Ashok Leyland - Addressing Market Challenges With Innovation

16-wheeler 5-axle truck the new disruptor

- N. Balasubramanian

Living up to its tag of being an innovator and a trend-setter in the Indian CV industry, Ashok Leyland had introduced a 16-wheeler rigid truck in 10x2 configuration – the 4123 – towards the end of 2018, a product that included patents and promised to deliver a unique value proposition for customers including much higher profitability. We met Mr. Anuj Kathuria, President - Global Trucks, Ashok Leyland, to get exclusive insights about the new product, along with updates on market sentiments, AL’s readiness for BS-VI, and more.

Excerpts:

How are the sentiments in the CV industry at present? What impact are the new axle load norms having on the market?

We have seen a dip in market sentiments since Q3 FY19 mainly due to liquidity crunch, axle load changes and rising fuel prices. The fuel prices have stabilized a bit and cash flow in the market is better; on the axle load side, July to October was mainly spent in understanding and adapting to the new norms, post which it starting reflecting on vehicle sales; now, we are seeing a different type of impact on the market, not on sales, but on the type of vehicles that are in demand; the sweet spot has shifted from 14-wheelers to 12-wheelers and also to 16-wheelers.

The hub & spoke model is maturing further, driven by GST; demand is shifting to ICVs on one side and higher tonnage vehicles on the other. We had anticipated most of this when the new axle load norms were announced. But, the rise in axle load capacity need not necessarily translate to reduced vehicle sales because the total demand in the market is not constant, it is growing. As road transport becomes more cost-competitive and efficient, as compared to rail, and with road infrastructure getting better, the demand for trucks is bound to go up.