With the economy struggling to get back on its feet, commercial vehicle YoY sales have dropped significantly across all states and Union Territories (UTs)
Among all auto segments, CVs have been hit hardest. As per vehicle registration data released by the Federation of Automobile Dealers Associations (FADA), the CV segment has registered 83.83% drop is YoY sales. A total of 10,509 units were sold in June 2020, as compared to 64,976 units sold in June last year.
Top ten states in CV sales
At 1,391 units, Tamil Nadu registered the max number of CV sales in June 2020. YoY sales are down -79.84%, as compared to 6,900 units sold in June last year. At number two is Karnataka with 1,173 units sold in June 2020. In comparison, 5,555 units were sold in June last year, which is YoY loss of -78.88%. Gujarat takes the third place with 1,030 units sold. Sales are down -75.96%, as against 4,284 units sold in June last year.
Other states in the top ten CV sales list in June 2020 are Uttar Pradesh 1,030 (units), Bihar (930), Maharashtra (808), Rajasthan (676), Odisha (615), Assam (599), and Kerala (548). Among the top ten, max negative growth in percentage terms is that of Maharashtra, followed by Uttar Pradesh and Rajasthan. Among all states, max de-growth was seen in Chandigarh, Manipur and Ladakh. Not even a single CV was sold in these states in June 2020. States with CV sales in single figures are J & K (9 units), Delhi (5), Puducherry (5), D &D & D & N (4), Sikkim (2) and Nagaland (1).
Key insights
FADA report states that CV sales in June 2020 have improved as compared to that of May 2020. Rural markets appear to be more robust in the current situation due to multiple factors including good harvest last year, early arrival of monsoon and prediction of normal monsoon in 2020. Demand for small commercial vehicles is picking up pace in rural markets. However, M&HCV and PV sales are yet to see the desired momentum, especially in urban areas. Mini lockdowns have been imposed in various cities, something that is adversely impacting CV sales.
For the revival of CV segment, FADA has requested the government to announce key policy decisions. One of the primary demands is the launch of an incentive based vehicle scrappage policy. This will not only boost CV sales, but also reduce emissions coming from old CVs. As of now, CVs older than 15 years are still operational across the country.
For July, FADA has predicted that CV sales will increase further. However, achieving pre-Covid level sales may be possible only by end of this year. For FY21, FADA has predicted de-growth for most auto segments including CVs in the range of 15% to 35%.
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