‘Ageing truck fleet will boost replacement demand in M&HCV market’

CHENNAI: India’s old trucks will help the commercial vehicle industry pick up speed on the demand highway. The average age of medium and heavy (M&HCV) trucks on Indian roads is currently at its highest at 10 years. According to truck manufacturing companies, this ageing fleet will translate into a “significant” increase in replacement demand as customers look for new technology and faster turnaround time from their vehicles.As per ICRA’s estimates, the average age of M&HCVs increased to around 10 years in the FY2023-FY2025 period after registering a gradual increase over the past years. “The elevated level of vehicle ageing was fuelled by deferment of new vehicle purchases by fleet owners during the pandemic period, and also with the domestic M&HCV (trucks) volumes staying flattish YoY in FY2024 and registering a 4% YoY decline in FY2025,” said Kinjal Shah, senior VP, ICRA. “With this, the average M&HCV vehicle age presently remains the highest in the past two decades, which along with the mandatory scrapping of govt vehicles older than 15 years from April 1, 2023, augurs well for replacement demand in the medium term,” added Shah. Already truck manufacturing companies are taking note of this opportunity. Shenu Agarwal, MD & CEO, Ashok Leyland, said: “The outlook for the truck industry in FY26 takes into account the all-time high ageing of the truck fleet which means fleet replacement will definitely happen.”

The demand pull will be predominantly in the M&HCV segment because the fleet is “higher vintage there,” he added.Industry estimates show that since FY2010, around 37 lakh trucks have been sold spanning BS0 to BS6 levels. In the last four years around 10 lakh BS6 trucks have been sold. There are another 8.5 lakh units of BS4 vehicles plying the roads. So for the balance around 50% of the vehicles sold in the last 15 odd years, the average age is more than 11 years.Not surprisingly, industry is gearing up for replacement demand to kick in. Vinod Aggarwal, MD&CEO, Volvo Eicher Commercial Vehicles: “Replacement demand will be very strong particularly since with improved road infrastructure, the new trucks are running around 15,000 km to 20,000 km per month compared to around 8,000 km to 10,000 km that older trucks manage.” Newer products, packed with telematics, offer more rigorous usage and faster turnaround time, he added.Currently replacement demand is 60% of the medium and heavy truck sales. And while overall sales have still not reached the 2018-19 peak of 295,000 units (it was 248,000 units in FY25), the payload is going up. “The M&HCV segment is migrating towards higher tonnage and payload wise FY25 truck sales is 10% higher,” said Aggarwal.