Commercial Vehicle Sales Gain Momentum in August as Freight, Replacement Demand Improve

The sales of commercial vehicles (CV) improved in August, with leading CV companies registering impressive double-digit growth in domestic dispatches due to freight movement, infrastructure development, and replacement demand ahead of the festive season. 

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The industry figures indicated that there was an increase in the sales of commercial vehicles, with domestic sales increasing between 20% and 43% on a year-on-year basis. Though the growth was helped by the easy base as domestic dispatches were muted during August 2025 due to GST uncertainties, there were signs of improvement in demand conditions as well. 

Ashok Leyland witnessed a 43% rise in domestic CV sales to 19,438 units from 13,622 units last year. Domestic CV volumes at Tata Motors stood at 36,619 units, registering a growth of 33% from 27,481 units. The domestic CV sales below 3.5 tonnes at Mahindra were up by 22% to reach 27,415 units. 

While the Mahindra Trucks & Buses business unit (consisting of Mahindra Truck & Bus business unit and SML Mahindra) saw an increase of 47% in sales (including domestic sales and exports) from 1,701 units to 2,495 units, on the other hand, VE Commercial Vehicles (VECV) (which is the joint venture of Volvo group and Eicher Motors) saw an increase in domestic commercial vehicle sales by 19.8% to 7,584 units. 

The growth was also visible on a sequential basis. Domestic volumes at Tata Motors and Ashok Leyland increased by around 8% each compared with July, while Mahindra’s sub-3.5-tonne commercial vehicle sales rose nearly 9%. VECV’s domestic sales remained broadly flat month-on-month.  

Retail demand trends reflected a similar improvement. According to InCred Research, Vahan registrations for commercial vehicles increased 22% year-on-year in August, suggesting that wholesale growth was not driven solely by the low base effect.  

Medium and Heavy Commercial Vehicles Lead Growth 

The strongest momentum was seen in medium and heavy commercial vehicles (M&HCVs). Ashok Leyland’s domestic M&HCV sales rose 55% year-on-year to 12,408 units. Within that segment, truck sales increased 60% to 10,285 units, while bus sales climbed 36% to 2,123 units. The company’s light commercial vehicle volumes grew 25% to 7,030 units.  

Tata Motors reported a 31% rise in domestic medium, heavy and intermediate commercial vehicle sales, which reached 17,531 units. Heavy commercial vehicle truck volumes increased 42%, while intermediate and light-medium commercial vehicle trucks grew 20%. Passenger carriers rose 31%, and small commercial vehicle cargo and pickup volumes increased 34%.  

Mahindra’s heavier commercial vehicle business also recorded strong growth. Cargo vehicle sales in its Trucks & Buses division increased 55%, while passenger vehicle sales rose 35%.  

According to Vinod Sahay, Executive Chairman of SML and President of Aerospace, Advanced Technologies, Trucks, Buses and Construction Equipment at Mahindra & Mahindra, demand in the truck and bus segment continues to be supported by infrastructure spending, freight demand and replacement demand, despite challenges related to rising fuel and input costs.  

Industry Heads into Festive Season with Stronger Momentum 

According to Arun Agarwal, Vice President - Fundamental Research at Kotak Securities, there was strong demand for CVs in August, which is due to increased optimism among fleet operators, and the GST demand stimulus. It was observed that the wholesale volumes were up over 20% year on year in both M&HCVs and LCVs. 

In the coming months, InCred Research says there is a possibility of higher industrial production and core sector growth driving demand for CVs, but fuel prices and cost inflation and West Asia tensions will pose significant risks. 

The report also highlighted a divergence between domestic and export markets. While automotive retail volumes grew more than 15% year-on-year in August, export performance remained uneven for manufacturers with higher exposure to West Asian markets affected by the conflict in Iran.  

As the festive season approaches, the domestic commercial vehicle market enters the period with stronger momentum than it had a year ago.