Truck Rental Rates Drop After Festive Rush, Vehicle Sales See Big Boost

Key Highlights:

• Truck rental rates dropped slightly in October, with declines of 2.1%, 1.6%, and 1.4% on major routes.
• Vehicle sales surged in October, with passenger cars and two-wheelers up by 76% and 72% month-over-month.
• EV sales grew by 24% for two-wheelers and 28% for passenger cars in October.
• Sales of earth-moving and commercial construction vehicles rose by 75% and 44%, driven by infrastructure projects.
• Rural market growth led to a 39% rise in tractor sales and a 67% increase in agricultural trailer sales.

As the festive season came to an end, truck rental rates had remained steady, but October saw a slight decline in these rates. This decline is part of a normal pattern, where truck rental rates often decrease after the festive period, which typically sees higher demand due to an increase in goods movement. Fleet utilization, which had risen in anticipation of the festive season, has now returned to its usual levels.

Truck rental rates on several key routes have seen a small drop in October. The Mumbai-Kolkata-Mumbai route experienced a 2.1% decrease, while the Bengaluru-Mumbai-Bengaluru route saw a 1.6% decline, and the Delhi-Bengaluru-Delhi route saw a reduction of 1.4%. On other major routes, truck rental rates have remained relatively stable, with no significant changes.

Strong Growth in Vehicle Sales

While truck rental services have seen this minor decline, vehicle sales in October have shown strong growth. Sales of passenger vehicles and two-wheelers surged by 76% and 72%, respectively, on a month-over-month basis. 

Compared to last year, sales increased by 24% for passenger vehicles and 37% for two-wheelers. The electric vehicle (EV) sector also experienced positive growth, with EV two-wheeler and passenger car sales growing by 24% and 28%, respectively, from the previous month.

Y S Chakravarti, Managing Director and Chief Executive Officer of Shriram Finance, attributed the rise in vehicle sales to festive discounts and appealing offers provided by manufacturers. He noted that after the Diwali period, truck rentals and fleet occupancy naturally dipped, which is typical during this time. He also mentioned that vehicle sales are expected to continue being strong, especially with the wedding season approaching, as it tends to support vehicle demand.

Infrastructure Growth Boosts Equipment Sales

In addition to the rise in vehicle sales, there has been an increase in infrastructure projects, particularly with the end of the monsoon season. This increase in activity has led to a significant rise in the sales of earth-moving equipment and commercial construction vehicles. Earth-moving equipment sales rose by 75% month-over-month, while commercial construction vehicle sales increased by 44%.

Rural Growth Fuels Tractor and Trailer Sales

Rural areas have also seen a boost in economic activity. Positive monsoon conditions and promising crop yields have supported growth in commercial tractor sales, which grew by 39% month-over-month. Similarly, agricultural trailer sales saw a rise of 67% compared to the previous month. Other vehicle categories such as e-rickshaws, goods carriers, and three-wheelers have also witnessed notable growth.

Role of Truck Rentals in India's Logistics Network

Truck rental services play an essential role in India's logistics and transportation network. They provide short-term, flexible solutions for businesses and individuals needing transportation for goods. Whether it’s moving household items, transporting goods over long distances, or handling bulk materials for industries like agriculture, manufacturing, and construction, truck rental services help facilitate the movement of goods across the country.

The truck rental sector in India offers a wide range of vehicle options, from light commercial vehicles (LCVs) to heavy-duty trucks. These services are available in major cities, regional hubs, and rural areas, ensuring that businesses in various sectors can access reliable transportation.

In recent years, technological advancements have made it easier for customers to book trucks, track shipments in real-time, and access flexible payment options. Digital platforms have streamlined the process, making truck rental services more accessible and convenient for users. Seasonal variations, such as increased demand during festive periods, can impact rental rates, which fluctuate in response to shifts in fleet utilization.

Truck rental services are crucial for India's economic growth. They provide businesses with an efficient and cost-effective way to manage logistics and support last-mile connectivity. Whether it's for long-distance transport or urban deliveries, truck rental services play a vital role in keeping the supply chain moving across the country.

Also Read: Delhi Government Introduces New Challan System for Commercial Vehicles

CMV360 Says

The decline in truck rental rates following the festive season is expected and reflects the normal patterns of fleet utilization. While rentals have decreased slightly, the growth in vehicle sales, especially in the EV sector, points to a positive trend for the transport and logistics industry. With continued growth in infrastructure projects and rural markets, the outlook for both vehicle sales and truck rental services remains strong.