May 29, 2025

India's commercial vehicle industry is set to gain momentum due to the ageing truck fleet on Indian roads. The average age of medium and heavy commercial vehicles (M&HCV) has hit a decade, prompting a surge in replacement demand. Truck manufacturing companies anticipate a significant increase in demand as customers seek newer technologies and quicker vehicle turnover. ICRA's data reveals that the average age of M&HCVs has risen to 10 years during the FY2023-FY2025 period. This trend is attributed to fleet owners postponing new vehicle purchases amid the pandemic and stagnant domestic M&HCV volumes. Kinjal Shah, senior VP at ICRA, noted that the current vehicle age is the highest in the past two decades, bolstered by the mandatory scrapping of government vehicles older than 15 years starting April 1, 2023. This situation bodes well for replacement demand in the medium term. Ashok Leyland's MD & CEO, Shenu Agarwal, acknowledged the industry's optimistic outlook, citing the all-time high ageing of the truck fleet as a driver for fleet replacement. The replacement demand is expected to be prominent in the M&HCV segment due to the fleet's higher vintage. Industry data indicates that approximately 37 lakh trucks have been sold since FY2010 across various emission levels, with around 10 lakh BS6 trucks sold recently. There are still 8.5 lakh BS4 vehicles in operation, indicating a substantial market for replacements. Vinod Aggarwal, MD&CEO of Volvo Eicher Commercial Vehicles, emphasized the robust nature of the replacement demand, especially considering the improved road infrastructure and enhanced performance of newer trucks equipped with telematics. Currently, replacement demand accounts for 60% of medium and heavy truck sales. Although the industry has not yet reached the sales peak of 2018-19, the payload capacity of trucks is on the rise, with FY25 truck sales experiencing a 10% increase in tonnage and payload. The market is witnessing a shift towards higher tonnage vehicles, signaling a positive outlook for the industry.

Read More at Timesofindia →

Tags: Truck industry, Vehicle age, Demand, Replacement demand, Commercial vehicles,