Commercial Vehicle Sales Witness Steady Growth in January 2025 Amidst Market Challenges

The Indian commercial vehicle (CV) sector kicked off 2025 with an encouraging performance, registering an 8.22% year-on-year (YoY) growth in January. While higher freight rates and increased demand for passenger carriers contributed to the surge, the industry continues to grapple with sluggish industrial activity, strict financing policies, and weak rural sentiment.

January 2025 CV Retail Performance

According to the Federation of Automobile Dealers Associations (FADA), the total retail sales of commercial vehicles in January 2025 stood at 99,425 units, up from 91,877 units in the same period last year. The month-on-month (MoM) increase was a staggering 38.04%, rising from 72,028 units in December 2024.

Category-wise Breakdown:

• Light Commercial Vehicles (LCVs): 56,410 units (YoY growth: 10.05%, MoM growth: 41.76%)
• Medium Commercial Vehicles (MCVs): 6,975 units (YoY growth: 24.87%, MoM growth: 49.61%)
• Heavy Commercial Vehicles (HCVs): 30,061 units (YoY decline: -0.53%, MoM growth: 31.96%)
• Other CVs (Construction & Specialized Equipment): 5,979 units (YoY growth: 24.28%, MoM growth: 24.80%)

Key Growth Drivers for Commercial Vehicles

1. Rising Freight Rates: The higher cost of freight transportation has pushed logistics companies to expand their fleet, especially in urban areas where demand surged.
2. Boost in Passenger Carrier Segment: With increased travel demand, especially in tier-2 and tier-3 cities, sales of buses and public transport vehicles have seen significant improvement.
3. Backlogged Orders from 2024: Several delayed deliveries from late 2024 were fulfilled in January, further pushing sales figures upward.
4. Government Infrastructure Push: Ongoing investments in highways, logistics parks, and urban mobility projects continue to support the medium and heavy commercial vehicle (MHCV) segment.

Challenges Hindering Higher Growth

Despite the overall growth, the CV sector continues to face headwinds:

1. Sluggish Industrial Demand: Key industries like cement, coal, and construction are yet to witness full-scale recovery, affecting bulk transport vehicle sales.
2. Strict Financing Policies: With high interest rates and stricter loan approval processes, small fleet owners and transporters are struggling to secure funding for new vehicles.
3. Weak Rural Sentiment: Rural demand for LCVs and other utility vehicles remains subdued, leading to slower-than-expected growth in these regions.
4. Inflationary Pressure: Rising input costs, including fuel and raw materials, continue to affect vehicle pricing and ownership costs.

OEM Market Share in Commercial Vehicles

The competition among original equipment manufacturers (OEMs) remained intense in January 2025. Tata Motors retained its top position, despite a marginal decline in its market share.

OEM	January 2025 Sales	Market Share	January 2024 Sales	Market Share
Tata Motors Ltd.	31,393	31.57%	31,816	34.63%
Mahindra & Mahindra Ltd.	27,523	27.68%	23,675	25.77%
Ashok Leyland Ltd.	15,748	15.84%	14,764	16.07%
VE Commercial Vehicles Ltd.	7,274	7.32%	6,021	6.55%
Maruti Suzuki India Ltd.	5,224	5.25%	4,227	4.60%
Daimler India Commercial Vehicles	2,151	2.16%	2,169	2.36%
Force Motors Ltd.	1,621	1.63%	1,278	1.39%
SML Isuzu Ltd.	690	0.69%	677	0.74%
Others	7,801	7.85%	7,250	7.89%
Total	99,425	100%	91,877	100%

Urban vs. Rural CV Sales Trends

The urban market showed higher sales growth, driven by strong fleet expansion in logistics and public transport sectors.

• Urban CV retail growth: 9.51% YoY, 41.06% MoM
• Rural CV retail growth: 6.89% YoY, 35.00% MoM

This trend highlights the slower recovery in rural markets, where financing constraints and industrial demand continue to lag.

Near-Term Outlook for Commercial Vehicles

FADA's dealer survey indicates a cautiously optimistic outlook for the CV segment in the coming months. 46% of dealers expect growth in February 2025, while 43% foresee stable sales and 11% anticipate a dip.

Key Growth Enablers for Q1 2025

Marriage season demand and promotional offers to drive footfalls.
Improved liquidity in select regions due to relaxed financing from some lenders.
Backlogged CV orders likely to be fulfilled, keeping demand stable.
Post-budget stimulus measures could boost infrastructure-related CV demand.

Challenges to Watch in Q1 2025

Shorter month (February) could slow sales momentum.
Inflationary pressure and financing hurdles may restrict purchasing power.
Subdued rural sentiment may delay a full-fledged recovery.

Conclusion

The commercial vehicle segment has started 2025 on a strong note, driven by urban freight demand, fleet expansions, and government infrastructure investments. However, rural weakness, financing challenges, and sector-specific slowdowns continue to pose hurdles. The industry remains cautiously optimistic, with a stable to moderate growth outlook for the coming months. As the Indian economy navigates inflation, policy shifts, and industry-specific trends, the CV segment is expected to be a key indicator of broader economic recovery in 2025.

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