The total domestic sales of Commercial Vehicles for September 2012, shows a 1% increase whereas for fiscal year April-September 2012-13 shows a positive growth of 3%. Production of commercial vehicles for September falls by 5.2%, whereas for the period April to September of the fiscal year declines by 6.2% compared to the first half of fiscal last year.
It is notable that the steep decline of M&HCV segment is hard done by tough domestic economic conditions. The sales for this segment for September falls by 16.58% compared to last year while April –September period has the decline is at 16.29%. LCV segment is encouraging for the first half of the fiscal year 2012-13, domestic sales at 17.33% increase and production positive at 4.62%, compared to same period last year. And for the month of September positive growth rate of 14.5% is market where as production is down by 5.1% compared to last year.
Let’s take a look at the facts for the decline in M&HCV sector. This has been largely constituted by a slowdown in industrial production together with inflation. The long distance transporters are adversely affected. A decline in construction industry has also added to the misery.
The retail inflation in India hikes up to 9.75% in the month of October 2012 after being measured on the scale of Consumer Price Index (CPI). The retail inflation was marginal as it witnessed a rise of 0.02 percent of the noted rise of 9.73 percent in the month of September 2012.
A slowdown in manufacturing sector together with decline in consumer and capital good outputs has caused a decrease in industrial production by 0.4% in September. In terms of overall factory output measured by IIP (Index of Industrial Production) stayed at 2.5% for September 2011. Industrial output in this fiscal (April-September) falls down to 1%; from 5.1% which were the figures same period last year. At the same time industrial production growth rate for August stays at 2.3%.
In the manufacturing sector, the output fell down to 1.5% from 3.1% for September in comparison to last year. The production rate came down to 0.4% this fiscal year (April-September 2012-13) from a growth-rate of 5.5% same period last year.
The output of Capital goods declined by 12.2% in September which also marked a decline of 6.5% in September-2011. For the period April-September, output of capital goods declined to 13.7% ascompared to a growth of 4.6% during April-September in 2011-12.
Production of consumer good went down by 0.3% September which was showing a growth of 5.7% in September 2011. The April-September period of this fiscal is showing a growth of 2.5%, compared to 4.7% in the first half of last fiscal.
Production of consumer durables also declined by 1.7% in September against a growth of 8.9% at September last year. The output marks a growth of 3.8% for April-September against 5.3% in the same period last fiscal.
For consumer non-durables, the output growth was 1.1% in September compared to 2.7%, the same month last year. A positive growth of 1.4% is marked in this segment for the first half of this fiscal, as against 4% the same period of 2011-12.
A slowdown is recorded for basic goods production constitutes to 3.5% in September when compared to last year which was 5.3%. For the April-September period, growth further declined to 2.9% from 7.3%.
Also it is significant to note that the power generation growth rate falls to 3.9% this September, compared to 9% for September 2011. For the April-September period the growth is 4.6% against
9.4% in 2011-12.
Besides all these, mining output in September is starting to pick up and a growth of by 5.5% is marked for September 2012 which was going down at 7.5% in same month last year. Production for April-September remains flat as compared to a contraction of 1.6 percent in 2011-12.
Government is taking some positive routes to improve the economy. Manufacturing and construction industries will improve which betters the situation for heavy commercial vehicle industry. We believe the third quarter will show some growth in Commercial Vehicle Industry.