With an aim to augment its presence in the booming Light Commercial Vehicle (LCV) market, Ashok Leyland has lined up six new models in this segment across various payload capacities and powertrains during financial year 2024-25. With the rollout of these models, the homegrown commercial vehiclemaker aims to enhance its market share in the 2-3.5 tonne light duty truck market from 20.4 percent to around 25 percent in the medium term.
“Currently, we address about half of the LCV market in India. We are looking at expanding our LCV product portfolio to cover atleast 70-80 percent in the next few years. LCVs present a huge potential for us to grow our CV volumes in the future,” said Dheeraj Hinduja, Chairman, Ashok Leyland Limited during a post Q4 FY 24 results media conference.
Ashok Leyland forayed into the LCV market with the rollout of Dost 1.25 tonne truck followed by products with bigger haulage capacities like Bada Dost and Partner.
When asked about the rationale behind its aggressive expansion in the light-duty trucks, Hinduja stated “We are traditionally known for our M&HCVs. But when we entered the market in 2011 (and) were late entrants . But our aspirations are to fulfill all the requirements of our customers when it comes to trucking or passenger side as well. From that perspective, we have been growing our LCV portfolio over the last 10-12 years.”
He revealed that in the 2-3.5 tonne LCV segment, the company is the second largest player during FY 2023-24 (behind Mahindra and Mahindra). In hs view, “There is a huge market of over half a million LCVs and as a company which has a network across the country and international operations, there is always going to be a hub-and- spoke approach that customers take. So it is only right for us to be expanding and strengthening our M&HCV business with more and more variants of LCVs as well.”
When queried if the company foresees any impact on margins with more LCVs, he said that he expects the same type of margins in light trucks as the company sees in Medium and Heavy Commercial Vehicles (M&HCVs).
In the e-LCV space, its is looking at widening its IeV series EV subsidiary Switch Mobility. Hinduja stated that while the company has just started delivering first e-LCV product in the market, the second offering will be launched in the near term.
"In March, we launched the IeV 4 light commercial vehicle. We will be launching IeV3 in the next few months. These two will be our mainstay in the e-LCV market. Both these vehicles would be segment-first and have the potential to transform the last-mile mobility in the country,” added Hinduja.
According to Society of Indian Automobile Manufacturers (SIAM), LCV sales (goods + passenger carriers) went down marginally from 6,03,465 units in FY 2022-23 to 5,94,684 units in FY 24. However, the auto industry body affirmed that this segment is poised for a sustained growth especially in the EV category.
Talking about the upcoming products Shenu Agarwal, CEO, Ashok Leyland said, “We are very optimistic and buoyant about our market share in the LCV segment because of so many launches coming up. So starting May, every alternate month, we will launching a new product in this segment.”
However, he didn’t state if the company will launch sub-two tonner LCV to take on Tata Ace.
With a focus on driving operating profit margins to the mid-teens over the next two to three years, the country’s second largest CV maker has categorically asserted that it will refrain from offering any discounting of its product lines in order to enhance its market share.
“Our focus on profitability remains (and) we are clear that we are not going to discount our products to win marketshare. We are confident that our marketshare wins will come on the back of our products' superiority and our expanding reach,” affirmed Hinduja.
Meanwhile, Ashok Leyland had spent Rs 500 crore last financial year has earmarked Rs 500- Rs 700 crore-capital expenditure for FY 2024-25.
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