‘Commercial vehicle sector to see double-digit growth’
NEW DELHI: The commercial vehicle industry is expected to grow in double-digits this fiscal, driven by favourable demand conditions amid accelerated economic activities, although high fuel prices and increase in interest rates on vehicle loans are headwinds, according to Tata Motors executive director Girish Wagh.
The commercial vehicles segment, which saw its peak in 2018-19, with industry volumes of more than 10 lakh units, went into a downturn in the following two fiscal years, has begun to pick up momentum from the last financial year.
While it may take longer to reach the highest volumes again, in terms of payload, the industry could reach the previous peak sooner amid rising demand for commercial vehicles (CVs) with higher payloads.
“I think last year, the economy started doing well again and we saw growth in the commercial vehicle market by around 26%. We (Tata Motors) have grown by 33%. We have done better than the industry,” Wagh said.
In the context of the last three years, he said, “FY19, was our previous peak, when the commercial vehicle industry volumes crossed 1 million (units). After that, we have had two years of downtime. FY20, which was the year of preparing for BS-VI transition and FY21, which was the year of Covid, if I may say so. In both these years, the market dropped and FY21 volumes were almost 52% of FY19 volumes.”
Responding to a query on the overall situation in the CV industry, he said, “We do see the industry coming back. It may take some more time to reach the previous peak in terms of volume but at the same time, I think in terms of payload, we should reach that earlier, because higher payload vehicles are being sold more today as compared to FY19.” This, he said, is due to demand for CVs generated due to the work which is happening in infrastructure propelled by the government’s allocation for the sector earmarked in the Budget.
“Then a lot of work is happening in the housing sector in urban areas. Consumption overall is going up and the rural growth story is intact. All these put together, I do see that the commercial vehicle industry should see a good growth this year,” he said.
When asked what could be the rate of growth, he said, “We should see double-digit growth this year also.” As for Tata Motors, he said the target is to do better than the industry like it did last year.