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As economy slides, truck sales enter slow lane

business Updated: Aug 12, 2012 21:32 IST
Manu P Toms

Domestic truck sales seem to be mirroring the current slowdown.

Thanks to slow industrial activity and goods movement, medium and heavy truck sales have fallen 18% to 71,456 so far in the current fiscal year.

Fearing a further decline in demand, manufacturers have also slashed production by 27% to 74,000 during the April-July period.

Market leader Tata Motors seemed to be the worst hit, with its medium and heavy commercial vehicle sales falling 22% during the period.

"The low GDP rate is one reason," said Ravi Pisharody, executive director, Tata Motors. "Certain sectors are facing challenges. For instance, the mining sector is in a standstill, affecting truck sales in a big way."

With goods movement also decreasing, truck rentals have gone down by as much as 11-13% in the current fiscal year.

This has resulted in truck operators turning away from dealers despite discounts of up to Rs. 2.5 lakh and finance schemes offering 5.5-6.5% interest rate, said SP Singh, co-ordinator, Indian Foundation of Transport Research & Training.

"If the freight market does not improve, there is possibility of repossession of delinquent trucks," he said.

During the downturn in 2008-09, more than 40000 trucks were repossessed for non payment of loan by fleet owners.