Ashok Leyland, the leading maker of trucks and buses, has chalked out an aggressive medium-term growth strategy, under which the company aims to increase market share to 35 per cent in medium and heavy trucks segment and 25 per cent in small commercial vehicles. The commercial vehicle industry is expected to maintain its positive growth momentum this fiscal. Though Q1 of this fiscal was a little weak due to pre-buying ahead of BS VI Phase-2 norms, the Hinduja flagship expects the volume to recover from July.

The optimism stems from positive customer feedback and favourable demand drivers, such as infrastructure development and other positive macro indicators. For FY24, the company has projected a growth rate of more than 10 per cent for the medium and heavy commercial vehicle (M&HCV) market and 5 per cent for the light commercial vehicle segment.

The company intends to grow its market share in the M&HCV segment to 35 per cent (up from 32 per cent in FY23), supported by suitable product launches, network expansion, differentiated aftermarket solutions, and stronger customer connect, according to the company’s investor presentation.

Under its medium-term growth strategy, it has taken up zone-wise mandates to achieve market share increase targets. As the company’s market share in the northern (25 per cent) and eastern (24 per cent) regions are substantially lower than that of its market share in other regions, it seeks to penetrate deeper into northern and eastern markets. The company will continue to expand its network in these regions as well as in key mining pockets. It added 79 outlets in FY23 (to 803), and plans to add 66 outlets in FY24, predominantly in Northern and Eastern pockets.

It is looking to expand its share in the western and central regions from 31 per cent and 35 per cent at present. Also, the company will defend its stronghold in the southern market (43 per cent share).

New products and segments

Along with network expansion, the company will revamp its product portfolio and launch new products in FY24 to plug the gaps. The objective is to grow the market share in the intermediate commercial vehicle segment (ICV) market share to 35 per cent from 25 per cent now and medium duty vehicle (MDV) to 40 per cent from 35 per cent. In the passenger segment, it will target to double the ICV bus market share to 30 per cent, defending its 50 per cent market share of the MDV bus segment.

In the LCV segment, the company aims to be a full-range player with entry into segments where it is not present now. It is present in 2-3.5 tonne (GVW) through Dost and Bada Dost and in 3.5-7.5 tonne (GVW) through Partner series of trucks. Its objective now is to grow the current market share of about 20 per cent in the 2-3.5 tonne category to 25 per cent, supported by new products, including electric ones, and network expansion. It will also target to grow the current market share of 5 per cent in the above 3.5 tonne segment.

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Ashok Leyland is contemplating entering the sub-2 tonne segment at the right time with a suitable product positioning.

The Chennai-headquartered company is also positive about growing its international business and plans to double its exports in the next two years (from about 11,300 units in FY23) by expanding its product portfolio and entering more markets. It is looking to expand its business to 50 countries in the coming years, up from 38 countries in FY23.