LCV Segment FY26 Growth: Indian Commercial Vehicles Set for Recovery

Published on April 18, 2025

The LCV segment FY26 growth is poised to rebound after a subdued performance in FY25, with industry experts projecting single-digit growth for India’s light commercial vehicle market. This recovery comes on the back of improving economic indicators and rising demand from consumption-led sectors across the country. The latest industry analysis shows promising signs for stakeholders across the commercial vehicle ecosystem as the market prepares to enter a new growth phase.

LCV Segment FY26 Growth Forecast: Recovery on the Horizon

While the overall commercial vehicle market showed mixed performance in FY25, the LCV segment FY26 growth outlook appears significantly more positive. The segment reported flat year-on-year growth in the fourth quarter of FY25, but a notable 7 percent sequential uptick signals early signs of recovery that analysts expect will continue into the next fiscal year.

“We see mid-single-digit growth in contrast to a mild de-growth that was seen last year.” Amandeep Singh, President – LCV, International Operations, Defence and Power Solutions, Ashok Leyland

This optimistic projection from one of the industry’s leading manufacturers highlights the shifting momentum in the market. According to Crisil Ratings, the LCV segment FY26 growth is expected to range between 4-6 percent, representing a significant improvement from the 2 percent decline observed in the previous fiscal year.

Key Factors Driving LCV Segment FY26 Growth

Several economic and industry-specific factors are expected to contribute to the LCV segment FY26 growth. Industry analysts have identified multiple tailwinds that could propel the market forward after a challenging period.

According to Poonam Upadhyay, Director at Crisil Ratings, the LCV segment FY26 growth will be substantially supported by these factors, with particular emphasis on “replacement demand, improved economic activity, last-mile delivery requirements, and the expansion of warehousing facilities in Tier-2 and -3 cities.” This combination of factors creates a favorable environment for market expansion after the recent period of stagnation.

Challenges Affecting the LCV Market Performance

Despite the positive LCV segment FY26 growth outlook, certain challenges continue to affect specific segments of the market. The analysis of FY25 performance reveals important trends that manufacturers and fleet operators should consider.

Industry experts note that these competitive pressures are largely limited to the lower-tonnage SCV category and don’t substantially impact the broader LCV segment FY26 growth prospects. Manufacturers with diverse product portfolios spanning multiple weight segments are better positioned to navigate these market dynamics successfully.

E-commerce growth and last-mile delivery expansion are key factors supporting LCV segment FY26 growth projections. (Image: Representative)

M&HCV Segment: Contrasting Growth Patterns

In contrast to the gradual recovery projected for the LCV market, the Medium and Heavy Commercial Vehicle (M&HCV) segment has already begun showing signs of structural recovery. This creates an interesting contrast when analyzing the broader commercial vehicle industry landscape alongside LCV segment FY26 growth patterns.

The differing recovery trajectories between the LCV and M&HCV segments highlight the unique market dynamics affecting various commercial vehicle categories. While LCV segment FY26 growth is driven primarily by consumption and last-mile delivery factors, the M&HCV segment’s performance is more closely tied to infrastructure development and government spending patterns.

Overall Commercial Vehicle Industry Outlook for FY26

When combined, the projections for both segments paint a comprehensive picture of the commercial vehicle industry’s direction. The LCV segment FY26 growth contributes significantly to the overall positive outlook for the sector.

Manufacturers across the commercial vehicle spectrum are positioning themselves to capitalize on these growth opportunities. Companies with strong presence in the LCV market are particularly optimistic about the LCV segment FY26 growth potential, with many planning expanded production capacity and new model introductions to capture market share.

“The full-year decline of 2 per cent was largely due to a sharp dip in Q2 FY25, compounded by base effects and rising competition from electric three-wheelers in the sub-1-tonne small commercial vehicle segment. However, this competitive pressure is mainly limited to the lower-tonnage SCV category.” Poonam Upadhyay, Director at Crisil Ratings

As the new fiscal year progresses, industry stakeholders will be closely monitoring monthly sales data and economic indicators to gauge whether the projected LCV segment FY26 growth materializes as expected. Early signs suggest that the positive trajectory has already begun, with sequential growth in recent quarters providing a foundation for the anticipated recovery.

For fleet operators, logistics companies, and businesses reliant on commercial vehicles, the improved outlook presents an opportunity to reassess fleet expansion and replacement strategies. The projected LCV segment FY26 growth may create favorable conditions for investments that had been delayed during the previous period of market stagnation.

Published on April 18, 2025 | Updated on April 18, 2025