Liquidity constraints faced by non-bank lenders and the new axle load norms have impacted VE Commercial Vehicles Ltd.'s sales growth, according to its Managing Director and Chief Executive Officer Vinod Aggarwal.
“Liquidity (issue) has really affected the truck industry,” Aggarwal told BloombergQuint in an interview. “The high-risk customers, who tend to be 15-20 percent of our customers, are finding it hard to get finance from non-banking finance companies.”
Aggarwal said the cash crunch will get solved over a period of time as old players will be replaced by new entrants as there were no fundamental issues with the financial sector. India's auto sales have been falling since the Diwali festival season due to higher upfront insurance costs and the liquidity crunch in September spilling over to the vehicle finance industry.
The automaker said the new axle load norms contributed to the slowdown in demand. “The drop in the heavy-duty trucks (sales) has been around 25 percent in the last two months,” Aggarwal said.
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