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Informist, Wednesday, Sept. 3, 2025

 

NEW DELHI – The growth in despatches of commercial vehicles in August was below market expectations while tractors outperformed all other segments on the back of above-normal showers, analysts said. Commercial vehicle despatches in the domestic market rose nearly 9% on year last month and tractors grew a much faster 28%.

 

Ashok Leyland Ltd., Eicher Motors Ltd., Tata Motors Ltd., Mahindra & Mahindra Ltd., and Maruti Suzuki India Ltd. sold 79,169 commercial vehicles to dealerships in India in August, compared to 72,803 units sold last year. Month on month, the growth was almost 5%.

 

"This growth is not very exciting, this has been the normal trend," a Mumbai-based analyst covering the sector said. "The street was expecting 15%, growth rate in August was neutral," he said.

 

According to this analyst, medium-heavy commercial vehicles did not get the expected traction in August due to the monsoon. "Private capital expenditure is not happening as per expectations either, it is weighing on MHCVs," he said.

 

On the other hand, wholesale sales of tractors increased to 36,573 units in August from 28,569 units last year. Monthly growth was much more sobering, at 2%. "August is a seasonally good month for tractors. We expect the next two months to be good as well, before demand starts tapering off," according to the analyst.

 

Other automobile segments in India, especially passenger vehicles, saw demand being hit due to news of a cut in goods and services tax around Diwali, as announced by Prime Minister Narendra Modi on Aug. 15.

Tractors are expected to benefit from the potential tax rate rationalisation, as rates are expected to come down to 5% from 12% currently. Dealers accepted higher shipments of tractors regardless of tax news as customers did not prefer to postpone tractor purchases during the monsoon, analysts said.

 

CV TRENDS

A total of 89,365 commercial vehicles were registered in August, up 6% on year, according to HSBC Global Research. This growth is encouraging for the industry which is going through a cyclical downturn, as registrations had dropped 1% on year in July and declined 5% on year in August last year.

 

Sales of medium-heavy commercial vehicles of Ashok Leyland and Tata Motors grew in high single digits. In the listed space, these two companies sell the bulk of medium-heavy commercial vehicles in India. However, despatches of the sub-segment by M&M saw a contraction.

 

Ashok Leyland's bus segment grew in double digits, offsetting the weaker performance in medium-heavy trucks segment. Eicher Motors, which sells commercial vehicles through its joint venture VE Commercial Vehicles, saw a sharp fall in bus sales.

 

"Triggers like better fleet operator profitability, increase in infrastructure and construction activity (seen in core sector growth), and real estate cycle picking up due to lower interest rate should result in mid-single digit volume growth for FY26," Nirmal Bang Institutional Equities said in a report Tuesday.

 

Light commercial vehicle despatches by Tata Motors grew nearly 13% and those by M&M saw a 11% growth. In contrast, Ashok Leyland, which has a smaller presence in the segment, saw only a 1% growth.

 

TRACTOR TRENDS

As per HSBC Global Research, registrations of tractors grew by a staggering 30% on year in August to 84,111 units. This was likely aided by the 13?ll in August last year and was also better than the 11% growth in July.

 

On a monthly basis, registrations of tractors fell 4% in August, compared to a 19% monthly fall in August last year and a 15% growth in July.

 

M&M's management on Monday indicated that the above-normal monsoon and improved reservoir levels augur well for kharif crops. They also augur well for the upcoming rabi season in October.

 

Following is the domestic wholesale sales of commercial vehicles in August:

 

Company	Aug-25	Jul-25	Aug-24	YoY % change	MoM % change
Ashok Leyland	15239	15064	14463	5.37	1.16
Eicher Motors	7167	7115	6543	9.54	0.73
Tata Motors	29863	28956	27207	9.76	3.13
M&M	24128	21571	22095	9.20	11.85
Maruti Suzuki	2772	2794	2495	11.10	-0.79
TOTAL	79169	75500	72803	8.74	4.86

 

Following is the wholesale sales of tractors in August:

Company	Aug-25	Jul-25	Aug-24	YoY % change	MoM % change
M&M	28117	28708	21917	28.29	-2.06
Escorts	8456	7154	6652	27.12	18.20
Total	36573	35862	28569	28.02	1.98

 

End

 

Reported by Anand JC

Edited by Ashish Shirke

 

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