Truck rentals recover in May, says report

Truck rentals recovered by 4.5 per cent on trunk routes in May on account of passing on of the diesel price hike to the end-users coupled with a 15-20 per cent increase in the arrivals of fruits and vegetables, a brokerage firm has said.
The recovery, which was also due to a reduced number of trucks operating under the national permit during the period, came after a decline of 4.5 per cent in rentals in April, Prabhudas Lilladhar said in a report today.
The Government had increased diesel prices by Rs 1.20 per litre in mid-May.
At the same time, dispatches from factory output remained flat, except for improvement in shipments of FMCG, consumer durables and general merchandise while housing showed some signs of improvement with a pick-up in the construction activity in Tier-I & II cities, it said.

According to the report, there is an optimism in the truck freight market, where owners have started exploring and planning fleet replacement so that when the stalled infrastructure projects resume activity, they are able to capture business.
Also, the pace of decline in the medium and heavy commercial vehicle (M&HCV) goods segment has been curtailed to just 8 per cent Y-o-Y in May as against as against 14.0 per cent YoY decline in April, the report said.
"We believe M&HCV volumes have bottomed out and a recovery may start from the third quarter of the current fiscal onwards. At the same time, truck rentals are up 10 per cent Y-o-Y."

However, the light commercial vehicle goods segment goods segment saw a de-growth at 19.7 per cent during the period, it said adding, "We expect M&HCV goods segment to be flat-to- marginally positive in FY15.