Commercial vehicle volumes to stay resilient as recovery takes hold in FY23

Margin pressures may continue on competitive pressures, input cost inflation

Medium and heavy commercial vehicle (M&HCV) makers were the worst hit in the automotive (auto) segment in the April-June quarter (first quarter, or Q1) quarter of 2022-23 due to a spike in raw material costs and moderating volumes.

The sequential margin drop for commercial vehicle (CV) players was a steep 290 basis points (bps). By comparison, margin compression was restricted to 40 bps for two-wheeler companies and 80 bps for passenger vehicle (PV) makers. The decline in margins for CV makers was due to weak seasonal volumes, points out Mansi Lall, research associate, Prabhudas Lilladher Research.

Sequential volumes of PV