We Will Continue To Build Our Book And Market Share In CV Space.

Amit Mohan
President and Head – Logistics, Infra, CV & CE Retail Loans and Working Capital, Kotak Mahindra Bank

How is the commercial vehicles market in India evolving?

The CV industry is growing at a steady pace. The pent-up demand post-Covid has settled down largely. Better highway infrastructure, higher urbanisation and reach of e-commerce to rural India will continue to fuel the growth of hub-and-spoke model. The higher tonnage segments of Multi Axle Vehicles (MAVs) and Tractor Trailers would relatively grow faster. Similarly, ICVs as a segment would also see better growth numbers. In my view, the HCV segment of 16-30 ton would be limited for specific usages and thus would have a relatively lower growth.

How is the customer buying trends in CVs changing?

We have seen a shift towards higher tonnage vehicles thereby increasing the carrying capacity for the industry, much beyond the unit growth. There is a clear consolidation happening in the M&HCV space. Stable diesel prices and better fleet management with use of technology has a positive impact on financial position of large operators. Backed by replacement demand and newer projects, the optimism to buy vehicles has improved across operators catering to diverse segments.

What are the financing solutions offered for the CV customers?

While regular CV financing is widely made available by many financiers, some are offering funding for special needs like maintenance, tyres, insurance and short & long-term working capital. Funding for higher tenure up to six years is also available. Used vehicle finance and refinancing which was dominated by NBFCs have now active participation of large private sector banks, thus making interest cost lower for the bottom of the pyramid retail operators.

How do you compare the demand trends from truck and bus segments?

The boom in the tourism industry, return to office from the earlier WFH, high ageing of state transports fleet and growth in intercity travel segment would keep up the momentum in bus industry. Bus segment will continue to grow at significantly larger pace than goods for the next couple of years. The contribution of buses to the overall CV industry would also see growth by a couple of percentage points.

Do you have any special offers for EVs and hybrid vehicles?

We will see early adoption of EVs in busses backed by the state transport corporations. EVs currently have higher asset risk and it will take some time for the resale value to establish. There are also EVs at the entry level SCVs. There is exuberance around EV segment across financiers. We have tailor-made schemes for EVs based on the customer profile, segment and specific use cases.

What are your expansion plans specifically in CV space? What opportunities do you look forward?

We will continue to build our book and market share in CV space with a focus on risk-adjusted return and increased distribution across geographies. We have migrated to one of the state-of-the-art LOS platforms. We will continue to use and upgrade technology solutions across functions for better TAT.