Truck Rentals Rise in August 2024: Festive Season and Trade Boost Demand
Truck rentals in India continued to rise in August 2024, marking the second consecutive month of growth. This increase is driven by the upcoming festive season and heightened post-election activities, according to the latest Shriram Mobility Bulletin.
Key Route Increases
Fleet utilization in the India-Bangladesh border region improved significantly, rising to nearly 60% from the previous 40%. The Kolkata-Guwahati-Kolkata route saw the highest surge in truck rentals at 3.0%, followed by the Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes, which saw increases of 2.7% and 2.3%, respectively.
Regional Freight Rate Changes
In the Srinagar region, apple harvest and pre-election activities pushed up freight rates by nearly 10% in August. The Wayanad region also experienced a rise in freight rates due to a reduced number of trucks, many of which are engaged in rehabilitation work.
Statements from Shriram Finance Ltd.
YS Chakravarti, MD and CEO of Shriram Finance Ltd., stated, “As the festive season approaches, companies across India are intensifying their efforts to boost production and supply, causing an uptick in truck rentals on key routes. The Srinagar area is particularly active due to the apple picking season and pre-election activities, which are driving up freight rates. Additionally, the reopening of trade at the India-Bangladesh border is leading to higher fleet usage in that region. However, the recent floods in Gujarat have led to logistical challenges. As we observe the situation, there is a cautious anticipation to see how quickly Andhra Pradesh and Telangana will recover from the devastating floods.”
Motor Car and Two-Wheeler Sales
Motor car sales witnessed a 6% decline in August 2024, with 280,151 units sold compared to 297,623 units in July 2024. This drop is attributed to excessive rainfall affecting showroom visits in Gujarat, Andhra Pradesh, and Tripura. In contrast, Goa, Kerala, and Haryana saw growth in vehicle sales. The two-wheeler segment saw an 8% month-on-month decline in sales, but a 6% year-on-year increase due to the upcoming festive season.
Used Commercial Vehicle Market
The used commercial vehicle (UCV) market showed healthy year-on-year growth across all weight categories. Prices for 31 to 36-ton 4-wheeler UCVs increased by 12%, while the 3.5 to 7.5-ton category saw an 11% price growth.
Fuel Consumption and Toll Collections
In August 2024, petrol consumption rose by 2% month-on-month, reflecting an 8% increase compared to the same period last year. However, diesel consumption declined by 10% month-on-month, totaling 6.48MT. Toll collections saw a slight month-on-month growth, with a 7% year-on-year increase in volume and an 8% rise in value.
Electric Vehicle Sales
Electric two- and three-wheelers registered a decline of 26% and 3% year-on-year, respectively. E-way bill generation experienced a month-on-month increase in July 2024.
Doubts Revealed
Truck Rentals -: Truck rentals mean the cost people pay to use trucks for transporting goods from one place to another.
Festive Season -: The festive season refers to times of the year when many festivals are celebrated, like Diwali or Durga Puja, leading to more goods being transported.
Post-election activities -: Post-election activities are events and tasks that happen after elections, like setting up new government offices, which can increase the need for transportation.
India-Bangladesh border region -: This is the area where India and Bangladesh meet. It’s important for trade between the two countries.
Fleet utilization -: Fleet utilization means how much the trucks are being used. Higher utilization means more trucks are on the road transporting goods.
Kolkata-Guwahati -: Kolkata and Guwahati are two big cities in India. Kolkata is in West Bengal, and Guwahati is in Assam.
Delhi-Kolkata -: Delhi is the capital of India, and Kolkata is a major city in West Bengal. They are connected by important trade routes.
Apple harvest -: Apple harvest is the time when apples are picked from trees. This usually happens in places like Srinagar, which is known for its apples.
Freight rates -: Freight rates are the charges for transporting goods. When demand is high, these rates can go up.
Srinagar -: Srinagar is a city in Jammu and Kashmir, known for its beautiful landscapes and apple orchards.
Motor car sales -: Motor car sales refer to the number of cars sold. If sales decline, it means fewer cars are being bought.
Excessive rainfall -: Excessive rainfall means a lot of rain, which can cause problems like floods and affect activities like car sales.
Used commercial vehicle market -: This market deals with buying and selling trucks and other vehicles that are not new but still useful for business purposes.