Commercial Vehicle exports falls due to slowing oil-run economies
While the domestic sale of commercial vehicle has been showing a healthy growth over the the last financial year, the exports of the CV have fallen in April after months of growth.
In April, the exports of commercial vehicle saw a year-on-year fall of 2.7 percent from 7,014 units in April 2015 to 6,826 units last month.
The fall has been primarily attributed to the slowdown in the oil dependent economies which are the main export markets for Indian OEMS.
“Bulk of the exports of commercial vehicles from India go to countries in Middle East and certain African countries like Nigeria, Algeria,” said Abdul Majeed, Partner, PwC. “The fall in oil prices over the last one year has seen these economies slowing down.”
The fall in exports is mainly because of the light commercial vehicle segment which exported less than last year. LCV segment saw a fall of 10.2 percent in the exports from 4,684 units in April last year to 4,206 last month. In LCV too, the fall has been primarily in the goods carrier which fell 12.4 percent.
The exports of the top three CV exporters, Tata Motors, Ashok Leyland, and Mahindra & Mahindra have fallen in April.
Tata Motors, which is is biggest exporter, exported 3,436 units in April. This is a marginal fall of 6 percent from the exports of 3,656 units in April 2015. Mahindra & Mahindra’s exports fell by 2.4 percent to 1,949 last month.
The biggest fall among the three was of Ashok Leyland exports as the company saw the exports dip 34.5 percent from 1019 units in April 2015 to 668.
“Many OEMs have targeted these selected African countries to build their base for exports. And the slowdown there is making the exports tough,” said Majeed.
Ashok Leyland had earlier said that it is looking to set up 2-3 manufacturing in Africa to boost sales and have shortlisted Kenya for the first manufacturing unit.