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Why Commercial Vehicles Sales Fell To An All Time Low In April?

As per data released by industrial body Siam, MHCV sales stood at just 10,602 units during the month as compared to 23,515 units sold in the same month last year

Photo Credit : Subhabrata Das

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High demand for BS-III compliant commercial vehicles due to huge discounts given by OEMs on March 30th and 31st and delay in buying as GST is soon to be rolled out, sale of medium and heavy commercial vehicles (MHCV) declined by 54.91 per cent in April 2017- the highest single month fall since 2008-09.

As per data released by industrial body Siam, MHCV sales stood at just 10,602 units during the month as compared to 23,515 units sold in the same month last year. The total CV segment recorded a fall of 23 per cent during April to 41,490 units as against 53,835 units sold in the same month last year.

Another reason why MHCVs sales declined is the sharp increase in price made by manufacturers last month. All the CV makers increased their prices between 8-10 per cent for BS-IV models.

Abdul Majeed, partner at consultancy firm PwC said, “Move to BS-IV which tempted many people to make early purchase and their anticipation as how GST will change logistic is holding them to make purchase.”

Among the MHCV segment, the cargo vehicles were hit the most as sales declined by 59 per cent to 8,194 units during the month. However, goods carrying LCVs registered a growth of 7 per cent during the same month to 27,505 units.

The CV industry still continues to face the impact of demonetisation. "After effect of demonetisation still remain in the segment. Besides, pre buying in the month of February and March also impact April sales,” SIAM's Deputy Director General, Sugato Sen said.

The industrial body has forecasted a 4-6 per cent growth in fiscal 2018 for the commercial vehicles segment.

“We can expect growth in the last two quarters because of GST roll-out coupled with good monsoon and increase in infrastructure activities,” Majeed said.


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