New orders to get Ashok Leyland 50% share of state transport buses

Ashok Leyland, one of India’s biggest bus manufacturers, said it will increase its share in the supply of buses to the state transport undertakings (STU) to 50 percent this year.

On January 9, the company received 2,580 new orders from three state-owned transport corporations collectively valued at Rs 300-390 crore.

“Last year, the STU numbers were 8,400 and our market share stood at 35 percent. This year, we are expecting the total STU orders to close at 10,500 with our market share reaching 50 percent,” Sanjay Saraswat, Head-Global Buses, Ashok Leyland told Moneycontrol.

The Hinduja group’s flagship firm bagged orders from Institute of Road Transport Chennai, Uttar Pradesh State Road Transport Corporation and Chandigarh Transport Undertaking. These orders have to be fulfilled by the end of March 2019.

There has been a revival in orders of buses from STUs this year compared to last year. The share of STUs in total bus market is expected to go up to 26 percent by end of March as against 23 percent last financial year.

The traditional market share of STUs in the total bus pie of India had been at 25-6 percent. It was even higher ten years ago when the transport routes were controlled exclusively by the state undertakings. After the privatisation of STUs overall demand from them dropped.

“Over a period of time, purchases from STUs were coming down. But this year the number has gone up. It stood at 12,300 units in 2016-17 then it went down to 8,400 units last year and this year it has picked up again,” Saraswat said.

Due to the new orders, Ashok Leyland’s share in overall buses segment will inch up to 40 percent by end of this year as against 37 percent clocked last financial year. Last year, the total bus market closed at 36,700 units.