Used truck prices rise sharply year-on-year, with significant growth in light commercial vehicles.
The Shriram Mobility Bulletin reports a notable increase in used truck prices year-on-year, with light commercial vehicles experiencing high double-digit growth. Prices for vehicles in the 1.5 to 2 tonne segment surged by 38 percent in the used vehicle market, while the 2 to 3.5 tonne segment saw a 22 percent rise, and the 3.5 to 7.5 tonne segment was up by 21 percent. The 31 to 36 tonne category also experienced significant price hikes, though this is attributed to the low repossession rates of higher GVW (gross vehicle weight) trucks.
“In the past year, smaller tonnage segments used for inter and intra-city logistics have increasingly shifted from new trucks to used ones,” said Ashutosh Pandey, CEO of Mahindra First Choice Wheels. This shift is driven by rising new truck prices and inconsistencies in freight rate increases, prompting smaller unorganised fleet operators to cut costs by opting for used trucks, which are about 40 percent cheaper.
The trend towards used trucks has been evident for nearly two years. A Shriram Finance spokesman noted, “Prices for all types of used commercial vehicles, whether BS IV or BS VI, have risen by 25-30 percent over the past two years.” Subdued sales during 2019-22 have led to a shortage of supply in the used truck market. With new vehicle prices continuing to rise, the used truck market is experiencing significant traction, and prices for used vehicles are expected to remain strong.
The current batch of new trucks, which are one or two years old, will enter the pre-owned segment in a few years, potentially driving sustained growth in the used vehicle market.
