AGILITY AND INNOVATION

As the CV industry is in for yet another eventful year (FY2021-22), agility and innovation hold the key.

- Shyam Maller

After an extraordinary FY2020-21, the CV industry is up for another extraordinary year it looks like. The second Covid-19 wave at the beginning of FY2021-22 has disrupted the acquired momentum. The macro economic indicators – the RBI’s original GDP growth forecast for FY2021-22 of 10.5 per cent as well as the Q1 FY2021-22 forecast of 26.2 per cent is unlikely to be met. The second Covid-19 wave has diverted attention from the economic revival in terms of the sequential month-on-month growth in most of the high frequency indicators like GST collections and PMI (Purchasing Managers Index). Lockdowns since April 2021 have been the way of life. The ensuing scenario has diverted attention from the rebound in electricity consumption and the rise of digital payments and electronic toll (FASTag) collections at highway toll plazas.

As efforts are made to tackle the second Covid-19 wave, the ground that the CV industry has covered post the first Covid-19 wave has been brought into question. The hard earned sales momentum has abruptly come to a grinding halt. With the second Covid-19 wave unleashing itself in the second week of April 2021, wholesale and retail numbers have crashed. The alarming growth of Covid-19 infections in the rural hinterland has had a profound effect. The direct impact on CV channel partners and transporter community is not hidden. The stock push by OEMs to retail channels in March 2021 has led to a stock build up of up to 45-60 days of inventory. Transporters have seen their utilisation levels plummet. Freight rates have declined – in April the fall was a good 20 per cent. The steep and unrelenting rise in fuel prices haven’t helped matters. The demand for 90 days loan moratorium is not unfounded. Neither is the 90 day interest support sought by dealers from their principals to neutralise their unsold inventory.