The ongoing slowdown in the Indian automobile industry and specifically the commercial vehicle industry is having its impact as OEMs are both cutting down on dealer inventory and now also halting production due to weak market demand.

The latest OEM to pause production is Chennai-based commercial vehicle major Ashok Leyland. It is learnt that the company’s Pantnagar plant in Uttarakhand will remain closed from July 16 to July 24, 2019 (both days inclusive) due to “weak demand and outlook for the industry.”

Like market leader Tata Motors, Ashok Leyland has been impacted adversely. In June 2019, the company sold a total of 12,085 units (-14.24%) and a total of 38,004 units in Q1 FY2019 (-0.30%).

Nonetheless, Ashok Leyland has, in Q1 FY2020, increased its overall CV market share to 18.25 percent from 16.56 percent in Q1 FY2019,. 

While it’s early days yet, OEMs will be looking forward to considerable pre-buying of BS IV vehicles months ahead of the BS VI mandate kicking in from April 1, 2020. Till then, however, they will have to contend with slow growth, fluctuation in diesel prices as politics dominates global crude supplies and an uptick in the domestic freight market. These constitute a number of variables, which means the sector will be navigating a potholed road for a few months more.  

Also read: M&HCV segment weighs heavy on CV sector's performance in June

Images courtesy: Ashok Leyland