Blow for Tata Motors, Ashok Leyland as sales plunge to under 1000 units

Published: September 29, 2017 5:28:12 AM

Monthly sales volumes of buses in the 16-tonne segment have plunged to an unprecedented sub-1,000 units for top two manufacturers — Ashok Leyland and Tata Motors — in the April-August period this year, compared with 9,392 units that the duo cranked up in the year-ago period.

Tata Motors, Ashok Leyland, Tata Motors sales, Ashok Leyland sales, medium-duty vehicle, VECV, Urban Rejuvenation Mission, T Venkataraman, AMRUT, MHCVsThe government is set to implement the bus building code to ensure that buses are manufactured as per the standards related to safety, design and comfort. (Image: Reuters)

Rohit R

Monthly sales volumes of buses in the 16-tonne segment have plunged to an unprecedented sub-1,000 units for top two manufacturers — Ashok Leyland and Tata Motors — in the April-August period this year, compared with 9,392 units that the duo cranked up in the year-ago period.
However, the third player in the medium-duty vehicle (MDV) segment, VECV, saw robust sales on the back of a low base. But the overall decline in bus sales is worrisome as state transport corporations are large buyers of buses. Abdul Majeed, partner, PwC, says: “Finances of state transport corporations are not in good shape, and bulk orders (for buses) come from these corporations. Besides, budget allocation to the centrally sponsored scheme – Urban Rejuvenation Mission – is lower this financial year.” Apart from a shortfall in demand from state corporations, most manufacturers are nonplussed by the government’s planned ‘bus building code’, which provides every bus manufacturing unit an accreditation certificate for making buses as per the safety standards set by the ARAI (Automotive Research Association of India). The government is set to implement the bus building code to ensure that buses are manufactured as per the standards related to safety, design and comfort.

T Venkataraman, president, global buses, Ashok Leyland, told FE, “The uncertainty in the implementation of the bus code continues to be the single-largest reason for a drop in the MDV segment as customers have to make up their mind and choose between fully-built vehicles versus building vehicles through body builders (who are yet to get their bus code compliance).”

Nowadays, BS IV compliance and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) allocation create a level playing field and it is up to the manufacturer to be able to leverage this through innovation to meet customers’ requirements. In the April-August period of the current fiscal, Ashok Leyland’s sales volumes in the MDV (16 tonne) bus segment have plummeted to 2,793 units, down by 48% year-on-year. Tata Motors, too, registered a 48% dip in the same time frame to 2,321 units.

Having said that, in the 12-tonne bus segment, monthly sales volumes for Ashok Leyland grew 28.98% to 2,639 units during the April-August period from 2,046 units a year ago. But this increase in sales is not able to compensate for the massive drop in the 16-tonne category. As a result, Ashok Leyland’s sales in the passenger carrier segment in MHCVs is on the wane since January this year.

“The increase in demand for buses in feeder routes, last-mile connectivity and increase in the volumes of school buses segment, etc have propelled growth in the 12-tonne segment,” says T Venkataraman.

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