Commercial vehicle volumes likely to grow 3-5% in FY26: Icra report

Commercial vehicle dispatches from companies to dealers are expected to witness a volume growth of 3-5 per cent year-on-year in the current fiscal, rating agency Icra said on Wednesday.

Domestic commercial vehicle wholesale volumes reported a moderate 6.1 per cent year-on-year increase in July 2025, even as volumes declined sequentially by 2.7 per cent.

"ICRA expects the domestic CV industry to post a modest year-on-year growth of 3-5 per cent in wholesale volumes in FY2026, following a marginal 1.2 per cent decline recorded in FY2025," the rating agency said in a report.

Within this, medium and heavy commercial vehicle (M&HCV) trucks and light commercial vehicle (LCV) trucks are expected to see modest growth in the range of 0-3 per cent and 3-5 per cent, respectively, during the year, it added.

The buses segment, on the other hand, is likely to witness a comparatively higher growth of 8-10 per cent in FY2026, Icra stated.

While an uptick in construction and mining activities and a steady economic environment are expected to support demand for the LCV and M&HCV truck segments, replacement demand is likely to drive growth in the buses category, it added.

The segment could also benefit from higher institutional demand from state transport undertakings and private operators, aiding overall volume momentum in the second half of the fiscal, Icra said.