With an eye on almost quadrupling volumes in the highly competitive light commercial vehicle (LCV) space in the coming 3-5 years, the truck maker from Chennai expects Phoenix to help the company penetrate deeper into the Indian market and add new markets globally.
For Ashok Leyland to get into global 10 commercial vehicle makers is only possible if it expands the volumes by double and for that it would have to expand the LCV sales by four times even after assuming the core M&HCV space remains around 1.5 lakh units - i.e it needs close to 4.5 lacs units p.a in the coming five years.
Team of 150 engineers led by Nitin Seth executed the Phoenix project in a record time of 24 months, claims the company. Seth apart from LCVs, also leads the international and defence business, which are critical pillars in de-risk Ashok Leyland’s business from cyclical core business of medium and heavy trucks.
Nitin Seth, COO for Ashok Leyland told ET, “Our aspiration is to grow the volumes multi-fold in the coming three to four years. The new platform allows us to penetrate deeper not only into the Indian market but global markets which is a critical pillar for Ashok Leyland in achieving our vision of breaking into top 10 markets globally in the coming years.”
Post the introduction of Phoenix platform, the addressable LCV market for Ashok Leyland expands from 34% to 65% sans sub-2 tonne segment.
The company has spent Rs 350 crore on the architecture including a fully robotic manufacturing line – set up in Hosur - a first for a commercial vehicles maker in India to ensure high quality tolerance levels for the global markets.
Over the coming three to four years, half a dozen models on the Phoenix platform are expected. The globally benchmarked products – will be available in both left hand drive and right hand drive market at multiple gross vehicle weight and it will be available in Diesel, CNG and EV powertrains.
It will be sold through a exclusive network of 113 dealerships across the country
To be sure, the light commercial market more than doubled in the last one decade from 288000 units at the end of FY-10 to hitting a peak of 616000 units in FY-19, before slipping to 493000 units in FY-20. The segment is quite counter cyclical to M&HCV business and it is less volatile
The share of LCV in the overall CV market has also changed dramatically from the share of 30% a decade back; today the share has shot up to 70% of the overall market, more or less in line with the global markets. The boom in e-commerce is really offering a big support to the segment post Pandemic.
ALL will take on over 3 dozen brands. The company gained market share over the last seven years, with Dost alone, it enjoys close to 18% share in the space.
For Ashok Leyland, the share of LCV , within their business has gone up from 0 to 39% in the last one decade.
The Bada dost will offer enhanced comfort, technology, and contemporary features raising the benchmark in the space, claims the company and the newly set up state of the art robotic line to ramp up quickly and offer better quality
Much like the most of the market, even the LCV segment is expected to witness a drop of about 18-20% but much lesser than the MHCV decline. The smaller truck segment is expected to come back strongly in the coming years due to Rural, E-commerce and consumption growth.
The International Operation is another key growth area for ALL in pursuit of its vision. 80% of international markets that ALL caters to is the LHD market, hence the introduction of Bada Dost will help the company expand the international reach. AL has set an aggressive growth target for their international operations with a new range of LCV and M&HCV trucks and Buses, claims the company.
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4 Comments on this Story
Medha Salgaonkar129 days ago
vehicles really looks good and will be more useful for secondary transportation
Binu Pillai129 days ago
Ashok Leyland will never grow beyond a point.. They don't have any mass-market product... Just like Toyota who converted their pickup truck to an SUV, can't Ashok Leyland try to do same ??
Surendra Sachdeva129 days ago
Mr Hinduja should take up the matter of vehicle scrappage policy with top level and tell them that it will revive auto sector and generate more than a million job.