In commercial vehicles, the tilt is towards heavier vehicles

The economics that governs the truck industry has nudged demand towards heavier and more powerful vehicles over the last few years, and the trend is expected to continue.

The trend indicates that the road transport industry is getting more efficient, say industry hands.

Over the last three years, the pattern of demand in the heavy commercial vehicles segment has veered towards multi axle vehicles (with two axles behind) and tractor trailers with a payload of about 25 tonne. The change has come at the expense of largely the 16.2 tonne vehicle.

The trend in demand is expected to keep moving towards vehicles with higher payloads. "The next move will be 40-45 tonne (vehicles) and will start happening in two to three years. In five to seven years it will come in to its own," says Ravi Kant, executive director of Tata Motors.

Ashok Leyland's executive director- finance, K Sridharan, feels that the move towards vehicles with higher payloads and power is a sign that the road transport system is getting efficient.

The trend is being driven primarily be the economics that governs a trucker's operation. Over the last couple of years, the increase in freight rates have not kept pace with the increase in the price of fuel. Sridharan says fuel makes up 55 per cent of operating cost of a truck today.

Freight is worked out on a tonnage basis. "More and more freight is available in one scoop when you carry larger quantity," says Sridharan. Lower operating cost has influenced the growing demand for heavier vehicles.

The tonne-kilometer cost of a multi axle vehicle is about 25 to 30 per cent lower than that of the 16.2 tonne haulage vehicles that have traditionally accounted for a big section of the heavy commercial vehicle population.

The move to bigger vehicles has also been helped along by the improvement in roads. On arterial routes, travel speed has increased. Consequently, the turnaround time for trucks has improved, making economic sense to buy bigger and more powerful vehicles.

The softening interest rates added momentum to the whole process, says Ravi Kant. The Society of Indian Automobile Manufacturers (SIAM) data shows that in 2004-05 heavy commercial vehicles' domestic sales grew by 26.38 per cent to stand at 1.72 lakh units.

Industry estimates indicate that the growth was really driven by multi axle vehicles and tractor trailers. This segment is believed to have grown by over 50 per cent in the last two years.

One industry hand feels that multi axle vehicles and tractor trailers make up about 35 per cent to 40 per cent of the commercial vehicle population in the goods sector, up from about 20 per cent five years ago.

The 16.2 tonne haulage vehicles are believed to have grown only by about 6 per cent over the last two years. However, they still make up about 40 per cent to 45 per cent of the commercial vehicle population in the goods sector, says an industry hand.

While he haulage vehicles are not expected to disappear, the trend in India mimics that of other markets. Ravi Kant says that the world over medium trucks are giving way to tractor trailers and heavy vehicles.