000 units in FY21 but after an initial decline in FY22, in the last two months there has been a recovery with a 10-15% growth in sales expected in FY22, Nakra said. The industry was expected to reach the FY20 pre-Covid levels by end of this year.

Around 50% of the LCV market in the country was in the 3-6 tonne category and the remaining 50% was in the 6-7.5 tonne category. The market was shifting towards the 6-7.5 tonne category so Mahindra Truck and Bus, a division of the Mahindra Group, decided to enter this segment with  the Mahindra Furio 7 range of LCV trucks, Jalaj Gupta, business head, commercial vehicles division, Mahindra & Mahindra, said. Gupta said the company had invested `650 crore in developing the Furio range of trucks. The LCV will be manufactured at Mahindra’s facility in Chakan, Pune. The Furio 7 LCV trucks was targeting both intra-city and inter-city applications. The LCV Furio 7 platform with three variants — four tyre cargo, six tyre cargo and a six tyre tipper. They were in the price range of `14.79-16.82 lakh (ex-showroom Pune).

Majority of the segment was dominated by single vehicle owners and driver owners who were sensitive to rising fuel cost and were looking for higher payload and the Furio was designed to meet these needs, Gupta said. Mahindra was offering a more mileage or truck back guarantee and a guaranteed resale value after five years offer to make a dent in the highly competitive LCV market.

The cargo vehicles were being launched in 38 locations in 13 states, which accounted for 85% of the market while the tippers would be available in 26 locations across 11 states, which was 90% of the market, Gupta said. There were no production constraints and would be ramped up as needed.

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