Strict interpretation of the notification implies prospective amendment: The notification prescribes the maximum permissible axle load for various trucks. Increase in ‘maximum permissible load’ may not increase the GVW of old trucks, which have been certified for a lower tonnage by OEMs and testing agencies. The way forward would be for OEMs to develop and get certified higher tonnage vehicles on same number of axles, which may take a few months. This may involve changes to chassis, axles, steering, tyres, brakes, etc. Fleet operators may choose to delay new truck purchases till availability of higher-tonnage trucks. Although near-term demand may be negatively impacted, we do not see a lasting impact.
Applicability to old trucks implies formalisation of existing overloading practices: Some news reports suggest that the new norms may be extended to old trucks. This may be through re-certification of existing fleet or a tacit approval for overloading without any re-certification requirements. We believe re-certification of 2.5-3.0mn trucks that are currently on the road would be impractical and time-consuming. On the other hand, if all fleet operators start overloading immediately to take advantage of the norms, it may impact truck demand over FY19-20.
Potential 4-5% impact on FY19-20 volumes: About 60% of trucks’ end-use is volume-based (e.g. oil tankers, 2Ws, cars, etc.), where higher tonnage would not enable higher loads. In the remaining ~40% of trucks use, there is significant overloading already being practised. We estimate that if the non-volume-based trucks that are currently not overloaded start being overloaded, it may impact truck demand by 4-5% over FY19-FY20.
Figure 1: Change in Maximum Axle Loads
|*Max load per axle||Old cap||Revised cap||Change|
|1A ‐ 1T||3.0||3.0||0%|
|1A ‐ 2T||6.0||7.5||25%|
|1A ‐ 4T||10.2||11.5||13%|
|2TA ‐ 8T||19.0||21.0||11%|
|3TA ‐ 12T||24.0||27.0||13%|
Figure 2: Change in Maximum Permissible Load per truck
|Max load per truck||Old tonnage||Revised tonnage||Change|
Figure 3: Change in Maximum Permissible Load per truck
|Applicable to new trucks||
|Applicable to all trucks, incl. existing||
Option A (Re‐certification of existing fleet)
Figure 4: Potential impact on new truck sales
|Break-down of trucks (current usage)||Population of trucks (current usage)||Impact of revised norms on old trucks|
|16%||416,000||(62,400)||15% higher tonnage availability, impacting new truck requirement|
|8%||208,000||31,200||15% lower tonnage availability, benefiting new truck requirement|
|Impact over two years||-4%|