The `worst-ever recession' in the commercial vehicle segment intensified further during the first quarter of the current year with HCV sales falling by a whopping 53 per cent.
According to early provisional estimates for the industry available with Ashok Leyland, only 11,770 heavy commercial vehicles were sold during April-June this year as against 24,800 vehicles sold during the corresponding three months during the previous year.
This 53 per cent fall, coming as it does after a 40 per cent fall during 1997-98, has pushed the industry to the brink.
Both Telco and Ashok Leyland, who are the only two HCV manufacturers in the country, have resorted to drastic cost cutting measures.
"As far as I can recollect, this has been the worst quarter during the last ten years,'' Ashok Leyland's Managing Director, R Seshasayee commented on the dismal performance during April-June this year.
Telco has faced a massive 61 per cent erosion in its HCV sales during the first quarter this year. According to provisional estimates, Telco sold only about 7250 HCVs as against 18,800 HCVs sold during the first quarter of 1997-98.
On the other hand, Ashok Leyland has faced a 25 per cent drop. It sold about 4520 HCVs during April-June this year as against 6000 HCVs sold during the corresponding period last year.
The bearish market has also brought about a shift in market shares with Ashok Leyland eating into Telco's shares. Leyland's market share has improved to 38 per cent from 24.6 per cent last year. However, it remains to be seen if Ashok Leyland's market share gains translates into increased volumes when the market revives.
The industry had sold about 1.50 lakh HCVs during 1993-94. This grew at a fast clip to 2.35 lakh HCVs during 1996-97 before the recession set in.
All the gains made during the intervening three years were wiped out last year, when sales slipped back almost to the 1993-94 level.
And if the first quarter is any indication, the current year could be the worst ever, industry sources said.
