Hinduja flagship Ashok Leyland is unlikely to focus on the sub-1 tonne segment due to unfavourable growth potential.
Even as it seeks to double its market share in the LCV segment from 15 per cent to about 30 per cent over the next 3-4 years through ‘one new product per quarter’ plan, Ashok Leyland has decided to skip the sub-1 tonne mini-truck segment and will roll out new products /variants between 2 tonnes and 7.5 tonnes.
Volumes in the sub-1 tonne segment, where Tata Ace is a dominant player, have been shrinking over the past few years.
“The sub-1 tonne market has shrunk around 50 per cent in the last three years,” Nitin Seth, President, LCV and Defence, Ashok Leyland, told
The sub-1 tonne segment has been facing challenges after new product launches in the above 1 tonne payload segments. In 2012-13, total volumes in the sub-1 tonne segment were about 2.47 lakh units with Tata Ace accounting for about 83 per cent of the sales.
Total sales of pick-up segment (above-1 tonne payload) were about 1.93 lakh units.
In 2016-17, sales of sub-1 tonne vehicles were about 1.17 lakh units, while pick-up volumes stood at about 2.08 lakh units.
Seth felt that the major reason for the shift towards higher payload vehicles was due to growing shortage of drivers. Entry of cab aggregators such as Ola and Uber has created challenges as more people prefer to drive an air-conditioned car than a small truck.
“Since drivers are becoming scarce, operators want the same drivers to carry more load, and hence, there is a shift towards higher tonnage small trucks,” he said.
The company has been serious about providing comfort features in cabins of its small trucks. “We have been selling AC version of Dost for long and AC versions account for a fifth of its total volumes,” he said.
Ashok Leyland seeks to build on the success of its Dost and has just come out with Dost Plus, which is heavier by 250 kg and is meant for people looking for slightly higher payload vehicles in the pick-up segment.
“Customer satisfaction on our product is very high even though our Dost is priced at a premium. Our priority now is to complete product portfolio on a war-footing. Market is definitely there. But the challenge is to get the products quickly into the market,” said Seth.