India’s commercial vehicle (CV) industry encountered a challenging July, with wholesale volumes of four listed OEMs declining by 12% year-on-year (YoY). The downturn was largely attributed to a high base effect from the previous year and the lingering impact of the post-election transition period.
Industry experts echoed these sentiments. Kinjal Shah, Senior Vice President and Co-Group Head – Corporate Ratings, ICRA Limited noted that the truck segment bore the brunt of the decline as compared to passenger carriers. The rating agency anticipates a 4-7% drop in domestic CV wholesale volumes for the entire fiscal year 2025.
Amit Mohan, business head- logistics and infrastructure, at Kotak Mahindra Bank, highlighted a broad-based slowdown across all CV segments, with the exception of the passenger vehicles segment, which grew 6% YoY, but also showed signs of cooling growth. He emphasised the severity of the decline compared to typical Q1 trends, resulting in overall flat growth for the fiscal year thus far. “The fall in the year-on-year numbers has led to overall flat growth so far in the current fiscal which is almost 4% below our estimates.”
Company Performance
Tata Motors led the pack with an 18% decline year on year, in domestic CV wholesale volumes to 27,042 units in July. The company’s heavy commercial vehicle (HCV) segment saw a 24% drop, while the intermediate, light, and medium commercial vehicles (ILMCV) witnessed an 11% decline. However, passenger carriers bucked the trend with a 3% growth. The small commercial vehicle (SCV) segment experienced a sharp 25% contraction.
Ashok Leyland’s total domestic CV wholesales fell 9% year on year to 12,926 units. The medium and heavy commercial vehicle (M&HCV) segment declined by 14%, with trucks and buses showing contrasting performances – a 20% drop for trucks and a 26% surge for buses. The light commercial vehicle (LCV) category remained flat.
Mahindra & Mahindra reported a mixed bag of results. The LCV category above 3.5 tonnes surged 77%, while the sub-2-tonne LCV segment contracted by 11%. The 2-3.5-tonne LCV category also declined by 14%. Three-wheeler sales plummeted by 45%.
VE Commercial Vehicles, a joint venture between Volvo Group and Eicher Motors, bucked the overall trend with a 12.7% growth in July sales to 6,622 units. Eicher-branded trucks and buses contributed to this growth, both domestically and in exports.
Outlook
The CV industry is navigating a complex landscape, with factors such as high base effects, economic conditions, and regulatory changes influencing demand. While some segments such as buses, have shown resilience, the overall picture remains challenging. Industry players will be closely monitoring market dynamics and government policies to adapt their strategies accordingly.