Commercial Vehicle (CV) industry is on the recovery path and likely to see sales crossing 4,35,000 units this fiscal amid rise in replacement demand and revival of the bus segment, an industry executive said.

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From a peak of 5,77,479 commercial vehicles (having more than 3.5 tonnes capacity) sold in 2018-19, including in export markets, the volumes contracted by more than half to 2,34,299 vehicles in 2020-21 owing to various factors.

In the fiscal year ended March 2020, when the pandemic hit the country, the industry had retailed a total of 3,34,425 units.

The industry volumes in FY22 stood at 3,43,199 units, logging a 47 per cent year-on-year growth.

"Looking at the growth that is happening in the last four months at the current market situation, it looks like we (CV industry) will be somewhere between the peak and 2019-20 (level). Our estimate is that it (the volume) would be around 4,35,200 (units)," Vinod Agarwal, Managing Director at Volvo Eicher Commercial Vehicle (VECV), said in a presentation at investors' meet held on Friday.

VECV is a joint venture between Swedish auto major Volvo Group and Eicher Motors.

He said that some of the segments (such as light and medium duty vehicles) of the industry are already reaching the 2018-19 sales volumes, while the school bus segment which was the worst hit during the pandemic with volumes plummeting to 11,000 from a peak of 65,000-70,000, has also seen recovery.

"With the schools starting to buy buses, we are expecting a good recovery in the bus segment also this year," he said.

According to Agarwal, the heavy duty truck segment, which is the largest segment of the CV industry, saw around 1.60 lakh unit sale last financial year, and it is expected to reach around 2.20-2.25 lakh trucks this year.

In 2018-19, the heavy truck sale volumes were recorded at 2.95 lakh units, he said.

"We are expecting the heavy duty truck segment to be far off this year from the 2018-19 level, but it may still reach around 2.20-25 lakh units," he added.

With the industry cyclical in nature, the next three years are going to be good for the industry, as per Agarwal.

There is a lot of pent-up replacement demand as replacement has not happened in the last three years . Moreover, a lot of investment is happening in the infrastructure sector and the economy is also on the growth path.

" (So) All put together, I think we are in good shape and the CV industry is on the recovery path," Agarwal said.