New Delhi, April 25: A report released on Saturday indicates that India’s commercial vehicle (CV) industry is projected to achieve a record sales figure of approximately 1.24 million units in the fiscal year 2027, surpassing the previous peak recorded in FY2019.
According to Crisil Ratings, the industry experienced a robust recovery of 13% in FY2026. However, due to this elevated base, the growth rate for FY2027 is expected to moderate to 5-6%.
Domestic demand is anticipated to remain supportive, bolstered by infrastructure-related activities, stable replacement demand, and reductions in Goods and Services Tax (GST) rates.
Nonetheless, the report also notes that ongoing events in West Asia may lead to some disruptions in exports in the near future. The domestic market constitutes approximately 92% of the total volume.
The industry is broadly categorized into light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs), with buses included as a sub-category within both segments.
The reduction in GST rates has improved purchasing costs, reviving previously stalled demand. Additionally, lower interest rates, better freight utilization, and a surge in infrastructure and mining activities have further strengthened this recovery.
Anuj Sethi, Senior Director at Crisil Ratings, stated, “LCVs, which account for nearly 60% of the industry’s total volume, are expected to grow at a rate of 5-6% due to demand from e-commerce and last-mile delivery.”
MHCV volumes are projected to increase by 4-5%, supported by spending on freight and infrastructure.
He added that the current trend of moving towards higher-capacity vehicles, aided by improved road infrastructure, may slightly slow the pace of volume growth, even as underlying demand remains stable.
In FY2027, the bus segment is expected to see a growth of 3-4%, driven by replacement demand and government purchases of electric buses.
The firm estimates that although the bus segment is currently small, the electrification trend in this category is expected to grow faster than in any other commercial vehicle segment. However, its current penetration remains low, with a steady increase anticipated.
Poonam Upadhyay, Director at Crisil Ratings, mentioned, “Exports, which account for about 8% of total commercial vehicle volume, may slow to a growth rate of 2-4% in FY2027, down from approximately 17% in FY2026.”
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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