Liberalisation of Automobile Industry Policy and Demand for Commercial Vehicles

and Demand for Commercial Vehicles Rajaram Dasgupta This paper attempts to estimate demand for different categories of commercial vehicles upto the end of this decade. The author contends that the official demand forecasts are exaggerated because the assumptions about growth of traffic on which they are based are unrealistic. In the light of his demand projection, the author argues that the current policies of licensing a number of new units is likely to result in underutilisation of capacity and consequent loss of economies of scale. A preferable policy would be to increase capacity in the existing units would achieve greater efficiency and introduce some competition in the industry.