India is one of the leading manufacturers and exporters of commercial vehicles (CVs) in the world. Commercial Vehicles hold almost 4% of the total market share of all vehicles sold in India. This is in comparison to a 13% market share for passenger vehicles, 3 percent for three wheelers and a massive 80 percent held by two wheelers. The CV Industry has seen a seen a lot of ups and downs in the past few years and hence we present the sales analysis of the past 4 FYs for better interpretation.
The Commercial Vehicle Industry saw an upswing in the recent years owing to exponential growth in online retailing and logistics services, improving road & infra corridor and increase in development activities across the country. But the spike in the operating costs of running these vehicles, increasing customs duty, and lack of demand in the market due to the current liquidity crisis in the economy are some of the factors impeding the growth of the market. The ongoing Covid-19 outbreak has hurt the economic activities even further and the CV sales are on a free fall! The Commercial Vehicle sales have been going down for more than one-and-a-half years and looks to drop even further in FY21.
Lets us assess the category-wise CV sales in the past 4 Financial Years –
Based on the product type, the commercial vehicles market in India can be segmented into Light Commercial Vehicles (LCVs) and Medium & Heavy Commercial Vehicles (M&HCV). They are further categorized into Load/Goods or Passenger Carriers basis their usage.
In FY 2020, the Light Commercial Vehicles segment accounted for ~68.7% of the total sales volume of commercial vehicles! M&HCVs contributed to ~31.3% of the overall commercial vehicle sales.
The Commercial Vehicle Industry saw a steady growth between FY17 to FY19 where the overall volumes rose from 7.13 Lakh units in FY17 to 10.07 Lakh units in FY19. However; the Industry registered a massive decline of -28.7% in FY20 v/s FY19! Ongoing liquidity crunch, Goods and Services Tax (GST) implementation , BS-IV inventory correction and economic slowdown were the primary reasons for the degrowth.
The Load Carriers category (Trucks) was specifically hit with freight capacity increasing due to the new axle norms and limited support from freight demand.
Graphical Analysis of the CV Sales in India –
LCVs Sales Trend India –
Passenger Carriers (LCVs)
Force Motors commanded the No.1 position in the LCV Passenger Carriers category with a Market Share of 37.1%. Force Traveller has been the favorite vehicle for operators and been consistently selling well over the years. The vehicle has an increased acceptability in a wide range of operations – such as ambulance, school bus, feeder bus as well as app-based city transport. However; the overall sales of Force Motors Passenger Carriers has dropped consecutively in the past 4 FYs!
Tata Motors presented a stiff competition in the LCV Passenger Carrier category and commanded a Market Share of 36%. It was just 508 units short of market leader Force Motors in FY2020.
Volvo Eicher ranked 3rd in the category and registered a Market Share of 11.8%. The volumes for the brand has been varying over the past 4 years.
Swaraj Mazda had a similar performance to that of VECV. It could garner a Market Share of 8.7% in FY20.
M&M has lost the volumes to a larger extent in the category and would be extinct if the trend continues!
Load Carriers (LCVs)
M&M has been the undisputed leader in the category with a Market Share of over 42% in FY2020. M&M toppled the erstwhile leader Tata Motors way back in 2015 and has been holding the fort since then. Mahindra has a wide product range in the category – Bolero Pick-up, Jeeto, Supro, Bolero Maxxi Truck, Camper and Jayo.
Tata Motors ranked second and recorded a Market Share of 39.3% in FY2020. The fight between Mahindra & Tata for the throne in LCVs has always been interesting.
Ashok Leyland’s Dost & Partner have been fighting hard for gaining share in LCV segment. They were able to garner a market share of 9.8% for Ashok Leyland in FY2020.
Maruti Suzuki’s Carry has gained volumes exponentially in the past 4-5 years. However; the OEM wasn’t shielded from the downturn last year and recorded a degrowth in FY20 v/s FY19.
M&CVs Sales Trend India –
Passenger Carriers (M&HCVs)
Ashok Leyland was the Market Leader in the category for FY2020 with a Market Share of over 45%. Surprisingly; it was the only OEM to register a growth in FY20 v/s FY19!
Tata Motors recorded a Market Share of over 35% and along with Ashok Leyland commanded over 80% of the market!
VECV & Swaraj Mazda Isuzu Limited came in 3rd & 4th rankings respectively. However; their volumes in the category are way behind the likes of Leyland/Tata.
Load Carriers (M&HCVs)
Tata Motors in M&HCVs in like the Maruti Suzuki of passenger cars! Its market share in Load Carriers segment has been a whopping 52.8% in FY2020 and sold almost 1.8 times that of second ranked Ashok Leyland!
Ashok Leyland registered a massive YoY fall of -53.9% in FY20 v/s FY19! It was able to register a market share of over 28% in FY2020.
VECV ranked third and recorded sales of 25,187 units in FY2020 along with a Market Share of 13.6%.
The likes of M&M, SML and Volvo have been fighting to gain a hold in the segment.