ICRA expects domestic CV wholesale volumes to register a moderate 4-6% YoY rise in FY2027, with the broadened base effect of H2 FY2026 likely to result in YoY volume contraction in the latter half of the current fiscal.

ICRA forecasts the domestic commercial vehicle (CV) industry to register a moderate 4-6% growth in wholesale volumes in FY2027 after recording a healthy 12.6% growth in FY2026. The volume growth in FY2026 was supported by the reduction in the Goods & Services Tax (GST) rate to 18% from 28% with effect from September 22, 2025, along with higher freight activity. The domestic CV wholesale volumes reported a robust 18.3% YoY growth in Q1 FY2027, supported by sustained demand push from the GST rate cuts. That said, demand momentum is likely to moderate in the coming months due to the broader base effect of H2 FY2026, coupled with the impact of the recent 8-10% fuel price hikes and WPI1 inflation.

The domestic medium and heavy commercial vehicle (M&HCV) (trucks) segment’s wholesale volumes reported a robust 19.6% YoY growth in Q1 FY2027, supported by healthy demand from infrastructure-led sectors like steel, cement and mining. However, the segment is estimated to register a limited 1-3% growth in wholesale volumes in FY2027 after a healthy 15.7% growth in FY2026, given the broad base effect. The volume growth momentum in the segment picked up after implementation of the GST rate cuts and was further supported by robust freight movement, strong rural demand and sustained infrastructure linked transportation requirements.

Exhibit 3: Domestic CV industry growth (wholesale volumes)

Source: SIAM, ICRA Research; 1Original Equipment Manufacturers