The commercial vehicle industry in India is growing at a healthy growth rate, and Ashok Leyland, the country’s second-largest M&HCV player is upbeat about seeing 8-10% industry growth for FY2024. The confidence is on the back of a smart uptick in Q2 FY2024, which was around 21% YoY, which helped overcome a bit of slowdown witnessed in Q1 on the back of pre-buying that happened in March. Interestingly, Dheeraj Hinduja, Executive Chairman, Ashok Leyland revealed that the company has got Board approval for investing Rs 1,200 crore in Switch Mobility.
“We see a very positive outlook for the next half of the year. In Q1 everyone was wondering what will happen to the industry as there was no growth. But from Q2 the growth has picked up in M&HCV segment, overall H1 growth was 10 percent, but in Q2 it was 21 percent, we are not saying this (over 20% growth) will continue. We expect that in H2 growth will be around 8-10%, all macroeconomic factors are favouring the industry, be it spending on infrastructure, demand for cement & coal, e-commerce and even rural markets showing positive signs. On the LCV side, the industry has not risen to the levels we were hoping for. On that side also, we see some green shoots in rural and e-commerce,” pointed out Shenu Agarwal, MD & CEO, Ashok Leyland.
In fact, the company is also optimistic about gearing up to see a push towards LNG trucks to be much stronger in the coming years.
“LNG is a better fuel than CNG in terms of thermal efficiency, in the long-term it has to catch up much better than CNG. Over the next year, we will see the maturity of technology, there are certain movements happening as well in terms of development in distribution of LNG trucks,” shared Hinduja.
Optimistic on EV demand
Responding to a query if electric three-wheelers have started eating up demand in the SCV and LCV category, Hinduja added that it would be incorrect to assess the same.
“I don’t think they have completely replaced the LCV segment in which we operate. We will be launching our own electric LCVs in Q4 and with the initial discussions we have a very strong order book of 10,000 units. Customers demand will determine pushing sales of LCVs and I don’t see e3Ws will be completely replacing the LCV segment.”
