While the heavy-duty trucks that haul steel and cement are flying off dealer lots, the buses that move the nation’s workforce and students have suddenly hit a speed bump.
Fresh sales data for January 2026 reveals a cooling trend in the passenger carrier segment, marking a sharp departure from the breakneck growth seen over the last two years. This slowdown comes even as the broader automotive industry continues to capitalize on a robust economy and aggressive infrastructure spending.
The contrast is most visible in the ledger of Tata Motors, India’s largest commercial vehicle manufacturer. The company reported a nearly 30% jump in total domestic sales for January, powered by a 41.2% surge in Heavy Commercial Vehicle (HCV) trucks, the massive lorries used for long-haul freight. However, its passenger carrier division, which includes everything from school buses to intercity coaches, remained essentially flat, slipping 0.4% to 4,562 units.
The figures are more stark at VE Commercial Vehicles (VECV), the joint venture between Eicher Motors and Sweden’s Volvo Group. While their truck sales grew at a double-digit clip, their domestic bus business faced a harsh winter. Sales of Light and Medium Duty (LMD) buses—typically used for school and staff transport—fell 11.4%. More concerning was the Heavy Duty (HD) bus segment, which saw a precipitous 65.4% decline, moving just 123 units compared to 356 in the same month last year.
Ashok Leyland, another major industry player, mirrored this trend, reporting a 27% drop in domestic Medium and Heavy Commercial Vehicle (M&HCV) bus sales for January.
To the seasoned observer, this isn’t necessarily a sign of economic distress, but rather a “normalization.” Following the pandemic, schools and private tour operators rushed to replace aging fleets that had sat idle for two years. This created “tremendous demand” that is now finally beginning to taper off.
In industry parlance, we are seeing the end of a massive replacement cycle. When a fleet owner buys 50 buses at once to replace an old fleet, they don’t return to the market for several years. We are now entering that quiet period. Furthermore, while freight carriers (trucks) are benefiting from a construction boom, passenger carriers (buses) are highly sensitive to procurement cycles from state transport undertakings, which can be lumpy and inconsistent.