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Commercial vehicle industry records strong start to FY26 after GST cut
Commercial Vehicle Sales FY26: The government's decision to reduce GST on commercial vehicles from September 22, 2025, is proving to be a masterstroke. Since then, sales have seen a significant increase in the October-December quarter, making it easier to purchase multiple vehicles. Learn the statistics.
The commercial vehicle segment, being a barometer for overall commercial activity, has had a robust start to FY26. On September 22, as a part of the GST reforms, the tax rate on commercial vehicles was reduced to 18 percent from 28 percent, leading to a boom in the commercial vehicle market.
According to SIAM data, CV sales increased 21.5% year-on-year to 2.90 lakh units in the October-December quarter. Total sales in April-December were 7.54 lakh units, a year-on-year increase of nearly 10%. According to industry experts, the post-monsoon boom in construction and mining activities, increased government spending on highways, logistics, and infrastructure projects, and improved fleet utilization levels have given the CV sector a boost in FY26.
According to Ashok Leyland MD and CEO Shenu Agarwal, if the current momentum continues, FY26 and FY27 could prove to be the best years ever for the commercial vehicle industry. Demand for replacing older vehicles has also increased following the GST cut.
Industry have estimated that the average age of the CV fleet is now 11 years old, as opposed to the normal 7–8 years. There are also 4.8 million older CVs (10–15 years old) that are now ready to be replaced, which will help drive sales in the future.
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According to Tata Motors MD and CEO Girish Wagh, the highest growth was in ILMCV (intermediate, light, and medium CVs), followed by small CVs and heavy-duty trucks. He stated that freight demand is steadily increasing in BTKM terms, and volumes will see a further surge in the coming months.
According to the NSO's first advance estimate, India's GDP is projected to grow by 7.4% in FY26. Growth in FY25 was 6.5%. Growing transport demand from sectors such as automobiles, steel, cement, e-commerce, and logistics will further strengthen the CV market.
Market leaders Tata Motors and Ashok Leyland, which together hold 53% market share, are enthusiastic about this momentum. According to Tata Motors, intermediate and heavy-duty trucks are seeing the highest growth. Ashok Leyland believes that if this pace continues, we will surpass all pre-pandemic (2019) records.
