Skip to main content

CV Sales May Stay in Top Gear for 2 years on GST, Infra Boost

By
 CV Sales May Stay in Top Gear for 2 years on GST, Infra Boost
Sales of medium and heavy commercial vehicles are set to reach a new high this financial year and continue the growth momentum into next year, with the positive rub-off from the government’s infrastructure push and implementation of GST, as well as strict enforcement of rules against overloading driving demand.
Sales of commercial vehicles in the 16-49-tonne category this fiscal year are set to top the record of 245,000 units achieved in 2011-12, industry executives estimate. In construction equipment, sales are expected to cross the 50,000-unit mark for the first time and be as much as 55,000 units, thanks primarily to the rapid pace at which the country is building highways and other infrastructure.
Commercial vehicle sales, particularly of higher tonnage trucks, are seen as an indicator of economic activity. The strong showing by the sector and expectations among industry executives for the momentum to continue into the next year and beyond bode well for the government, at a time when it is striving to push economic growth with just over a year remaining for elections.
“The next two years look positive for the truck industry,” said Anuj Kathuria, head of the global trucks segment at Ashok Leyland, the nation’s second largest maker of CVs. “The continued expenses on infra, housing and other major projects are bound to create good demand. Schemes such as Sagar Mala, freight corridor construction, smart cities, etc., will require commodity movement, which will drive vehicle demand.”
The drive against overloaded trucks, which have been a common sight on India’s highways, is making operators to purchase new vehicles, said executives. Another boon is the scrapping of check posts on state borders after GST created a national market by subsuming several state and central taxes.
“Enforcement of overloading restrictions and optimisation of warehousing solutions post GST have prompted large fleet operators to replace older vehicles with modern multiaxle trucks,” said Vinod Aggarwal, MD of VE Commercial Vehicles that makes the Volvo and Eicher tagged trucks in India. “Sales of medium and heavy duty trucks have already crossed 224,000 units in the first nine months (April-December) of the fiscal year. We should surpass the peak seen in 2011-12.” GST has made long haul multiaxle vehicles more economical, as transportation of commodities will happen from plants to the market directly, Ashok Leyland’s Kathuria said.
Demand for intermediate commercial vehicles, too, is expected to remain strong with an increase in the need for intra-city movement. Including light commercial vehicles, industry executives expect sales in the commercial vehicle sector to grow 13%, the fastest pace in seven years. A Looking Ahead Conclave organised by the Society of Indian Automobile Manufacturers projected sales to grow 9-11% in the medium and heavy commercial vehicles segment next fiscal year starting April and 10% in construction equipment. Sales of light commercial vehicles are expected to expand 10-12% next fiscal year.
The Economic Times, New Delhi, 06th February, 2018
.....

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more