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Truck and bus maker Ashok Leyland has turned its LCV (light commercial vehicle) business around, a year after it acquired full control of the joint venture it had with Nissan.
The LCV business reported profit before tax (PBT) for the first time during the second quarter of this fiscal and is also generating 8-9 per cent EBITDA margins.
“Yes, on a consolidated level we were positive on the PBT side,” Gopal Mahadevan, Chief Financial Officer, Ashok Leyland, told BusinessLine .
A year ago, Ashok Leyland bought out the shares of all three joint venture companies in LCV from its erstwhile partner Nissan in order to gain full control of the business, which was in its fifth year.
Mahadevan attributed the turnaround to rationalising the structure of LCV business and seamless decision making,“We have been running it like a single entity,” he added.
Dealers have also been happy as uncertainty vanished. They are looking forward to getting more products.
Ashok Leyland is preparing to introduce 5-6 new products in the next 12 months in the LCV space both for domestic and international markets. “We will have higher payload vehicles coming and we will also look at left-hand drive markets outside the country,” he said.
While the company sees opportunities to fill the gaps between Dost and Partner LCVs and in some higher tonnage categories, it will strengthen its presence in the Dost segment, sub-3.5 tonne GVW (gross vehicle weight).
“We have been maintaining a market share of about 15 per cent in pick-ups (small commercial vehicle segment) with Dost and our intent is to further strengthen the presence in this segment,” said Mahadevan.
During April-October 2017 period, total sales of Dost stood at 20,430 units when compared with 17,709 units in the year-ago period, an increase of 15 per cent. Total volumes of this segment, fast growing among the LCVs, stood at 138,452 units (117,911 units).
Ashok Leyland sees a lot of traction in the LCV market and expects to grow in line with the industry growth in the near term.
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