Source: LiveMint.com, Dec 05, 2018
The anaemic growth seen in passenger vehicle sales over the last couple of months is now spreading to commercial vehicles (CVs).
The sharp decline in medium and heavy commercial vehicle (M&HCV) sales in November was most glaring compared to other auto segments. Ashok Leyland Ltd’s volumes fell by 18% year-on-year, while those of Tata Motors Ltd contracted 24% year-on-year. Combined with sales of Eicher Motors Ltd, and Mahindra and Mahindra Ltd, M&HCV sales fell 14.6%. The sudden drop is after a strong double-digit growth until October.
According to Bharat Gianani, analyst at Sharekhan Ltd, “M&HCV sales dropped due to the liquidity crunch and impact of higher axle load norms, which led to capacity increase in the system.” This led to volatility in freight rates, at a time when fuel prices were spiralling. To add to this, interest rates were on the rise; and the non-banking financial companies’ crisis curtailed lending to the sector. Read the rest of this entry »