Vinod Aggarwal, VECV, Auto Information, DFL – ALL NEWS BY DF-L.DE

Vinod Aggarwal, VECV, Auto Information, DFL – ALL NEWS BY DF-L.DE

Vinod Aggarwal, VECV, Auto Information, DFL


Total, there’s a slowdown however on the identical time, it isn’t a lot of a priority within the medium to long run, mentioned Vinod Aggarwal, MD & CEO, VECV, in an interview with ET Now.
Edited excerpts:

So, for the general trade this 12 months, we’ll see good development and even in sub 5-ton section, there’s a development of greater than 20%.

A lot of the reviews that we’re studying appear to point that the Indian CV trade is getting into a downturn. What precisely is the sense that you’re getting? Is the slowdown of the previous couple of months structural or cyclical in nature, based on you?
There was slowdown in final 4 months ranging from November, However on the identical time, we must always not neglect that the final 12 months, the January to March quarter was a bumper quarter and this 12 months resulting from that enormous base impact, the numbers are much less as in comparison with the final quarter’s.
However the numbers are nonetheless good. For instance, in February, the heavy responsibility vehicles trade was nonetheless 25,000 plus and 5-15 ton vehicles trade was nonetheless 10,500 that are good numbers. So, general, there’s some slowdown however on the identical time, it isn’t a lot of a priority within the medium to long run.

Would you attribute it to solely excessive base impact or is it one thing else?

No, positively there’s liquidity crunch. After November, there was some downside with respect to the financing by NBFCs. To that extent, there’s liquidity crunch. Some retail prospects usually are not capable of get the financing as simply because it was earlier. Equally, the rates of interest have gone up a little bit bit. On the identical time, there was some influence of the axle load norms which have been modified final 12 months and resulting from that, greater capability can also be out there.

Then the replacements are required however on the identical time, the fleet operators are nonetheless ready and watching as a result of there’s plenty of uncertainty. I’m positive as soon as the elections are over, we must always get into common demand and there can be a really robust substitute cycle that’s coming in after which on the identical time you should have the pre-buying influence resulting from BS VI norms that’s going to kick in.

One other constructive for the trade is infrastructure investments. The infrastructure sector is doing very properly and on account of that, even when the general trade was wanting down as in comparison with the identical quarter (Jan to March) final 12 months, the development vehicles — tippers — have grown even in February and YTD, the expansion in tippers market is 50%. That could be a large development within the building vehicles.

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I might say infrastructure is constant to be very robust. Other than that, the e-commerce section is constant to result in plenty of calls for,. There are these positives that are in sectors that are resulting in good prospects for the trade in medium to long run.

Do you see the liquidity state of affairs enhance any time quickly? Are the headwinds that you simply simply highlighted, going to maintain within the close to to medium time period as properly?
No. The liquidity crunch will recover from as a result of I’ve seen numerous steps being taken by NBFCs to boost the medium to long run finance. They’re taking steps to substitute the short-term borrowing which they have been doing, by business papers. They’re popping out with increasingly more medium-term papers and on the identical time, there’s extra assist coming in from the banks. Banks have additionally began giving loans to NBFCs. I’m assured that the NBFCs’ liquidity crunch must be over in subsequent three to 6 months.

What’s the present stock stage at current? Is there droop in demand in heavy responsibility section or is it going to be extra broad-based?

So far as the stock is anxious, it’s completely regular so far as we’re involved. I’m not positive concerning the stock of the competitors however so far as Volvo Eicher is anxious, our stock is completely regular after which we have been rising.

Within the YTD foundation, we now have grown by 14%. In case you have a look at the trade additionally, on YTD foundation, it’s nonetheless rising handsomely and we’re going to new peaks in all of the segments like heavy responsibility vehicles which can contact gross sales of near 300,000 and lightweight and medium responsibility (5-15 tonne) truck gross sales will go as much as 1,10,000 to 1,15,00. The sooner peak was 1,03,000 in 2011-12. Buses gross sales must be round 65,000 to 75,000.

So, for the general trade this 12 months, we’ll see good development and even in sub 5-ton section, there’s a development of greater than 20%. Total CV trade will fare very properly this regardless of going through some headwinds in previous couple of months.

OEMs, based on you, are nonetheless doling out reductions so as to push gross sales. What precisely is the outlook on that entrance? Do you assume that type of a pattern goes to proceed?

Reductions are nonetheless persevering with. They’re on deal-to-deal foundation. If there’s a bulk deal, the low cost possibly greater. If there’s a retail deal, reductions possibly much less. So the reductions are persevering with. After all, you’ll be able to say it’s a issue of demand and provide. Capability is offered with the trade and consequently, reductions are nonetheless excessive.

Watch: How will CV market evolve amidst BS-VI and new trailer code, explains Vinod Aggarwal, CEO & MD, VECV

What’s the possible influence on margins given the discounting pattern and the decline that one has seen within the heavy and the medium section to date?

In first 9 months, we’re sustaining the margins at round 8-9%. After all, past some extent, we now have a really clear coverage that we are going to not run after the market share, we is not going to promote the vehicles at any value. So, we now have put an higher restrict past which we is not going to give the discounting past some extent. Every firm has its coverage on the identical and so far as we’re involved, we’re very clear that we are going to not transcend some extent.

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