Ashok Leyland plans to skip sub One-Tonne Mini Truck segment
Published On May 11, 2017
Ashok Leyland, the second largest commercial vehicle manufacturer and flagship Hinduja brand has decided to skip the sub-1 tonne segment citing lack of favourable growth in the category. The company is looking forward for twofold market share in the LCV segment in the next 2-4 years with the aim of taking it from current 15 percent to 30 percent. For this, it will be on a launching spree one new product between 2-7.5 tonnes, every quarter.
The reason for skipping the sub 1-tonne category is because the segment is shrinking and in the last three years it has reduced to almost 50 percent. Secondly, due to new product launches in the above 1 tonne category, the sub-1 tonne segment has become a hard nut to crack for many manufacturers. In 2012-13 alone, total production volume in the category was 2.47 lakh and Tata Ace accounted for about 83 percent of the total sales.
Nitin Seth, President, LCV and Defence, Ashok Leyland, said in an interview that another major factor is the lack of drivers while the entry of players such as Uber and Ola is creating challenges as more and more people want to drive an air-conditioner car rather a small truck. Since there is shortage of drivers, the operators wants the same number of drivers to carry more load, hence the shift towards high payload trucks has become indispensable.
It’s not that Ashok Leyland is not providing comfort features in its small trucks, the AC version of Dost is one of its bestselling small trucks, driving one fifth of the total volumes. The overwhelming success of Dost led the introduction of Dost Plus, which is 250kgs heavier than its sibling. It is good for those looking for extra payload in the pick-up segment.
Seth also added that even though Dost model is priced high, the customer satisfaction is very positive. So the intention of the company is to launch new products quickly in the market instead of focusing on less favourable segment. Ashok Leyland will be investing INR 400 crore as part of its strategy towards growing LCV segment.
In FY'17, sales in the sub-1 tonne segment stood at 1.17 lakh units, while pick-up category recorded 2.08 lakh units in the same period.