In its latest assessment released on Tuesday, rating agency ICRA unveiled a revised projection for the Indian commercial vehicle (CV) industry, signalling a more cautious outlook for the coming fiscal year. The agency’s forecast indicates a modest volume growth of 2-4 percent in wholesale dispatches, with the industry expected to reach a total volume of 0.98–1 million units during FY24.
This updated projection represents a significant departure from earlier estimates made in April, which had anticipated a more robust growth rate of 7–10 percent for the domestic CV industry throughout the year. The revised outlook from ICRA suggests potential challenges and headwinds that the industry may face in the coming months, prompting a more measured approach.
Kinjal Shah, Vice President and Co-Group Head of Corporate Ratings at ICRA, shed light on the industry’s recent performance, revealing that in September 2023, the Indian CV industry experienced a notable growth of 14.7 percent in domestic wholesale volumes on a sequential basis and an impressive 11.7 percent year-on-year. This surge in wholesale dispatch volumes indicates an upward trajectory as the industry prepares for the seasonally strong festive period.
The industry’s recent growth comes after a period of relative sluggishness since the transition to the BS6 2.0 emission norms on April 1, 2023. Shah emphasised that the domestic CV industry reported a year-on-year growth of 2.4 percent in wholesale volumes during H1FY24 (April–September 2023), indicating a gradual recovery in the wake of the regulatory transition.
Looking ahead, ICRA expects the wholesale volumes of the CV industry to remain stable throughout the rest of the year. This projection is supported by factors such as steady freight demand during the upcoming festive period, the ongoing economic recovery, and the government’s focus on infrastructure spending, aligning with allocated budgets. Based on these considerations, ICRA anticipates a volume growth of 2-4 percent in wholesale dispatches for the Indian CV industry in FY24, amounting to a range of 0.98–1 million units.