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‘CV industry heading toward a 3%-6% de-growth in FY25’


CareEdge expects a slowdown in demand in the MHCV and LCV segments leading to high inventory levels with dealers. File
| Photo Credit: Reuters

After witnessing year-on-year volume growth of 30.7% in FY22 and 28.7% in FY23; and a muted growth of 0.7% in FY24, India’s commercial vehicles (CV) industry is headed to de-grow by up to 6% in FY25 rating agency CareEdge said in a study.

“Several factors contribute to this, including general election-related disruptions, elevated vehicle costs, and high channel inventory levels,” said Arti Roy, Associate Director, CareEdge Ratings.

‘Possible improvement’

“However, there is hope for improvement in H2 of FY25, as infrastructure projects pick up pace post-monsoon and anticipated interest rate cuts provide some relief,” she added.

Hardik Shah, Director, CareEdge said the CV industry witnessed its highest ever sales in FY19. Post Covid the industry will surpass FY19 performance due to improvement in sales in FY22 and FY23.

“However, it faced a few hurdles in FY24 due to higher channel inventory, the impact of the transition to BS-VI norms, a rise in vehicle cost and high interest rates. Looking ahead, the sales volume is expected to degrow in FY25 before gathering pace in FY26,” he added.

The rating agency expects a slowdown in demand in both the Medium and Heavy Commercial Vehicle (MHCV) and Light Commercial Vehicle (LCV) segments leading to high inventory levels with dealers.

‘Electric buses sales spike’

In the CV industry electric buses as a segment has been growing rapidly though on a small base. Between FY21 to FY24 this segment experienced substantial growth.

“In FY24, registrations of electric heavy passenger vehicles (e-HPVs), primarily large electric buses, surged significantly. The number of registrations increased from a mere 217 units in FY21 to an impressive 3,400 units in FY24,” the rating agency said.

“Registration of electric light passenger vehicles (e-LPV) also surged from 360 units to more than 10,500 units during the aforementioned period,” it added.

Looking ahead, demand for electric buses is expected to remain robust due to the growing focus on cleaner transportation systems and various government initiatives.



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