Some more nasty news from India today.
According to this report from Bloomberg, India's inflation increased beyond estimates last month, and now sits at 12.44 per cent. Forecasts had suggested a rise to 12.2 per cent. The report suggests that inflation is likely to reach 13.5 per cent by the end of the year.
This seems to make likely further hikes in the RBI's benchmark rate - which currently sits at nine per cent. Given that the Indian government has just approved a salary increase of an average 21 per cent - at a cost of $8 billion - an inflationary spiral looks to have been established here.
For the truck manufacturers - both domestic and foreign - this isn't good news. We've already reported on the fall off in demand for Commercial Vehicles caused, so it would seem, by increased borrowing costs. These seem likely to increase further, placing yet more restraints on the truck market.
And, as if by magic, here's a rather telling interview with R. Sridhar, managing director of Shriram Transport Finance Co, which provides finance to around 400,000 truck buyers per year. Check out the delinquency rates.