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India has emerged one of the largest markets for commercial vehicles globally. The growth of the Indian CV market is underpinned by various macro and micro-economic factors which impact the allied industries generating demand for vehicles. Construction, logistics, mining and passenger transportation are a few of the major allied industries that need commercial vehicles.
India’s largest platform for acquiring and disposing of pre-owned commercial vehicles, Shriram Automall India Ltd. (SAMIL), has stood strong while competing with its counterparts in the market since its inception in 2011. The company is like a new breed venture that very successfully bridges the gap between the buyer and the seller through its innovative bidding platforms. It’s the multiple platforms that the company offers that enabled the transaction between them with complete transparency and trust.
Through extensive inventory providing pre-owned commercial vehicles of every make and model at reasonable prices, SAMIL has become the No.1 choice of customers throughout the country. The main growth drivers for the Indian CV industry are modernization of the trucking industry, structural shift to the hub & spoke model, improved road infrastructure, growing freight capacity and increase in exports from remote areas enabling the producers / manufacturers to move their goods to ports.
Shriram Automall understands the demand and requirements of its customers, thereby gaining a leading edge for implementing the most unique line-up of used commercial vehicles with a dedicated team for the segment. The CV industry, which is cyclical in nature, has seen fairly rapid growth in the past two years. It grew by 4.16 per cent by selling 714,232 units in 2016-17 as against 685,704 units in 2015-16. The M&HCV segment grew marginally by 0.05 per cent by selling 302,529 units in 2016-17 against 302,373 units in 2015-16. The LCV segment witnessed a strong growth of 7.40 per cent by selling 411,703 units in 2016-17 as compared to 383,331 units in the previous year.
Shriram Automall, playing its part in the used commercial vehicle market, has turned out to be the leader in the field, as since inception, it has already sold a total of 2,50,000 vehicles.
With the help of organized players like Shriram Automall, the used commercial vehicle market has its potential to maintain its future. And if the current trend persists, the market size will double before long.
The year 2017 is set to be a challenging one for the Indian commercial vehicle industry. In April 2017, it witnessed one of the biggest transformations in decades. Global warming necessitating drastic reduction in CO2 levels, the Government wants automakers to go in for cleaner, fuel-efficient vehicles. A cohesive step in this direction has been taken with the mandatory shift to BS-IV emission standards nationwide for all commercial vehicles from April 1, 2017. While the implementation of BS-IV was one that was foreseen, India will be leap-frogging to BS-V norms and adopting BS-VI norms by 2020.
Slowdown
For commercial vehicles, a slowdown was reported by almost all the manufacturers with the top players posting a double-digit fall in sales. In fact, in May 2017 many renowned players in the market reported a huge drop in sales as compared to the corresponding month last year. The primary reason for poor sales is the ban on BS-III vehicles. The trend seems to continue for several months due to abundant pre-buying in the three-day discount period before the ban. There, within no time the used commercial vehicle segment picked up as India remains a transport hub.
This probably is the most uncertain time to talk about the sales outlook of the CV industry after the implementation of GST. However, the experts in the industry are confident that price reduction will boost demand for commercial vehicles. This new tax initiative by the Government will bring about significant gains to the country’s economy.
With the implementation of BS-IV and recently introduced GST, the demand for the commercial vehicles in coming times will only get higher which will eventually lead to a rise in demand for used commercial vehicles as well.
The ratio of new commercial vehicles sold to that of the old ones is 1:1. This means that people are equally interested in going for a properly maintained pre-owned vehicle as compared to investing in a new one. To match the demand, Shriram Automall across the country, thus making it easy for customers to reach out for their convenient services.
SAMIL makes the complete process so easy and accessible for their customers through its Physical Bidding Concept. These events follow an organized procedure wherein a customer can visit the nearest Automall to inspect a range of pre-owned commercial vehicles. SAMIL also enhances the reach of such vehicles while taking them to a huge number of customers sitting anywhere through its online bidding process.
SAMIL also provides the private treaty platform where customers can do one-on-one deals to buy or sell their vehicles and equipment. This platform enables them to directly make the transaction without having to participate in the bidding process with personalized approach and negotiated deals. It also makes the business easy for customers by providing parking facility at over 70 + locations and by providing easy financing options though its parent company Shriram Transport Finance Ltd.
Thus India, a growing economy, offers scope for expansion of the commercial vehicle industry will have a good future here. This will be in line with the increase in infrastructure spend, rapid urbanization and the entry of major multinational players in the country. As new norms take shape, the country’s economy will grow and so will its commercial vehicle industry.