The Commercial Vehicle (CV) segment in India is likely to surge around 15-25 % in the current financial year (2010-11).

The growth would be mainly driven by the increased focus on infrastructure growth and the forecast of normal monsoons in the current financial year.

This surge in the sales of CV would help ensure a new peak of more than 600,000 unit sales.

Besides, a considerable surge is expected in the Medium and Heavy CV (M&HCV) category (7.5 tonne and above), which is still to reach the earlier sales record of 2006-07, which was pegged at 275,556 units.

Mr. V G Ramakrishna, Senior Director of Frost & Sullivan has said that after a recovery registered in the last financial year, this year the CV industry is likely to increase at 25 % and would enter the stabilization phase, as finance continues to be readily available and the cost of funds is still relatively low vis-…-vis earlier levels.

As per the Society of Indian Automobile Manufacturers, in 2009-10, the M&HCV segment has recorded 33.5 % growth at 245,058 units, total CV sales went up by 38.3 % to 531,395 units. At an estimated 25 % growth, the M&HCV segment is expected at about 306,000 units, total CV sales would be about 664,000 units in 2010-11.

Mr. Vinod Aggarwal, CFO of VE Commercial Vehicles has said the exceedingly good growth in the manufacturing sector and a normal forecast for the monsoon will ensure the CV industry will cover all the lost ground and may end the current financial year at a new peak across all sub-segments.

During 2008-09 financial year, the CV sales declined by 21.7 % at 384,122 units. However, the Centre's intervention in last financial year through stimulus measures and enhanced spending on infrastructure helped the sector to renew.

However, if the overall economy continues to grow at a buoyant pace, the growth force of the current financial year is expected to sustain over the next 2 years.

Mr. R Seshasayee, MD of Ashok Leyland has said that the demand for CV is inter-related to the economy and since the economy is expected to grow at around 8 %, the country may achieve a minimum growth of 15 % in demand for CVs in this year and similar growths in the next 2-3 years.