India’s CV Industry Gears Up for Recovery in H2 FY25

Key Highlights:

• India’s CV sector had a slow start in FY25 but is expected to recover in the second half.
• Tata Motors predicts growth in buses and vans, with small commercial vehicles and heavy trucks also showing growth.
• Consumer preferences are shifting towards larger vehicles like 19-tonne ILMCVs and 55-tonne HCVs.
• Ashok Leyland faced a dip in Q2 but remains optimistic for a strong recovery in H2.
• VE Commercial Vehicles believes that increased infrastructure spending will drive demand in the second half of the year.

India's commercial vehicle (CV) sector has faced challenges in the first half of fiscal year 2025, marked by sluggish demand. However, industry leaders are optimistic about recovery in the second half, supported by infrastructure spending and shifting market trends.

Tata Motors: Hopeful Recovery in Buses and Vans

Girish Wagh, executive director at Tata Motors, shared a cautiously optimistic outlook during a recent earnings call. He highlighted the potential for growth across most CV segments, especially buses and vans, which are expected to surpass last year’s performance.

Intermediate, light, and medium commercial vehicles (ILMCVs) are also likely to match or exceed FY24 levels. Small commercial vehicles (SCVs), pickups, and heavy commercial vehicles (HCVs) are anticipated to see flat to slightly positive growth, with buses experiencing strong demand driven by school transportation and city travel.

Customer Preferences Shaping CV Trends

Changing customer demands are influencing segment-specific growth patterns. In ILMCVs, demand is rising for 19-tonne vehicles, while the HCV segment is seeing a shift toward 55-tonne tractor-trailers. SCVs are trending toward higher payload pickups, reflecting a focus on efficiency.

Ashok Leyland: Challenges and Optimism

Shenu Agarwal, managing director and CEO of Ashok Leyland, discussed the mixed performance in the medium and heavy commercial vehicle (MHCV) segment. While Q1 showed 10% growth, Q2 faced a 12% decline due to extreme weather, erratic rainfall, and delays in government projects.

Agarwal remains optimistic about H2, citing a potential expansion of 6-10%, as per ICRA’s projections. He emphasized that the Q2 slowdown is temporary and expects a medium-term recovery.

VE Commercial Vehicles: Infrastructure Spending as a Key Driver

Vinod Aggarwal, managing director and CEO of VE Commercial Vehicles Ltd., highlighted the importance of infrastructure investments in driving CV demand. Despite challenges like geopolitical instability and uneven monsoons, he expressed confidence in a rebound during H2, supported by the government's pro-growth budget.

Outlook for H2 FY25

After a sluggish start to fiscal 2025, the CV sector is set for a turnaround in the latter half of the year. Increased infrastructure spending, evolving consumer preferences, and improving market confidence are expected to drive growth. However, challenges like unpredictable weather and policy delays may require careful monitoring.

The optimism among industry leaders signals that the sector is poised for recovery, with the wheels of growth likely to gain momentum in the coming months.

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CMV360 Says

India’s CV sector has faced a tough start this year, but the future looks brighter. Leaders are hopeful that infrastructure spending and growing demand will boost the market in the second half. Challenges like bad weather and delays in projects still exist, but they seem temporary. If the recovery happens as expected, it could set the stage for steady growth ahead.