The Light Commercial Vehicle (LCV) space in India is set to see some major action. It has already seen the entry of new players (Isuzu, Maruti Suzuki) and some major product interventions by leading players Mahindra & Mahindra (Jeeto, Supro) and Tata Motors (Ace Mint, Xenon Yodha). Ashok Leyland, a distant third position player is also set to step up its game.
"You will see almost a new product coming out from our LCV division every quarter," Vinod Dasari, MD, Ashok Leyland, told Autocar Professional.
Ashok Leyland currently has only one product, the Dost, in the small commercial vehicle space. Launched in September 2011, it currently clocks sales of around 2,500 units a month. Independently, it may be a good figure but not significant in the overall LCV market that sells over 20,000 units a month.
Ashok Leyland's share in the LCV (goods carriers) segment currently stands at 9 percent only. To enhance this figure, the company has planned a "slew of products". Some primary new products in the LCV space will be variants of existing ones.
It is to be noted that Ashok Leyland still has a licence agreement with Nissan, its erstwhile joint venture partner. Ashok Leyland and Nissan struck three JVs in 2008 to develop and manufacture products for the LCV market in India. However, things didn't progress as planned and eventually the JVs were diluted in November last year when Nissan sold its stake in them, after some litigation in court. "We will continue to be associated with Nissan for the technology of the existing Dost, Partner, and Mitr models. These are very important products for us and hold tremendous potential both within and outside India,” Dasari had said at the time of announcing the acquisition of Nissan's stake in the JVs.
Dost Express and Partner bus on the cards
Mahindra & Mahindra, with 48.5 percent and Tata Motors with 39.5 percent market share dominate the LCV (goods carrier) space which has nine players in it. In the passenger carrier space, Force Motors leads the pack with its popular Traveller buses, followed by Tata Motors and Volvo-Eicher. The first lot of new LCVs from Ashok Leyland could come in this space. It is learnt that a passenger carrier version of the Dost – called Dost Express – and a bus version of the Partner light truck are set to hit the market soon.
A renewed focus on the LCV business, which also sometimes acts in a counter-cyclical way against the heavy truck and bus market, would help Ashok Leyland to enhance its performance. And, as time progresses, the LCV division could provide a good thrust to Ashok Leyland's globalisation drive. That, if the company manages to face the stiff competition successfully from the heavyweights in the LCV space.
As the economy in India grows, the prospects are only positive for players in the LCV space. It is to be noted that the sales ratio between medium and heavy trucks to light trucks is at 1:2 in India currently. In matured markets, this ratio stands at 1:4.
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