With cargo of agri-based and manufacturing based companies in Gujarat growing, the monthly truck rentals also increased by 15-20 per cent in fiscal 2011-12. For instance, the average truck rental from Ahmedabad to Mumbai, which used to be around Rs 20,000, shot up to Rs 30,000 per truck in the last fiscal.
"Last year the heavy commercial vehicles (HCV) segment grew tremendously on the back of growth in cargo. It was only part of the last quarter of fiscal 2011-12 that saw some slowdown. Nevertheless, almost the whole of last fiscal saw about 20 per cent growth in truck rentals in Gujarat," said BM Buch, senior general manager of Automotive Manufacturers Pvt. Ltd. (AML), an Ashok Leyland HCV dealer in Ahmedabad.
In fact, the rise in cargo is being attributed to growth in the manufacturing sector, especially among the small and medium enterprises (SMEs). "SMEs have seen growth in their business, be it manufacturing, machinery parts or agri-based products. So while the cargo has risen, we have witnessed an increase in truck rentals as a result," said Madan Chopra, president of Ahmedabad Transport Association (ATA). According to Chopra, per day rentals have increased from Rs 1,500-1,700 to Rs 2,000-2,200.
According to analyst firm Prabhudas Lilladher, the overall average monthly rental increase for April 2011-March 2012 witnessed 10.6-18.3 per cent increase in truck rentals on trunk routes. "The rentals rose on the back of robust double-digit increase in cargo from agri-based items like food grains, cereals, fresh fruits and vegetables, while small and medium enterprises sustained decent flow of dispatches from manufacturing sector," the firm stated.
In fact, for Global Transport Corporation, truck rentals rose by almost 50 per cent. "An average Ahmedabad-Mumbai dispatch used to earn us a truck rental of Rs 20,000 last year. It now does Rs 30,000. The dispatches have grown across segments, including cement, agricultural, machinery parts and plastics, among others," said Hemant Agrawal of Global Transport Corporation.
However, industry players said that the last quarter saw some dip in dispatches, thereby taking a toll on truck rentals. While January and February 2012 witnessed 5-6 per cent increase in truck rentals, it remained flat during March 2012 over the previous month with 8-10 per cent increase in the cargo flow from manufacturing sector despite drop in dispatches from fresh fruits and vegetables.
"With the last quarter slowing down truck rentals, we don't expect a similar growth in the current fiscal 2012-13. Moreover, with hike in excise duty, truck prices have also gone up by Rs 70,000-1 lakh more, which might impact truck sales," Buch added.