Manufacturers upbeat on account of economic revival, year-end sales
A strong surge in manufacturing and mining sectors and a rise in demand from a government-backed bus purchase programme pushed sales of medium and heavy trucks and buses in November, helping the industry maintain the sales momentum of earlier months.
Vehicle manufacturers such as Mumbai-based Tata Motors and Chennai-based Ashok Leyland, which together control more than 70 per cent of the Indian commercial vehicle (CV) market, reported a surge of 116 per cent and 136 per cent, respectively, in sales during November compared to the same month a year ago.
Although sales in November last year were hit by the economic meltdown that crippled many key sectors that use medium and heavy commercial vehicle (M&HCV) trucks, company executives as well as market analysts said the uptick in the economy would be carried forward, aiding sales.
Prakash M Telang, managing director (India operations), Tata Motors, said, “The overall sense is that economic activity has started picking up. The manufacturing sector as picked up. We are seeing good movement in cement and some revival in the mining.”
“If the government continues its plan of national development of highways, it will lead to stable demand,” said Telang during a recent analyst conference call.
With the economy beating estimates by clocking a gross domestic product (GDP) growth of 7.9 per cent in the second quarter and with the remaining two quarters expected to report a growth of around 6.5 per cent, the CV demand is looking up.
A senior executive of Ashok Leyland, the second-largest CV maker in the country, said, “Apart from the fundamental reasons of demand pull like economic recovery, there will be largescale buying post January to escape the proposed hike in costs from April 1. The year-change effect will add to sales.”
Tata Motors’ sales in the M&HCV space stood at 12,507 units for November as compared to 5,792 units in the same month a year ago. The company had sold 11,916 units in October.
Sales of Ashok Leyland stood at 4,189 units for November as against 1,772 units in the same month last year. Sequentially, sales fell marginally from 4,851 units in October, the best month for Ashok Leyland.
Ashok Leyland’s bus sales have went up to almost 1,500 units in November from the low of less than 600 units in April.
Both Tata Motors and Ashok Leyland have been asked to speed up delivery of the buses that they have committed to supply under the Jawaharlal Nehru National Urban Renewal Mission. A total of 2,500 buses have to be delivered by both before the end of the financial year to Delhi Transport Corporation.
