Increase in load capacity halts commercial vehicle growth

The new axle load norms initiated by the government has proven to be a hazard to the commercial vehicle demand. The industry is jolted by the sudden change in the norms and its wide-ranging effects on the industry, going forward.

The increase in the load capacity of heavy-duty trucks by 20-25 per cent will have impacts on capacity expansion and change the design of vehicles. The automobile industry is already going through structural changes like BS-IV norms and getting ready for BS-VI norms by 2020.

Commercial vehicle segment was witnessing strong buoyancy in demand led by rising economic and infrastructure activity in the country. In addition, earlier the government had levied ban on heavy loading by freight carriers which had boosted strong demand for M&HCVs.

Industry experts consider the recent development as total disappointing and confusing on the part of the government. The industry expects demand for commercial vehicles to dry up in the near to medium and cost the industry to the tune of Rs. 7,000-8,000 crore.

The companies like Force Motors, Ashok Leyland, Tata Motors have fallen 5.6 per cent, 13 per cent and 2 per cent in the last two days post the announcement.