Bad news for financiers: CVs in for a long haul, may be last to recover

Lower fleet utilisation, weak cash flows keep NBFCs under pressure

Commercial vehicles (CVs) have spoilt the party for both automakers and vehicle financiers, at a time when overall auto sales were picking up pace and had seen some recovery in June over May.

Analysts forecast CVs to trail in the long race for revival of the sector, which will not be music to lenders’ ears.

Covid-19 was a double-whammy for the CV segment, which was already under pressure due to the auto slowdown. Lower fleet utilisation, hike in vehicle prices amid the BS-VI transition, and the muted demand were factors that hurt the CV segment. Shashank Kanodia, auto sector analyst at ICICI