Commercial vehicle manufacturers have raised Rs. A huge loss of Rs 6,000 crore will be incurred

Mumbai, Ta. 21 August 2020, Friday

Due to the steady decline in sales, the country's commercial vehicle manufacturers may face a loss of Rs 2,000 crore in the current financial year. Even with a low level of sales volume, a 20 per cent drop in sales would double the net loss in the current financial year, according to a Crisil report.

In addition, companies are facing a shortage of working capital due to support from dealers and suppliers. Cash floss is also looking negative.

The economic downturn created by the spread of coronavirus has exacerbated the situation, with new standards for overloading adversely affecting commercial vehicle sales. The debt burden of companies has also increased. Sales of commercial vehicles have declined by 3% in the last financial year. In the first quarter of the current financial year, sales volume has declined by 3%.

Sales of medium and heavy commercial vehicles declined due to sluggish economic activity. About 3% of the total revenue of this industry comes from the sale of medium and heavy commercial vehicles. However, sales of light commercial vehicles are looking good due to the support of the rural economy.

Sales of commercial vehicles have been declining for the past two years.