ICRA Projects Moderate Growth for India's Commercial Vehicle Industry in FY2027
India's domestic commercial vehicle (CV) industry is expected to record a moderate 4-6% year-on-year increase in wholesale volumes during FY2027, according to a report by rating agency ICRA. This growth comes after a strong performance in FY2026, which has broadened the base and may temper the momentum in the coming fiscal year.
ICRA stated, "ICRA expects the domestic CV industry to register a moderate YoY growth of 4-6% in wholesale volumes in FY2027." The agency added that "the broadened base of FY2026 is likely to have some bearing on the growth momentum in FY2027."
Segment-Wise Growth Projections: Buses to Lead
The report provides detailed forecasts for key segments. The medium and heavy commercial vehicle (M&HCV) truck segment is expected to see volume growth of 1-3% in FY2027. In contrast, light commercial vehicle (LCV) trucks are projected to grow at a stronger 6-8%. The buses segment is anticipated to register the highest growth at 7-9% during the fiscal year.
ICRA noted that domestic CV wholesale volumes remained robust in May 2026, rising 13.5% year-on-year, while retail volumes increased 5.3%. The growth was primarily attributed to the lingering impact of GST rate cuts and a favorable base effect.
Monthly Trends: Wholesale Up, Retail Down Sequentially
On a sequential basis, wholesale volumes declined 1.1% in May compared to April, while retail volumes fell 18.3% month-on-month. However, for the first two months of FY2027, wholesale volumes were still up 15% year-on-year.
ICRA also observed that 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.
LCV and M&HCV Retail Performance
In the LCV segment, retail sales rose 7.7% 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% year-on-year in May. ICRA said that infrastructure-led freight movement and school bus replacement demand supported sales in recent months, but fuel price hikes during May weighed on growth.
