After a disappointing end to FY24, the commercial vehicle (CV) segment comprising buses and trucks is expected to see a revival this fiscal, with volumes forecasted to surpass the all-time high level of FY19. Truck and bus manufacturers expect demand to gather momentum in the second half of FY25 with the new government continuing its focus on investments on various projects. However, interest rates, fuel prices and inflation will be keenly watched as these could have an impact on consumer sentiments.
India’s CV volumes had crossed the one million unit mark for the first time in 2019. This was mainly due to strong GDP growth enabled by infrastructure growth and pre-buying because of adoption of Bharat Stage 6 emission norms in the succeeding year. Volumes declined in FY20 due to the pandemic, but recovered sharply in FY23. Growth in FY24 over FY23 was negligible at under 1%.
Growth revival has been visible so far this year. Tata Motors, the country’s largest commercial vehicle maker, saw a growth of 16% in domestic volumes to nearly 57,000 units in April and May. Girish Wagh, executive director, Tata Motors, said, “With promising GDP growth outlook, favourable policy framework driving growth across segments, and continuing focus on infra-related developmental projects, demand for commercial vehicles has held well till end May. It is expected to improve further from the latter half of Q2.”
Domestic volumes at Ashok Leyland grew by 10% in April and May. A major reason behind the increase is the more than doubling of the bus volumes. The Chennai-based company is the leader in the bus segment. In June, Dheeraj Hinduja, executive chairman, Ashok Leyland, said, “Initially the expectation of many agencies and the industry was that the first quarter might be a slow one due to elections, but April-May saw a growth of 10% over last year. If this continues, we will have another very promising year.”
To tap the demand growth, JK Tyre, the country’s largest producer of CV tyres, rolled out four new tyre models a few days ago. Anuj Kathuria, president (India), JK Tyre & Industries said, “Demand for medium and heavy vehicles is a little slow. We expect… work to restart on the infrastructure and transport projects. Demand will come back.”
