Will India’s Commercial Vehicle Sales See 2-5% Growth in FY26?
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Synopsis
Could India's commercial vehicle sector rebound? A recent report predicts a growth of 2-5% in FY26, driven by infrastructure development and favorable financing options. As the industry adapts to new trends, including electric vehicles, the future looks promising. Discover the factors influencing this anticipated growth and what it means for the economy.
Key Takeaways
- Projected growth in India's CV sales is 2-5% in FY26.
- The MHCV segment is expected to grow by 4-6%.
- The LCV segment is projected to see growth of 2-4%.
- Infrastructure activity and rural sentiment are key growth drivers.
- Government initiatives are encouraging the transition to electric vehicles.
New Delhi, July 7 (NationPress) The wholesale volumes of Commercial Vehicles (CV) in India are anticipated to rebound by approximately 2–5 percent in FY26, following a period of modest growth over the last two fiscal years, according to a report released on Monday.
The medium and heavy commercial vehicle (MHCV) category is estimated to expand by 4–6 percent this financial year, while the light commercial vehicle (LCV) segment is projected to grow by 2–4 percent during the same timeframe, as indicated in a report by CareEdge Ratings.
“The commercial vehicle (CV) sector is set to witness moderate growth, with total sales expected to improve by around 2-5 percent year-on-year in FY26,” stated Arti Roy, Associate Director at CareEdge Ratings.
This recovery is likely to be fueled by heightened infrastructure activities, a positive rural sentiment bolstered by a favorable monsoon forecast, more appealing vehicle financing options due to recent interest rate reductions, and ongoing fleet replacements—especially in the bus segment—driven by aging vehicles, road tax incentives for new vehicles under the scrappage policy for older vehicles, and a shift towards electric vehicles (EVs), as explained by Roy.
The lackluster growth in FY25 was attributed to a decline in demand across both the MHCV and LCV segments. Despite this, MHCV volumes experienced a slight uptick of 1.2 percent, while LCV volumes fell by 0.3 percent, according to the report.
In FY25, MHCV volumes showed limited growth due to prolonged monsoon conditions that delayed construction projects. Increased competition from the electric cargo three-wheeler market and cautious financing attitudes among small fleet operators also impacted the LCV segment.
“The Indian CV market had recorded its peak sales volume in FY19, and after suffering setbacks from the Covid-19 pandemic, the industry seems poised to exceed this all-time high, bolstered by substantial sales growth in FY22 and FY23,” remarked Hardik Shah, Director of CareEdge Ratings.
Buses, which constitute about 20 percent of the MHCV market, demonstrated a strong growth trend within this segment, surging by 21.6 percent in FY25, driven by the ongoing transition to electric buses, government fleet replacement initiatives, and escalating demand for public transportation, as outlined in the report.
Point of View
I emphasize that the anticipated growth in India's commercial vehicle sector is a positive indicator of economic recovery. With government support and evolving market conditions, the industry is set to navigate challenges while embracing opportunities, reinforcing our commitment to keeping the nation informed.
NationPress
25/07/2025
Frequently Asked Questions
What is the projected growth for India's commercial vehicle sales in FY26?
India's commercial vehicle sales are expected to grow by approximately 2-5% in FY26, following subdued growth in recent years.
Which segments of commercial vehicles are expected to grow?
The medium and heavy commercial vehicle segment is projected to grow by 4-6%, while the light commercial vehicle segment is expected to increase by 2-4%.
What factors contribute to the expected recovery in the commercial vehicle sector?
The recovery is anticipated due to increased infrastructure activity, improved rural sentiment, attractive vehicle financing, and ongoing fleet replacements.
Why was there muted growth in FY25?
Muted growth in FY25 was largely due to a slowdown in demand and external factors such as prolonged monsoon conditions that affected construction activities.
How did the pandemic impact the commercial vehicle industry?
The Indian commercial vehicle industry experienced significant sales declines during the pandemic, but is now poised for recovery as conditions improve.
