Fall in CV volumes in November, December is temporary: Vinod Dasari, MD, Ashok Leyland

By: |
Mumbai | Published: January 10, 2019 5:11:08 AM

Putting forward an optimistic picture of the commercial vehicle industry, Vinod Dasari, managing director at Ashok Leyland, believes that the fall in the volumes of commercial vehicles in November and December is a temporary blip.

Ashok Leyland, Vinod Dasari, CV industry, Shriram Transport, Euro VIFor the eight months from April to November, the commercial vehicle segment growth stood at 31% y-o-y at 647,278 units.

Putting forward an optimistic picture of the commercial vehicle industry, Vinod Dasari, managing director at Ashok Leyland, believes that the fall in the volumes of commercial vehicles in November and December is a temporary blip.
“Year-to-date, the CV industry has grown 25% which is a good growth in any industry. Just in the month of December, we had a 20% decline but even with that decline, December was 25% higher than November. However, the year-on-year growth in December was lower due to high base effect of last year. It is only because in January 2018, the blower regulation had come, the air-conditioner regulation had come, so they had a huge pre-buy last December. If it wasn’t for that, we would have had continued growth,” Dasari told business news channel CNBC TV18 in an interview.

For the eight months from April to November, the commercial vehicle segment growth stood at 31% y-o-y at 647,278 units. The commercial vehicle segment was faring well until October with M&HCV segment growing at 12% y-o-y at 27,571 units and LCV growing at 32% y-o-y at 55,593 units. However in November, the growth took a reverse trend with M&HCV de-growing at 19% y-o-y and LCV at 18% y-o-y. The tipper segment was relatively unaffected on the back of road construction, affordable housing, irrigation projects and government spending on infrastructure projects.

Also read| IndiGo offer: Grab flight tickets for just Rs 899; check routes, other details

Umesh Revankar, managing director, Shriram Transport, says that while axle load norms is one of the reasons for the slowdown in demand, the major factor is the liquidity crunch that has hit the real estate sector. With the slowdown of real estate and infrastructure, demand for steel, cement and sand has come down too. These are the bulk materials and slowdown in their movement automatically drags down the vehicle utility.

Dasari said even if the January-March quarter turns out to be flat, the market for the full year will easily grow by 15-20%. However, in the next fiscal year – which will be the last year before Euro VI comes in – there will be pre-buying. So, even with the conservative approach, growth will be 25-30% next financial year.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.