CV OEMs are now sitting on sizeable stock of unsold inventory, which is worth approximately Rs. 46-58 billion : ICRA

  • Exports appears to be the most pragmatic solution for CV OEMs
  • Given the sizeable level of un-sold inventory levels (almost 30-40% of India’s CV Exports – ~110,000 units), clearing up the inventory could take up to two quarters depending on the model mix and inventory ageing
  • ICRA expects ~200 bps correction in EBITDA margins of CV Industry in the near-term
  • Domestic CV Sales of Top-5 OEMs grew by 7.7% in March 2017 on YoY basis
  • Domestic CV industry growth has moderated from 11.5% in FY 2016 to 3.5% in 9m FY 2017
  • M&HCV (Truck) segment has witnessed the most slowdown as reflected by a decline of 2.2% during the same period
  • Industry is likely to witness 6-8% growth in FY 2018 aided by higher budgetary allocation towards infrastructure and rural sectors,  potential implementation of scrappage program could trigger replacement demand according to ICRA

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CR-Commercial Vehicles-T-1-April 2017