The fleet operators are experiencing a sluggish market in the country
In the financial year 2012, the commercial vehicle industry is undergoing a major slump. Sale of commercial vehicle in India has been reduced to a great extent and affects the profit margin of fleet operators.
This is due to some factors like hike in diesel prices, recession in demand, flat freight rates, high interest rates are, lack of foreign investment, turn down in the movement of goods from agriculture to manufacturing to export-import etc., which are mainly responsible for the slothful demand of Heavy Commercial Vehicles.
As per the report of the Indian Automobile Manufacturers Society, sales of medium and heavy ...view middle of the document...
It is expected that the quality of retail assets may go down in due course of time.
The fleet operators may experience a better situation as truck rentals have expected to increase by 1.2-2% this financial year regardless of the hike in diesel prices. The truck operators have to pay higher charges for operational costs, drivers’ salaries, purchasing of tyres and spare parts but still it is anticipated that commercial vehicles industry will raise at least 10% in the current year.
However, the industry usually develops 1.25% times in excess of the GDP growth. As a result, with the expansion of GDP, the industry will get a superior position.
The industry experts hope that the transaction of consumer goods will be increased in the metropolitan areas and the sales of LCVs are likely to attain double-digit growth in the present fiscal.
Probable Remedies to improve the situation :-
To cope up with the situation, some of the leading commercial vehicles makers in the country have taken the following initiatives:-
Tata Motors Ltd and Ashok...