Festive demand lifts truck freight rates and vehicle sales in October ahead of Diwali

Freight demand rose in the festive season before Diwali, and retail vehicle sales climbed in almost every segment. This gave India's transport sector good momentum in October and points to positive conditions for consumption and freight movement in the country.

Truck freight rates stayed firm on festive demand. On all the main routes that are tracked, rates rose year on year. The sharpest increase, 13 per cent, was on the Delhi-Kolkata-Delhi route. The Bengaluru-Mumbai-Bengaluru route recorded a 12 per cent rise and the Kolkata-Guwahati-Kolkata route 9 per cent. Rates on the remaining routes rose 4 to 7 per cent. Rates also held up against the previous month, rising 2 per cent on the Bengaluru-Mumbai-Bengaluru route and 1.4 per cent on the Delhi-Chennai-Delhi route.

However, the ban on the entry of BS IV trucks into the National Capital Region (NCR) caused difficulty for truck drivers and transporters. The ban created confusion at the border.

Two-wheeler sales were strong in October. Sales of motorcycles and scooters rose 29 per cent over the previous month. Pre-Diwali festive buying drove the gain, the biggest among all types of vehicles.

Sales of cars and construction equipment also rose. Motor car sales were 17 per cent higher than the previous month. Construction equipment sales rose 25 per cent and earthmoving equipment sales 7 per cent. Construction equipment sales were also up 21 per cent year on year.

Among other categories, sales of three-wheeler goods vehicles and farm trailers each rose 20 per cent over the previous month. Commercial tractor sales rose 15 per cent and goods vehicle sales 11 per cent. Maxi cab sales fell 11 per cent and bus sales 2 per cent.

The year-on-year picture for vehicle sales was mixed. Sales had hit their highest level in the festive season of October last year, so this year's comparison was against a high base. Three-wheeler goods vehicle sales rose the most, by 25 per cent. Bus sales rose 14 per cent and farm tractor sales 7 per cent.

In contrast, sales of motorcycles and scooters fell 28 per cent, commercial tractors 24 per cent, motor cars 15 per cent, earthmoving equipment 12 per cent and farm trailers 11 per cent. Goods vehicle sales also recorded a slight decline.

Electric vehicle sales continued to grow sharply year on year. Electric car sales rose 115 per cent, more than doubling. Electric three-wheeler sales rose 93 per cent and electric two-wheeler sales 62 per cent. Against the previous month, electric two-wheeler sales rose 8 per cent and electric three-wheelers 5 per cent. This shows that electric mobility continues to expand.

Commenting on the figures, Sudarshan Holla, Joint Managing Director and Chief Operating Officer (Commercial Vehicles) at Shriram Finance, said: "Truck freight rates were very strong in October because of festive-season freight movement. The momentum is expected to continue through the first fifteen days of November. The ban on the entry of BS IV trucks into NCR is causing difficulty for truck drivers and transporters. Sales of two-wheelers, passenger cars and construction equipment have grown strongly over the previous month. Diwali falls this month, so this pace of sales is likely to continue."

Fuel consumption also rose in October. Petrol consumption rose 4 per cent and diesel consumption 20 per cent over the previous month, mainly because of the increased freight movement during the festivals. Year on year, petrol consumption rose 3.1 per cent and diesel consumption 11.7 per cent.

FASTag collections also improved. Against the previous month, the number of FASTag transactions rose 1 per cent and the value collected 2.3 per cent. Year on year, however, the number of transactions fell 6 per cent, while the value collected rose 9 per cent.