(Riya Singh, Intern Journalist): In the current fiscal and business needs market recovery, commercial vehicle sales are forecast to fall by more than one-third, a survey said on Friday. The domestic commercial vehicle (CV) industry continues to demonstrate cyclicality as observed in the last two decades, but the downturn experienced in the fiscal year 2020 was sharp with sales volume dropping 29 percent year-on-year to 7.2 lakh units, Care Rating agency said in its report. In the fiscal year 2020, M&HCV (medium and heavy commercial vehicles) accounted for 31% of overall CV deliveries in terms of unit value, while LCV (light commercial vehicles) accounted for the remainder of domestic sales.

Also, although M&HCV revenues declined by 42 percent, the volume of the LCV segment was 20 percent lower over the fiscal year 2019 than the previous fiscal year, as stated in the study. In the fiscal year 2021, the industry is looking to more de-growth as COVID-19-led economic slowdown adds to the pessimistic feeling, it added.

The downturn in the LCV segment is expected to be minimal, as demand from rural and semi-urban markets is expected to recover more rapidly in the current year due to higher agricultural production on the back of strong monsoons. Overall volumes are expected to slowly pick up from the current lows during the second half of the fiscal period; however, little significant market recovery from the fiscal year 2022 alone is expected, it said.

Although this is likely to have an effect on the financial results of numerous domestic CV companies, most are better positioned to handle the downtrend than in the past, and the sector needs stabilization steps to meet both short-term and long-term demand. With the COVID-19 pandemic outbreak, economic life throughout the world remains affected as a result of lockdown since March. Domestic sales were negligible due to lockdowns during the April-June 2020 period, it added.

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