Ashok Leyland (ALL) has said it is working on a slew of vehicles in the alternative fuels such as CNG, LNG, and HCNG (hydrogen compressed natural gas) to cash in on the revival of demand in the commercial vehicles (CV) segment. The company, a Hinduja flagship commercial vehicle major, believes that due to an uptick in demand following the easing of the pandemic, opening up of the economy and thrust on infrastructure projects, alternative fuel vehicles would be ideal to push growth in the marketplace, as the fleet owners are now preferring economic vehicles on the back of high fuel prices.
Gopal Mahadevan, director and CFO, ALL, told a select group of media persons that with the opening up of the economy, the demand recovery for light commercial vehicles, M&HCV (trucks and buses) will be on course. With infra focus, intermediate commercial vehicles (ICV) will be in demand and ALL is working on a slew of launches soon. In LCVs, the Bada Dost CNG version will be rolled out soon.
He said: “CNG is a very important fuel. After the GST launch, the truck volume has trifurcated. ICV accounts for 35-40% of total industry volume, of which CNG accounts for 35% that’s 10% of total industry volume. Truck owners are preferring CNG vehicles due to the rise in fuel prices. It is more economical than diesel.”
To address the growing demand for ICV CNG vehicles, ALL had recently introduced the first of the trucks from the CNG stable – the Ecomet Star — based on the highly successful Ecomet platform. The company plans to launch further vehicles in Q4 of the current year under the CNG range.
The company’s EV arm Switch Mobility has been working on the electric LCVs and buses and is on the course of its development of products, both for Indian and global markets, he said. An eMaaS company is being set up with unique offerings for ownership.
Mahadevan, while answering questions on the possible capex for FY’23 said that it is still working on the numbers. “We may need capex of `600 to `750 crore for ALL alone for FY23. For Switch Mobility, initially, about $200 million to $300 million will be required. We have initiated talks with potential investors for the investments. It would be a mix of debt and equity,” he said.
Asserting that they are in a financially comfortable position, he said that the total debt for the current fiscal was reduced by `400 crore and stood equivalent to the level it was at the beginning of the year.
He said it was a satisfying quarter after eight quarters and ALL was black in the back. The sales volume has not reached the 2018-19 level, but things are getting better.
On the international business, Mahadevan said ALL is focusing on SAARC, Sri Lanka, Bangladesh, West Asia and South African markets with strategies such as large distributorships and loan support by financial institutions.
He said due to a semi-conductor shortage, the company was not able to address some of its global markets. The situation is likely to improve with Taiwan scaling up its production and India giving more importance to chip production.