CV Industry to See Record Volume: Crisil

Mumbai, Apr 24 (PTI) The domestic commercial vehicle (CV) industry is expected to clock a record overall volume of around 12.4 lakh units this fiscal, surpassing the previous peak of the financial year 2019, ratings agency Crisil said on Friday.

The expected growth in the domestic commercial vehicle (CV) industry follows a strong 13 per cent rebound in the just-concluded financial year.

According to Crisil, financial year 2026 was marked by a strong domestic recovery, driven by several factors, such as the GST rate cut from 28 per cent to 18 per cent in September 2025, which significantly improved purchase economics.

Additionally, easing of interest rates, improving freight utilisation, and a pickup in infrastructure and mining activity reinforced the recovery, it stated.

"Domestic demand momentum is expected to continue this fiscal, albeit with some growth moderation owing to the higher base.

"LCVs, accounting for around 60 per cent of the industry volume, are projected to grow 5-6 per cent, driven by e-commerce and last-mile delivery demand, while MHCV volumes are expected to expand 4-5 per cent, supported by freight movement and infrastructure spending," said Anuj Sethi, Senior Director, Crisil Ratings.

According to Crisil, domestic demand will remain supportive, driven by infrastructure-led activity, steady replacement demand, and continued benefits from improved affordability following the rationalisation of Goods and Services Tax (GST) rates last year.


Exports, however, could see some near-term disruptions due to the ongoing developments in West Asia, it said.

Crisil said its analysis is based on four CV manufacturers, who account for as much as around 94 per cent of industry volumes.

The CV industry is broadly categorised into light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs), with buses forming a sub-segment within each.

"Exports, at around 8 per cent of overall CV volume, may see a sharp deceleration to 2-“4 per cent growth in fiscal 2027 from around 17 per cent in fiscal 2026. West Asia, accounting for nearly a quarter of exports, is the key reason, with shipping disruptions deferring dispatches rather than reflecting lost demand," said Poonam Upadhyay, Director, Crisil Ratings.

The bus segment is expected to grow 3-“4 per cent in fiscal 2027, supported by replacement demand and government-led electric bus procurement.

Although buses remain a small sub-segment, electrification in this category is expected to progress faster than in any other CV category, with penetration still in low single digits but rising steadily, the ratings agency said.

However, rising input costs (such as steel, aluminium, and fuel) due to the geopolitical situation in West Asia may compress operating margins by 40-50 basis points, from around 12 per cent in fiscal 2026, it said.