Commercial Vehicle Sales to Rise 2–5% in FY26

India's commercial vehicle sector is expected to grow by 2–5% in FY26, according to CareEdge Ratings. This forecast comes after two years of slow demand. Now, multiple factors—policy changes, financing support, and infrastructure spending—are helping the industry move forward.

What Is Driving This Growth?

Infrastructure Projects Increase Demand

The government is building more roads, ports, and logistics parks. These projects need heavy-duty vehicles to move materials. As a result, demand for medium and heavy commercial vehicles (MHCVs) is rising. More construction means more freight, which means more trucks.

Scrappage Policy Creates Replacement Demand

The vehicle scrappage policy is pushing older trucks and buses off the roads. Owners are replacing old vehicles with newer, cleaner ones. This shift is helping truck and bus sales in India grow, especially in cities where pollution rules are strict.

RBI Rate Cut Eases Financing

The recent RBI repo rate cut has made loans cheaper. Buyers now find it easier to finance new commercial vehicles. This lower cost is encouraging both large fleet owners and small transporters to expand or refresh their fleets.

Segment-Wise Outlook

MHCVs See Strong Recovery

The MHCV segment is bouncing back. Industrial activity is growing, and so is long-haul freight. Operators want newer, more efficient vehicles. They are also reacting to new fuel and safety norms. All these reasons are driving MHCV market growth.

LCVs Stay Stable with Local Demand

Light commercial vehicle (LCV) sales in India are expected to remain steady. E-commerce, farm logistics, and small businesses are still buying LCVs. Growth here is not high, but it is consistent. These vehicles are important for last-mile delivery.

Electric Commercial Vehicles Gain Ground

More companies are exploring electric commercial vehicles. They cost less to run and fit well in city transport. Though their sales are still low, the trend is growing. Small electric trucks and buses are being tested across states. Their role in FY26 will increase.

Technology Focus: SIAT 2026 Brings Future Closer

At the same time, the Automotive Research Association of India (ARAI) is preparing for SIAT 2026, a major symposium on automotive tech. It will be held in Pune in January 2026. The theme is "Innovative Pathways for Safe and Sustainable Mobility."

At SIAT, experts will share ideas on electric mobility, hydrogen engines, ADAS, and vehicle safety. These topics also apply to commercial vehicles. Fleets must now adapt to stricter rules and faster tech upgrades. The SIAT event will help shape how manufacturers and buyers plan for the future.

Outlook for FY26: Positive but Cautious

CareEdge Ratings says the overall vehicle market outlook for FY26 is cautiously optimistic. The key support pillars—policy reforms, easier financing, and tech advances—are all in place. But risks remain: fuel price changes, global trade issues, and crop output swings could still affect sales.

Still, even a 2–5% growth would signal a stable recovery. It would show that the commercial vehicle market is adapting well.

Conclusion

India’s commercial vehicle industry is set for a careful comeback. Policies like the vehicle scrappage program, the RBI’s repo rate cut, and new infrastructure projects are helping drive this recovery. Meanwhile, events like SIAT 2026 are pushing the sector toward smarter, cleaner, and more efficient transport.

With MHCVs improving, LCVs staying steady, and electric commercial vehicles gaining interest, the market is evolving—slowly but steadily—into its next phase.

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