‘Centre’s new norms of CVs must leave existing vehicles’

On the government increasing the maximum safe axle weight of CVs, S Viji, Chairman, Sundaram Finance Ltd, said making them applicable to existing vehicles could have negative implications for new CV offtake in the near term. 

 “This has caused a 14-18 % increase in the load-carrying capacity of trucks, in a move that is intended to reduce logistics costs in the country. 

The load carrying capacity of tractor trailers has also been increased. While a prospective application of the new axle load limits is unlikely to have an impact on sale of new CVs, making them applicable to existing vehicles could have negative implications for new CV offtake in the near term,” he said at the sixty-fifth AGM held here on Friday.

Viji also struck a note of caution and said global developments, notably the looming trade wars, could add a layer of uncertainty to economic growth “Diesel prices continue to remain stubbornly high and coupled with higher interest rates could prove a dampener from the point of view of the transport operator’s viability and consequently on CV offtake. 

With inflation numbers trending upwards and liquidity tightening, interest rates have already shown an upward bias in the first quarter of the current financial year. RBI, for the first time in almost two years, raised the policy rate by 25 basis points in June this year. 

It is widely predicted that further increases are likely in the coming months,” he said.

He said the company had drawn up plans for the year factoring these aspects. “While concentrating on our core markets and product segments, we see significant opportunities in the rapidly growing construction equipment segment, as also the LCV and tractor segments,” he added.

On growth philosophy, TT Srinivasaraghavan, MD, Sundaram Finance, said, “Our disbursements last year grew by 18% and our loan book by close to 20% which is a healthy growth. Sundaram Finance has always followed a policy of prudent growth.”