Commercial Vehicle Demand Rises Before Festive Season; Fleet Utilization Hits 90%

Key Highlights:

• Truck rentals stayed steady, with fleet utilization reaching 90%.
• Freight rates saw slight increases, with the Bengaluru-Mumbai route rising by 1.6%.
• Commercial vehicle sales grew, but EV sales fell behind expectations.
• Used vehicle prices rose in the 1.5 to 2-tonne category, while 16 to 19-tonne prices dropped.
• New passenger vehicle sales fell, with cars down 14% month-on-month.

Truck rents remained stable in September, despite significant pre-festive stocking across India. Fleet utilisation increased to 90%, the highest level seen recently, up from 70%. Freight rates remained stable without considerable adjustments, while there were slight increases on several routes. 

Route-Specific Freight Rate Changes

• The Bengaluru-Mumbai-Bengaluru route saw the highest increase in freight rates, rising by 1.6%.
• Kolkata-Guwahati-Kolkata route showed no change.
• The Delhi-Bengaluru-Delhi and Delhi-Mumbai-Delhi routes recorded moderate growth, with increases of 1% and 0.7%, respectively.

Growth in Commercial Vehicle Sales

Sales of commercial vehicles, including construction equipment and goods carriers, grew as demand picked up ahead of the festive season. The market for e-rickshaws with carts and three-wheeler goods carriers also showed growth. However, EV sales decreased in September as the Electric Mobility Promotion Scheme 2024 failed to achieve expectations.

Used Vehicle Market Trends

In the used commercial vehicle market, prices in the 1.5 to 2-tonne category jumped by 21% year on year, while prices in the 7.5 to 16-tonne category rose by 12%. 

However, prices in the 16-19-tonne category fell by 16%. Meanwhile, in the used passenger vehicle market, the Maruti Baleno and Maruti Dzire saw 8% and 7% year-on-year sales growth, respectively, while other segments remained under pressure. Most brands reported a decrease in used two-wheeler sales.

Passenger Vehicle Sales Decline

Passenger vehicle sales, including cars and two-wheelers, fell during the same time period. Despite rising tyre prices and toll charges, freight rates remained stable, however truck owners warned that a tariff increase may be required soon. 

The trucking industry also pointed to rising operational costs, with fleet operators appealing for lower gasoline prices to offset any anticipated freight rate increases.

Challenges in New Vehicle and EV Sales

New vehicle sales dropped sharply in September 2024. Car sales fell by 14% month-on-month and 20% year-on-year, while two-wheeler sales decreased by 10% month-on-month and 8% year-on-year. EV sales also struggled, with two-wheeler EV sales dropping by 23% month-on-month and 44% year-on-year, and four-wheeler EV sales down by 31% month-on-month and 43% year-on-year.

Fuel and Toll Trends

Petrol consumption decreased by 6% month-on-month in September 2024, and diesel consumption fell by 2%. Although fast-tag volumes dropped by 3.2%, overall toll revenues increased due to higher charges. E-way bill generation was flat month-on-month but showed a 13% increase year-on-year.

Also Read: Ashok Leyland Delivers First Electric Trucks to Billion Electric Mobility

CMV360 Says

The steady truck rentals and fleet utilization levels indicate strong demand ahead of the festive season. However, the drop in passenger and EV sales points to cautious consumer behavior, likely driven by high operational costs and the anticipation of upcoming deals. As the festive season approaches, it is expected that both demand and market conditions will improve, boosting sales across sectors.