{"id":29952,"date":"2023-05-11T13:09:20","date_gmt":"2023-05-11T07:39:20","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=29952"},"modified":"2023-05-12T08:22:48","modified_gmt":"2023-05-12T02:52:48","slug":"governments-scrappage-policy-to-help-cv-industry-volumes-report","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/governments-scrappage-policy-to-help-cv-industry-volumes-report\/","title":{"rendered":"Government\u2019s scrappage policy to boost CV industry volumes in FY24: Report"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"29952\" class=\"elementor elementor-29952\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5a2c82e5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"5a2c82e5\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2b1cd3b9\" data-id=\"2b1cd3b9\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7693b8c3 elementor-widget elementor-widget-text-editor\" data-id=\"7693b8c3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The commercial vehicle (CV) industry volumes is likely to grow by 7-10% in FY2024, helped by a host of factors including replacement demand as the scrappage policy, which was announced in March 2021, is being implemented from April 1, 2023, according to rating agency ICRA. Other factors are pick-up in mining, infrastructure, and construction activities, and overall healthy fleet utilisation levels, the rating agency said. The said growth is in contrast to 5% YoY and 41% sequential contraction in volumes in April 2023 due to expected price increases with the transition to BS6 2.0 and associated pre-buying in March 2023.<\/p><p>The rating agency also stated that the growth in FY2024 would follow a year of healthy demand in FY2023, wherein the industry volumes expanded by more than 33%, supported by a favourable base, as well as a healthy pick-up in macroeconomic activity.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-23135a45 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"23135a45\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-756f418d\" data-id=\"756f418d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-439d5489 elementor-widget elementor-widget-heading\" data-id=\"439d5489\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Scrappage policy's impact on CV industry<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-63db598a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"63db598a\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-273f6662\" data-id=\"273f6662\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-759b860f elementor-widget elementor-widget-text-editor\" data-id=\"759b860f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The scrappage policy is being implemented in phases, primarily to reduce the carbon footprint. In the first phase, it has been proposed to mandatory scrap government vehicles older than 15 years from April 1, 2023, which has a potential to replace about 9 lakh vehicles, according to rating agency ICRA.<\/p><p>In the second phase, scrapping is based on vehicle fitness. Heavy commercial vehicles (HCVs) older than 15 years and other vehicles<br \/>older than 20 years will undergo a mandatory fitness test from October 1, 2024. Further, several measures have been proposed by the government to incentivise scrapping of older vehicles and on submission of the scrapping certificate, new vehicle purchases would be eligible for discounts from the OEMs, road tax rebate, and registration fee waiver.<\/p><p>\u201cThe major impact of the Scrappage Policy is expected in the CV segment, especially passenger carriers,\u201d said Kinjal Shah, Vice President &amp; Co Group Head, Corporate Ratings, ICRA Limited. ICRA estimates the population of medium and heavy commercial vehicles (M&amp;HCV) older than 15 years at about 11 lakh units currently, offering significant potential for scrappage.<\/p><p>However, Shah said that the actual scrappage could possibly be lower due to a significant portion of used CVs and older trucks in the overall mix are used in hinterlands for short-haul operations by small fleet operators. Shah added that the scrappage policy would drive additional benefits like stimulating modernisation of the fleet in the country, improving fuel efficiencies, and reducing pollution and raw material costs through metal recycling going forward.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-f26cbbb elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"f26cbbb\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b7e06ff\" data-id=\"b7e06ff\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-72b135e6 elementor-widget elementor-widget-heading\" data-id=\"72b135e6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Growth in sub-segments of CVs<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3be64ffd elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3be64ffd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5a17b1b1\" data-id=\"5a17b1b1\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-414b1777 elementor-widget elementor-widget-text-editor\" data-id=\"414b1777\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>ICRA expects the Medium and Heavy CV (M&amp;HCV) goods carrier segment to report a growth of 8-10% in FY2024 after closing FY2023 with a robust rise of 40%. The segment volumes would be supported by the stable macroeconomic environment, Government push on infrastructure development, and the consequent higher freight availability, as well as an element of replacement demand.<\/p>\n<p>In the light commercial vehicle (LCV) goods carrier segment, demand would be led by the higher requirement for last-mile transportation from the e-commerce segment and healthy demand from agriculture and allied sectors. The rating agency stated that the growth momentum is likely to moderate to 4-6% in FY2024 from 23% in FY2023 as the base effect catches up. Volumes declined in April 2023, primarily due to the high base effect and concerns of a possible El Nino condition.<\/p>\n<p>Meanwhile, the passenger carrier or bus segment volumes would see a higher growth momentum of 12-15% in FY2024, after closing FY2023 with 2.6x volumes in the previous year, with the low base, opening up of offices and educational institutes as well as replacement demand supporting the growth.<\/p>\n<p>In FY2024, the segment volumes are also likely to be supported by the mandatory scrappage of Government vehicles older than 15 years. Overall, ICRA expects the credit profile of CV OEMs to improve steadily going forward due to improvement in profitability supported by operating leverage benefits and no major capital expenditure plans.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-358b9e4d elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"358b9e4d\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-218ffc6\" data-id=\"218ffc6\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-6b78c48b elementor-align-center elementor-widget elementor-widget-button\" data-id=\"6b78c48b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/ekyc.flattrade.in\/openaccount\/?utm_source=Blog&#038;utm_medium=organic&#038;utm_campaign=Demat+Account\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Open a Free Demat Account<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"The commercial vehicle (CV) industry volumes is likely to grow by 7-10% in FY2024, helped by a host&hellip;","protected":false},"author":5,"featured_media":29953,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[685,686,688,786,781,46,43,95,785,78,139,48,26,77,47,24,23,84,327,21],"class_list":{"0":"post-29952","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-lcv","9":"tag-light-commercial-vehicles","10":"tag-mhcv","11":"tag-mm","12":"tag-mahindra","13":"tag-market-news","14":"tag-market-update","15":"tag-markets","16":"tag-medium-commercial-vehicles","17":"tag-nifty","18":"tag-nifty-futures","19":"tag-nifty-today","20":"tag-nse","21":"tag-sensex","22":"tag-sensex-today","23":"tag-share-market","24":"tag-stock-market","25":"tag-stocks","26":"tag-tata","27":"tag-trading-account","28":"cs-entry","29":"cs-video-wrap"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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