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Auto Part Suppliers Unsure Of Medium & Heavy Commerical Vehicles Segment

The medium & heavy commercial vehicles (MHCV) segment has seen improving sales in the past three months. The expansion, after a prolonged period of falling sales, gives credence to expectations of an economic turnaround and much-needed relief to vehicle manufactures, but...

The medium & heavy commercial vehicles (MHCV) segment has seen improving sales in the past three months. The expansion, after a prolonged period of falling sales, gives credence to expectations of an economic turnaround and much-needed relief to vehicle manufactures, but parts suppliers to the MHCV segment aren't ready to rejoice yet.

A number of suppliers that ET spoke to said they would wait until the end of this fiscal year to decide whether to consider the current trend as sustainable. If the volume for the quarter through March 2015 is healthy, then it can be considered as the first confirmatory signal for a real turnaround, they said.While MHCV sales have been increasing since June, overall CV sales, including those of light vehicles, have been slower to return to the positive territory--they rose for the first time in two-and-half years in August. For cars, August was the fourth straight month of higher sales.

B Rajaram, vice president of Wheels India, a steel-wheel manufacturer and part of the TVS Group, said the current trend in the segment can't be termed as a genuine recovery yet "though there has been phenomenal improvement in the sentiment within the fleet operators group". He expects the phasing out of diesel subsidy to be positive, as "diesel rates will not increase henceforth" and CV operators may not delay purchases citing uncertainties over fuel price.Some vendors say the base effect is helping latest comparisons as MHCV sales had fallen steeply in the past two years, and the latest numbers may not be as healthy as they perceive to be."After the CV sales dropped for the last two consecutive years, even a minor uptick now will depict a higher percentage growth in the recovery ... Hence, this (the latest improvement in year-overyear sales) will not be a right way to gauge the recovery of CV volumes," said the managing director of an auto-ancillary company.

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