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Commercial vehicles shine in FY16
Mar 17, 2016

The auto industry is one of the many indicators of the health of the Indian economy. And if one were to look at the data for the eleven months of FY16, things do not look too good. Barring commercial vehicles (CVs), most auto segments saw tepid growth in volumes.

Growth in CVs was led by the medium and heavy CV segment (MHCV). Better freight rates and improvement in operations of fleet operators meant that they had more funds at their disposal to purchase MHCVs. Growth of light CVs (LCVs), however, remained sluggish.

The next best performer was passenger vehicles (PVs) and growth for this segment was largely attributed to new product launches by many players.

Two-wheelers struggled this year. The rural economy is a big market for two-wheelers. Thus, as poor monsoons wreaked havoc on crop production, farm incomes reduced and rural demand took a hit. And this impacted volume growth for two-wheeler players.

Exports growth was also subdued because of currency problems in certain markets of Africa and Asia. All in all, it was not particularly a great year for the auto industry.

Clearly, once the Indian economy picks up pace, volumes for most of the major auto companies are expected to ramp up.

This Chart Of The Day was published in The 5 Minute WrapUp - Why Warren Buffett Didn't Want to Buy a House to Live In

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