New Delhi, March 10 (IANS) The domestic commercial vehicle (CV) industry’s wholesale volumes is set to witness a year-on-year growth of 3-5 per cent in FY26, demonstrating some recovery, a report showed on Monday.
This follows a flat volume movement estimated in FY2025, marred by the demand slowdown in the first half of the fiscal due to the Lok Sabha elections, according to an ICRA report.
Commenting on the outlook for the industry, Kinjal Shah, senior vice president at ICRA, said: “Resumption of construction and infrastructure activities, steady rural demand along with higher replacement sales stemming out of ageing fleets and Government mandates are the likely driving factors to propel this volume expansion towards the end of FY2025 and through FY2026.”
ICRA expects the long-term growth drivers for the domestic CV industry to remain intact. The sustained push in infrastructure development, evidenced by the higher infrastructure capital outlay in the recent budgetary allocation, a steady increase in mining activities and the improvement in roads/highway connectivity are expected to support volumes going forward.
The replacement demand would also remain healthy, primarily due to the ageing fleet, estimated at around 10 years for the medium & heavy commercial vehicles (M&HCVs) and is expected to aid the industry volume expansion in the medium term, according to the report.
Among the various sub-segments, the M&HCV (trucks) wholesale volumes are likely to grow by up to 3 per cent YoY in FY2026 after seeing a flattish growth or marginal contraction in FY2025.
Resumption of construction and infrastructure activities is likely to aid the low YoY volume increase in FY2026. The segment reported an 7 per cent YoY contraction in the April-December period of FY2025, with the tipper volumes contracting by 11 per cent YoY, and the haulage and tractor-trailer sub-segments each declining by 5 per cent YoY.
Wholesale volumes for the domestic light commercial vehicles (LCV) (trucks) are expected to see a modest 3-5 per cent YoY expansion in FY2026, after registering a flattish growth or marginal contraction in FY2025.
Resumption of infrastructure and construction activities, coupled with an improving economic environment are likely to remain the key drivers for the segment’s growth in FY2026. The segment witnessed a decline of 3 per cent on a YoY basis in the nine months of FY25, on account of factors such as a high base effect, sustained slowdown in e-commerce and cannibalisation from electric three-wheelers (e3Ws).
The scrapping of older government vehicles has been driving replacement demand for the bus segment from the state road transport undertakings (SRTUs). The same is expected to result in an 8-10 per cent YoY growth for the segment in FY2026, after an anticipated 11-14 per cent YoY expansion in FY2025, thereby surpassing the historic high volumes of FY2013, in FY2025.
In terms of powertrain mix, conventional fuels (primarily diesel) continue to dominate the domestic CV industry with a penetration of 88 per cent in YTD FY2025, while alternative fuels (CNG, LNG and electric) accounted for the balance. Relatively higher penetration of electric vehicles (EVs) has been witnessed in the buses segment, with a penetration of 5 per cent in YTD FY2025, the report stated.
Formation of the dedicated freight corridors (DFCs) will add incremental capacity to the railways network — while ICRA anticipates the DFCs to largely impact container traffic on Western corridor, other road traffic is expected to remain relatively unimpacted.
Increasing freight rates are likely to support the industry’s demand prospects. While delinquencies for both new and used CV portfolios have moderated from their respective peaks from the pandemic period and have remained steady over the last four quarters, the movement in the same remains a key monitorable, the report added.
–IANS
sps/na
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by BhaskarLive.in and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of BhaskarLive.in We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, BhaskarLive.in takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
