Truck rentals in India continued to rise for the second consecutive month in August 2024, driven by the upcoming festive season and increased post-election activities. Fleet utilisation surged in the India-Bangladesh border region due to resumed trade, while key routes such as Kolkata-Guwahati-Kolkata saw a 3.0% hike in rentals. The Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes also noted increases. The apple harvest and pre-election activities in Srinagar pushed freight rates up by nearly 10%. Concurrently, the used commercial vehicle market showed notable growth, despite a decline in motor car and two-wheeler sales partly due to excessive rainfall.
According to the latest Shriram Mobility Bulletin, the drive in demand for truck rentals is evident, particularly across various transportation routes in India. YS Chakravarti, MD & CEO of Shriram Finance Ltd., highlighted the contributing factors:
“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.”
Truck rentals
Truck rentals saw significant increases, especially in the India-Bangladesh border region, where fleet utilisation improved from 40% to 60%. The Kolkata-Guwahati-Kolkata route experienced the most significant surge at 3.0%. Other notable routes included Delhi-Kolkata-Delhi with a 2.7% rise and Delhi-Hyderabad-Delhi at 2.3%. In the Srinagar region, apple harvest season and election preparations led to a nearly 10% increase in freight rates. The Wayanad region also saw a surge in freight rates due to a shortage of trucks, many of which are involved in rehabilitation efforts.
Automobile sector sales
In the automotive sector, motor car sales declined by 6% month-on-month, with 280,151 units sold in August 2024 compared to 297,623 units in July 2024. This drop was largely due to excessive rainfall, which curtailed showroom visits in states like Gujarat, Andhra Pradesh, and Tripura. Conversely, states such as Goa, Kerala, and Haryana saw growth in vehicle sales.
The two-wheeler segment also faced a contraction, dropping by 8% month-on-month in August 2024. Despite this, year-on-year sales rose by 6%, spurred by the anticipation of the upcoming festive season.
Meanwhile, the used commercial vehicle (UCV) market exhibited healthy year-on-year growth across all weight categories. Notably, prices for 31 to 36-ton 4-wheeler UCVs increased by up to 12%, while the 3.5 to 7.5-ton category saw an 11% price growth.
Electric two-wheelers and three-wheelers registered declines of 26% and 3% year-on-year, respectively. E-way bill generation showed a month-on-month increase in July 2024, reflecting the overall growth momentum in the transportation sector despite some localised setbacks.
Fuel consumption
Petrol consumption increased by 2% month-on-month, translating to an 8% rise compared to the same period last year. However, diesel consumption fell by 10% month-on-month, totalling 6.48 million metric tons. Toll collections experienced slight month-on-month growth, with a 7% year-on-year increase in volume and an 8% rise in value.
