ICRA Projects 4-6% Growth in Commercial Vehicle Volumes for FY27

ICRA sees commercial vehicle wholesale volumes growing 4-6% in FY27

New Delhi, June 27

The rating agency said, "ICRA expects the domestic CV industry to register a moderate YoY growth of 4-6% in wholesale volumes in FY2027." It added that "the broadened base of FY2026 is likely to have some bearing on the growth momentum in FY2027."

According to the report, the medium and heavy commercial vehicle (M&HCV) truck segment is expected to record volume growth of 1-3 per cent in FY2027, while light commercial vehicle (LCV) trucks are likely to grow by 6-8 per cent. The buses segment is projected to register the strongest growth at 7-9 per cent during the fiscal.

ICRA noted that domestic commercial vehicle wholesale volumes remained strong in May 2026, rising 13.5 per cent year-on-year, while retail volumes increased 5.3 per cent. It attributed the growth mainly to the lingering impact of GST rate cuts and a favourable base effect.

The report said commercial vehicle wholesale volumes declined 1.1 per cent sequentially in May, while retail volumes fell 18.3 per cent from the previous month. However, wholesale volumes for the first two months of FY2027 were still up 15 per cent year-on-year.

ICRA also observed that commercial vehicle retail demand was broader geographically, with rural markets recording stronger year-on-year growth than urban markets, indicating increasing demand for goods movement beyond metro regions.

In the LCV segment, retail sales rose 7.7 per cent year-on-year in May, supported by GST rate cuts and improved last-mile freight movement. However, the agency flagged longer financing turnaround times as a key challenge for the segment.

For M&HCVs, retail volumes grew 1.9 per cent year-on-year in May. ICRA said infrastructure-led freight movement and school bus replacement demand supported sales in recent months, but fuel price hikes during May weighed on growth.

— ANI