In the realm of India’s automotive landscape, the commercial vehicle (CV) sector encounters a slowdown, notably in the Small Commercial Vehicle (SCV) category. Sales figures for SCVs, indicative of consumer expenditure trends, experienced a dip of 4% year-on-year, totaling 514,432 units in FY24. This downturn cast a shadow over the overall CV market, which barely eked out a 1% year-on-year growth.
Conversely, the bus segment bucked the trend, marking its third consecutive year of growth by soaring 30% year-on-year to reach 109,212 units, surpassing pre-pandemic levels as per industry insights.
Kinjal Shah, the Vice President and Co-Group Head of Corporate Ratings at ICRA Limited, observed that within the medium and heavy commercial vehicle (M&HCV) sphere, a stable macroeconomic climate and replacement demands had bolstered recent upticks in demand. However, the latter part of FY2024 witnessed a slowdown in volume uptake, attributed to both a high base effect and perceived deceleration in infrastructure activities leading up to impending general elections.
Delving deeper into the data, medium and heavy commercial vehicles (MHCVs), acting as barometers of GDP growth, witnessed subdued demand, with a modest 6% year-on-year increase to 318,672 units. Nevertheless, amidst this scenario, a noteworthy shift is underway. “The discernible move within the goods CV market towards heavier tonnage vehicles underscores cargo consolidation, facilitated by enhanced logistics infrastructure, with potential implications for cost reduction,” remarked Amit Mohan, President of Logistics & Infrastructure at Kotak Mahindra Bank.
Similarly, light commercial vehicles (LCVs) displayed an 11% year-on-year growth in FY24, reaching 157,466 units. However, recent times have seen a contraction in volume, attributed to the inevitable impact of a high base effect, sluggish e-commerce demands, and some encroachment from electric three-wheelers (e3Ws). Moreover, rural demand and financial liquidity took a hit from unseasonal rainfall, likely to persist in negatively influencing demand, as highlighted by industry experts.
