India CV Market Hits Record 12.4 Lakh Units by 2027

India's commercial vehicle industry is set to achieve a landmark 12.4 lakh units by fiscal 2027, surpassing the FY19 peak. Growth is projected at 5-6% after a strong 13% rebound in FY26. A key driver is the GST rate cut to 18% effective September 2025, improving purchase economics and demand.

Domestic demand will be sustained by infrastructure projects and replacement needs, while exports may see disruptions from the West Asia crisis, deferring dispatches. Light commercial vehicles (LCVs) will grow 5-6% driven by e-commerce, with a trend towards higher GVW vehicles for payload efficiency.

Medium and heavy commercial vehicles (MHCVs) are expected to grow 4-5%, supported by freight movement and infrastructure spending. The bus segment anticipates 3-4% growth, aided by replacement and electric bus procurements.

Revenue growth is expected to outpace volumes due to price increases. However, rising input costs may compress operating margins by 40-50 basis points to 11.5-11.6% from 12% in FY26.

Mandatory Advanced Driver Assistance Systems from April 2026 and upcoming fuel efficiency norms will drive investments. Despite these pressures, the industry's credit profile remains stable with strong cash flows and healthy balance sheets.