There is an interesting article in the Indian press this morning in which the Medium and Heavy Duty truck demand cycles are discussed.

We're not going to repeat it all here, but, in essence, there still seems to be sufficient demand momentum to maintain double digit demand for trucks over the next couple of years. The imposition of VAT and the Indian Supreme Court's dim view of overloading are both cited as factors in this.

And so the Indian market - which traditionally cycles in four-year periods - appears to have reshaped itself. Historical analysis would have pointed to a downturn during the past fiscal year: Indian numbers are calculated on an April - April basis, and so FY2005-2006 should have proved awkward. It didn't, suggesting that the Indian market is swapping one boom for another, without an intervening period of bust.

But, going back to the historical analysis for a moment, FY2009 - 2010 should prove to be bad. What is difficult to assess is how bad. Some supply problems mean that not all Indian truck buyers have managed to buy those trucks as yet. However, there will come a point at which this demand lag will end.

What happens then? Given the attention now being paid to the Indian market by the European OEMs: DaimlerChrsyler, MAN, Volvo, Scania - and, we believe - PACAAR - does this means that their major investments in India will bear fruit just at the start of a downturn? Intriguing - especially as both Tata and Ashok Leyland are on record as saying that it is export and foreign earnings as much as domestic growth that has got their attention.