Triggered by replacement demand and economic growth, India’s commercial vehicle segment sales are expected to reach its 2018-19 peak of 5,77,479 units in the coming financial year (2023-24), a top executive of Volvo Eicher Commercial Vehicle (VECV) has said.
Commercial vehicles (having more than 3.5 tonnes capacity) had dropped from the 2018-19 peak to 2,34,299 vehicles in 2020-21 and had increased to 3,43,199 units in 2021-22. “This year, it should be somewhere between 343,000 and an early peak of 577,000 units. We expect the industry to cross this earlier peak during the coming financial year. During the first half of the current financial year, the industry size was 210,000 versus last year’s first half of 125,000. There is a growth of 69 per cent,” said Vinod Agarwal, managing director of VECV. VECV is a joint venture between Volvo Group and Eicher Motors.
He added that commercial vehicles are going through a recovery cycle, and replacement demands have started, leading to increasing demand. “There are a lot of pent-up replacements. Another is a rise in sales due to a pick up in infrastructure activities. In addition, our economy is also growing and is expected to be around 7 per cent,” Agarwal added.
The company said that during the first half of the financial year 2022-23, it saw around 35,000 units, compared to 20,940 units during the first six months of the previous financial year. “We have seen good growth till now and second half also hopefully we should see better sales. Last year, the second half was around 36,000 units,” he added. VECV recorded sales of 6,631 units in September 2022 compared to 6,070 units in September 2021, registering a growth of 9.2 per cent.
Agarwal expected hope of a rise in electric vehicle sales with the government set to come out with more tenders. “We will participate in those tenders. We are also working on electric trucks, whenever there is a requirement, we will come out with that. We will continue to work with leading private bus operators and state transport undertakings in this area,” he added. The company has already floated a separate subsidiary to manufacture, sell and operate electric buses. The division will be named VE Electric Mobility. So far, VECV has won a tender for supplying 40 electric buses to the Chandigarh Transport Undertaking and has been awarded an order for another 150 buses from the city of Surat in Bus Rapid Transport (BRT) application.
Recently, CESL (Convergence Energy Services) concluded a tender for 5,500 electric buses, and now the government has kicked off a new program called the National E- Bus Program, under which 50,000 electric buses would be deployed for public transportation within the next three to four years, of which requirement for 6000 buses already been floated. The company said it is betting on all these initiatives for future growth in this segment.