Industry Trend Analysis - Mining And Construction Projects To Drive CV Demand - JUNE 2017

BMI View : India ' s robust infrastructure project pipeline and solid growth in the country ' s mining sector will be the main driving forces behind annual average growth of 3.7% in commercial vehicle sales over our 2017-2021 forecast period.

We forecast commercial vehicle (CV) sales in India to grow 3.2% in 2017, reaching 725,126 units and averaging annual growth of 3.7% over our 2017-2021 forecast period. This demand for CVs will be driven by robust growth in the country's mining and infrastructure sectors which will create the supportive market for both light commercial vehicles (LCVs) and heavy truck sales over the next five years. This view is further supported by data from the Society of Indian Automobile Manufacturers (SIAM) which showed that total CV sales grew 4.2% y-o-y in FY2016 (April 2016-March 2017).

Our Infrastructure team forecasts real growth of 5.6% in 2017 and average annual growth of 6.4% over our 2017-2021 forecast period for India's construction sector. This will be driven by a rapidly increasing project pipeline across the residential and non-residential building sector, energy and utilities sector and transport sector ( see ' Transport Growth Boosted By Road, Rail Investments ' , March 14). According to our Infrastructure Key Projects Database - a comprehensive catalogue of construction projects taking place within a country - there are currently 42 infrastructure projects at the planning stage in India across the previously mentioned sectors that are set to be completed in the next five years. We expect this construction activity to help drive demand for both LCVs and heavy trucks that are needed to meet the logistical requirements of these various projects.

Mining And Infrastucture To Fuel CV Sales
India - Commercial Vehicle Sales, Units
f = BMI forecast. Source: BMI, SIAM

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