India’s CV Market set for record 12.4 lakh sales in FY27: Crisil report

India’s commercial vehicle (CV) industry is projected to reach an all-time high of 12.4 lakh units in FY27, surpassing the previous peak recorded in FY19, according to a new Crisil Ratings report. While volumes are set to rise further, the agency expects annual growth to moderate to 5-6 per cent after a strong 13 per cent rebound in FY26.

FY26 recovery created momentum

Multiple factors drove the strong recovery seen in FY26. A GST rate cut from 28 per cent to 18 per cent in September 2025 improved vehicle affordability and helped revive delayed purchases. Lower borrowing costs, stronger freight utilisation and increased activity in infrastructure and mining also supported demand.

Domestic market remains the key pillar

India continues to be the main growth engine for the industry, accounting for nearly 92 per cent of total volumes, while exports contribute the balance. Crisil expects domestic demand to remain supportive in FY27 through infrastructure spending, regular replacement cycles and improved affordability.

LCV segment to remain volume leader

Light commercial vehicles are expected to continue leading the market, contributing around 60 per cent of overall volumes. The segment is forecast to grow 5-6 per cent in FY27, supported by e-commerce expansion and last-mile delivery demand.

Within the category, larger vehicles above 2 tonne gross vehicle weight now make up 73 per cent of LCV sales, compared with 60 per cent in FY20, reflecting a shift towards higher payload efficiency.

MHCVs and buses to post steady gains

Medium and heavy commercial vehicles are expected to grow 4-5 per cent in FY27, aided by freight movement and public infrastructure projects. However, rising preference for higher-tonnage trucks may reduce unit growth despite healthy cargo demand.

The bus segment is likely to expand 3-4 per cent, supported by fleet replacement and government electric bus purchases. Electrification in buses remains ahead of other CV categories, though overall penetration is still low.

Exports, costs and regulations to be watched

Export growth may slow sharply to 2-4 per cent from 17 per cent in FY26, mainly due to shipping disruptions linked to the West Asia crisis. Crisil also expects operating margins to ease to 11.5-11.6 per cent from 12 per cent, as steel, aluminium and fuel costs rise. Annual capital expenditure is estimated at ₹5,500 crore, focused on plant upgrades and regulatory compliance.

(With inputs from ANI)

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