LS POLL SLOWS DOWN CV VOLUME GROWTH

India’s general elections are slowing down the commercial vehicles (CV) industry with volumes for the domestic CV industry remaining muted as the base effect catches up and amidst a perceived pause in the infrastructural activities as the model code of conduct kicked in ahead of the polls.

- NIVEDITA MUKHERJEE

According to ICRA estimates, the domestic CV industry volumes are seen to have registered 2-5 per cent yoy growth in FY2024 and the industry’s sharp upcycle is expected to plateau in FY2025, with a marginal decline of 4-7 per cent in volume.

The rating agency expects medium and heavy CV volumes to decline by 4-7 per cent in FY2025, given the high base effect and the impact on the momentum in the Government’s capex in the first few months of the fiscal with the onset of the general elections. According to India Ratings’ FY25 outlook on auto and auto ancillaries, senior analyst Shefali Joshi and Director Shruti Saboo the CV segment is likely to buck the trend of a “continuity in the domestic upcycle in FY25 albeit at a moderate level. Even as domestic demand in FY25 will continue to grow by around 6 per cent to 9 per cent, “except CV, other industry segments volumes are likely to touch pre-COVID levels peaks”, project Joshi and Saboo.