Medium, heavy truck replacement demand drops

After a top gear run till earlier this year, the segment has been sputtering for the past three months and top truck and bus makers like Tata Motors, Ashok Leyland, Volvo Eicher have seen volume go completely stagnant.

Is the medium and heavy commercial vehicle (M&HCV) market running out of steam? After a top gear run till earlier this year, the segment has been sputtering for the past three months and top truck and bus makers like Tata Motors, Ashok Leyland, Volvo, Eicher have seen volume go completely stagnant.

Medium, heavy truck replacement demand drops

Analysts and industry experts are blaming replacement demand, which is beginning to peter out in the truck market.

According to a Kotak Institutional Equities report, M&HCV industry volumes have declined by 10%-11% yoy in August 2016 which makes last month the third consecutive month of weak volumes.

Top truck makers have already started to feel the pinch. Tata Motors, for instance, saw its M&HCV volumes hit a high of 15,276 units in May but stagnate at 12,395 units in June, 12,457 in July and 11,769 in August.

Ditto for Ashok Leyland which saw its M&HCV volumes remain almost same at 8,685 units in June, 8,182 units in July and 8,201 units in August. Volvo Eicher Commercial Vehicles followed the trend with 2,777 units in June, 2,565 units in July and 2,374 units in August.

Source: http://goo.gl/ZV8RKD