- 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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