As economy slides, truck sales enter slow lane
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, Manu Toms reports.business Updated: Aug 12, 2012 21:32 IST
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.