In November 2024, truck rental rates declined and fleet occupancy dropped to 60%, impacted by the BS4 vehicle ban in NCR, reduced agricultural movement, and slowdowns from polling activities in Maharashtra.
05 Dec 2024 | 2468 Views | By Autocar Professional Bureau
Truck rentals, which had stabilised in October 2024 after the festive season, declined in November 2024 across most major routes as demand for transportation services weakened. Fleet occupancy levels fell to around 60% in November, compared to the previous month. This decline can be attributed to several factors, including weaker ...
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Truck rentals, which had stabilised in October 2024 after the festive season, declined in November 2024 across most major routes as demand for transportation services weakened. Fleet occupancy levels fell to around 60% in November, compared to the previous month. This decline can be attributed to several factors, including weaker urban demand, the ban on BS4 trucks in the NCR region due to air pollution concerns, polling activities in Maharashtra, and reduced agricultural produce movement.
A significant portion of trucks in operation are BS4 compliant. With the entry ban on such vehicles in the NCR region, these trucks now transport goods to the NCR border, where they are transferred to smaller BS6 or CNG trucks for delivery. This has led to increased logistics costs in the region. Additionally, the slowdown in logistics activities due to polling in Maharashtra also contributed to the reduced demand for truck rentals. As a result, rental rates on major routes like Delhi-Chennai-Delhi and Delhi-Bengaluru-Delhi declined by 1.4% and 1%, respectively, month-on-month.
Y.S. Chakravarti, Managing Director & CEO of Shriram Finance Ltd., noted, “The logistics sector has slowed after the festive season. Private consumption, which makes up 60% of GDP, grew by 6% in the second quarter, down from 7.4% in the first quarter. This decline is driven by weak urban consumption, higher food inflation, high borrowing costs, and slow wage growth, despite a recovery in rural demand. Trucking activity in the NCR region has also been significantly impacted by the BS4 vehicle ban, leading to lower fleet occupancy levels.”
On a positive note, the two-wheeler segment saw a 27% month-on-month increase in sales in November, possibly due to lingering demand from the Deepavali festival. Similarly, agricultural tractor sales rose by 29% month-on-month, supported by a good monsoon and expectations of a strong Rabi harvest.
However, passenger vehicle sales showed a decline, with car sales dropping 36% month-on-month, attributed to the end of festive schemes offered by manufacturers. Commercial vehicle sales also decreased, with bus sales down 32%.
Electric vehicle (EV) sales continued to decline. Sales of EV cars dropped 38% month-on-month, while sales of two-wheeler EVs fell 19%. It remains to be seen whether the upcoming launches of new EV models will help improve sales in the coming months.
Fuel consumption in November 2024 showed a 7% increase in diesel usage, while petrol consumption rose by 0.3%. Meanwhile, FASTag transactions increased by 4% month-on-month, indicating higher traffic volumes. However, total toll collection declined by 0.7%, likely due to shorter trips or smaller vehicles that incur lower toll charges compared to larger vehicles.