Commercial vehicle sales volume to fall 3-6 % in FY25: Report

Commercial vehicle sales volume is expected to decline 3-6 per cent in the current fiscal due to a slump in demand, according to a report by CareEdge Ratings.

The drop in sales volume is due to a slowdown in demand in both the medium and heavy commercial and light commercial vehicle segments, as well as on account of high inventory levels with dealers, it said in a statement.

The muted growth in FY24 was mainly due to the high base of FY23, the transition to BS VI leading to higher vehicle costs and a slowdown in infrastructure projects amidst elections during the latter part of the year leading to higher inventory with dealers, it added.

"The commercial vehicle (CV) industry is expected to experience sluggish growth, with overall sales volume likely to decline by around 3-6 per cent in FY25," CareEdge Ratings Associate Director Arti Roy said.

Several factors contribute to this, including general election-related disruptions, elevated vehicle costs, and high channel inventory levels, she added.

"However, there is hope for improvement in the latter half of FY25 as infrastructure projects pick up pace post-monsoon and anticipated interest rate cuts provide some relief," Roy said.

Replacement demand and mandatory scrapping of older government vehicles are also expected to support volumes in FY25, CareEdge Ratings stated.