India CV Sector
Low base likely to push growth further in coming months
The Commercial Vehicle (CV) sector, which is considered to be the barometer of an economy, recorded a surge of 19.9% in unit sales during FY18. The remarkable feature of this growth has been recovery post GST implementation (Image 1). Overall sales of CVs increased by 34% and 31% respectively in Q4CY17 and Q1CY18 after a decline of 9% in Q2CY17.
[Image 1: India CV quarterly unit sales and y-o-y change]
At the same time, the 12-month moving sum of CV sales witnessed sharp northwards movement post July-17 (Image 2). We assign this surge to fleet owners’ bulk buying post GST implementation. Moreover, this trend is expected to continue in coming months given improved macro-conditions at ground level, huge pent-up demand, the higher average age of the fleet and lower comparable (Q2CY17 was down 9% y-o-y).
[Image 2: India CV unit sales 12-month moving sum] Read the rest of this entry »