Domestic CV Volumes May Touch 1 Mn Units Mark This Fiscal: Crisil

Mumbai: Domestic CV volumes are expected to touch 1 million units mark this fiscal, the pre-pandemic peak logged in FY19, driven by accelerating infrastructure execution, replacement demand and policy support from the PM-eBus Sewa scheme, ratings agency Crisil said on Wednesday.

The sector's credit outlook remains stable, supported by strong liquidity and healthy cash flows, it said. The volume growth will be led by light commercial vehicles (LCVs), which are expected to account for around 62 per cent of total volume on account of rising penetration of e-commerce and warehousing. A pickup in freight-intensive sectors such as cement and mining will boost the overall demand, it said.

Crisil said its analysis is based on four key CV players, which account for around 70 per cent of the sector volume. The commercial vehicle (CV) sector comprises two segments-- LCVs and M&HCV ( medium and heavy commercial vehicles) -- with buses classified under both the segments. The M&HCV volume, comprising around 38 per cent of total volume, is expected to grow 2-4 per cent this fiscal, led by increased infrastructure spending across construction, roads and metro-rail projects, it said.

On the other hand, the LCV segment may grow faster at 4-6 per cent driven by e-commerce-led deliveries and expansion of warehouses in Tier 2/3 cities.