New Delhi, Aug. 31: The commercial vehicle market, which has been in the grip of a slowdown for the last two years, is hoping for a turnaround on the back of an economic recovery.

“This is the 15th consecutive month of decline in commercial vehicle sales. This sector is still a concern,” Vishnu Mathur, director-general of the Society of Indian Automobile Manufacturers (Siam), said.

Sales of trucks and buses dropped 20.23 per cent to 6,32,738 units in the last fiscal.

Though a new government at the Centre has had a positive effect on passenger vehicles, sales of commercial vehicles do not look promising.

Passenger car sales rose for the third consecutive month in July by 5.04 per cent. However, sales of commercial vehicles in July were down 13.64 per cent to 47,765 units from 55,310 units in the year-ago period.

Lack of infrastructure projects and high taxes have taken a toll on commercial vehicles, analysts said.

“Mining and infrastructure sectors drive demand for medium and heavy commercial vehicles. These sectors performed poorly in the last couple of years. The sale of small commercial vehicles grew on the back of demand from the retail sector. As consumer buying slowed, it had an impact on the growth of the light vehicles as well,” said Kumar Kandaswami, senior director, Deloitte Touche Tohmatsu India Private Ltd.

The demand of auto makers to withdraw old vehicles from the road is yet to be met, allowing old buses and trucks to continue to ply.

“Truckers have realised that plying older vehicles, which they used to sell after claiming the depreciation, is economic. The high fuel use is still a cheaper option than paying high loan servicing costs,” said S.P. Singh, senior fellow and coordinator, Indian Foundation of Transport Research & Training.

“Fleet modernisation would immensely help the sector. We were hoping the government would address the demand,” said S. Sandilya, the chief executive of Eicher Group.