Emerging Trends in India's Commercial Vehicle Market for 2025
Growth of the Commercial Vehicle Market in India
The commercial vehicle sector in India has seen significant growth, with sales rising from 9.62 lakh units to 9.69 lakh units between 2023 and 2024, as reported by the Society of Indian Automobile Manufacturers (SIAM).
This growth can be attributed to various factors, including the rise of electric vehicles (EVs) and advancements in technology.
Explore the key trends shaping the commercial vehicle market that have contributed to its expansion.
Key Trends in the Commercial Vehicle Market for 2025
1. Technological Advancements in Financing
The commercial vehicle industry is experiencing a technological revolution. Innovations such as Advanced Driver Assistance Systems (ADAS) are enhancing safety and efficiency in vehicles like trucks and lorries. Features like digital dashboards and predictive maintenance are helping operators reduce costs and improve operational uptime.
Moreover, the financing landscape is evolving with KYC automation, AI-driven risk assessments, and digital lending platforms, streamlining the loan application and approval processes.
2. Growth of Eco-friendly Vehicle Financing
The penetration of electric vehicles in India has increased from 0.8% in FY24 to 0.9% in FY25, with urban areas accounting for over half of the commercial vehicle retail sales. EVs are promoting sustainability and improving financing options.
Green financing, which includes subsidized interest rates and tax benefits, is becoming more accessible, encouraging businesses to adopt electric commercial vehicles. This shift not only supports environmental goals but also aids in reducing reliance on fossil fuels.
3. Trends in Commercial Vehicle Insurance
The insurance sector for commercial vehicles is adapting to technological advancements and regulatory changes. Enhanced safety features are prompting insurers to offer competitive rates for commercial vehicle insurance.
Fleets equipped with telematics and ADAS often enjoy lower premiums due to reduced accident risks. As the market evolves, insurers are likely to focus more on risk mitigation and provide additional services like predictive maintenance alerts.
4. Market Dynamics and Performance
In FY25, the Indian commercial vehicle market saw a slight decline in retail sales, dropping by 0.17% year-on-year to 10,08,623 units. Heavy commercial vehicles (HCVs) experienced a 4.07% decrease, while light commercial vehicles (LCVs) saw a 0.21% increase, indicating changing demand patterns.
The first half of FY25 was marked by subdued demand due to general elections and a slowdown in infrastructure projects. However, forecasts suggest a potential increase in wholesale volumes as construction activities resume, with LCVs expected to lead this recovery.
5. Competitive Landscape and Market Shifts
The competitive landscape among Indian commercial vehicle manufacturers is shifting. Tata Motors remains the leader but has seen its market share decrease from 35.42% in April 2024 to approximately 33.57% in April 2025, reflecting increased competition.
Mahindra & Mahindra has strengthened its position, capturing over 23.24% of the market with a 1.72% year-on-year increase in sales. Meanwhile, Ashok Leyland has faced a 5.24% decline in retail sales during the same period.
This evolving landscape is prompting manufacturers to diversify their offerings and invest in technology to remain competitive. Insurers are also adapting, providing services like predictive claim tracking and real-time assistance, enhancing trust among fleet operators.
Future Outlook for the Commercial Vehicle Market
The Indian commercial vehicle market is poised for modest growth, driven by replacement demand, rural consumption, and infrastructure development. The electrification trend is expected to accelerate, particularly in the LCV segment.
As digitalization and regulatory compliance continue to influence investments in technology and insurance solutions, manufacturers will focus on innovation and customer-centric products to capture market share. Insurance companies will play a vital role in supporting fleet operators with tailored insurance products at competitive rates.
The outlook for 2025 reflects cautious optimism, with technological advancements and strategic realignments shaping the future of the commercial vehicle sector. Stakeholders who embrace these trends and invest in future-ready capabilities will be well-positioned for success.