With growing emphasis on inland manufacturing and infrastructure growth, commercial vehicle segment in India witnessed significant growth over the past few years. Despite being the smallest segment within the Indian automotive industry, the production volume of commercial vehicles across the subcontinent was the fourth largest in Asia in 2018. That year, over one million commercial vehicles were sold in the country. Commercial vehicle sales had been on an incline until the economic slowdown caught up with the automotive sector. The country witnessed the sharpest drop in monthly car sales in about 18 years. The country had previously been on track to become the third largest automotive market globally. The slowdown, which could be a consequence of a number of factors such as demonetization, GST and revised axle load regulations piled-up immense pressure on original equipment manufacturers.
The domestic commercial vehicle market in India was dominated by Tata Motors, with a share of about 44 percent. It was the largest commercial vehicle manufacturer in the country. Other market leaders included Mahindra & Mahindra, Ashok Leyland and Eicher Motors. Tata Motors saw a drop in sales from fiscal year 2018 to fiscal year 2019. The demand was expected to remain muted until early 2020 until the introduction of the new emission standards in April. The emission norms known as BS 6, short of Bharat Stage 6, were planned in order to reduce the pollution levels across the Indian cities, which were one of the most polluted cities across the globe. Several automotive OEMs had started working on new models in compliance with the new standards. In 2018, the truck and bus segment of the Volvo Eicher Commercial Vehicles group had already launched new CNG variants for the Pro 1000 series to strengthen the company’s green portfolio. Ashok Leyland was the first Indian manufacturer to receive the green light for its heavy-duty trucks in accordance with the new regulations. In 2019, the VEVC group also announced a new range of light-duty trucks that comply with the BS 6 regulations.
The focus of the government, however, has been on electrification of vehicles. The initial push was towards the two and three wheelers across the country. Nonetheless, to tone down the dependence on fossil fuels, a bigger focus on improved public transportation and electrification in other vehicle segments is needed. Market leaders Tata Motors unveiled their first electric truck in 2020 at the Auto Expo as part of the changing automotive market. However, challenges such as lack of proper charging infrastructure, relatively high prices of electric vehicles and long lanes of stagnant traffic need to be addressed as part of this major shift in the Indian automotive segment. The major penetration so far was in electric two-wheeler sales. Overall, the market penetration in the electric vehicle segment was a mere one percent. New startups and growing demands however, are likely to propel the shift to electrification at a much faster pace.