Replacement demand, GST reset may boost MHCV sales

India’s medium and heavy commercial vehicle segment appears to be entering a fresh upcycle

- SOHINI DAS

India’s medium and heavy commercial vehicle (MHCV) segment appears to be entering a fresh upcycle after several years of uneven growth. This is mainly on the back of improving freight economics, an ageing fleet profile, regulatory tailwinds anda reset in goods and services tax (GST)-driven distortions.

Brokerages say the recovery, while still freight-rate dependent, is becoming more structurally grounded than previous false starts. This is a view increasingly echoed by industry executives. Volumes (419,000 units) remain below the FY19 peak for MHCVs, underscoring how deep and prolonged the downturn has been. But conditions on the ground are improving.

Nomura, in a recent note on the sector, said the MHCV industry is entering early stages of an upcycle. It has forecast volume growth of about 8 per cent in FY26 and closer to 10 per cent in FY27 as utilisation improves and replacement demand gathers pace. As a result, Nomura estimates MHCV volumes at 404,000 units for FY26; 444,000 units for FY27 and 466,000 units for FY28.

One of the biggest changes has been in fleet operator economics.