Tepid demand from the infrastructure sector for freight led to lacklustre truck rentals in February, though fleet operators are expecting a pickup in occupancy in the current month on the back of summer stocking demands that will fuel fiscal year-end goods dispatches.
Another factor that has hit small transporters is a notification by the government last month proposing increased renewal charges for registration and fitness certificates. Small fleet operators fear this move could further strain their financial viability, according to Shriram Mobility Bulletin released today.
It said the All Indian Motor Transport Congress has raised concerns over the increased charges that will raise costs for fleet owners.
Rentals fall
“The demand for trucks in February was lacklustre. The impact of the rate cut by RBI is yet to percolate down to borrowers totally as interest rate resets are underway,” said Shriram Finance Managing Director and CEO Y S Chakravarti.
Sectors such as the Delhi-Hyderabad-Delhi route saw a 1.1 per cent month-on-month (MoM) fall in truck rentals. Though some other routes saw an increase, it was fairly small.
In the Delhi-Kolkata-Delhi route rentals increased 1.3 per cent MoM while the Bengaluru-Mumbai-Bengaluru route saw a rise of 1.6 per cent.
“With March fiscal end coming, the expectation is that manufacturers across locations may move goods to commercial hubs, thus increasing trucking activity,” Chakravarti said.
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The dip in truck rentals was accompanied by a slowdown in vehicle sales across all segments, as buyers delayed purchases, awaiting new fiscal-year discounts in March-April, the report said.
On a month-on-month basis sales of motor cars declined by 37 per cent, agricultural trailers and tractors dropped by 30 per cent and 31 per cent. The sales in the commercial vehicles segment also took a hit, with goods carriers falling by 18 per cent, three-wheeler goods carriers declining by 10 per cent, and commercial tractors dropping by 17 per cent.
Electric vehicle sales also saw a fall in February but e-rickshaws with carts bucked the trend reporting a 11 per cent growth, indicating the resilience in demand for last mile connectivity.
The sluggish demand across sectors was also reflected in fuel consumption patterns, the bulletin said.
The drop in petrol and diesel consumption in February coupled with flat FASTag transaction volumes and values showed reduced movement of goods and passengers resulting in a slowdown in road transport and logistics activity.
The dip in vehicle sales and transportation demand highlights broader economic uncertainties, as businesses remain cautious ahead of the new fiscal year, it said.
