Indian Commercial Vehicle Industry Post COVID Era:

The Indian CV industry is facing some of its worst times in last 4 to 5 years. The overall CV volumes (Trucks & Buses) in F19 was 7,17,688 Units & the sales for the same for F20 was 5,23,329 units which is a dip of 25~27%.

The reasons for the same are:

• GST implementation-reducing the waiting times are octroi posts which have vanished since and higher vehicle prices
• Axle Load Norm: with around 10% overload capacity, overall fleet capacity has increased by about 20% in the market thereby reducing the demand for new vehicles
• Increasing diesel prices in Delhi from 50.22 INR per litre in July 2015 to 79.95 INR per litre as on 17th Feb 2021, while keeping the freight rates almost unchanged
• Competition from other modes of transportation like Railways (upto 110 rakes, double decker bogies and RoadRailer a bimodal vehicle capable of running on rails as a wagon and on road as semi-trailer truck) and RO-RO services using water transport

The expected growth of CV industry in F22 is around 25~28% and likely to continue for next 2 years due to:

• Cyclicity of industry
• Sunrise sectors like e-commerce driving the growth in segments like ILCV
• Infrastructure & Power Generation projects impacting the demand in Cement, Steel, Iron Ore and Coal sectors and thereby in segments like MAV, Tractor Trailers and Tippers
• Implementation of vehicle scrappage policy from April 2022 thereby boosting demand (around 7,00,000 vehicles with more than 15 years age will get scrapped)

Future Market Trends:

• Modular platforms with higher power to weight ratios and comfort and efficiency enhancement features like AC and AMT/AT
• Alternate fuels (CNG, Biodiesel, Ethanol, Hydrogen)
• Replacement of 3G with 5G
• Telematics/ Video Intelligence: Computer based AI platform with in cab audible feedback
• Prognostics: Integration of IoT and Big Data for routing, scheduling, navigation, monitoring and driver behavior monitoring etc.
• Aggregation of fleets
• Electrification starting with LCVs