The commercial vehicle industry is expected to showcase better performance this year as compared to the last financial year. A Top Mahindra Group executive believes the segment to show a significant double-digit growth.
He believes that the tapering effect seen in certain segments in the Q3 will push the intermediate commercial vehicle (ICV) and light commercial vehicle (LCV) segments to likely do better.
“I think this fiscal will end significantly better than FY21. Last year, the whole industry was two lakh units. We believe this year, the industry is already sitting at 1.80 lakh. We will see a good double-digit growth this year by the end of the year,”Veejay Nakra, chief executive officer (automotive sector) of Mahindra & Mahindra, in response to a question on the outlook for the commercial vehicle (CV) industry.
From the base effect point of view, if one looks at year-to-date (YTD) data, a growth of over 60% has been observed from 3.5 tonnes to 55 tonnes, he said.
Nakra added that even within that, segment-wise, they have seen strong double-digit growth.
“But, if one was to look at Q3FY 22 data versus Q3 FY21 data, some of the segments have already started tapering off. It could be because when the industry opened in Q3FY21, there was pent-up demand and, hence, there was a surge in sales,” Nakra said.
The third quarter of the current fiscal is already starting to see pressure on what is going to play out in the March 2022 quarter, Nakra said citing several reasons Like Revision of GDP forecast a couple of times, the effect of Omicron, freight rates have not moved up incommensurate with the hike in diesel rates, and overall utilization of trucks is not more than 45-50 percent.
“So, we have seen pressure playing out on some of the segments,” he added.
Earlier, MTB announced the ‘Get More Mileage or Give Truck Back’ guarantee for its entire range HCV, ICV, and LCV of Mahindra BS-VI trucks.
What is known as a landmark move for the light, intermediate and heavy commercial vehicle industry, Nakra believes that given the spiraling fuel prices, there wasn’t a better time to introduce this customer value proposition.
He added that it will reaffirm the company’s customers’ faith in Mahindra’s ability to create technologically advanced, class-leading products and set higher standards for the Indian CV industry while reflecting its commitment to the segment.
“‘Get More Mileage or Give the Truck Back’ was first offered on our HCV truck Blazo in 2016 and not a single truck has come back. All our new introductions ever since — Blazo X, Furio ICV range and Furio 7 have delivered higher fuel efficiency,”Jalaj Gupta, business head (commercial vehicles business unit) at Mahindra & Mahindra Ltd.
He further said that additionally, MTB is offering a service guarantee to ensure higher uptime for its customers through the guaranteed speedier turnaround of the truck, be it on the highway or at the dealership workshop.
“We are seeing increasing penetration of CNG fuel in LCVs as well as the ILCV and the ICV segments. It has raised to almost one-third level YTD this year because of the operating.
“There is an increasing shift towards CNG (compressed natural gas) from diesel. We have our plans on the CNG on our entire ILCV range of trucks,” he stated.