The past few months have seen a slowdown in commercial vehicle (CV) sales as tight liquidity conditions hurt most auto makers. Vinod Dasari, Managing Director of Ashok Leyland, spoke to CNBC-TV18 about the issues plaguing the sector.
"I completely believe that it is a temporary problem. Year-to-date, the CV industry has grown 25 percent. So I don't know who is talking about the slowdown but 25 percent growth in any industry is very good. Just in the month of December, we had a 20 percent decline but remember even after the 20 percent decline, December was 25 percent higher than November. So even though it was lower than last December, why was it lower than last December? It is only because in January 2018, the blower regulation had come, the air-conditioner regulation had come so they had a huge pre-buy last December. If it wasn't for that, we would have continued growth."
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"So please look at two statistics, for the nine months, the market is up 25 percent and compared to the previous month, we are up 25 percent. So, I am continuing to be very bullish about this. I had said in the beginning of the year that I believe the market will grow by 10-15 percent, I still feel the market will grow 15-20 percent before the year-end. Even if Q4 is lower than last year, I think in the worst case it will go by 15-20 percent,” Dasari said on January 9.
Talking about the company's growth, he said, 'We will be 15-20 percent better if I took the full year of – calendar year if you take, it will certainly be about 25 percent higher and even sequential months, it is 25 percent higher. So even though December beat November by 25 percent, it could not beat last December because of a very high base effect."
"I don't know what will happen in Q4 but even if it is flat – like I said the market for the full year will easily grow by 15-20 percent. However, the next year, the year before euro-VI comes in in FY20 – world over there has been a pre-buy whether it is in US or Europe, there is usually anywhere between 25 percent and 50 percent pre-buy in the year before the Euro-VI. So let us take a conservative approach, you would still have 25-30 percent growth in the next year that is coming up. We are fairly bullish about it now," said Dasari.
Souce: CNBC-TV18
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