The Indian commercial vehicle (CV) industry is likely to notch sales growth of 3-5 percent in 2025-26, according to a report by Indian rating agency ICRA on Tuesday, March 11.
This projected recovery comes on the heels of a flat volume movement in the fiscal year 2024-25 which was largely attributed to a demand slowdown during the first half of the financial year due to the national elections, ICRA said.
According to ICRA, the anticipated growth will be fuelled by a confluence of factors, including the resumption of construction and infrastructure activities, consistent rural demand, and a surge in replacement sales driven by ageing fleets and government mandates.
“The push in infrastructure development, higher allocation in the recent national budget for 2025-26, steady mining activities, and improved highway connectivity will support volumes going forward. Additionally, replacement demand for medium and heavy commercial vehicles (M&HCVs), with an average fleet age of around 10 years, is expected to further aid industry expansion,” it said.
Breaking down the segments, ICRA said that the M&HCV truck category is expected to witness a marginal volume growth of 0-3 percent in 2025-26 after a flattish or slightly negative trend in 2024-25.
The segment recorded a seven percent negative sales growth in the first nine months of 2024-25 with tippers, haulage trucks, and tractor-trailers experiencing declines of 11 percent and five percent, respectively.
Meanwhile, light commercial vehicles (LCVs) are projected to grow by 3-5 percent in 2025-26 after facing a marginal contraction in 2024-25, impacted by a high base effect, a slowdown in e-commerce, and increased competition from electric three-wheelers, the ICRA report said.
The bus segment, however, remains a bright spot, with an 8-10 percent growth anticipated following an 11-14 percent increase in 2024-25, it added.
