To cross 80,000 units in FY07: Ashok Leyland

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To cross 80,000 units in FY07: Ashok Leyland

Hinduja Group flagship Ashok Leyland has announced its second quarter results. CFO of Ashok Leyland, K Sridharan says that though they have given a guidance to the market at about 78,000 vehicles, they should be crossing 80,000 vehicles this financial year.

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Q: Are you seeing any traction at all in pricing whether it is in the MHCV or even in the LCV segment now?

A: We have increased the prices by about 2.5% in October. The bottomline will get the benefit of it November onwards. We do believe that the market buoyancy in the demand for heavy-duty range of vehicles will continue and the pricing action will further improve our profitability.

Q: We saw significant demand in the commercial vehicle segment because of the overloading ban, is that still a real issue in the market place? Are you still seeing it driving vehicle demand?

A: It continues to drive vehicle demand and I do believe that this banning of overload will have an effect for the next 24 months. This is because not all parts of the country fall in line with the directives and it takes time for the operators to align their practices with the rated pay loads. This phenomenon will contribute at least about 10% growth, if not more in the current year's total industry volume growth.

Q: How are freight rates right now and what kind of indications are you picking up for the CV market at large from that?

A: We do see freight rates hardening. Going forward, the busy seasons is always a good boom period for the freight sector and one will see more and more of the freight rates hardening on the backdrop of oil prices softening. So all that should auger well for the viability and profitability of transport operators.

Q: There has been a spate of tie-ups with the global players and domestic players particularly in your business. Is there anything that Leyland is looking at actively for the next two quarters? Have you been speaking with Volvo?

A: The shareholder level discussions are on with few of the world majors like Volvo, Scania, Daimler Chrysler, etc. It is too early to predict what would be the outcome in the next six months on account of those understandings.

But one thing I can say is that Leyland has chartered its own path on the technology front and we are moving ahead with our plans to upgrade our engine to Euro 4 and to get higher pay load vehicles on the roads. This process should consolidate our market position irrespective of whether we tie up with any particular global major or not.