After leading LMDT space in FY25, VE Commercial Vehicles sees structural tailwinds and network gains powering next phase of growth.
14 May 2025 | 256 Views | By Ketan Thakkar and Darshan Nakhwa
After delivering its best-ever annual performance in FY25, VE Commercial Vehicles (VECV) is entering FY26 with cautious optimism. The company anticipates single-digit volume growth in the commercial vehicle (CV) industry during the current fiscal year, following a relatively flat performance in FY25. Despite the broader industry stagnation, VECV recorded over ...
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After delivering its best-ever annual performance in FY25, VE Commercial Vehicles (VECV) is entering FY26 with cautious optimism. The company anticipates single-digit volume growth in the commercial vehicle (CV) industry during the current fiscal year, following a relatively flat performance in FY25. Despite the broader industry stagnation, VECV recorded over 5% volume growth last year, gaining market share across the light, medium, and heavy-duty truck segments.
"Last year, as you all know, the market was flat with just 0.3% growth for the 3.5-tonne and above segment. Even so, we grew by more than 5%," said Vinod Aggarwal, MD & CEO of VECV. "This year, we anticipate strong single-digit growth."
Aggarwal cited macro tailwinds, infrastructure spending, and replacement demand as key structural drivers for commercial vehicle growth in FY26. With India's GDP expected to grow at 6.5%, the demand for freight movement and corresponding vehicle replacement is expected to remain strong.
"If the GDP is growing, commercial vehicle demand has to follow. Replacement demand is also picking up, especially as BS3 and BS4 trucks get phased out," he explained.
"New trucks offer better productivity, are suited for modern infrastructure, and bring lower costs. It makes a lot of sense to replace the older fleet."
Migration to Higher-Tonnage and Premium Offerings
Aggarwal noted that while absolute CV unit volumes may not have crossed 2018–19 levels, there has been a clear migration to higher-tonnage, more efficient vehicles—a trend visible in rigid trucks and light-to-medium duty segments.
"There's been a lot of migration to high-intensity trucks. In medium-duty, there's growing preference for higher tonnage trucks like 18–19T, which lifts the overall tonnage even if unit numbers appear similar," he said.
This shift also favors OEMs like VECV, which have a broad and increasingly localized product range across tonnage points and applications.
VECV Strategy: Segment Expansion and Distribution Growth
Aggarwal attributed VECV's FY25 success and anticipated FY26 growth to a multi-pronged strategy:
In the light and medium-duty truck (LMDT) category, VECV ended FY25 with a market share of 36%, becoming the No. 1 player in the 5–18 tonne segment. The company also saw gradual share gains in heavy-duty trucks, climbing to 9.7% in FY25 from 9% the previous year.
"We're seeing growth across the country, not just from metros but rural areas too. Our distribution expansion is translating into volume growth," Aggarwal said.
New Category Play: 2–3.5 Tonne Small CVs
The company also entered the 2–3.5 tonne small commercial vehicle segment in FY25, launching the electric-first Eicher Pro-X. Over the next few months, diesel and CNG versions will follow, allowing VECV to address a broader swathe of last-mile and intra-city delivery use cases.
"This is a large segment, and we will now be present in it with electric, diesel, and CNG offerings," he noted.
Outlook: Confidence Tempered by Realism
While Aggarwal expects the growth cycle to continue, he acknowledged that technical corrections or sentiment-led dips could emerge temporarily. Nonetheless, the long-term direction remains clear.
"All the fundamentals point to good growth. You will always have short-term hiccups, but structurally, demand is intact. More goods movement means more trucks," he said.
With an emphasis on sustainable mobility, inclusive manufacturing, and measured product expansion, VECV is preparing to navigate the next growth cycle while remaining open to opportunities that may allow it to sustain its outperformance.