Indian CV segment poised to grow 6 pc this FY: ICRA

NEW DELHI: The Indian commercial vehicles segment, which was hit hard last fiscal by the economic downturn, is likely to witness 5-6 per cent growth this year on the back of strong demand in the light commercial vehicle category.

However, one of the important categories -- the medium and heavy commercial vehicle (M&HCV) segment -- will be stagnant in 2009-10, according to study by rating agency ICRA.

"India's CV goods carrier domestic sales are expected to increase at around 5-6 per cent during FY'10, driven largely by expected strong growth in the light commercial vehicle (LCV) segment," it said.

The report by ICRA Management Consulting Services, however, said factors like volatility in crude oil prices, upward movement in interest rates and tight credit conditions continue to be key risk factors for the industry.

"The M&HCV segment is expected to stagnate during FY'10 with negative growth during the first half of FY'10 offset by higher growth during the later half of FY'10," the study said attributing this factor to demand recovery and low-base effect.

According to the Society of Indian Automobile Manufacturers (SIAM), M&HCV sales segment fell 18.95 per cent in the first half of the fiscal at 93,623 units against 115,519 units in the same period last year.