Ashok Leyland expects commercial vehicle industry to grow at fast pace in coming quarters

The group’s flagship vehicle expects the commercial vehicle industry to grow at a rapid pace in the coming quarters, with economic activity gaining momentum and demand increasing in all segments, according to a senior company official.

The Chennai-based company, the second largest commercial vehicle player, expects both domestic sales and overseas shipments to remain robust through the remainder of the fiscal year.

“I believe so because the pandemic and some of the uncertainties that were there worldwide are now all behind us. There is no reason why the commercial vehicle industry should not grow,” Ashok Leyland Whole Time Director and CFO Gopal Mahadevan told PTI in an interaction. .

He answered when asked if the worst is behind the commercial vehicle industry, which has seen sales decline in recent years due to regulatory changes and a low decline during the pandemic period.

“The commercial sector will grow with trucks and buses expected to do well… truck sales will improve as many industries require more units as they run at full capacity,” Mahadevan said.

In addition, if the Covid impact subsides and schools, colleges and offices open, it would lead to an increase in intercity and intracity travel, boosting bus sales, he noted.

“So bus sales should also increase. Light commercial vehicles will also grow because there is a disruptive change in behavior and consumer patterns. E-commerce has grown… So what’s happening is that e-commerce is a big driver, and last-mile delivery is going to be very, very important,” Mahadevan said.

Speaking about the export outlook, he said the company expects shipments to grow in the current fiscal year compared to FY22, with the demand scenario improving in all markets.

The company shipped about 11,000 units in the past fiscal year and expects to improve the number in the current fiscal year.

“So, we are positive. We have some challenges in Sri Lanka, which will hopefully be resolved. But the rest of the SAARC market is slowly warming up. And we expect our export experts to grow definitely higher than last year,” stated Mahadevan.

The company, which mainly exports to SAARC, the Middle East and Africa, also expects better shipments this year due to an improved product range that is well-tailored to the demands of customers outside the country, he added.

Mahadevan noted that the company is “slackily managing” the chip shortage problem to reduce the impact on production and meet increased demand.

“Even now it presents a challenge, and the production teams are working around the clock to manage it,” he added.

Supply has certainly improved, but has yet to reach normal levels, Mahadevan noted.

“Hopefully we’ll see a lot of capacity emerge in the coming years, which would be helpful for the industry,” he noted.

When asked about the prospects of electric mobility, Mahadevan said: “This is definitely the focus area for the future… the adoption of electric vehicles is going much faster than we thought”.

It will be adopted at a rapid pace across the LCV and bus segments, while the vertical heavy-duty vehicles will take more time to accommodate the change, he added.

“India is typically a very fast adoption of technology… So we’re going to see the same adoption happening, but as a country we should look at the overall infrastructure for charging. You know, because there’s no point in saying we’re going to have a have an electric cell that, you know, will be charged with power generated from coal,” Mahadevan said.

So more green energy should be available to charge these electric vehicles, he added.

In addition, there should be some uniformity regarding the charging stations, Mahadevan said.

“So this can all be worked out. It’s not very difficult,” he added.

Continuing with the company’s strategy, Mahadevan said it has received firm orders for electric buses from several states.

“We’re also not going to randomly pick up orders. You know, orders have to be sensible, they have to be doable. They have to be profitable. So we make sure we do business very methodically.” he noticed.

Ashok Leyland is optimistic about the future of green mobility and has lined up an investment of Rs 500 crore to develop powertrains based on alternative fuels such as CNG, hydrogen and electric for its commercial vehicles.

The company has already announced an investment of USD 200 million (nearly Rs 1,500 crore) through its UK-based Switch Mobility branch for electric mobility.

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