Ashok Leyland to Invest USD61.57 Million for Light Commercial Vehicle Development

Indian automobile manufacturer to invest heavily in its Light Commercials segment

India: Hinduja flagship firm, Ashok Leyland, is planning to develop new light commercial vehicles with an investment of over USD61.50 million in the Indian market over the course of next two years and is further planning to triple its sales by 2019-2020. The company is also re-hiring few of its employees which had earlier left the company, when Ashok Leyland was under partnership with Nissan.

"For the medium term between 12 months to two years, we have allocated fresh fund of Rs 400 crore on product development for LCVs. We will have two new platforms on which we can develop several models -- from right hand drive to the left-hand drives with different powertrains, as we will be targeting not only the domestic market but overseas as well," said Ashok Leyland’s President (LCV & Defence) Nitin Seth.

Nitin Seth also added, "We believe we can be a significant player in the LCV segment. Our target is to achieve annual sales of one lakh units by 2019-20. Our new products will be able to address markets like Indonesia, Malaysia and Africa, SAARC region which are very similar to India. Even for GCC, we will be able to meet the standards there with our new products.”

As per recent numbers, almost 10-12 percent of total sales by Ashok Leyland is generated from exports. As per the President of the company, in the domestic market, Ashok Leyland’s LCVs, i.e. Dost, Partner and Mitr have already gained a wide popularity and are doing well.

The President of the company also stated, "Our dealers have been longing for new products, which we will deliver. There will be variants of existing models in short term while the roll out of brand new products will happen in the medium term."

TechSci Research believes that the recent investment decision made by the renowned commercial vehicle producer of the country, is likely to result in the wide research & development activity in the LCV segment of India commercial vehicle market. Moreover, the company also expects the results to be fruitful by 2020 in India with the anticipated incline in the sale of such vehicles. The investment plan by the company is estimated to further intensify competition among the commercial vehicle manufacturers in coming years with in India.

According to a recent report published by TechSci Research, “India Commercial Vehicles Market By Vehicle Type (Light, Medium and Heavy), By End Use Industry (Passenger Transportation, Logistics, Mining, and Construction), Competition Forecast and Opportunities, 2021”, the market of commercial vehicles in India is projected to grow at a CAGR of over 14%, in value terms, during FY2017–FY2022. Rising infrastructure development projects across the country, tentative replacement of old commercial vehicles fleet on account of implementation of stringent emission norms, growing manufacturing and logistics sectors, and increasing focus on tourism and hospitality sector by central and various state governments are few of the major factors projected to propel India commercial vehicles market over the course of next five years.