Commercial Vehicles Segment Projected To Grow 3

New Delhi, July 1 (KNN) India’s commercial vehicle (CV) industry is projected to register a modest 3–5 percent year-on-year (YoY) growth in wholesale volumes in FY2026, driven by a revival in infrastructure and construction activity and a broadly stable macroeconomic environment, according to ratings agency ICRA’s latest outlook.

The forecast follows a marginal 1.2 percent decline in industry volumes in FY2025.

Growth across segments is expected to remain uneven. The light commercial vehicle (LCV) and medium and heavy commercial vehicle (M&HCV) categories are likely to see limited growth of 3–5 percent and 0–3 percent, respectively.

In contrast, the bus segment is expected to lead with an 8–10 percent YoY increase, driven by fleet replacement demand and network expansion by state transport undertakings and private operators.

Despite the positive annual forecast, near-term indicators remain subdued.

Domestic CV wholesale volumes were flat in May 2025, inching up by just 0.1 percent YoY, while retail volumes declined 3.7 percent YoY and 11.3 percent sequentially.

For the April–May 2025 period, wholesale volumes contracted 0.7 percent YoY, suggesting inventory pressures and weak buyer sentiment.

The LCV segment, in particular, reported a 3.2 percent YoY decline in retail sales in May and a 4.9 percent drop compared to April 2025.

ICRA attributed the muted demand to a growing customer preference for pre-owned vehicles and tight liquidity conditions. Nonetheless, wholesale LCV (truck) volumes are expected to grow 3–5 percent in FY2026.

The M&HCV segment also continued to face headwinds. Retail volumes fell 4.4 percent YoY and nearly 19 percent month-on-month in May 2025, impacted by regional disruptions and broader geopolitical uncertainty.

Following a 4 percent volume decline in FY2025, wholesale M&HCV growth in FY2026 is projected to remain restrained at 0–3 percent.

Looking ahead, ICRA anticipates that resumed momentum in infrastructure and mining projects, coupled with macroeconomic stability, will help the industry rebalance inventories and stimulate demand in the latter half of the fiscal year.

(KNN Bureau)