The commercial vehicle (CV) industry may be set to end the present fiscal with

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a strong growth of 25-30 per cent, but it has taken unprecedented pricing measures round the year for the CV players to protect their margins in the wake of the rising material costs.

Commercial vehicle makers such as Tata Motors, Ashok Leyland and Eicher Motors hiked prices of their trucks several times to offset raw material price increases. The most recent price hike was announced in January.

Leading CV maker Ashok Leyland effected price hikes in April, June and October last year and in January this year. “We’ve taken a cumulative price hike of about 12 per cent in this financial year, which is a record pricing action for the commercial vehicle industry,” said K Sridharan, chief financial officer, Ashok Leyland.

There was a significant increase in material costs and more pressure was on the tyre prices, followed by castings and forgings. “Ashok Leyland has reported a cost increase of closer to about 5-6 per cent in the cumulative nine months period of this fiscal. We expect the overall cost increases to be contained between 7.5-8 per cent for the fiscal 2010-11, he added.

Thanks to strong domestic and export volumes coupled with pricing actions, Ashok Leyland expect the margins to be better or slightly exceeding 10.5 per cent for the full year.

Country’s largest CV maker Tata Motors announced its first price hike for fiscal 2010-11 in July 2010 — an average of 1.5 per cent across its commercial vehicles, except the Tata Ace and the Tata Magic ranges. On October 1, 2010, the price increase on all its commercial vehicles was in the range of Rs 5,000-40,000, followed by an increase in the range of Rs 1,500-Rs 30,000, effective January 1, 2011. VE Commercial Vehicles, an equal joint venture between Eicher Motors and Volvo Group, took pricing actions at least four times during the calendar year 2010.

Domestic CV sales have reported a 29 per cent growth at 598,679 units for the April 2010-February 2011 period, compared with 465,369 units during April 2009-February 2010, with medium and heavy commercial vehicles recording 34 per cent growth and light commercial vehicle segment registering 24 per cent growth, according to the statistics of the Society of Indian Automobile Manufacturers (SIAM).