Mumbai: Domestic commercial vehicle (CV) industry is likely to see a 3-5 per cent year-on-year growth in wholesale volumes this fiscal, after logging a slight dip of 1.2 per cent in FY25, Icra said in a report on Monday.
This growth is expected to be driven by resumption of construction and infrastructure activities and a steady economic environment, the ratings agency said in its latest report.
Domestic CV wholesale volumes saw a miniscule 0.1 per cent increase in the previous month on a year-on-year basis, while sequentially it grew by around 1.6 per cent. However, in the first two months (April-May) of the current financial year, the CV wholesale volumes declined by 0.7 per cent year-on-year, it said.
CV retail volumes, according to Icra, declined by 3.7 per cent year-on-year in May 2025, while sequential decline was at 11.3 per cent, it said, adding such trends reflect elevated inventory at dealerships' end.
In the medium and heavy commercial vehicle (M&HCV) segment, retail sales volumes in May witnessed a moderate decline of 4.4 per cent on a Y-o-Y basis, while reporting a sizeable decline of 18.9 per cent sequentially.
Regional disruptions and geopolitical situation had some bearing on demand for the month. The M&HCV (trucks) wholesale volumes are expected to register a 0-3 per cent Y-o-Y growth in FY26, after a 4 per cent decline in FY25, as per the report.
Retail volumes in the light commercial vehicle (LCV) segment in the previous month declined by 3.2 per cent on a Y-o-Y basis, and by 4.9 per cent on a sequential basis, reflecting muted demand.
The LCV (trucks) wholesale volumes are likely to register a limited 3-5 per cent Y-o-Y growth in FY26. Increasing preference for pre-owned vehicles over new vehicles in this segment has also impacted the demand in the recent past, it stated.
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While M&HCV (trucks) and LCV (trucks) segments are expected to witness modest Y-o-Y volume growth of 0-3 per cent and 3-5 per cent, respectively, the buses segment is likely to see a relatively higher growth of 8-10 per cent Y-o-Y for this fiscal, Icra said.
At the same time, pick up in construction and mining activities, coupled with a steady economic environment, will support the demand prospects for the LCV (trucks) and M&HCV (trucks) segments, while replacement demand is likely to support volume growth for the buses segment, the report said.
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