Why commercial vehicle makers in India are diversifying beyond trucks
What's the story
India's commercial vehicle (CV) manufacturers are diversifying their business portfolios beyond truck sales. The move is aimed at shielding revenues and profits from the cyclical nature of the market, which is heavily influenced by economic growth, freight activity, and government infrastructure spending. Leading players in this sector such as Tata Motors, Ashok Leyland, and VE Commercial Vehicles (VECV) have all reported stellar annual performances for fiscal 2026.
Revenue diversification
Non-core businesses see rapid growth
During their earnings calls, these companies highlighted the rapid growth of their non-core businesses such as spare parts, financing, and fleet services. Ashok Leyland's aftermarket business alone generated nearly ₹3,800 crore in revenue for FY26. Meanwhile, VECV's spare-parts business crossed ₹3,000 crore with a growth rate of nearly 14% year-on-year. Tata Motors revealed that its non-cyclical revenue is growing at 2.7 times the rate of cyclical revenue due to its focus on parts, services and fleet solutions.
Stability
After-sales services provide recurring revenue
For commercial vehicle makers, after-sales businesses like spare parts and maintenance are a major source of recurring revenue even in times of weak vehicle demand. Tata Motors has expanded its footprint in fleet-management services, connected vehicle platforms and aftermarket businesses. "We've been deliberately building this mix, and this is now showing up meaningfully in the numbers," said Tata Motors Commercial Vehicles CFO GV Ramanan during an analyst call.
Business expansion
Ashok Leyland's non-CV businesses thrive
Ashok Leyland also witnessed strong growth in its non-core businesses during FY26. The company's domestic spare parts revenue grew by 9.5% year-on-year, while its power solutions and defense businesses grew by 16.4% and 20%, respectively. Hinduja Leyland Finance expanded assets under management by a whopping 24% to about ₹59,500 crore. "Our non-CV businesses demonstrated remarkable growth," said Shenu Agarwal, Managing Director & CEO of Ashok Leyland.