Ashok Leyland clocked 91 per cent volume growth in the medium and heavy commercial vehicles (MHCV) segment in FY23 compared to the previous financial year, said a senior executive as the industry gains from various economic factors.
The commercial vehicle market grew robustly and MHCV industry volumes were up by 53 per cent compared to FY22, as construction and mining expanded, capital expenditure increased in infrastructure and pent-up replacement demand continued.
Ashok Leyland’s FY23 growth comes alongside its market share increasing in the commercial vehicle segment: from 15.46 per cent in February 2022 to 16.87 per cent in February 2023, according to the data from the Federation of Automobile Dealers Associations (FADA). Tata Motors, the market leader in the segment, saw its market share decline from 42.13 per cent to 38.32 per cent in the same period, though the company’s sales increased. Mahindra and Mahindra’s market share increased from 21.11 per cent to 23.85 per cent in the same period.
“Our volumes have grown by 91 per cent in FY23 over the same period last year, and we remain confident and optimistic about the future,” said Sanjeev Kumar, head of MHCV business at Ashok Leyland. MHCVs contributed 68 per cent of the company's total sales in February.
“Volumes in the MHCV market have increased due to development initiatives in key industries like construction and mining, higher capital expenditure for infrastructure projects, increased expenditure for road transport and roads, multimodal connectivity, and pent-up replacement demand,” said Kumar. His company’s total MHCV sales (domestic and exports) in February 2023 was seen at 12,668 units, up 35 per cent compared to 9,363 units in February 2022.
A major reason for demand rising is the replacement cycle. “There is a huge pent-up demand overall. The average age of vehicles is at an all-time high of 10 years. With Covid-19 delaying the new sales, the replacement cycle has also brought in a strong demand in the industry. Replacement of STU (State Transport Undertaking) buses is expected to boost growth in the passenger segment. We will bolster our product offerings in all these segments,” Kumar said.
Ashok Leyland said it gets strong demand for its AVTR range, India’s first modular truck platform. “In the light commercial vehicle (LCV) segment, the Bada Dost has been well accepted by the customers and the company is ramping up production in line with market demand. Also, other businesses like after-market and power solutions business continue to contribute strongly to the top line of the company,” said Amandeep Singh, head of Ashok Leyland’s LCV, defence and power solutions business.
“We have lined up our electric vehicle (EV) CV road map, setting a target of becoming one of the world’s top 10 CV brands. We will roll out electric LCVs very shortly. We remain very optimistic about the future of the CV (commercial vehicle) industry in India. For that we plan to invest our time and effort in innovating resulting in disrupted yet affordable customer solutions,” Singh said.
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