Indian commercial vehicle industry likely to grow 12-15 % in FY23: ICRA

New Delhi, Aug 20 (KNN) India’s commercial vehicle Industry is on the path of recovery post-pandemic and is expected to grow by 12-15 per cent in the FY2023, according to the latest research of ICRA ratings.

The research also indicates that the demand for light commercial vehicles (LCVs) has started picking up ahead of M&HCV (trucks). This was attributed to the healthy demand generated from e-commerce, agriculture and other allied sectors.

However, the segment witnessed an 8 per cent dip in volumes in Q1 FY2023 as the pent-up demand tapered off and the base effect caught up.

“The growth trends in the CV industry have been largely secular in nature, but more pronounced in the goods carrier sub-segment. This is expected to continue over the medium term, and ICRA expects volume growth of 15-20 per cent for M&HCV (trucks) in FY2023," said Kinjal Shah, Vice President & Co-Group Head, ICRA Ratings.

Shah further highlighted that within goods carriers, growth in the medium and heavy commercial vehicles (M&HCV) has spurred. The rise in construction activity has boosted the demand for tippers and trucks in M&HCV.

Another segment that has picked up pace in Q4 FY22 after a prolonged dip is the bus segment. It has segment recorded a 258 per cent growth on a Y-oY basis in Q1 FY2023, by selling 19,297 buses. The demand for this was primarily driven by the gradual opening up of offices and educational institutions.

The report further suggests that as time passes, other challenges such as ongoing aversion to public transport are expected to stabilise as well. ICRA expects a growth of 60-65 per cent in the segment in FY2023, albeit on a low base.  (KNN Bureau)