Truck Rentals Surge as Festive Season Approaches, Srinagar Sector Looks up, Indo-Bangla Border Reopens: Shriram Mobility Bulletin

• Approaching festive season and post-election activities contributes to increase in truck rentals across major trunk routes

• Resumption in India-Bangladesh bilateral trade has improved fleet utilization

Truck rentals continued their upward trend in August 2024, marking the second consecutive month of growth, as per the latest Shriram Mobility Bulletin. The festive season’s approach, coupled with increased post-election activities, has significantly driven demand across various transportation routes.

Notably, fleet utilization in the India-Bangladesh border region saw a significant improvement, rising to nearly 60% from the previous 40%. Resumption of trade activities between India and Bangladesh has particularly increased truck rentals in the Kolkata-Guwahati-Kolkata route, registering the highest surge at 3.0%. The Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes also witnessed increases of 2.7% and 2.3%, respectively. Apple harvest and poll bound activity pushed up freight rates in the Srinagar region. Freight rates rose by nearly 10% in August, in this area. The Wayanad region experienced a rise in freight rates due to a reduced number of trucks, many of which are engaged in rehabilitation work.

Mr. YS Chakravarti, MD & CEO, Shriram Finance Ltd. speaking about the Bulletin said, “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 sales has witnessed a 6% decline in sales with 280,151 units sold in August 2024 compared to 297,623 units in July 2024. The drop in sales is attributed to excessive rainfall, which affected showroom visits in Gujarat, Andhra Pradesh, and Tripura. In contrast, Goa, Kerala, and Haryana saw growth in vehicle sales.

In the two-wheeler segment, sales contracted by 8% month-on-month in August 2024. However, year-on-year sales rose by 6%, fuelled by anticipation of the upcoming festive season.

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 as much as 12%, while the 3.5 to 7.5-ton category saw an 11% price growth.

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, totalling 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 two- and three-wheelers registered a decline of 26% and 3% YOY respectively. E-way bill generation experienced a month-on-month increase in July 2024.

About Shriram Finance

Shriram Finance Limited is the flagship company of the Shriram group which has a significant presence in Consumer Finance, Life Insurance, General Insurance, Housing Finance, Stock Broking, and Distribution businesses. Shriram Finance Limited is one of India’s largest retail asset financing Non-Banking Finance Companies (NBFC) with Assets under Management (AUM) above Rs. 2.33 trillion. Established in 1979, Shriram Finance is a holistic finance provider catering to the needs of Small Road Transport Operators and small business owners and is a leader in organized financing of pre-owned commercial vehicles and two-wheelers. It has a vertically integrated business model and offers financing number of products which include passenger commercial vehicles, loans to micro and small and medium enterprises (MSMEs), tractors & farm equipment, gold, personal loans and working capital loans etc. Over the last 45 years, it has developed strong competencies in the areas of loan origination, valuation of pre-owned commercial vehicles and other assets, and collections. It has a pan India presence with a network of 3,095 branches and an employee strength of 75,813 servicing 87.14 lakhs of customers.

About Shriram Mobility Bulletin

Shriram Finance Limited, the flagship company of the Shriram Group, publishes the monthly Shriram Mobility Bulletin. The Shriram Mobility Bulletin aims to provide stakeholders with a picture of Indias statistical data about the logistics and automobile sector through its nationwide network of fleet owners & vehicle dealers and analyses it to identify trends for its stakeholders.