Commercial Vehicle Industry: CV industry to be hit by election impact and driver shortage. chennai news

CHENNAI: The commercial vehicle industry is facing some headwinds in terms of shortage of drivers as well as demand slowdown ahead of the general elections. According to industry experts, fleet replacement demand from small operators has slowed down considerably in the calendar year so far and will only pick up once the election results are declared. Additionally, due to seasonal driver shortages in the industry, fleet operators are struggling with turnaround times. Satyakam Arya, MD and CEO, DICV, said, “January and February of 2024 are 10%-11% lower than 2023 due to base effect. and the impact of the upcoming general elections. Already small fleet owners have moved out and we expect the second quarter of calendar 2024 to be slow due to the elections. Based on the results, the second half of the calendar should be stronger. The overall medium and heavy commercial vehicle market should shrink to just under five lakh units by 2030, he said. The election impact is also being confirmed by market analysts. Kinjal Shah, VP and co-group head, ICRA Ratings, said, “In the near term, ICRA expects volumes to stabilize at a higher base, amid a momentary softening in economic activity in some sectors with the onset of general elections.” ICRA estimates the domestic CV industry volume to register 2%-5% year-on-year growth in FY2024, but subsequently, the industry is expected to stabilize at a rapid pace in FY2025, with volumes expected to grow by 4% in FY2025. There will be a decline of -7%. As far as driver availability goes, this is an ongoing problem. “Air-conditioned cabins will become mandatory in India from 2025 and the MoRTH notification has already come, so it should be extended,” said Vinod Aggarwal, MD and CEO, Volvo Eicher Commercial Vehicles and president of the Society of Indian Automobile Manufacturers (SIAM). In future, the driver will get greater comfort and ease in driving. The driver shortage has had no impact on fleet companies that are changing the way they handle their drivers, but companies that pay low wages and expect drivers to make up the rest with fuel savings.' The average salary of Rs 50,000 to Rs 60,000 per month is also increasing and the driver shortage will go away if driving conditions improve. As far as the impact of the elections is concerned, he said there will be some impact on a month-to-month basis. , “Language demand will pick up after June 4 as government projects will start and transport demand will pick up”. Ravi Bhatia, Chairman, JATO Dynamics, said that apart from this, the elections will not have any impact on the demand for passenger vehicles. “Elections are an exercise in uniting the people so more two-wheelers and people-carrying vehicles will be pressed into service. Otherwise it will be business as usual,” Bhatia said.

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