Commercial vehicles, construction equipment to drive auto growth as passenger vehicles, tractors remain subdued: Nuvama
New Delhi, September 4
The global auto cycle is likely to remain uneven through the rest of CY26, with commercial vehicles and construction equipment offering stronger growth prospects while passenger vehicles and tractors face a more subdued outlook, according to a research report by Nuvama Institutional Equities.
The brokerage expects improving CV and CE demand to support Indian auto-component suppliers, while India's PV growth could moderate to low single digits in H2FY27.
Nuvama, in its report on the global automotive outlook, said guidance from more than 20 global entities pointed to growth of up to 16 per cent in North American heavy commercial vehicles and up to 11 per cent in Europe. Construction equipment demand is also expected to expand by as much as 10 per cent in North America and Europe, with several major manufacturers raising their CY26 guidance.
The brokerage expects India's medium and heavy commercial vehicle segment to grow 6 per cent in CY26, while India's construction equipment industry could expand 12-15 per cent in FY27. Escorts expects particularly strong growth in mini excavators and cranes, while compactors and backhoe loaders are expected to grow 5-6 per cent and 5-7 per cent, respectively.
"Demand in India has continued to grow supported by steady freight activity, continued investments in infrastructure and healthy replacement demand," Nuvama said, citing Volvo's assessment of the Indian truck market.
The outlook for tractors remains more cautious globally, with North American large tractor volumes expected to decline sharply amid elevated input costs and pressure on farm profitability. In India, however, Escorts and Mahindra & Mahindra expect mid-single-digit tractor industry growth in FY27, although the timing of the festive season could make the second quarter weaker.
Passenger vehicles are also expected to face a softer growth trajectory. Nuvama said Indian PV industry growth is likely to moderate to low single digits in H2FY27 because of a high base.
The brokerage suggested that infrastructure spending, fleet replacement and improving freight activity could keep CV and CE demand resilient into 2027, while the recovery in tractors and PVs is likely to remain more dependent on consumer and farm-sector conditions.
— ANI
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