Revving Up: India's CV Industry Looks to Rebound Amid Growth Projections

ICRA forecasts a 3-5% YoY growth in India's commercial vehicle sector by FY2026, driven by infrastructure development and vehicle replacement demand. Despite a flat FY2025 due to election impacts, the sector eyes recovery with rising investments and regulatory changes. Diesel dominates the market, but alternatives grow.

India's domestic commercial vehicle industry is anticipated to experience a rebound, with a 3-5% year-on-year growth in wholesale volumes slated for FY2026, according to ICRA's latest projections. This follows a muted performance in FY2025, largely due to demand slowdowns amid the General Elections.

Kinjal Shah, Senior Vice President & Co-Group Head of ICRA, indicates long-term growth drivers remain robust. Enhanced infrastructure investment and increased mining activities, alongside improved highway connectivity, are set to bolster future volumes. The ageing medium & heavy commercial vehicle fleet, averaging at 10 years, is expected to drive replacement demand, aiding industry expansion.

The segment previously saw a 7% contraction over FY2025's first nine months. Yet, the anticipated resurgence in the light commercial vehicle segment, driven by infrastructure recovery, signals lucrative growth prospects. Additionally, alternative fuels are gaining market share, with regulatory measures like mandated air-conditioned cabins suggesting an evolving landscape.

(With inputs from agencies.)