ICRA, one of the leading ratings agency, expects the domestic commercial vehicle industry’s wholesale volumes to witness a nominal YoY growth of 0-3 percent in FY2025, against the earlier estimated decline of 4-7 percent. This follows a better-than-expected volume growth in 4M FY2025 and expectations of a marginal uptick in demand in the second half of the fiscal. 

FY2025 will be the second consecutive year of muted growth after a 1 percent and 3 percent YoY growth in wholesale and retail sales, respectively, in FY2024.

Kinjal Shah, Senior Vice-President & Co-Group Head – Corporate Ratings, ICRA: “A range of factors such as the slowdown in infrastructure activities during the General Elections, as well as extreme heatwaves across the country, had some bearing on demand in Q1 FY2025. However, volumes in this period exceeded ICRA’s expectations. Looking ahead, ICRA expects a recovery in volumes in H2 FY2025 aided by a back-ended government capex, some pick-up in private capex across manufacturing sectors, and an improvement in rural demand, following visibility around the Kharif crop output and farm cash flows. The replacement demand would also remain healthy (primarily due to the ageing fleet) and is expected to support the industry volumes in the medium term.”

“The long-term growth drivers for the domestic CV industry remain intact, like the sustained push in infrastructure development (evidenced by retaining the higher infrastructure capital outlay in the July 2024 budgetary allocation), a steady increase in mining activities, and the improvement in roads/highway connectivity.”

ICRA states that medium and heavy commercial vehicles (M&HCV) (trucks) volumes in FY2025 are expected to report a nominal growth of 0-3 percent YoY, given the high base effect and the impact of the General Elections on infrastructure activities in the first few months of the fiscal. The segment had ended FY2024 with flattish volumes. Within this sub-segment, while the tipper volumes reported 4 percent YoY contraction in Q1 FY2025, the haulage sub-segment showed a modest 3 percent YoY growth for the quarter. Tractor-trailers reported a modest 7 percent YoY volume growth in Q1 FY2025.

Domestic light commercial vehicles (LCV) (trucks) wholesale volumes are expected to show a tepid YoY growth of -1 percent to 2 percent in FY2025 due to factors such as a high base effect, sustained slowdown in e-commerce and cannibalisation from electric three-wheelers. The segment had witnessed a mild decline of 3 percent on a YoY basis in FY2024, owing to the above factors, in addition to a deficit rainfall impacting the rural economy. Increased total cost of ownership of LCVs has also led to a rising preference for pre-owned vehicles by the small fleet operators, which may impact the demand, going forward.

The scrappage of older government vehicles is expected to drive replacement demand for the bus segment from state road transport undertakings (SRTUs) in FY2025, supporting a YoY growth of 8-11 percent. The sub-segment volumes gained considerable traction in FY2024 and exceeded the pre-covid levels.

In terms of powertrain mix, conventional fuels (primarily diesel) continue to dominate the domestic CV industry with a penetration of over 90 percent, while alternative fuels (CNG, LNG and electric) had driven around 9 percent sales in FY2024. Relatively higher penetration of electric vehicles (EVs) has been witnessed in buses (as e-buses were covered under FAME-II subsidies but not the other sub-segments), followed by LCV goods, with a penetration of 7 percent and 1 percent, respectively, in FY2024.

ICRA expects the operating profit margin (OPM) of the domestic CV original equipment manufacturers to remain range bound in FY2025 to 9.5 percent to 10.5 percent on the back of muted volumes and higher competitive pricing pressures, although factors such as cost improvement, favourable raw material costs and better product discipline are expected to lend some support to the profitability. 

The operating margins in FY2024 had improved by almost 300 bps to 10.7 percent supported by operating leverage benefits and better product mix. In addition, lower discounting and benign commodity prices aided in the margin expansion in FY2024. The capex and investments for the industry are likely to increase to around INR 56-58 billion in FY2025, against about INR 34 billion in FY2024. These will be mainly towards product development, especially in the areas of alternate powertrains, technology upgradation and maintenance-related activities.

“ICRA foresees the credit metrics of the industry to remain stable in FY2025 even as margins may contract marginally and capex outlay is anticipated to increase. The continued strong operating performance is expected to support the coverage metrics of the industry, with Total Debt / OPBITDA projected at 1.2-1.4 times as on March 31, 2025, against 1.5 times in as on 31 March, 2024 and interest coverage at 6.8-7.2x in FY2025, against 7.2 times in FY2024,” concluded Shah.

Comments (0)

ADD COMMENT

Link Copied!

TVS Motor Company has announced the launch of ‘TVS KING Ka Vaada 3.0’, an expanded value-added scheme for its three-wheeler portfolio. The initiative extends beyond vehicle maintenance to include financial security and protection benefits for customers and their families.

The updated programme introduces personal and family protection measures alongside traditional vehicle support.

Personal accident coverage for up to INR 1 million in the event of death or permanent disability. Education support of INR 100,000 per child for up to two children in the event of death or permanent disability. Hospitalisation income of INR 4,000 per day for up to 30 days during medical confinement. Three free services and roadside assistance across the range.

The scheme applies to both Internal Combustion Engine (ICE) and Electric Vehicle (EV) models in the passenger and cargo segments.

Comments (0)

ADD COMMENT

Link Copied!

In what is seen as a global energy crisis on the back of the ongoing war between Iran and USA-Israel, is now also expected to have an impact on the Indian transport sector.

Bal Malkit Singh, Advisor & Former President – All India Motor Transport Congress (AIMTC), has called for proactive government measures to protect the economy and the road transport sector from the effects of escalating tensions in the Middle East. The warning follows a surge in crude oil prices to nearly USD 95 per barrel and the effective closure of the Strait of Hormuz as of late February 2026.

The road transport sector is experiencing a slowdown due to reduced industrial output. Industry observations indicate a decline of up to 50 percent in certain segments, with projections suggesting this could reach 70–80 percent if current disruptions persist.

Furthermore, it can also lead to rising prices for fuel, lubricants, tyres and AdBlue (urea). He has expressed concerns over driver migration due to fewer work opportunities and the closure or price increases at highway eateries.

The ‘energy war’ scenario is impacting the wider MSME ecosystem, leading to higher production costs and operational challenges for small businesses and trading establishments.

Singh has urged the government to implement policy support to maintain economic stability, emphasising that the transport sector serves as the lifeline for domestic trade.

Proposed interventions include:

• Deferment of Equated Monthly Instalments (EMIs).
• Introduction of soft loan schemes.
• Targeted tax relaxations for transporters and MSMEs.

Bal Malkit Singh, said, “The current geo-political developments are an early warning signal for our economy. The road transport sector, being the lifeline of trade and commerce, is already experiencing stress due to reduced movement and rising operational costs. If timely interventions are not considered, the situation could escalate significantly in the coming weeks. It is essential to support MSMEs and transporters through relief measures such as deferment of EMIs, soft loan schemes, and tax relaxations to ensure business continuity and economic stability.”

Image credit: Samuel Wolfl/Pexels

Comments (0)

ADD COMMENT

Link Copied!

Euro NCAP has announced that Allianz has joined the Safer Trucks programme as an Associate Member, which combines vehicle safety assessment with commercial risk data.

The Safer Trucks programme, launched in 2024, provides safety ratings for heavy goods vehicles (HGVs). In its first two years, the initiative has assessed 30 truck models and identified safety gaps in the freight sector. Data indicates that in collisions involving HGVs, 90 percent of fatalities are occupants of other vehicles or pedestrians and cyclists. Freight transport accounts for the movement of 95 percent of goods across the EU.

Allianz operates in 70 countries and will contribute expertise on risk trends and claims data. The Allianz Center for Technology will serve as the centre for automotive technology and traffic safety to promote vehicle safety.

The involvement of insurers in safety assessments aims to inform manufacturers and fleet operators about areas for improvement. According to the programme, avoiding accidents reduces repair costs and downtime, which can lead to lower insurance premiums for fleets.

Matthew Avery, Director of Strategic Development, Euro NCAP, said, “We are delighted to welcome Allianz to the Safer Trucks programme. Their expertise in risk and casualty analysis adds a valuable new dimension to our multi-disciplinary approach. Safer Trucks is designed not only to benchmark safety performance but also to catalyse improvements in truck design and technology. By integrating risk insight from Allianz with our independent testing data, we aim to accelerate safety innovation across the commercial vehicle sector.”

Matthias Trustedt, Head of Global P&C, Allianz SE, said, “Joining Euro NCAP’s Safer Trucks initiative aligns with our commitment to reducing road risk through evidence-based insights. We believe that independent safety ratings, tied to real-world risk data, can influence both purchasing decisions and the development of safer vehicle technologies. Allianz is proud to support this important work, to help fleet operators make informed choices that protect drivers and other road users, and to offer them tailored and risk-based insurance solutions.”

Christian Sahr, MD, Allianz Center for Technology, said, “Our accident research shows that modern safety systems in trucks can significantly reduce the number of serious accidents. In addition to protecting life, avoiding accidents brings economic benefits for fleet operators because a fleet with lower repair and downtime costs is more efficient, offers better working conditions for drivers, and has significantly lower insurance premiums. Through our cooperation with Euro NCAP, we see excellent opportunities to use our combined expertise to improve the market penetration of safety systems that are already available and that contribute to accident prevention.”

Comments (0)

ADD COMMENT

Link Copied!

Piaggio Vehicles (PVPL), a subsidiary of the Piaggio Group, has secured an order for more than 100 units of its Ape Xtra Bada 700 cargo three-wheeler from HeidelbergCement India.

The three-wheelers will be deployed across 53 districts in Uttar Pradesh, Madhya Pradesh and Bihar. This order marks the entry of the new diesel cargo model into industrial applications.

The Ape Xtra Bada 700 features a 700 DI diesel engine, a 7-foot cargo deck and a payload capacity of 750 kg, which is the highest in the three-wheeler cargo segment. The vehicle is equipped with 12-inch radial tyres, a digital instrument cluster with a 3.5-inch LCD and an optional rear sensor for reversing.

The vehicle architecture includes a chassis and suspension geometry designed for stability and load distribution. The cabin is engineered for long-distance operation and the engine is tuned for torque and pickup. Piaggio offers a five-year warranty on the model. The company positions this three-wheeler as a replacement for entry-level four-wheeler small commercial vehicles (SCVs) due to its operating economics.

Amit Sagar, Executive Vice President, CV Domestic Business & Retail Finance, Piaggio Vehicles, said, “This flagship order from Heidelberg Cement India Limited is a strong validation of the Ape Xtra Bada 700’s disruptive capabilities. At Piaggio India, we have always believed in pushing the boundaries of innovation in the last-mile mobility segment. The Ape Xtra Bada 700 sets new industry benchmarks in engine capacity, deck size and payload, and is designed to empower customers with more productivity and superior earnings. Breaking into applications traditionally dominated by 4-wheeler SCV marks an important milestone in our journey of offering better TCO and profitability to our customers.”

Comments (0)

ADD COMMENT

Link Copied!