The country’s one of the largest commercial vehicle manufacturers Ashok Leyland (ALL) is gearing up for a complete overhaul of the business by increasing its volume and enhancing the light commercial vehicle segment.
The Hinduja Group-owned company, which doesn’t have a strong presence in the light commercial vehicle (LCV) segment, is beefing up its portfolio in this segment to over 6-8 platforms in the next two to three years, from 3 platforms currently, multiple sources aware of the development informed ETAuto.
While the Chennai-headquartered company is also increasing its product portfolio in the medium and heavy commercial vehicle (M&HCV) segment, and is planning to roll-out first Made in India modular platform, the sources informed.
“The modular platform will enhance the company's product offering drastically with customization option in both buses and trucks,” a source aware of the matter said.
The company expects the modular platform to contribute 50-60 per cent of the total M&HCV volume in the next two years.
“The first product on the modular platform is expected to be launched in the next 12 months,” another person aware of the matter confirmed.
One of the sources also informed that the company will also bring two new types of cabins to meet the changing requirements, which will be better in terms of driver comfort and safety.
Ashok Leyland upcoming M&HCV will feature 6-speed and 9-speed transmissions, while the vehicles will have BS-VI engines by December 2019 and will have both 4-cylinder and 6-cylinder engines on offer.
According to the industry sources to execute this kind of plan, the company is likely to invest around Rs 1,500 crore.
Recently in an interview with ETAuto, Vinod Dasari, managing director, ALL said: “It doesn’t really matter what volume of the vehicle is, as the type of vehicles we are making is much larger now, and it doesn’t matter the volume go up or not. I think, it (volume) will go up by 10 per cent this year, and the revenue will certainly go up because we are making much larger vehicles now.”
The company sold 133,264 units in FY17, compared to 127,321 units in the previous financial year.
With the new plan, the CV maker expects to sell 1.35 lakh units in the coming financial year 2018-19. It is aiming to double LCV volume from about 2,000 units a month.
Currently, ALL has smaller product range in the LCV category, compared to its competition, but this plan will put it in a strong position.
Talking about LCV, Dasari added: “…we have made substantial improvement and the business is profitable now. We are launching new product and we have seen market share gain. The over-all LCV market is doing well, so we are happy with the business now.”
The commercial vehicle manufacturer posted nearly three-fold increase in net profit to Rs 449.7 crore for the third quarter ended December 2017, against a net profit of Rs 161.71 crore for the same period in the previous fiscal.
ALL’s total income jumped to Rs 7,151.1 crore for the third quarter, over Rs 4,854 crore in the same period of the previous fiscal.
Ashok Leyland continued its growth run in February 2018, with a surge of 29 per cent. The CV manufacturer posted total sales of 18,181 units, compared to sales of 14,067 vehicles in the same month last year. M&HCV were up by 21 per cent, with sales of 13,726 units, compared to 11329 units in January 2017.
The growth in LCVs was higher at 63 per cent, with sales of 4,455 units, compared to 2,738 units in the same month last year.
Source- ET Auto