Truck freight rates hold steady in festive September as commercial vehicle and EV sales rise
Truck rental rates stayed firm on key routes and above last year's levels, while sales of commercial vehicles, construction equipment and electric vehicles grew in September.
India's transport sector strengthened during the festive period in September, with retail vehicle sales rising in most categories. The overall trend points to strong momentum in the economy. Steady movement of goods kept truck rental rates stable on major routes, and on every route tracked they stayed above last year's levels.
On a month-on-month basis, the Bengaluru-Mumbai-Bengaluru route led with a 1.3% rise, followed by Delhi-Mumbai-Delhi (1.1%) and Delhi-Hyderabad-Delhi (1%). Rates rose marginally on the Delhi-Bengaluru-Delhi and Bengaluru-Kolkata-Bengaluru routes, while they held steady on the remaining routes.
On a year-on-year basis, rates were higher on all major routes tracked. The Delhi-Kolkata-Delhi route recorded a 13% rise, followed by Bengaluru-Mumbai-Bengaluru (11%) and Kolkata-Guwahati-Kolkata (10%). Rates on the remaining routes rose by 4% to 9%.
Vehicle sales rose sequentially in September, led by core-sector segments. Sales of construction equipment grew 31%, earth-moving equipment 17% and goods carriers 13%. Motorcycles and scooters, and cars, each grew 4%. Sales of agricultural tractors fell 15% and commercial tractors 22%.
On a year-on-year basis, sales rose in nearly every category. Maxi cabs led with 75% growth, while three-wheeler goods carriers rose 63%. Goods carrier sales grew 40%, indicating strong demand for heavy-duty trucks. Motorcycles and scooters grew 33%, cars 31%, construction equipment 25% and earth-moving equipment 19%. Agricultural trailers were the only segment to record a decline, of 27% year on year.
The surge in electric vehicle sales continued. All categories under observation showed strong growth on both monthly and annual bases. E-two-wheeler sales rose 13% month on month, e-three-wheelers 8% and electric cars 12%. On an annual basis, electric car sales grew 143%, followed by e-three-wheelers (113%) and e-two-wheelers (111%). This underlines the rapid expansion of the electric mobility ecosystem.
Commenting on the trends, Sudarshan Holla, Joint Managing Director and Chief Operating Officer (COO) of the commercial vehicles division of Shriram Finance, said: "Stable truck rental rates on the back of festive-season freight, strong demand for two-wheelers, growing adoption of EVs and good sales of heavy-duty trucks and construction equipment all reflect strength in economic activity. Importantly, this strength in sales of commercial vehicles and construction equipment shows sustained momentum in infrastructure and core sectors, which reinforces the positive outlook for the broader economy. However, the possibility of interest rates rising during the festive period could somewhat dampen market sentiment."
Fuel consumption showed a mixed trend in September. Petrol consumption fell 5% month on month, while diesel consumption rose 2%. On an annual basis, petrol and diesel consumption grew 7.2% and 4.9% respectively.
FASTag collections dipped slightly in September. Compared with the previous month, the number of transactions fell 3.9% and the value of collections fell 1.2%. On an annual basis, however, the number of transactions rose 1% and the value of collections rose 11%.
