The fleet operators in the country are experience a sluggish market for moving their freight

KOLKATA, India - May 30, 2013 - PRLog -- In the financial year 2012, the commercial vehicle industry is undergoing a major slump. Sale of commercial vehicle in India has been reduced to a great extent and affects the profit margin of fleet operators.

This is due to some factors like hike in diesel prices, recession in demand, flat freight rates, high interest rates are, lack of foreign investment, turn down in the movement of goods from agriculture to manufacturing to export-import etc., which are mainly responsible for the slothful demand of Heavy Commercial Vehicles.

As per the report of the Indian Automobile Manufacturers Society, sales of medium and heavy commercial vehicles reduced to more or less 23% on-year whereas the total sales for commercial vehicles has been trim down to 2%.

Ashok Leyland, the leading commercial vehicle maker, has also witnessed a 23% fall in their net profit for the financial year at Rs. 433 crore. Bharatbenz is likely to sell only about 150 - 200 trucks a month between 25 & 31 ton trucks and tippers (4 models).

In the last financial year the level of sales has been affected owing to unfavorable monsoons resulting in slow-moving industrial output. In this fiscal year, it is expected that the market condition will not be improved for truck-owners and commercial vehicle makers as there will not be any kind of crucial fleet development program.

Though there were additional supplies of fleets in the market but still industrial output and truck rentals were not increased significantly in the last financial year. Truck rentals slipped 1.5-3% in March and were losing around 8% for the just-ended fiscal year. The usage of trucks especially the heavy-duty commercial vehicles were also reduced very much.

Defaulters for commercial vehicles loans are increasing at alarming rates as fleet operators find it difficult to reimburse arrears with the existing economic slowdown. It is expected that the quality of retail assets may go down in due course of time.

The fleet operators may experience a better situation as truck rentals have expected to increase by 1.2-2% this financial year regardless of the hike in diesel prices. The truck operators have to pay higher charges for operational costs, drivers’ salaries, purchasing of tyres and spare parts but still it is anticipated that commercial vehicles industry will raise at least 10% in the current year.

However, the industry usually develops 1.25% times in excess of the GDP growth. As a result, with the expansion of GDP, the industry will get a superior position.

The industry experts hope that the transaction of consumer goods will be increased in the metropolitan areas and the sales of LCVs are likely to attain double-digit growth in the present fiscal.

Probable Remedies to improve the situation :-

To cope up with the situation, some of the leading commercial vehicles makers in the country have taken the following initiatives:-

Tata Motors Ltd and Ashok Leyland, the largest truck and commercial vehicles maker are introducing a multi-layered policy to enhance sales in a slow-moving market at the same time as finding solutions to combat with increasing competition from foreign players like Daimler AG of Germany and Beiqi Foton Motor Co. Ltd of China.

They are producing more fuel-efficient models containing a superior power-to-weight ratio. They are also providing corporate discounts and extended warranties to increase their customer base.

Tata Motors has commenced an invincible warranty of 4 years, on its complete series of heavy trucks involving 25 tonnes and higher GVW (Gross Vehicle Weight). The 4-year warranty will be applied for the full range of tractor trailers, multi-axle trucks & tippers of 25 tonnes GVW & above, including the vehicle’s driveline (engine, gear box & rear axle) as a standard offer. Besides, the warranty for the other vehicles has been increased from 18 months to 24 months. The 4 year’s standard warranty will be introduced on the vehicles sold after 6th Jan 2013.

~~~~~

Published by

Rajib Dey
Content Writer
http://www.loadjunction.com [The first Indian online freight rate exchange portal for all kinds of truck freights]

Like us on facebook
http://www.facebook.com/LOADJUNCTION2012