India's commercial vehicle sales surge, manufacturers double growth projections to 10-15% this fiscal

India’s top commercial vehicle manufacturers have sharply revised upwards their sales growth projections for the current fiscal, after demand in the first five months of the year far outstripped early estimates, industry executives said.

Several senior industry executives now expect commercial vehicle sales to grow 10-15% this fiscal — double the 4-6% estimate they had pencilled in at the start of the year. The heads of the country’s top three CV makers Tata Motors, Ashok Leyland and VE Commercial Vehicles said replacement demand, a pickup in construction and mining activity post monsoons, and government infrastructure spending is pushing volumes higher.

The upgrade follows a run of numbers that has surprised even the industry. CV sales grew 18% in the first quarter, before accelerating further to as much as 40% across categories in August. CV sales grew by 12.65 to 1,079,871 units in the last financial year.


“In the first quarter, demand was quite strong despite the challenges we faced around availability of diesel fuel and on account of price hikes. July was fantastic, August was beyond imagination with sales growing by 40%. This tells us there is a fundamental need for trucks and buses in India,” said Shenu Agarwal, president of the Society of Indian Automobile Manufacturers (SIAM).

The recalibration comes even as India’s GDP expanded 7.8% in the April-June quarter on the back of 8.6% growth in January-March, beating estimates on both counts, and reinforcing the country’s position as the world’s fastest-growing major economy even as global geopolitical headwinds persist.

Executives point to GST rationalisation as the single biggest trigger for the demand surge, alongside lower interest rates, easier access to financing, and stepped-up infrastructure activity.

Agarwal, who is also the MD and CEO of Ashok Leyland, said the CV economy is resilient. “This industry needed a trigger, and it happened with GST rationalisation. We expect medium and heavy commercial vehicles to grow in high single digits and light commercial vehicles sales to be higher (this fiscal),” he said.

Vinod Aggarwal, Chairman of VE Commercial Vehicles said the rally is being led by fleet replacement economics. " With a lot of positive sentiments in the economy after the GST reset, customers are keen to replace older vehicles with BS VI vehicles that are much more productive and also reduce the overall cost of ownership. Thus a huge parc of ageing commercial vehicles, will come in for replacement over the next 1-2 years. CV sales are likely grow in double-digits this fiscal," he said

With the monsoon season ending and construction and mining operations picking up pace, along with continued government capital expenditure on infrastructure, industry stakeholders expect the momentum to sustain through the rest of the fiscal.

“While H1 benefited from a low base, H2 will be measured over a much stronger base following the sharp recovery that began in September last year after the GST rate revision. Even so, the strength of the demand environment gives us confidence that the industry can deliver high single-digit growth in FY27, with the potential to move into double digits if the current momentum sustains”, Girish Wagh, MD &CEO, Tata Motors said, adding, “The demand drivers are broad-based, led by infrastructure activity, growth in freight movement, improving industrial and economic activity, deeper e-commerce penetration, healthy fleet economics and higher vehicle utilisation levels.”