SCV segment in India to grow 13% till FY 2020: Report

SCVs is largest segment within commercial vehicle industry with sales of about 4,32,000 units in 2013-14

The Indian Small Commercial Vehicle (SCV) segment is expected to grow at 13 per cent Compound Annual Growth Rate (CAGR) till financial year (FY) 2020, accounting for 80 per cent of the total market sales, says Germany-based global strategy consulting firm, Roland Berger Strategy Consultants. The company had conducted a survey on the SCV industry.

According to the survery, SCVs is the largest segment within the commercial vehicle industry with sales of about 432,000 units in 2013-14 financial year contributing to 60 per cent of the overall industry.

The need for intercity goods and passenger transportation drives the demand for SCVs. The study reveals that Tata Motors and Mahindra & Mahindra continue to be the top players.

“The SCV segment has outperformed all the other Commercial Vehicles segments and now accounts for more than 60 per cent of the industry. OEMs in the SCV segment need to focus on creating the demand for SCVs by developing newer applications. They also need to liaise with government authorities in order to further promote SCV passengers,” says Wilfried Aulbur, managing partner, Roland Berger Strategy Consultants India.

The study also reveals that the future of this segment depends significantly on the rise of unique applications of the vehicles. OEMs could augment the current demand by continuously developing newer applications and educating the customers on the benefits of using SCVs.

New applications are being developed to expand the market prompting newer customers to buy SCVs. Poultry, milk and water distribution industries are some of the new applications that have been witnessed over the last few years.

The segment was particularly established in 2005 with the launch of ACE Truck in the sub two ton category, which has considerably grown since then.

The segment grew by 30 per cent CAGR between the year 2010 and 2012 and it declined only by only 1 per cent CAGR over the last 2 years while the overall industry declined by 11 per cent CAGR.