The worst is over for the commercial vehicle (CV) sector, which expects to witness a good recovery in the coming year, said Vinod Aggarwal, CEO of VE Commercial Vehicles (VECV), a joint venture between Volvo Group and Eicher Motors.
“As far as the industry is concerned, I think the worst period is behind us,” Mr. Aggarwal said in an interview.
“Going forward, you will see things getting better as the sentiments have become positive in the economy. In Q2, the GDP contraction was less than what was earlier anticipated. CV industry is totally dependent on the economy and sentiments.”
The VECV MD was speaking on the sidelines of the start of commercial operations at the JV’s new truck plant at Bagroda near Bhopal, Madhya Pradesh.
Mr. Aggarwal noted that the truck segment had seen year-on-year volume growth in both October and November, albeit on a lower base. “Numbers are still low, but the decline has stopped. We are optimistic about 2021. We expect replacement demand is going to be very high. The volumes will be less than 2018-19, but better than 2019-2020.”
In addition to pent-up replacement demand, Mr. Aggarwal said there was good demand for construction trucks, CNG trucks as well as from the e-commerce and haulage segments.
Mr. Aggarwal said the new plant had been set up with the latest manufacturing technologies and based on ‘industry 4.0’ standards and was very important from a strategic perspective.
“When the markets come back, we will have the adequate capacity for trucks... given the current demand scenario, we may not have that much immediate need from the numbers point of view However, from the organization, technology, production and manufacturing quality... this plant is of strategic importance for us , ” Mr. Aggarwal added.
