Truck rentals continue to rise in August, driven by festive demand and post-election activities

Truck rentals in India continued to increase in August 2024 for the second consecutive month, according to the latest Shriram Mobility Bulletin. The growth is attributed to the approach of the festive season and a rise in post-election activities, boosting demand across multiple transportation routes.

Fleet utilization in the India-Bangladesh border region showed a notable improvement, rising from 40% to nearly 60%, with renewed trade activities between the two countries. This led to higher truck rentals, particularly on the Kolkata-Guwahati-Kolkata route, which saw the highest increase at 3%. The Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes also experienced growth, with increases of 2.7% and 2.3%, respectively. Freight rates in the Srinagar region rose by almost 10% in August due to the apple harvest and election-related activities, while the Wayanad region experienced a rise in rates because of a shortage of trucks, many of which were deployed in rehabilitation work.

YS Chakravarti, Managing Director and CEO of Shriram Finance Ltd., commented on the report, stating that as the festive season approaches, companies are ramping up production and supply efforts, resulting in increased truck rentals on key routes. He noted that the Srinagar area is particularly active due to the apple picking season and pre-election activities, which are driving up freight rates. The reopening of trade at the India-Bangladesh border has also led to higher fleet usage in that region. However, recent floods in Gujarat have presented logistical challenges, and there is anticipation to see how quickly Andhra Pradesh and Telangana recover from similar flooding events.

In the automobile sector, motor car sales declined by 6% in August 2024, with 280,151 units sold, down from 297,623 units in July 2024. This drop is largely attributed to excessive rainfall, which affected showroom visits in states like Gujarat, Andhra Pradesh, and Tripura. Meanwhile, vehicle sales increased in Goa, Kerala, and Haryana. The two-wheeler segment saw an 8% month-on-month decline in sales, but year-on-year sales rose by 6%, driven by anticipation of the upcoming festive season.

The used commercial vehicle (UCV) market showed strong year-on-year growth across all weight categories, with prices for 31 to 36-ton 4-wheeler UCVs rising by 12%, and the 3.5 to 7.5-ton category seeing an 11% price increase.

Petrol consumption rose by 2% month-on-month in August 2024, reflecting an 8% increase compared to the same period last year. However, diesel consumption fell by 10% month-on-month, totaling 6.48 million tonnes. Toll collections experienced slight month-on-month growth, with a 7% year-on-year increase in volume and an 8% rise in value. Meanwhile, electric two- and three-wheeler sales declined by 26% and 3% year-on-year, respectively. E-way bill generation saw a month-on-month increase in July 2024.