Mumbai, The domestic commercial vehicle industry's wholesale volumes are expected to register moderate growth of 4-6 per cent year-on-year this fiscal, ratings agency ICRA said on Friday.

The broadened base effect in the second half of the previous financial year is likely to result in a year-on-year contraction in volumes in H2 FY27, ICRA said.

This is despite a strong 30.7 per cent year-on-year growth in wholesale volume in August this year, while retail volumes rose 20.1 per cent year-on-year, ICRA said.

While medium and heavy commercial vehicles, and light commercial vehicles are estimated to record growth of 1-3 per cent and 6-8 per cent, respectively, bus volumes are likely to see 3-5 per cent YoY growth during the fiscal, it said.

ICRA said CV wholesale volumes grew by 23.4 per cent year-on-year in the first five months (April-August) of FY2027.

The growth momentum in domestic CV sales volume was supported by infrastructure execution, mining activity, e-commerce-linked logistics and steady financing availability, while strong growth in the light commercial vehicle (LCV) segment, in particular, reflected healthy last-mile transportation activities, the ratings agency said.

LCV retail volumes rose by 21.3 per cent year-on-year in August 2026, with a sequential decline of 9.2 per cent, according to ICRA.

Demand momentum for the LCV segment was also positively impacted by the GST rate cuts, further supported by improved last-mile freight movement and healthy e-commerce-linked activities, the ratings agency said and added that elevated cost of ownership (even after the GST rate cuts), however, remains one of the key challenges.

Retail volumes in the Medium and Heavy Commercial Vehicles (M&HCV) segment grew by 18.2 per cent year-on-year in the previous month with a sequential decline of 8.6 per cent.

The volume growth momentum in the segment picked up after the implementation of the Goods & Services Tax (GST) rate cut with effect in September last year and was further supported by strong rural demand, higher logistics activity, and sustained infrastructure-linked transportation requirements, it stated.

Demand was particularly aided by increased movement from cement, steel and mining sectors, according to ICRA.