Vinod Agarwal, MD of Volvo Eicher Commercial Vehicle, predicts a revival in the commercial vehicle sector.

Vinod Agarwal, MD of Volvo Eicher Commercial Vehicle, expects a revival in the commercial vehicle business and is optimistic about sales figures.

The commercial vehicle (CV) market is on the mend, with sales set to exceed 4,35,000 units this fiscal year due to increased replacement demand and the revival of the bus segment, according to an industry executive. Following a peak of 5,77,479 commercial vehicles (with a capacity of more than 3.5 tonnes) sold in 2018-19, including export markets, volumes fell by more than half to 2,34,299 cars in 2020-21 due to a variety of circumstances. When the pandemic hit the country in the fiscal year that ended in March 2020, the industry had sold a total of 3,34,425 units.

In FY22, industry volumes totalled 43,199 units, representing a 47% year-on-year increase.

"Based on the growth that has occurred in the last four months and the present market scenario, it appears that we (the CV industry) will be somewhere between the peak and 2019-20. (level). We believe that the volume would be approximately 4,35,200 (units).” Volvo Eicher Commercial Vehicle (VECV) Managing Director Vinod Agarwal stated during a presentation at an investors' meeting.

VECV is a collaboration between Volvo Group of Sweden and Eicher Motors. He stated that several parts of the industry (such as light and medium duty vehicles) have already reached 2018-19 sales figures, while the school bus market, which was the hardest hit during the epidemic, with volumes falling to 11,000 from a peak of 65,000-70,000, has also recovered.

"With schools beginning to purchase buses, we anticipate a healthy recovery in the bus segment this year," he said. According to Agarwal, the heavy-duty truck market, the largest part of the CV industry, sold over 1.60 lakh units last fiscal year and is likely to sell between 2.20-2.25 lakh vehicles this year.

He stated that the heavy truck sales volume in 2018-19 was 2.95 lakh units.

"We expect the heavy-duty truck segment to be significantly below the 2018-19 level this year, but it may still reach about 2.20-25 lakh units," he added.

According to Agarwal, the next three years would be beneficial for the business due to its cyclical nature. Because replacement has not occurred in the last three years, there is a lot of pent-up demand. Furthermore, significant investment is being made in the infrastructure sector, and the economy is expanding.

"All in all, I think we're in good health, and the CV industry is on the mend," Agarwal said.