Report On Indian Commercial Vehicle Industry
India is the 5h largest commercial vehicle manufacturer in world. Over the last couple of years the CV industry witnessed strong growth primarily due to healthy economic climate combined with massive investments from government in infrastructure activities as well as developing public transport. However in near term the pain exists for the CV industry due to declining IIP, slower GDP growth, steep hike in diesel prices and spiraling interest rate scenario.
The report gives valuable insights of the CV industry and outlook for the next 5 years. The report also focuses on key segments in the CV industry and the fundamentals driving the industry. Furthermore, report covers various regulatory issues and trend in duties imposed by the Government and detailed cost analysis and credit profile of the key players in the industry. The report also provide a brief note on impact of recent hike of diesel prices of the profitability of fleet operators.
The report presents CARE Research's forecasts of domestic market as well as exports for next five years till FY17. The outlook section also provides insights on profitability for next 2 fiscals after considering expected movement in important cost components like raw materials and selling and distribution expenses.
The company section in the report provides detailed profiles of top 4 players in the industry which forms approximate 90 per cent of the market including their financial and operational data. Vehicle Industry
The report is indispensable for any company operating in Commercial Vehicle and allied sectors, auto component companies, banks/ FIs, policy makers, research & academic organizations, other international and national agencies, etc.
SECTION- I CARE Research's OUTLOOK
Outlook on Indian CV industry
• Domestic market is expected to grow at a CAGR of 10-11 per cent by FY17
• GC demand to be majorly impacted by macroeconomic concerns in short term
• LCV GC to provide cushion for ailing growth levels for GC segment in short term
- ...Need for last mile transportation to drive SCV's growth
• M&HCV demand to decline in near term but long term factor remains intact
- ...ICVs to almost double in next 5 years
- ...MCVs to witness lowest growth levels in the industry
- MAVs to witness sharp slide in short term due to economic slowdown, but gradually recover in medium term
- Tractor Trailers (TT) to follow trajectory similar to MAVs
• Recent rise in diesel prices - An impact on reeling profitability of transport operators
- Healthy freight demand has been cushion for diesel price hikes in the past...
- With slowdown in the freight movement, the hike in the diesel prices will be challenging...
- ...onset of festive season might provide some respite to the transport operators
- Economic uncertainty continues to remain primary concern factor
• Investments in transport infrastructure coupled with rising fuel cost could drive the shift towards public transport
• Exports too would remain under pressure in short term
• Disbursement levels for CV financing likely to remain flat current fiscal
• Government initiatives towards improvement in infrastructure to boost CV demand in medium term
• Investments of around Rs 4,000-4,500 crore are expected in next 2 years
• Sluggish demand to put strain on utilization levels of the industry
Outlook on Profitability
• Top line to witness moderate growth
• Raw material cost may soften marginally, providing some respite for the manufacturers
• Return on capital employed to witness a drop, debt-equity to remain unchanged
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