Mumbai, December 4, 2024: Truck rentals, which had returned to normal levels in October 2024 post the festive season rush, saw a decline in November 2024 in most trunk routes as demand for transportation services softened.Fleet occupancy levels dropped to around 60% in November 2024 on a month-on-month (MoM) basis. This decline is largely attributed to a combination of factors, including poor urban demand across categories, the BS4 truck ban in the NCR region because of air pollution issues, polling activities in Maharashtra, and reduced agricultural produce movement.
A majority trucks in the business are BS4 compliant and given the existing entry ban in the NCR region, these trucks transport items to the NCR border from where the goods are loaded into smaller BS6 or CNG trucks and delivered in the NCR region. This has resulted in increasing the logistics costs in the region. Another factor that has impacted the truck rentals was the polling activities in Maharashtra which resulted in slowing down the logistics activity. Truck rental rates (round tips) followed a downward trend, with rentals on key trunk routes like Delhi-Chennai-Delhi and Delhi-Bengaluru-Delhi declining by 1.4% and 1% respectively on a month-on-month basis.
Mr. Y S Chakravarti, Managing Director & Chief Executive Officer, Shriram Finance Ltd., said, “The festive season excitement has faded in the logistics sector. Private consumption, which makes up 60% of GDP, grew by 6%, down from the first quarter’s 7.4%. This decline is due to weak urban consumption, higher food inflation, high borrowing costs, and weak real wage growth, despite a recovery in rural demand. Trucking activity in the NCR region nearly came to a halt with the ban on BS4 vehicles. Fleet occupancy levels also dropped to a new low of 60%. The bright spot is agricultural output which rose 3.5% year-on-year in July-September, up from 2% growth in the previous quarter.”
November 2024 witnessed a strong surge in sales for the two-wheeler segment at 27% on a month-on-month basis, possibly due to spillover sales from Deepavali which was on the last day of the previous month. The only other vehicle segment that saw robust growth was the agricultural tractor segment at 29% on a month-on-month basis. This significant growth in tractor sales can be attributed to the fact that following a good monsoon, expectations of good agricultural output with the upcoming Rabi harvest in December / January.
The news on passenger vehicle sales, however, is not very heartening. The sales of cars dropped significantly by 36% on a month-on-month basis which can be attributed to the withdrawal of festive schemes by car manufacturers. Similarly, the sales of commercial vehicles also saw a sharp decline with sales of buses dropping by 32%.
The sales of EVs, (two, three, and four-wheelers), continued declining, except for October when festive season offers boosted the sales to some extent. While the sales of EV Cars dropped by 38% on a month-on-month basis, the sales of two-wheeler EVs dropped by 19% on a month-on-month basis. It remains to be seen if the upcoming launches of new two and four-wheeler EVs will help boost the sales in the coming months.
Fuel consumption trends for diesel showed a 7% increase while petrol consumption rose by 0.3% in November 2024 on a month-on-month basis. Meanwhile, FASTag transactions saw a 4% on a month-on-month basis increase, indicating rising traffic volumes, though the total toll collection value declined by 0.7% on a month-on-month basis, likely due to shorter trips or smaller vehicles incurring a lower toll charge as compared to larger vehicles.