Mini-trucks to drive commercial vehicles sales

Chennai: Commercial vehicle sales in India are set to double to 1.6 million units by 2016-17, driven by mini trucks, says Ernst & Young.

Last year, the commercial vehicle industry in the country grew at 8 per cent to 809,000 units. This year it is expected to post 10 per cent growth, said Mr Rakesh Batra, National Leader - Automotive Sector, Ernst & Young. “Things will pick up after the second quarter. The third and fourth quarters, especially, will see strong growth.”

In the next five years, the commercial vehicle industry is expected to grow at a CAGR of 15 per cent, according to an E&Y report ‘Mega trends shaping the Indian commercial vehicle industry’. A chunk of this growth will come from mini trucks or small commercial vehicles, said Mr Batra.

In the last three-four years, the SCV segment (sub 1-tonne load factor) has been growing at 30 per cent, though on a small base. The major players in the space are Tata Ace and Mahindra Maximo. Ashok Leyland too launched the light commercial vehicle Dost early this year (1.25 tonne).

“In the next few years, SCV growth will settle down to 20 per cent.”

The ratio of mini trucks to the overall number of trucks is 1.25 in India. In the developed countries, it is around 10:1, says Mr Batra. The ration is 4:1 in the emerging markets of Russia and Brazil.

Although one cannot predict the SCV density in India in the coming years, the experience of emerging markets suggests a similar story evolving here too, said Mr Batra.