Growth momentum in CV industry to continue till next year, says Ashok Leyland MD Shenu Agarwal

Ashok Leyland Managing Director and CEO Shenu Agarwal hopes that M&HCV segment to post 8-10% growth and about 5-6% in LCV segment this fiscal.
| Photo Credit: Special Arrangement

The all-rounded growth momentum in the commercial vehicles industry is expected to continue till next year due to Centre’s unprecedented focus on infrastructure development, said Ashok Leyland Ltd. (ALL) Managing Director and CEO Shenu Agarwal.

“The growth is expected to be all-rounded, whether it is buses, heavy duty trucks or light commercial vehicles (LCVs). The growth momentum should continue for at least this year and the next,” he said during an interaction.

In line with the industry growth, ALL at the year beginning had estimated 8-10% growth in Medium and Heavy Commercial Vehicle (M&HCV) segment and 5-6% in LCV segment.

“In the first five months of the year, M&HCV has grown at a good pace and we maintain our initial estimates for the whole fiscal. The LCV segment, mainly because of the high base last year, has still not caught up. But with the festive season on, we expect the LCV segment also to start growing,” he said.

While mentioning many of the government’s initiatives such as Scrappage Policy, National Infrastructure pipeline, dedicated freight corridors, and multimodal logistics parks were still in a nascent stage, he said the CV industry would benefit immensely when it starts making full impact.

According to him, the CV manufacturer has set long-term road map envisaging holistic growth in volumes, market share, product portfolio, and technology.

“We are expanding and establishing our presence across the country through various touchpoints. To expand our market presence further, we are also evaluating entry in the sub-2.0 tonnes segment targeting 35% of the Indian LCV market, where we are absent right now. Our primary focus remains on profitability – with a clear target to get into double digit EBITDA this year and up to mid-teens in the medium term,” he said.

Regarding their recent announcement to set up a e-bus facility by investing up to ₹1,000 crore to invest there, he said: “The UP Government is willing to provide us all the necessary support under its Investment Policy framework in setting up this plant, as well as facilitate enough demand of electric and other vehicles for this plant to be viable from the very beginning.”

In the initial phase, ALL plans to predominantly produce e-buses with 2,500 units per annum encompassing bus chassis assembly and bus body building. It intends to commence production in 18 months from the date of acquisition of land.

Besides, the plant will be designed in a way to provide flexibility to assemble vehicles powered by currently available fuels as well as emerging alternative fuels.

Mr. Agarwal said that ALL has been focusing a lot on alternate fuel technologies such as EVs, CNG, LNG, hydrogen-powered internal combustion engines, hydrogen fuel cells, synthetic fuels, methanol, and a higher ethanol blend.

Asserting that Tamil Nadu continues to be the cornerstone of ALL’s growth and development story, he said “all these vehicles shall be produced in our plants in Tamil Nadu.”