Truck Rentals stay subdued in May
The drop in Truck Rentals has continued since November 2018. Indian Foundation of Transport Research (IFTRTT) and Training, during last month (May 2019) the truck rentals across the key 75 trunk route reduced by 1% to 1.5%.
Slower economic growth has resulted in truck rentals in India continuing to remain subdued in May.
The drop in rentals has continued since November 2018.
According to SP Singh, senior fellow and coordinator or Indian Foundation of Transport Research (IFTRTT) and Training, during last month (May 2019) the truck rentals across the key 75 trunk route reduced by 1% to 1.5%. Since November 2018, the rentals have slipped as much as 11% to 15% depending upon the routes.
The reasons attributed include a gradual slump in factory output, checkered working in the infrastructure sector and exports not taking advantage of US-China trade war.
“As a consequence, the freight market is flushed with oversupply of cargo vehicles in the open freight market and every month heavy truck sales have been on a southward journey with a double-digit drop in heavy truck sales during May as intermediate commercial vehicles and light commercial vehicles too having joined the negative flow,” said Singh.
Given the present economic scenario, both domestic and international, truck sales, despite soft funding options, may remain benign till H1 and, in fact, the delinquency in payment of EMIs by truckers may gather menacing proportions leading to high repossession of defaulting heavy goods carriers, read IFTRT’s monthly report.
Going forward, IFTRT is of the view that the future isn’t looking positive. The grim economic scenario, deepening domestic crisis in manufacturing as well as infrastructure sector coupled with ensuing drought-like situation in several parts of the country due to and below average monsoon forecast may affect goods transport trade in a big way.
Consequently, in the months to come, this may result in loan defaults, the surrender of goods carriers on vehicle loans and even re-possession of defaulted vehicles.