With economic activity in deep freeze, truckmakers wait for signs of thaw

Balance-sheet squeeze makes purchase of trucks impractical, they say

This financial year (2020-21, or FY21) will be a complete washout for truckmakers as economic activity remains low and the balance sheet of fleet operators is feeling the squeeze, say analysts and transporters.

A grossly under-utilised capacity, coupled with issues related to financing, makes purchase of new trucks unfeasible.

The pain may linger beyond FY21 as freight generation - as and when the economy in deep freeze thaws - will happen with a lag. Therefore, buying new trucks will not be a priority for fleet operators already struggling for survival.

Vipin Sondhi, managing director (MD) and chief executive officer (CEO), Ashok Leyland, agrees,