Post-pandemic, there are still grey clouds that are hampering the Indian auto sector's growth. But if you look at commercial vehicle dispatches, there is a silver lining. Companies like Tata Motors, Mahindra & Mahindra, Eicher Motors, Ashok Leyland, and Maruti Suzuki have seen steady growth in CV wholesale volumes from December 2021 to March 2022.

The rise in wholesales of medium and heavy-duty trucks (medium & heavy commercial vehicles, M&HCV) has been the biggest contributor to the volume growth of commercial vehicles. Ashok Leyland’s M&HCV volumes jumped 38.6% YoY to 12,161 units, while Tata Motors saw 33% YoY growth to 14,499 units for March 2022. This is because of a pick-up in construction and mining activities leading to an increase in demand for trucks.  

Eicher Motors' heavy-duty vehicles’ wholesales has also risen 41% YoY to 2,006 units in March 2022. According to a report from Dolat Capital, the demand for medium and heavy-duty trucks will continue to stay strong because of high fleet utilisation and freight availability, as construction and industrial activities will be on an uptrend in FY23.

Demand for light commercial vehicles (LCV) has increased as chip supplies improved. Mahindra & Mahindra’s LCV wholesales jumped 132% YoY to 3,806 units in March 2022. But heavy-duty truck wholesales has grown slowly. The surge in e-commerce sales rubbed off on Maruti Suzuki’s LCV wholesales - it gained 15% YoY to 3,797 units in March 2022. 

According to Emkay Global, the volume momentum for CVs will continue as chip supplies for LCVs and tippers improve. Nirmal Bang expects demand drivers to remain intact in coming months. However, it’ll be interesting to see how long demand sustains. A recent report suggests that even though the Centre is going full throttle to meet its capital expenditure targets, it will most likely fall short of meeting its revised capital expenditure target of Rs 6 lakh crore for FY22. If this continues into FY23 as well, then the party for commercial vehicle makers might end early.