Commercial vehicle industry volumes to see 7-10 pc growth
ROADS & HIGHWAYS

Commercial vehicle industry volumes to see 7-10 pc growth

According to rating agency Icra, the commercial vehicle market volume is anticipated to increase by 7 to 10% in the upcoming fiscal year. The expansion of e-commerce, back-to-school and office seasons, replacement demand, government infrastructure spending, and back-to-work scenarios would all contribute to the volume growth, it was underlined.

However, it added, the growth will slow from 24-26% in the current fiscal year.

Icra stated that the macroeconomic environment has improved, replacement demand has increased by 16% year over year, and the underlying industries such as steel, cement, mining, automobiles, and e-commerce have shown strong traction. These growth trends were evident in the third quarter of the current fiscal, according to wholesale dispatches.

It was highlighted that freight rates were still holding steady and that this, along with good freight availability, was sustaining fleet operator viability.

Medium and heavy commercial vehicles (M&HCV), light commercial vehicles (LCV), and buses all had broad-based growth patterns in the third quarter and the nine months that concluded on December 31, 2022, according to Icra.

Icra Assistant Vice President & Sector Head - Corporate Ratings Sruthi Thomas stated that "sales in the domestic CV industry continue to be propelled by multiple tailwinds including replacement of ageing vehicles, pick-up in mining, infrastructure, and construction activities, improvement in the overall macroeconomic environment, and healthy fleet utilisation levels resulting in improved fleet operator viability.

The increased capex spending of Rs 10 trillion in the Union Budget for 2023–24, which is further proof of the government's continuous emphasis on infrastructure development, bodes well for sustainable growth, particularly in the heavy truck category over the short term, she noted.

Icra anticipates that the CV OEMs' financial performance will also improve, driven by lower operating costs and a reduction in commodity prices. As a result, the combined operating profit margin of CV OEMs is anticipated to increase to 6% in FY2023 and further in the following fiscal year.

According to rating agency Icra, the commercial vehicle market volume is anticipated to increase by 7 to 10% in the upcoming fiscal year. The expansion of e-commerce, back-to-school and office seasons, replacement demand, government infrastructure spending, and back-to-work scenarios would all contribute to the volume growth, it was underlined. However, it added, the growth will slow from 24-26% in the current fiscal year. Icra stated that the macroeconomic environment has improved, replacement demand has increased by 16% year over year, and the underlying industries such as steel, cement, mining, automobiles, and e-commerce have shown strong traction. These growth trends were evident in the third quarter of the current fiscal, according to wholesale dispatches. It was highlighted that freight rates were still holding steady and that this, along with good freight availability, was sustaining fleet operator viability. Medium and heavy commercial vehicles (M&HCV), light commercial vehicles (LCV), and buses all had broad-based growth patterns in the third quarter and the nine months that concluded on December 31, 2022, according to Icra. Icra Assistant Vice President & Sector Head - Corporate Ratings Sruthi Thomas stated that sales in the domestic CV industry continue to be propelled by multiple tailwinds including replacement of ageing vehicles, pick-up in mining, infrastructure, and construction activities, improvement in the overall macroeconomic environment, and healthy fleet utilisation levels resulting in improved fleet operator viability. The increased capex spending of Rs 10 trillion in the Union Budget for 2023–24, which is further proof of the government's continuous emphasis on infrastructure development, bodes well for sustainable growth, particularly in the heavy truck category over the short term, she noted. Icra anticipates that the CV OEMs' financial performance will also improve, driven by lower operating costs and a reduction in commodity prices. As a result, the combined operating profit margin of CV OEMs is anticipated to increase to 6% in FY2023 and further in the following fiscal year.

Next Story
Infrastructure Transport

Modi Launches Rs 318.5 Billion Projects in Maharashtra

Prime Minister Narendra Modi on Wednesday launched infrastructure projects worth Rs 318.5 billion during his two-day visit to Maharashtra, including two landmark developments — the first phase of the Rs 196.5 billion Navi Mumbai International Airport (NMIA) and the second phase of the Rs 122 billion Mumbai Metro Line 3. India’s first fully digitised airport, NMIA, has been designed for multimodal connectivity and is being developed under a public-private partnership between Adani Airport Holdings, which holds a 74 per cent stake, and the City and Industrial Development Corporation of Maha..

Next Story
Real Estate

Tata Housing Sells Rs 10 Billion Homes in Bengaluru

Real estate developer Tata Housing on Wednesday announced that it has achieved home sales worth over Rs 10 billion in its newly launched residential project in Bengaluru, driven by strong demand. In a statement, the company said Tata Housing Varnam Phase I — part of the 135-acre integrated township Carnatica in North Bengaluru — has surpassed Rs 10 billion in sales since its launch in August 2025. Spread across 20 acres, Varnam Phase I has recorded sales of 377 units out of 582 apartments, along with 48 townhouses and row houses. The project has attracted substantial interest from both e..

Next Story
Infrastructure Transport

OMRON to Train 1,000 Graduates Annually at Bengaluru Centre

Japanese industrial automation giant OMRON announced on Wednesday that it will train and skill 1,000 fresh engineering graduates annually at its newly launched Automation Centre in Bengaluru. The initiative aims to enhance India’s employable manufacturing talent and build a resilient, future-ready industrial ecosystem. Motohiro Yamanishi, President of the Industrial Automation Company at OMRON Corporation, said, “We see immense potential in the dynamism of India’s manufacturing sector. The new Automation Centre underscores India’s vital role in our global and Asia-Pacific vision. It i..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?