Business IdeasAshok Leyland sees 3-5% sales drop
Commercial vechicle manufacturer Ashok Leyland (AL) expects its overall sales to drop by 3-5 per cent in the second half of the year, in case the poor monsoons this year hits the economy hard. The company, at the same time, is bullish on its bus segment on the back of the impetus provided by the Jawaharlal Nehru National Urban Renewal Mission(JNNURM) order book.
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Talking on the sidelines of the launch of its new multi-axle truck, the 2516 Super, Rajive Saharia, executive director marketing of the Hinduja Group company said that heavy commercial vehicles sales was largely driven by sentiments. “While the impact of a poor monsoon on agriculture and the economy would be felt later, people can hold back buying on the back of negative sentiments,” he added. AL, however, expects to do better than the industry average in the coming two quarters. “If the industry grows by five per cent, we expect to clock in at least a seven per cent growth. Things are looking up in the first few months of the current fiscal,” Saharia said.
While the overall medium and heavy truck sales in the country fell 8 per cent to 16,138 vehicles in July over last year, AL is confident of a growth in demand. “We see demand coming in from cement and iron ore movement. Last year there was a steep drop in iron ore traffic, which has now picked up,” Saharia said. AL is banking on growth in the bus segment. Under JNNURM, it has an order book of 5,200 buses out of total order for 10,000 buses and will start delivering from October-November. Announcing the stimulus package in January, the Centre had approved 15,260 buses for 61 cities under JNNURM. AL enjoys a 57 per cent market share in the segment. “Bus sales constitute nearly 20 per cent of our net sales, but this year it could go up to 25 per cent.”