According to a recent report by leading research firm Ind-Ra, the sales growth of commercial vehicles declined to single digit trajectory in November. “In November 2018, CV sales volume increased at a 12-month low of 6% yoy due to a sales volume drop of 11% yoy in MHCVs, though the impact was partly offset by a modest 17% yoy growth in LCVs. Delayed purchases owing to weak customer sentiment, rising borrowing costs and increased fuel prices translated into modest sales growth. Sales were hit by lower credit availability owing to a liquidity crunch in the NBFC sector, which is the main source of funding for CVs,” the report said.
The implementation of new axle norms has also been attributed to be a strong factor for the decline in the sales growth. “Sales were affected by the new axle load norms that have increased the maximum load carrying capacity of existing vehicles. However, tipper segments and LCVs continued to record modest growth, backed by a rise in construction spending, steady demand from the rural economy and consumption-driven and e-commerce sectors,” it further said.