After festive rush, truck rentals dip in November: Shriram Mobility report

Truck rentals, which had returned to normal levels in October 2024 after the festive season rush, declined in November 2024 across most trunk routes due to softened demand for transportation services, according to a monthly report on the automobile sector released on Wednesday.

 

Truck rental rates (round trips) on key trunk routes like Delhi-Chennai-Delhi and Delhi-Bengaluru-Delhi declined by 1.4 per cent and 1 per cent respectively on a month-on-month (M-o-M) basis, stated the Shriram Mobility report by the Shriram Group.

 

Fleet occupancy levels dropped to around 60 per cent in November 2024 on a M-o-M basis. This decline was attributed to weak urban demand across categories, the Bharat Stage IV (BS IV) truck ban in the National Capital Region (NCR) due to air pollution, polling activities in Maharashtra, and reduced movement of agricultural produce.

 

A majority of trucks in the business are BS IV compliant. With the entry ban in the NCR region, these trucks are now transporting goods only up to the NCR border, from where smaller BS VI or compressed natural gas (CNG) trucks deliver the items within the region. This has resulted in increased logistics costs. Additionally, polling activities in Maharashtra slowed down logistics operations, further impacting truck rentals.

 

Y S Chakravarti, managing director and chief executive officer, Shriram Finance Ltd, said, "The festive season excitement has faded in the logistics sector. Private consumption, which constitutes 60 per cent of GDP, grew by 6 per cent, down from 7.4 per cent in the first quarter. This decline is due to weak urban consumption, higher food inflation, high borrowing costs, and weak real wage growth, despite a recovery in rural demand."

 

"Trucking activity in the NCR region nearly came to a halt with the ban on BS IV vehicles. Fleet occupancy levels also dropped to a new low of 60 per cent. The bright spot is agricultural output, which rose 3.5 per cent year-on-year in July-September, up from 2 per cent growth in the previous quarter," he added.

 

Automobile sector trends in November 2024 

Two-wheeler and tractor sales: November 2024 witnessed a surge in two-wheeler sales, which grew 27 per cent on a M-o-M basis, possibly due to spillover sales from Deepavali, which fell on the last day of October. The agricultural tractor segment also saw robust growth of 29 per cent on a M-o-M basis, supported by a good monsoon and expectations of strong agricultural output with the upcoming Rabi harvest in December and January.

 

Passenger and commercial vehicles: Sales of passenger vehicles dropped significantly, with car sales declining by 36 per cent on a M-o-M basis, attributed to the withdrawal of festive offers by car manufacturers. Similarly, sales of commercial vehicles saw a sharp decline, with bus sales falling by 32 per cent.

 

Electric vehicles (EVs): EV sales continued to decline, except in October when festive season offers temporarily boosted sales. In November, EV car sales dropped by 38 per cent, while sales of two-wheeler EVs declined by 19 per cent on a M-o-M basis. It remains to be seen if the upcoming launches of new two- and four-wheeler EVs will revive sales in the coming months.

 

Fuel consumption and toll trends 

Diesel consumption rose by 7 per cent, and petrol consumption increased marginally by 0.3 per cent in November 2024 on a M-o-M basis. FASTag transactions increased by 4 per cent, indicating higher traffic volumes. However, total toll collection value fell by 0.7 per cent on a M-o-M basis, possibly due to shorter trips or smaller vehicles paying lower toll charges compared to larger vehicles.