Ashok Leyland readies 'Newgen' offerings

Commercial vehicle major Ashok Leyland is looking at launching the first of its 'Newgen' products in a couple of months, starting with the tractor-trailer segment, while the buses will roll out by end of 2004.

K N Krishnamurthy, special director (customer service), said, "The tippers will come in the next financial year."

The company is very coy about divulging its marketing plans for the 'Newgen' series, though it has earlier talked about using them to grow its market share from 33 per cent in the medium and heavy duty vehicles segment to 50 per cent.

In the tractor-trailer segment, Leyland already has an over 50 per cent market share which it hopes to substantially improve on in the current year with the launch of 'Newgen' products.

The target for the current year is 6,500 units, company sources said. How much of this will be constituted by 'Newgen' products is not being specified just as yet.

The tractor-trailer segment, though a small component of the heavy and medium duty vehicles' (HDV/MDV) sector, has been growing rather phenomenally in the recent past. In fact, the share of this segment in the HDV/MDV market went up from 3.5 per cent 2002-03 to5.5 per cent 2003-04.

In volume terms this marks a 120 per cent jump with tractor-trailer sales going from 3,540 units in 2002-03 to 7,776 units in 2003-04. This segment continues to be dominated by the two-axle and lower gross train weight (GTW) vehicles.

Volvo has been trying to carve a niche for a higher tonnage in this market, without much success. Its total volume in the truck and tractors was in the range of 200-400 units.

But it is hopeful of seeing an improvement in the current year. This is also a segment that the MAN-Bajaj Tempo duo showcased at the Auto Expo.

There are signs that market leader Tata Motors may also be moving towards modernising its vehicles with acquisition of the commercial vehicles unit of Daewoo. It is not yet clear in which segment this would be.

While Volvo's tractor-trailers have been operational in the 6x4 segment, Leyland's 'Newgen' will be in the 4x2 segment.

Lyeland has been selling tractor-trailers largely in the range of 30-35 GTW (and to smaller extent up to 49 GTW) with 160 HP engines. The 'Newgen' products will be fitted with `J' series 260 HP engines sourced from Japan's Hino Motors.

In terms of markets, Volvo's tractor-trailers have made inroads in the south and west. Leyland sees a greater volume of sales in tractor-trailers in the north and west. Industry sources say the future of these long-haul vehicles hinges on the turnaround of vehicles and fuel costs.

With better roads, greater speed and turnaround of vehicles is possible. Projects such as the Golden Quadrilateral hold a lot of promise for this. Rise in fuel costs also make the switch to these greater haulage vehicle more feasible.

By the close of the calendar, Leyland will also deliver its 'Newgen' buses. Bus sales in the country grew from 20,000 in 2002-03 to 23,000 in 2003-04. In 2003-04, Leyland sold 11,000 buses and garnered a 47 per cent market stake.

It is targeting to touch 50 per cent this year selling 13,000 buses, while the market is projected to grow to 26,000 buses.

As reported earlier, the company has embarked on a Rs 650 crore expansion, which besides ramping up capacity from 50,000 to 85,000 in two phases will also see a 10,000 unit capacity for manufacturing new generation vehicles.

In fact, the company recently floated $100 million foreign currency convertible bond, which was oversubscribed by about five times, to part-fund the project.