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Informist, Wednesday, Apr. 16, 2025

NEW DELHI – Domestic commercial vehicle sales in 2025-26 (Apr-Mar) are expected to cross one million units due to accelerating infrastructure execution, replacement demand, and government policy support, CRISIL Ratings Ltd. said in a report on Wednesday. In doing so, the sales will reclaim the previous high reported in the pre-COVID-19 pandemic peak in FY19, it said. 

Light commercial vehicles, which account for around 62% of the overall commercial vehicles sold, may lead the rebound with 4-6% volume growth in FY26, while medium-heavy commercial vehicles could grow 2-4%. While despatches of the former sub-segment contracted 2% in FY25, sales of the latter were flat year-on-year, according to data by the Society of Indian Automobile Manufacturers.

Overall, domestic sales of the segment are likely to grow 3-5% in FY26. Weaker infrastructure execution and slower economic growth in FY25 led to a 1.2% on-year contraction in wholesale sales in the segment.

"The recovery will be driven by a revival in infrastructure execution – an anchor for CV demand – which gained momentum in the last quarter of fiscal 2025 and is likely to sustain on the back of a 10-11% rise in central government capex," Anuj Sethi, senior director at CRISIL Ratings, said in a report.

Light commercial vehicles are set to gain from e-commerce-led deliveries and expansion of warehouses in tier-II and III cities, while medium-heavy commercial vehicles could benefit from higher infrastructure spending across construction, roads and metro-rail projects. Both categories could get a fillip from easing inflation and interest rates, which in turn boost deferred replacement demand from the ageing fleet bought between FY17 and FY19, CRISIL Ratings said.

Electric buses are expected to benefit from the PM-eBus Sewa Scheme. The government allotted INR 576 billion to this scheme to deploy 10,000 electric buses across 100 cities under a public-private partnership model. Buses are classified as both light commercial vehicles and medium-heavy commercial vehicles. 

The government has mandated the fitting of air-conditioned cabins in trucks from October. CRISIL expects this to increase their costs by at least INR 30,000 per unit, especially for medium-heavy commercial vehicles. Commercial vehicle companies hiked prices 2-3% in January to pass on the increase in compliance costs.  End

Reported by Anand JC

Edited by Avishek Dutta

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