Domestic commercial vehicle (CV) volumes may touch one million units mark this financial year: Crisil

Domestic commercial vehicle (CV) volumes are projected to reach one million units this fiscal (FY26), matching the pre-pandemic peak of FY19, according to ratings agency Crisil. This growth is driven by accelerating infrastructure development, replacement demand, and policy support from the PM-eBus Sewa scheme. The sector’s credit outlook remains stable, underpinned by strong liquidity and healthy cash flows. Light commercial vehicles (LCVs) are expected to lead the growth, making up approximately 62% of total volumes, driven by the increasing demand from e-commerce and warehousing sectors. Growth in freight-intensive industries such as cement and mining will further boost demand. 

Crisil's, based on four key CV players representing around 70% of the sector volume, forecasts a 2-4% growth in the medium and heavy commercial vehicle (M&HCV) volumes, accounting for around 38% of total CV volume. This growth is supported by increased infrastructure spending in construction, roads, and metro-rail projects. Meanwhile, the LCV segment is projected to grow faster at 4-6%, fuelled by e-commerce deliveries and warehouse expansion in Tier 2 and 3 cities. Easing inflation and interest rates will spur deferred replacement demand from the aging fleet purchased during FY17-19. The PM-eBus Sewa scheme, launched in August 2023 with an estimated cost of Rs. 57,613 crore, aims to deploy 10,000 electric buses across 100 cities, further catalysing growth in the electric bus segment. The overall CV volume is expected to grow by 3-5% this fiscal, aligning with long-term growth trends. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.