Despite a drop in Truck volumes in the last few months, Truck majors such as Tata Motors, Ashok Leyland and Eicher have raised prices by about 2% to 2.5%. This is necessitated by a steep rise in the cost of raw materials and installation of expensive safety features in line with mandatory norms.

However, according to sources, dealers of commercial vehicles have not yet passed on the hike to their customers as most of them are stuck with huge inventory. The trend was earlier seen in 2005, when Trucks adhering to the BS3 emission norms were forced to raise their prices by around Rs 50,000 per vehicle.

“Recent government norms have made it mandatory for multi-axle Tractor-Trailers and buses with all-India tourist permits to install anti-lock braking system or ABS, a feature currently seen only in expensive cars. ABS and headrests typically push up prices of Trucks by about Rs 10,000 to Rs 45,000 per unit”, the sources added.

While multi-axle vehicle prices have gone up by Rs 25,000, Tractor-Trailers are costlier by Rs 45,000. Bus prices have gone up in the range of Rs 7,000 to Rs 12,000 per unit despite low sales. State Transport Corporations which are typically large buyers of buses, have been deferring their purchase decisions due to low funds.

Truck majors initiated steps last month when they reduced discounts. “We are hoping things will start improving from November. We are initiating a number of measures to boost sales,” said Tata Motors executive director P M Telang. Industry sales have been hit by rising interest rates in the last few months as most of the Trucks are bought through finance. However truck majors are initiating cost cutting initiatives to sustain growth momentum.

In spite of the commercial vehicle industry declining by about 5%, Eicher has registered a sales growth of 12.5%,”said Eicher’s commercial vehicles division CEO A Ramasubramanian.