While discretionary purchases of vehicles have taken a back seat, lower freight demand has hurt sales of commercial vehicles.
Exports are expected to decline 10-12 per cent in value terms, as demand from key markets abroad is subdued because of the pandemic. There are some signs of revival in a few destinations, though.
SMEs in the sector are largely tier-2 and tier-3 players catering to tier-1 manufacturers, the replacement market, OEMs and exports.
However, demand for tractors has been resilient owing to better farm income prospects and government support. This will help SMEs catering to this segment.
Tractor production volumes are forecast to rise about 12 per cent year-on-year, while that of other segments could plunge 15-30 per cent.
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