Medium and heavy truck market to grow 50-80% in 2021, says Daimler India Commercial Vehicle MD

MUMBAI: The Indian subsidiary of Daimler AG said the worst was over for the local truck market, which could grow 50-80% in 2021 as the economic activities start gaining momentum.

The world’s largest truck maker expects medium and heavy truck sales during the January-March quarter in India to be higher than pre-pandemic levels of 2019, as demand returns and continue to improve sequentially quarter after quarter.

“The worst is over when it comes to market demand,” Daimler India Commercial Vehicles managing director Satyakam Arya said. “During October to December, the demand came very close to the 2019 level. That shows that quarter by quarter it is recovering as the economic activity is picking up. We expect the medium and heavy trucks industry to register non-linear growth in 2021 with sales of between 150,000 and 200,000 units, up 50-80% over 2020, before returning to a linear growth rate in 2022.”

About 106,000 medium and heavy trucks were sold in 2020 in India, according to Arya. This is the lowest annual sales number in two decades.

The demand is coming from segments like construction and ecommerce, especially with support from small towns and rural India, he said.

On its part, the company has doubled its market share since the transition to BS-VI emission standards in India last April, Arya said. “We’ve seen overwhelming demand for Bharat Benz and we are absolutely prepared to benefit from this recovery and continue to grow profitably in this market,” Arya told ET.

However, the shortage of components and other supply chain issues could play spoilsport. “The worst is not over yet on the supply side. I believe in this quarter we will face some challenges, but we also expect that by next quarter, most of them will be resolved,” Arya said.

But he doesn’t expect the global shortage of semiconductors to affect the company’s production lines like it has impacted some other automakers.

While initial signs of recovery are visible in the truck segment, the sale of buses has been decimated since the pandemic struck.

The demand for buses continues to be a tenth of what it was pre-Covid. Arya expects bus sales to continue being low till mid-2021 followed by a sharp recovery as demand would suddenly boom when schools, colleges and offices resume normal operations. The demand for buses could be higher than even pre-Covid levels then, he said, as people would want to maintain social distancing on public means of transport, requiring more transport capacity.

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