Homegrown commercial vehicle major Ashok Leyland (ALL) has announced plans to reclaim its share in the volatile light commercial vehicle (LCV) market, with a strategy driven on new platforms, and a rural push.
ALL, which has clung on to the second position in the LCV market with its workhorse Dost, currently has 16 per cent market share. In 2012-13, it was 18 per cent, which dipped due to certain unforeseen market factors that hit industries across the economy. “Now the aim is to achieve our previous market share of 18 per cent, and even grow further,” ALL President (LCV and Defence) Nitin Seth told Deccan Herald on Monday, when the company celebrated the sale of one lakh units of the Dost.
ALL (with its Nissan JV) has rolled out new vehicle platforms, namely the Dost Strong, Partner (minitruck), and MiTR (minibus), which will enable it to penetrate more segments. The MiTR is especially aimed at the school bus segment, to tap demand when the government’s new school bus compliance norms kick in.
“In order to expand our range in the market, we are bullish on our three platforms since the LCV segment growth is platform-driven. Depending on demand, the capacity at our Hosur plant can be enhanced from the current 55,000 units. The next stage of our strategy is to open small service outlets in rural areas, since a sizeable chunk of our business is from there, which will complement our 360 touch points in 23 states,” Seth said.
Since 2011, the LCV market has been declining gradually in sales. While around 5,25,000 LCVs were sold in 2011-12, the same dipped by 12 per cent to around 3,85,000 units in 2014-15. Meanwhile, there was a modest spurt in the sales of medium and heavy commercial vehicles (M&HCVs) during the period.
Last year, ALL’s LCV sales dipped by one per cent, compared with 2013-14. While it recorded M&HCV sales at 70,200 units, its LCV sales stood at 27,600 units.
“The decline may be attributed to a fall in demand due to a hike in rates, fuel prices and so on, which affects the largely individual-run LCV business. Interest rates for LCV purchases have been to the tune of 12.5 per cent,” Seth added.
But the company is optimistic that in the second half of this year, the economic situation will improve and the LCV business will pick up.
“From October-November 2015, the monsoon will help the agriculture sector. Transportation of agro produce, durables, vegetables and groceries will become necessary, and demand will set in. Meanwhile, if the RBI cuts rates, it will be an even larger boost,” he said.
He added that Ashok Leyland is doing its bit to grow faster than the market.