Truck companies eye demand boost with ageing fleet on roads

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 .

According to Icra's estimates, the average age of M&HCVs increased to around 10 years in FY23-25 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 y-o-y in FY24 and registering a 4% y-o-y decline in FY25," said Kinjal Shah, senior VP, Icra. "With this, the average M&HCV vehicle age presently remains the highest in the past two decades," added Shah.

Already truck manufacturing companies are taking note of this opportunity. "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," said Shenu Agarwal, MD & CEO, Ashok Leyland.

Vinod Aggarwal, MD & CEO, Volvo Eicher Commercial Vehicles said, "Replacement demand will be very strong, particularly since with improved road infrastructure, the new trucks are running around 15,000km to 20,000km per month compared to around 8000km to 10,000km 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. However, overall sales have still not reached the 2018-19 peak of 2,95,000 units (it was 2,48,000 units in FY25).