Domestic Commercial Vehicles Sales Expected to Grow 9-11% in FY '24

The Volume of Domestic CV Sales was 31% up in the year-on-year sales of 2021-22. Whereas the sales volume is expected to increase by around 27% as the demand rises.  
 
Domestic, commercial vehicle sales are expected to grow 9-11% in FY '24. The growth of medium and heavy retail vehicle sales with an increase of 6% leads the growth, by the rating agency CRISIL.

It also said that the increased allocation of infrastructure funds in the Union Budget for the next year would support the demand. This is the consecutively third year of growth for the domestic CV industry, according to CRISIL. 
 
Light commercial vehicle (LCV) sales are expected to increase by 8-10 per cent. On the other hand, the sales of medium and heavy commercial vehicles are expected to rise 13-15% in FY '24.

Official Statement:-

Anuj Sethi, Senior Director at CRISIL ratings, said, "With strong demand prospects, we expect LCV sale volumes to grow 8-10 per cent next fiscal, and cross pre-pandemic (fiscal 2019) sale volumes. MHCV sale volumes will continue to grow faster than LCVs at 13-15 per cent next fiscal, but are expected to exceed pre-pandemic sale volumes in fiscal 2025,"
 
The domestic CV sales volume increased 31% year-on-year in the 2021-22 fiscal year. Also, it is expected to surge around 27% as the demand comes back on activities like mining and road construction and focus on last-mile connectivity. Besides the higher volume, a 2 to 5 % growth in the realisations as the OEMs comply with BS VI-Stage II norms. Also, lower commodity prices, especially steel, will help improve the operating profitability to a four-year high of 7 - 7.5% net fiscal from an estimated 5-6% of this one. "Strong balance sheets and healthy liquidity helped offset profitability pressures ensuring 'Stable' credit profiles of CV manufacturers in the recent past," said Anil More, Associate Director at CRISIL Ratings. The expected improvement in the operating profit in this fiscal year and the next one, and only the model capital spending needs (if we gave a utilisation rate of around per cent). It will ensure the improvement in the key debt metrics and keep the credit profiles stable. The years of pandemic affected these debt metrics. 

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