The Hindu Business Line : Ashok Leyland sees HCV sales improving

Ashok Leyland expects a better performance in heavy commercial vehicles segment in the remainder of the year riding on the possibility of reasonable improvement in sales of trucks and a steady order book position for buses procured under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

The company has secured orders for supplying 5,200 buses, approximately half of the total order placed under JNURRM, so far. With a relatively better demand for buses, the company is expecting buses to contribute 25 per cent of its total HCV sales volume in 2009-10, up from 20 per cent in 2008-09.

Ashok Leyland controls 20 per cent of the country’s truck market and 57 per cent of the bus market.

Truck sales in the country are lower so far in this fiscal compared to 2008-09. Bus sales, are however, less affected due to the procurements under JNNURM.

“We are witnessing positive market sentiments and are hopeful of a better performance in the second half of this fiscal,” Mr Rajiv Saharia, Executive Director (Marketing), told media persons here today.

He, however, admitted that the fundamentals might differ if agricultural production was seriously affected. Mr Saharia was in the city in connection with the launch of “2516 Super” multi axle truck in the eastern region.

Elaborating on the reasons for the positive sentiment, he said that compared to the October-December 2008 quarter, the iron ore mining activity had picked up considerably.

An improved performance was also expected from the core manufacturing sectors such as cement. Together these two sectors may bring in substantial change in the HCV demand outlook.

“HCV sales crashed during the October 2008 –March 2009 period due to economic meltdown. There is a decent possibility that the domestic HCV sales may grow in the second half of this fiscal taking advantage of lower sales during the corresponding period of 2008-09,” he said.