In 2011, sales of commercial vehicles (CVs) peaked. And then it fell, to almost half in 2013. It was the “worst recession ever for CVs,” recalled Volvo Eicher Motor’s MD and CEO Siddhartha Lal. Ashok Leyland MD Vinod K Dasari referred to it as the “perfect storm”.
Commercial vehicle sales are seen as an indicator of the health of an economy. Higher the sales, better the state of the economy, as trade, construction, transport would all be on the upswing.
Twice in 25 years — in 2013 and 2014 — India’s growth fell below 5%. High inflation forced people to cut down purchases, and oil prices ballooned.
For the past year, though, things have been looking up. Last year, the CV industry grew at 8%, but the market was in a realignment.
For the first time, Tata Motors, which owned half the market, saw marketshare dip to 44% as others nibble away at it. Ashok Leyland grew from 13.7% to 18%, while Volvo Eicher Commercial Vehicles (VECV) rose from 5.8% to 6.6%. Mahindra & Mahindra too grew by a little less than 1%.
In 2016, the market is expected to grow further.
“Last year the infrastructure grew 5%. This year it will lead CVs’ growth,” said Vinod Aggarwal, CEO, VECV. The fastest-growing segment will be the medium and heavy vehicles, where VECV has a 12% marketshare, he feels. Last year it launched 17 products against two in 2014. It hopes to corner 15% in the next three years.
The share of heavy vehicles (above 16 tonnes) has gone up by 16 percentage points to 65% of overall truck sales. Ashok Leyland focuses on this segment. Moreover, the company dominates southern India, which saw greater economic activity.
Even M&M, which has more than 25% marketshare, but only 3% in heavy vehicles, is now focusing on the latter with its new Blazo series.
“In the last quarter we have started seeing new demand, especially in construction equipment. There is a movement from lower tonnage to higher tonnage,” said Pawan Goenka, executive director of M&M. Higher tonnage trucks offer better economies.
“If we cannot give the best fuel efficiency we will take back the trucks,” Goenka said.
Meanwhile, the market leader isn’t sitting back. Tata Motors is overhauling its products — all heavy vehicles will be under the Signa brand, and the 25-tonne trucks will be replaced by new ones. “The mainstream products had to change… the entire portfolio is under the new design architecture,” said Ravindra Pisharody, executive director, commercial vehicles at Tata Motors.
It is also introducing more technology, and more stylish interiors. “Earlier the design was not important,” said Pisharody. “This is changing.”