Domestic commercial vehicles wholesale volumes to grow 3-5% in FY26, backed by construction, infrastructure activities: ICRA

The country’s commercial vehicle industry is likely to witness 3-5% growth in wholesale volumes on a year-on-year basis, aided by the resumption of construction and infrastructure activities and a steady economic environment, ICRA said in its latest report.

Domestic commercial vehicle wholesale volumes saw a miniscule 0.1% year-on-year increase in May 2025, while sequentially it grew by around 1.6%. For the second month of FY2026 (April-May 2025), the CV wholesale volumes declined by 0.7% on a YoY basis.

The commercial vehicle retail volumes declined by 3.7% YoY in May 2025, while the sequential decline was at 11.3% owing to elevated inventory at the dealerships’ end.

In the medium and heavy commercial vehicle (M&HCV) segment, retail sales volumes in May 2025 witnessed a moderate year-on-year decline of 4.4%, while reporting a sizeable sequential decline of 18.9% owing to regional disruptions and geopolitical situation. The M&HCV (trucks) wholesale volumes are expected to register a 0-3% YoY growth in FY2026, after a 4% decline in FY2025.

Retail volumes in the light commercial vehicle (LCV) segment in May 2025 witnessed a year-on-year decline of 3.2% and a sequential decline of 4.9%, reflecting muted demand for the segment. The LCV (trucks) wholesale volumes are likely to register a limited 3-5% YoY growth in FY2026. The increasing preference for pre-owned vehicles over new ones in this segment has also impacted demand in recent years.

ICRA expects the domestic CV industry to register a modest YoY growth of 3-5 per cent in wholesale volumes in FY2026 after witnessing a marginal 1.2% YoY decline in FY2025.

While M&HCV (trucks) and LCV (trucks) segments are expected to witness modest YoY volume growth of 0-3% and 3-5%, respectively, the buses segment is likely to see a relatively higher growth of 8-10% YoY for this fiscal. While pickup in construction and mining activities, coupled with a steady economic environment, will support demand prospects for the LCV (light commercial vehicles) and M&HCV (medium and heavy commercial vehicles) segments, replacement demand is likely to support volume growth for the buses segment, ICRA said.