Commercial Vehicle Industry: The domestic commercial vehicle industry is expected to see a 4-7% dip in wholesale volumes for the current fiscal year (FY25) compared to FY24, due to last year's high base and current demand weakness, rating agency Icra said on Friday.


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Medium and heavy commercial vehicle (truck) volumes are anticipated to shrink by 4-7% year-on-year given the high base effect and the impact of the Lok Sabha polls on infrastructure activities in the first few months of FY25.


Similarly, light commercial vehicle (truck) wholesale volumes are expected to fall by 5-8% in FY2025. This is due to factors such as the high base effect, a prolonged slowdown in e-commerce, and competition from electric three-wheelers, Icra said.


The rating agency expects the domestic CV industry's uptrend to be arrested in FY2025, with a decline of 4-7 percent in wholesale volumes, it stated. This follows a muted year-on-year growth of 1 percent and 3 percent for wholesale and retail sales, respectively, in FY2024, it added.


Highlighting the insights, Kinjal Shah, Senior Vice President & Co-Group Head, Icra Ratings, said, "FY2022 and FY2023 had witnessed a very sharp growth in volume as well as tonnage terms, enlarging the base. The domestic CV volume growth momentum slowed down in FY2024 and is expected to dip in FY2025 amid the transient moderation in economic activity in some sectors in the backdrop of the General Elections."


"The replacement demand would nevertheless remain healthy (primarily due to the ageing fleet) and is expected to support CV volumes in the near-to-medium term," she added. "The long-term growth drivers for the domestic CV industry remain intact, like the sustained push in infrastructure development, a steady increase in mining activities, and the improvement in roads/highway connectivity," Shah said.


(Inputs- PTI)