In the last few months, the sale of commercial vehicles (CVs) in India remained sluggish and the growth figures for the industry continued to remain muted. However, things have begun improving as sale of CVs has reportedly surged in the recent past, thereby offering a breather to the SME auto-part makers engaged in manufacturing components for the sector.
Hike in sales of CVs and launch of new models in July 2009 have once again revived the hopes of recovery of small-scale component vendors supplying auto-parts to this segment.
Worst seems to be over
The demand and off-take of CVs in India, which was on a decline for over a year, is now rising, indicating that the severe crisis faced by the CV industry is gradually subsiding. Industry giants such as Tata Motors and Eicher havereported a sales volume growth of 27% and 14%, respectively, in July 2009 over the same period last year.
“The sudden spurt in the sales of medium and heavy commercial vehicles (M&HCVs) and trucks in July 2009 has resulted in increased inquiries for small vendors providing spare parts to this sector. This is a positive sign, indicating that revival is round the corner,” said A Kumar, Proprietor of Yash Auto, a small-sized
Auto Parts dealer in Kolkata.
Moreover, the pick-up in infrastructure and construction activity over the past few months has also provided a fillip to the CV industry. The higher fund allocation for the infrastructure sector in the Union Budget 2009-10 is also expected to perk-up sales of heavy CVs.
“The lull in the construction and infrastructure sectors, which are key consuming markets of CVs, led to the slowdown in the CV industry as demand declined drastically. However, as CV sales is picking up again, we expect to witness a rise in growth this year,” said M Vora, Proprietor of Kunal Auto Services, a supplier of auto parts in Mumbai.
However, despite the signs of turnaround, the small-scale auto-part sellers to the CV industry vendors will have to tread with caution.
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