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Commercial vehicle volumes are set to pick up with the ongoing economic revival, ratings agency Acuite Ratings and Research said.

According to the agency, the ease in restrictions on movement of goods by various state governments and the recovery in the core infrastructure sector continued to remain positive for the CV industry.

"The combined domestic sales of Ashok Leyland, Tata Motors, and VECV witnessed a growth of 7.5 per cent YoY in September 2021," agency's Chief Analytical Officer Suman Chowdhury.

"However, the domestic sales of M&M witnessed decline in sales of 26.8 per cent YoY during the same period owing to supply challenges."

On sequential basis, the agency said that total sales of all the four CV manufactures showed an encouraging 14 per cent MoM growth in October 2021 compared against September 2021.

"The growth in the CV industry is majorly led by a healthy recovery in domestic sales by market leaders Tata Motors and Ashok Leyland recording 3.2 per cent YoY and 13 per cent YoY growth, respectively."

"We believe that as industrial activity and the momentum of both public and private sector capital expenditure picks up further, the overall demand for CVs will continue to strengthen over the near to medium term."

In terms of domestic PV segment, the agency said that its volumes continued to reveal a slowdown in October 2021 as reported by the top 14 players in India.

The volumes recorded a contraction of 33.4 per cent YoY in the peak of the festive season primarily due to production challenges across the sector due to a severe global shortage of semiconductors.

"After a sharp decline in the previous month, the domestic sales of the market leaders, Maruti Suzuki and Hyundai both observed a significant recovery on a sequential basis although the drop in sales continue to remain on a yearly basis."

"However, the sales witnessed a recovery on a sequential basis reflecting a growth of 40 per cent MoM versus September 2021 highlighting the improved consumer sentiments, the pent-up demand factor and some impact of the festive season."

Among the major players, the agency cited that only Tata Motors was able to clock a YoY growth of 43.6 per cent with a 31.8 per cent growth on a sequential basis due to its new product launches.

"Going ahead, the shortage of semiconductors may continue to disrupt PV sales over the next few months despite the pent up demand factor and a recovery in consumer sentiments during the ongoing festive season."

In addition, the agency pointed out that sales trajectory of the other major segment - two-wheelers - in October 2021 continued to remain weak as reflected by the volumes of the top four players in the industry.

"The overall sales declined 21.7 per cent YoY owing to the 25.7 per cent drop in domestic despatches in October 2021. Furthermore, the sequential trajectory is also not very encouraging with domestic volumes rising marginally by 0.4 per cent as against September 2021."

"We believe that the revival in the demand of 2Ws will take some more time despite the onset of the festive season given the deeper impact of the second wave of the pandemic in the rural economy."