In the past few months there has been a slowdown in commercial vehicle sales after tightening liquidity conditions hit financiers.
In an interview with CNBC-TV18, TT Srinivasaraghavan, managing director of Sundaram Finance, discussed the outlook for the space going forward.
He said the slowdown seen in CV sales in November-December was more than the earlier part of the year but December was marginally better than November.
The spike in sales seen in the first half of this fiscal was due to lower sales in first half of last fiscal. The CV sales in H1 of this year were 50 percent higher than last year, he said, which has now cooled down to low 20s.
According to him, a lot of growth in the CV segment over the last 12-18 months was more driven by the tipper segment than the haulage segment and growth momentum still continued for the tipper segment. Haulage segment has been sluggish for some time now and unless something dramatic happens in the overall economy, there may not be any pick up in sales for them. Moreover, axle-load norms, bigger trucks have also impacted sales of haulage vehicles, said Srinivasraghavan.
On the passenger car segment, he said the sales for them has begun to slow down with rise in petrol/diesel prices earlier in the year. Buyer fatigue and fewer new launches also could have impacted their sales, he added.
With regards to disbursements, he said growth in low to mid double-digit would be good. There could be some potential stress going forward on back of funding constraints and so the aim is to keep the portfolio healthy and profitable than focusing on growing at breakneck speed.