Commercial vehicles industry expects to marginal volume growth during festive period after 5 sluggish months 

With the southwest monsoon coming to an end, and a resurgence in infrastructure projects and essential goods transportation, India’s commercial vehicle (CV) industry is expected to see a robust demand growth. According to the Federation of Automobile Dealers Associations (FADA), in September the CV industry retailed 80,804 vehicles as opposed to 77,054 CVs in September 2022, registering a growth of 4.87 per cent.

“The market is likely to be buoyed by the availability of a broader range of vehicles and enticing finance options, thus, facilitating bulk purchases. September showcased a resilient CV segment, observing a noticeable demand in coal, cement and general market load sectors, with the passenger carrier segment also experiencing a favourable uptick. This positive trend can be attributed to the adequate deployment of funds from the central government towards infrastructure development, which fostered an environment for bulk deals, especially in tippers and government sectors,” Manish Raj Singhania, President, FADA said.

He adds that there was a discernible improvement in market sentiment post-Covid, supporting a healthy traction in HCVs, Buses and LCVs and signalling a revitalized tourism market.

The Indian commercial vehicle (CV) industry registered a growth of 14.7 per cent in domestic wholesale volumes on a sequential basis and 11.7 per cent on a YoY basis in September 2023. “Wholesale dispatch volumes picked up pace in anticipation of the seasonally strong festive period. This comes after five relatively sluggish months, post the transition to BS-VI 2.0 emission norms from April 1, 2023. For H1 FY24 (April-September), the domestic CV industry reported a YoY growth of 2.4 per cent in wholesale volumes,” Kinjal Shah, Vice President & Co-Group Head–Corporate Ratings, ICRA Limited says.

ICRA expects the CV industry wholesale volumes to remain firm during the rest of the year, supported by steady freight demand during the upcoming festive period, economic recovery and the Government’s focus on infrastructure spending in line with the budgetary allocations. “ICRA expects the industry to report volume growth of 2-4 per cent in wholesale dispatches in FY24 to 0.98-1 million,” Shah said.