New road projects, pickup in construction activities and a revival of mining have led to sustained high growth for tipper trucks across key markets even as overall demand for commercial vehicles has taken a hit in recent months.
Tipper trucks have grown by 40 per cent during April-August while the medium and heavy truck segment reported a decline of five per cent in the same period, according to data provided by the Society of Indian Automobile Manufacturers.
The continued demand for tippers has enthused manufacturers who believe the orders are not for replacement by fleet managers but new demand that had dried up long ago.
Anuj Kathuria, president, global trucks, Ashok Leyland, said, “Tippers have been growing robustly since April on the back of new road projects, construction and mining activities. Post-monsoon, we are expecting a further pickup in demand. Ashok Leyland gained five-six per cent share this year and presently has a share of 30 per cent in the tipper segment.”
In the tipper segment, the Chennai-based company achieved a growth of over 100 per cent in April-June this year compared to the same period last year, whereas the total industry volume expanded 57 per cent.
The growth has led to Ashok Leyland gaining market share, around 30 per cent this year as against around 20 per cent for the same quarter last year.
The total industry volume for tippers for the last financial year has been about 45,000. It is expected to grow by about 10-15 per cent for the current fiscal.
Rajesh Kaul, business head, intermediate, medium and heavy trucks, Tata Motors, said, “In H1 FY15-16, the growth in M&HCVs (medium and heavy commercial vehicle) was primarily driven by cargo vehicles, while growth from construction tippers came in during the second half of the year.” With the industry witnessing sales of over 19,000 tippers during April-August, Tata Motors recorded sales of around 10,000 units, continuing to lead in the tippers and overall M&HCV space.
“The (tipper) segment is expected to further grow on the back of an improving economy, with increasing construction, infrastructure, irrigation and mining activities. However, we need to wait out and watch the overall M&HCV performance in September and October, before drawing any long-term trend,” added Kaul.
During June, the domestic commercial vehicle industry registered 5.6 per cent growth in volume terms, much lower than the growth witnessed by the industry during the first two months of the current fiscal.
“The sharp decline in growth momentum appears to be an aberration and is likely to get corrected over the fiscal with expectation of healthy growth outlook from various end-user segments, especially infrastructure and mining. In addition, the growth outlook for the current year also factors in some pre-buying ahead of the complete roll-out of BS-IV emission norms by April 2017,” said a report from ICRA.