Udayavni Special

Overdue replacement cycle to drive recovery in commercial vehicles: VECVL


PTI, Aug 30, 2020, 3:20 PM IST

New Delhi: Overdue replacement cycle of commercial vehicles will drive recovery in the market, while demand for trucks is expected to start coming back from October-November onwards, according to a top official of Volvo Eicher Commercial Vehicles Limited (VECVL).

Despite the challenging market situation currently, the company, a joint venture between the Volvo Group and Eicher Motors Ltd, expects that truck makers may find it difficult to supply when demand starts coming back, especially when large fleet operators opt for efficiency and productivity to drive down operating costs.

“Even though the current market situation is very very tough, I am very optimistic because of a few reasons,” VECV Managing Director and CEO Vinod Aggarwal said.

“In the commercial vehicle (CV) market, trucks are replaced by big fleet operators in five to six years, but the CV market dropped by 40 per cent in 2019-20, and this year the first four months have been almost a washout and the market has dropped by almost 85-90 per cent,” he said.

“It means the replacement cycle which normally should have gone through last year has not happened. Similarly, this year the replacement has not yet happened. It does not mean that replacement is not required,” Aggarwal said.

“Two years ago, the government increased axle loads following which customers started loading their trucks with revised loads, even though those trucks were not designed to carry those extra loads,” he added.

“All those redesign has happened this April 1, when BS-VI migration happened,” he said, adding that VECVL has ensured that all its new trucks are designed to carry the extra load.

“Therefore if you drive for the best productivity, it means you will have to go in for replacement of the old trucks where you were carrying the extra loads with trucks which are not designed to carry those loads. It means you need more replacement,” Aggarwal added.

“The normal replacement cycle has not gone through and secondly, replacements have to happen because of the axle load norms,” he said.

“So there will be huge replacement demand which will get generated due to past pent up, axle load-related and current replacement (requirements). So you will see demand coming back very fast and when that happens, I think there will be difficulty in supplying the trucks,” Aggarwal asserted, adding that the normal replacement cycle is expected to start by September.

He further said, “Truck demand will start getting better with the start of the festive season from October-November onwards. The economy will recover in six to eight months and infrastructure investments will also start happening and based on that you will see better CV demand.”

When asked if the current situation of the economy won’t hurt demand, he said, “Of course the current situation is very challenging, but at the same time whatever goes down that goes up, that’s a natural principle. The situation is not going to stay like this.”

Though the economy is not in the best shape currently, things will come back to normal in six to eight months, he said.

“It will bounce back. Once this pandemic is over economic activity will start coming back, more and more ‘unlock’ is happening. People will start leading normal lives and there will be better treatment (of COVID-19) available and after sometime vaccines will also be available. So things will come back to normal, maybe in the next six to eight months,” Aggarwal said.

He said people are already learning to live with this situation and things will improve as confidence comes back in the economy.

India has tremendous potential for growth and if infrastructure investments happen, then consumption will go up, which in turn will entail the requirement of more trucks for transportation of goods.

Besides, he said logistics cost is still very high in India.

“If you have to drive down the logistics cost and increase efficiency and productivity, there will be more and more migration towards better productivity trucks,” he added.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

India might see ‘serious livelihood crisis’, says economist Jean Dreze

1971 war veteran Sqn Ldr Anil Bhalla (Retd) no more

Prioritise vaccinating those due for second dose of COVID-19 vaccine: Centre to states

Over-staying COVID-19 patients in hospitals should go home, says BSY

Telangana announces 10-day lockdown from May 12

Met Dept forecasts thunderstorm in Udupi, DK and Kodagu dists on Monday evening

‘Variant of Concern’: All you need to know about the Indian variant of Covid-19



Related Articles More

Flipkart to add 8 lakh sq ft warehousing space to strengthen grocery infrastructure

Sensex tanks over 450 pts in early trade; Nifty slips below 14,800

Sebi comes out with new proposal for segregation, monitoring of collateral at client level

Snapdeal launches Sanjeevani app to connect COVID patients with potential plasma donors

Ola to start doorstep delivery of oxygen concentrators to consumers

MUST WATCH

Udayavani 11 -May -2021 News Bulletin

Karnataka’s first oxygen express to reach Whitefield

Kuwait ship carrying medical oxygen arrives at Navamangalore port

Dr Dinesh Shetty | Current Situation in Karnataka | Udayavani

Young man comes to buy vegetables wearing doctor’s apron

Latest Additions

India might see ‘serious livelihood crisis’, says economist Jean Dreze

1971 war veteran Sqn Ldr Anil Bhalla (Retd) no more

Prioritise vaccinating those due for second dose of COVID-19 vaccine: Centre to states

Centre, states doing everything possible to tackle COVID crisis: Rajnath

Govt says no link between 5G and spread of COVID, urges public to not fall for baseless claims

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.