Given the pace of demand revival, sales will rescale peak levels in 2023: Satyakam Arya, Daimler India Commercial Vehicles

The slowdown and the pandemic pushed commercial vehicle sales to their lowest level in 11 years in FY21. However, looking at the revival in demand in the past couple of months, the segment can come near the peak sales levels in 2023 itself, a top industry official said.

Medium and heavy truck sales between January and July this year has already surpassed volumes of the entire 2020 and is expected to close at almost double the sales volume compared to last year, said Satyakam Arya, Managing Director, and CEO, Daimler India Commercial Vehicles (DICV), in an exclusive interaction with Moneycontrol.

“The demand is coming back and recovery from the second wave has been much better than the first one. This year the market will be a lot better than in 2020. We could come near the peak sales in 2023,” Arya said.

Last year, the industry ended with sales of 106,000 trucks. This year till July, the number was already 107,000 units. “If this trend continues, the industry will close at around 205,000. Though demand is still not to normal levels but if it continues like this, we believe that in 2022, the industry would be in the region of 250,000-280,000 trucks - the 2019 level,” Arya added.

According to registration data shared by the Federation of Automobile Dealer Association (FADA), CV retail sales grew by 98 percent in August to 53,150 units as against 26,851 units sold in the same month last year and only 15 percent lower than August 2019 sales. In July 2021, CV sales had grown by 166 percent.

“CV segment continues to witness some recovery coming back majorly due to low base of last year. While small commercial vehicles had already shown good recovery due to intracity goods movement, medium and heavy commercial vehicles are picking up pace in specific geographies where the Government is rolling out infrastructure projects,” FADA noted.

Demand for heavy trucks from the infrastructure sector, mining, and long-haul segments has been on the rise. E-commerce has emerged as a sunrise segment for small and intermediate commercial vehicle segments.

“Construction continues to be a strong segment. We see very strong buying from the e-commerce segment... even stronger than last year. We are also seeing demand revival from the long-haul sectors like cement and steel and these were the segments which have been most depressed,” Arya added.

DICV’s own volumes at 7,000 units have more than doubled in the January to June period compared to the same six months last year. The company is operating its plant in Chennai in two shifts and is prepared to go to three shifts if demand moves even higher. Arya, however, warns about the supply chain niggles that have been troubling the auto industry since the past eight months.

“The supply chain continues to be a challenge and from here on matching demand with supply till 2023 would be the name of the game. In addition, we have the third wave (of the pandemic) which some say would have a much milder impact than the first two but nobody can predict about its severity,” Arya added.