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| Edited By: Neha Rishi |Source: DNA |Updated: Mar 30, 2018, 02:52 AM IST
After announcing its U truck platform, Ashok Leyland Ltd (ALL) is gearing up to put up a fight in the intermediate commercial vehicle (ICV) and the bus space.
ALL is trying to prop up its market share in the ICV segment with the help of its Czech subsidiary Avia.
While Avia trucks will take two years to reach the Indian market, Ashok Leyland has decided to start locally manufacturing cabins for the Czech company in a couple of months, said K Sridharan, CFO, Ashok Leyland.
With just two products in the ICV category — Ecomet 912 and 1112 — Ashok Leyland has a market share of about 3-5%.
“We do not have a strong product portfolio in the ICV category, so with the use of more sophisticated looking and comfortable Avia cabins, we will be able to launch more variants in the 9- and 11-tonne categories,” he said.
Sridharan said the company aims to capture a 12% market share in the ICV category over 2-3 years by launching 3-5 products in this fiscal. “In the next one year we plan to launch new generation cabs.” However, he refused to comment if these new cabs would be on Avia platform. The launch of the products is couple of months away and will be manufactured at its Uttarakhand facility.
On the health of the loss-making subsidiary Avia, Sridharan said that due to the various restructuring efforts and high localisation of Avia coming from India, the subsidiary will break even at cash levels in the next one year.
Besides the ICV space, ALL is also bullish on the luxury bus segment. Sridharan said that through its joint venture with IRIZAR (Spanish bus body builder) and TVS the company will roll out a new range of luxury buses in the current financial year.
All will begin rolling out its trucks on the U platform by July this year and introduce 25 new models over 18 months.
With the new launch slated over the year the company is optimistic of achieving a growth rate of over 15%.
Due to shortage of components the company is looking at increasing sourcing from China. Sridharan said China will play a substantial role in component supply to the company going forward. Also, due to tyre shortage the company wants to increase sourcing of tyres too from China.
In FY10 the company has incurred capex of Rs 810 crore and the investment in the joint ventures has been to the tune of Rs 142 crore. The planned capex over the next 2 years is Rs 1,200 crore and investments in the JVs would be Rs 800 crore.
ALL’s net profit jumped over four-fold to Rs 222.66 crore in the fourth quarter year on year. Net sales during the reporting quarter rose to Rs 2,941 crore as against Rs 1,230 crore in the same period last year. For the year ended March 31, the company has posted a net profit of Rs 423.67 crore, a two-fold jump in the same period year-ago.
