New Delhi: India’s commercial vehicle (CV) industry is projected to reach an all-time high of around 12.4 lakh units by fiscal 2027, surpassing its previous peak recorded in FY2019, according to a report by CRISIL Ratings.
The sector witnessed a strong rebound of 13 percent in FY2026. However, due to the higher base, growth is expected to moderate to about 5–6 percent in FY2027. The report highlights that domestic demand will remain the key growth driver, supported by infrastructure development, steady replacement cycles, and benefits from Goods and Services Tax (GST) rate cuts.
India’s domestic market contributes nearly 92 percent of the total CV volumes. The industry is broadly divided into light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs), with buses forming a smaller sub-segment.
LCVs, which account for about 60 percent of total volumes, are expected to grow by 5–6 percent, driven largely by rising e-commerce activity and last-mile delivery demand. Meanwhile, MHCVs are likely to see a growth of 4–5 percent, supported by increased freight movement and continued infrastructure spending.
The report also notes a gradual shift towards higher-tonnage vehicles, enabled by improved road infrastructure. While this may slightly temper volume growth, overall demand remains stable.
The bus segment is projected to grow by 3–4 percent in FY2027, aided by replacement demand and government initiatives to procure electric buses. Although currently a smaller segment, electrification in buses is expected to accelerate faster than in other CV categories.
On the export front, growth may slow down significantly to 2–4 percent in FY2027, compared to around 17 percent in FY2026, mainly due to geopolitical uncertainties, particularly in West Asia.
Overall, the industry outlook remains positive, with steady domestic demand expected to offset global headwinds and sustain growth momentum.
With inputs from IANS