India’s urban population is expected to reach 600 million by 2031, driving increased demand for CVs in sectors such as construction, logistics, and public transportation. Projected GDP growth of 6-7% and initiatives like Make-in-India are further boosting demand for both heavy and light CVs, Wagh said at the 3rd edition of Indian Commercial Vehicle Conclave (ICVC), organized by Confederation of Indian Industry (CII) on Thursday. He is also the Chairman of CII- ICVC.
He stated that owing to an increase in sales for higher tonnage trucks, the CAGR for road freight transport has gone up by 4% from FY19 to FY24, and the supply has increased by 4.5%. As a result the road logistics industry has achieved healthy utilization levels in the year gone by, which is almost similar to that of the pre-Covid levels.
Ratings agency ICRA suggests that the long-term growth drivers for the domestic CV industry remain intact, like the sustained push in infrastructure development (evidenced by an increase in the interim budgetary allocation), a steady increase in mining activities, and the improvement in roads/highway connectivity.
However, for the current fiscal year, it expects the domestic CV industry’s uptrend to be arrested in FY2025, with a decline of 4-7% in wholesale volumes.
Kinjal Shah, Senior Vice President & Co-Group Head, ICRA 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 aging fleet) and is expected to support CV volumes in the near to medium term.”
Speaking on the potential of the CV sector, Nishant Arya, Vice Chairman & Managing Director, JBM Group noted that there is a need to invest more in research and development, conducive regulatory and policy framework, skill development, and global collaboration and partnerships.
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