Government mandating AC cabins in CVs from 2018 gives December sales a boost

By: | Published: December 15, 2017 5:24 AM

Sales of medium and heavy commercial vehicles (M&HCV) are expected to get a boost in December as pre-buying of trucks ahead of the January 1 deadline for rolling out commercial vehicles with air-conditioned cabins (or ventilation systems) is expected to kick in.

Trucks, Medium and heavy commerical vehicles, Commerical vehiclesSales of medium and heavy commercial vehicles (M&HCV) are expected to get a boost in December as pre-buying of trucks ahead of the January 1 deadline for rolling out commercial vehicles with air-conditioned cabins (or ventilation systems) is expected to kick in. (Representation Image: PTI)

Sales of medium and heavy commercial vehicles (M&HCV) are expected to get a boost in December as pre-buying of trucks ahead of the January 1 deadline for rolling out commercial vehicles with air-conditioned cabins (or ventilation systems) is expected to kick in. Such features will be mandatory in commercial vehicle cabins from January 1, as mandated by the government. To beat the date, buyers are booking lower-priced trucks without these features before the New Year. In December every year, OEMs see a strong growth in retail sales because of heavy discounts given to clear inventory. Truck dealerships are currently offering discounts of 12-15%. However, this year, they are also expecting some pre-buying before the new, higher-priced models hit the market. According to Rajesh Kaul, head, sales and marketing, M&HCVs, Tata Motors, the pre-buying impact of the new rules started in November itself. “Majority of Indian trucks have so far been with natural ventilation, with few offering AC or ventilated cabins from OEMs to cater to premium and operationally demanding segments.

Hence, low proclivity of Indian customers towards mechanised ventilation systems coupled with entailing price increase may create some surge in December sales also.” According to the mandate, all commercial vehicles with a gross vehicle weight of 3.5 tonne and above will need to have natural or forced ventilation, which also refers to AC cabins. The cabin can have natural ventilation by way of several openings to let fresh air inside, and others to let hot air outside. While an air-conditioning system can increase the cost of a truck significantly, according to Vinod Aggarwal, managing director and CEO, Volvo Eicher Commercial Vehicles, a simple ventilation system may increase the cost by only about Rs 7,000-10,000 per vehicle, depending on the size of the cabin. However, SP Singh, senior fellow, Indian Foundation of Transport Research and Training, a Delhi-based think tank on transport issues, said most medium and heavy duty trucks are sold without cabins in India, and costs are likely to rise if cabins are built at independent body-building shops by buyers themselves.

He said, “Even for the ventilation system that will be made mandatory by the government soon, the cost can go up by anywhere between Rs 20,000 and Rs 70,000.” Singh added that installing an AC unit could drive costs up by as much as Rs 1.25-1.5 lakh, lending greater credence to the argument of commercial vehicle dealers who anticipate a high pre-booking sales surge for existing models. The government notification says that for vehicles which are sold in the form of drive-away chassis, the OEM will have to supply a kit of forced ventilation items so that the body-builder may do it according to new rules.

According Singh, this new rule will add to the fleet operator’s operational costs. He also says the government’s reason behind bringing out the new notification to avoid fatigue-led accidents by increasing driver comfort cannot be achieved by setting up ventilation systems inside the truck cabins. Rather, regulating the number of hours a truck driver is on the road and how much sleep he gets are more important.

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