The Indian Commercial Vehicle, specifically the Truck Industry, is suffering a downswing since the third quarter of FY 2020. With less than half a million sales made in FY 2021, the Indian Truck market recorded a minus CAGR (Compound Annual Growth Rate) of 3% between FY 2012 to FY 2021.
Tata Motors is a leading player in the market, accounting for 43% shares in FY 2021, after dropping 18% market share in the past ten years. However, the company registered a CAGR of -6.6% from FY 2012 to 2021, appearing to topple its annual growth. However, Ashok Leyland, Mahindra, or Maruti Suzuki, Isuzu, and Volvo registered positive yearly growth at the same time. With Mahindra, Ashok Leyland, and Maruti Suzuki scoring 9%, 7%, and 5% respectively in the early ten years, they appear to straighten the market growth.
The key reason behind obtaining the market share is the entry into a new division and, secondly, launching a new vehicle range at a competitive price. Moreover, it is undeniable that the new generation massively influences the purchase decision and the changing vehicle purchase cycle. Hence, customers seek to test other brands available, which started the incremental value in Mahindra, Maruti and Ashok Leyland's market share in Indian Truck Industry Trend.
While the whole world has been brought to a standstill, OEMs have introduced a new range of products. The trucks are designed for demanding applications such as courier and parcel, poultry, white goods, agro-pear, e-commerce, FMCG, garbage dumpers, auto parts and reefers.
Customers are expecting efficient solutions about transport and not just vehicles. As a result, OEMs provide the After Sales Service, advanced technology, and Digital technology solution at affordable prices to meet customer expectations.
Tipper, Tractor-Trailer, and Rigid Haulage:
After launching new outcomes with improved payload capacity, customers began to move to higher tonnage tippers to get more real TCO.
In the entire Truck segment, Tata Motors rules about 57% market share. On the other hand, Ashok Leyland is the second-highest OEM with a 29% market share. And Eicher grew its market share from 5% to 8% in just one year in the Tipper division.
Tata Motors rules 60% in the heavy-duty tipper segment, and Ashok Leyland leads a 30% market share. On the other hand, Volvo has more than 90% market share in the premium Tipper segment.
The rigid Haulage division tops the Indian chart as the most outstanding Indian truck industry division because 90% of sales come from the Rigid Haulage division. Tata Motors, Ashok Leyland and Mahindra are amongst other leading performers in this division.
The tractor Trailer section got shrunk. It occurred due to the launching of heavy-duty Rigid Haulage and the changing business dynamics. As a result, Tata Motors emerged as the market leader holding 64% and Ashok Leyland, with 27% market share in FY 2021.
Segment level Analysis:
Heavy Duty Truck (HDT):
Except for Pickup, the all-sub division of the Truck Industry recorded a negative CAGR from FY 2012 to FY 2021. The Pickup segment recorded an 8% CAGR. The HDT segment registered a CAGR of -7%. While MDT, LDT, and Mini Truck listed -6% CAGR in the last ten years.
In FY 2016, HDT was the highest segment in the Indian Truck market with a 36% Division share. However, it had only a 21% market share in FY 2021. On the other hand, the need for Mini and Pick Up Truck expanded because of the increased usage of the trucks.
After FY 2019, HDT rolled out to be the most affected division, including a reduction of 50% and 15% in FY 2020 and FY 2021, respectively.
Tata Motors is the front player in the HDT division but lost a 12% market share in the prior ten years. BharatBenz is also one of the causes that some of the volumes have been moved to BharatBenz's sales pocket. Eicher is competitive to gain market share in this division. The company raised its market share from 3% in FY 2012 to 7% in FY 2021, with a CAGR of 5%.
Volvo Trucks recorded the largest degrowth in the last two years due to weak interest in some specific segments.
Medium-Duty Truck (MDT):
Tata Motors managed to obtain momentum in this division. In FY 2016, 2017, and 2018, Eicher had been the pilot in this division. After FY 2018, Tata is onward of Eicher, with a 46% business share in FY 2021.
Eicher lost its grip in this segment, maintaining only a 31.5% market share in FY 2021. On the other hand, Ashok Leyland focused on this division and gained a 9% market share with a 4% CAGR in the last ten years.
Light-Duty Truck (LDT):
In FY 2012, Tata Motors owned a 70% market share. But in FY 2021, it has just a 56% market share showing a drop of 14%.
The group lost 14% market share in the last ten years. On the other hand, Eicher's new outcome launches helped the brand to reach 29% from the 13% market share in the early decade. As a result, SML and Isuzu registered 3.8% and 1.2% CAGR between FY 2012 to FY 2021.
Pick Up Segment:
This is one of the fastest developing and currently the most significant segments in the Indian Truck Industry. Due to the company product portfolio and pickup size, Isuzu launched its Pickup truck in this segment. The Pickup segment is supposed to make a prominent presence in this division due to its quality and performance.
Tata Launched Tata Intra vehicle's range and Yodha to gain market share. Ashok Leyland also introduced Bada Dost to target a new customer section for Driver cum owner but the more enjoyable driving experience.
In FY 2021, Mini Truck is the second biggest truck section. Unfortunately, the pandemic induced a pause in its growth. Customers switched to purchasing Pickup trucks instead of Mini trucks to get more applications and more reliable business.
Tata Motor is the market head with a 62% market share. However, the company lost a 12% market share in the last decade.
After the entry of Maruti Suzuki, Tata Motors lost 9%, and Mahindra lost 11% market share. However, Maruti's outcome position and specifications supported the company to become the fastest-growing OEM in this division with a 21% market share.
However, the year 2020-2021 brought the whole world to a standstill, and the industrial economy collapsed as before. Nevertheless, demand is set to increase in short to medium term in certain sectors such as construction, mining, e-commerce and commercial vehicle.