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Informist, Thursday, Sept. 11, 2025

 

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--Ashok Leyland: Medium-heavy CVs won't see double-digit growth immediately
--CONTEXT: Ashok Leyland MD Agarwal's comments on sidelines of SIAM event
--Ashok Leyland: GST cut will trigger replacement demand for CVs
--Ashok Leyland: Electric buses facing capacity issues, unable to meet demand
--Ashok Leyland: See fully built-bus capacity up at 1,650 units in Apr 2026
--Ashok Leyland: Hope to match pre-COVID medium-heavy CV sales in FY26

 

By Anand JC

 

NEW DELHI – Ashok Leyland hopes that the recently announced goods and services tax rejig will trigger a replacement demand the likes of which the commercial vehicle sector has not seen in the past two-three years, said its Managing Director and Chief Executive Officer Shenu Agarwal on the sidelines of the 65th annual convention of the Society of Indian Automobile Manufacturers on Thursday.

 

"We had seen some obstacles, rather, like regulations. But we hadn't seen a really, really positive trigger," Agarwal said. "This could be that trigger because this is like huge. This is 10% of the price," he added. The company expects the GST rate rejig which saw the regime move to effectively only two slabs (excluding 0% tax and 40% tax on demerit goods) to boost consumption, which in turn, will boost the freight traffic.

 

In the ongoing financial year, the company expects to sell as many commercial vehicles as it did the year before COVID-19 pandemic, if demand trends play out as expected. The company sees around 1.1-1.2 million medium-heavy commercial vehicles primed to benefit from replacement demand. 

 

The industry had expected the commercial vehicle sector to grow in mid-single digit in 2025-26 (Apr-Mar). Despite the GST cut, Agarwal does not expect growth to be in double-digit immediately, because of the dynamics of the industry. "Our industry is little bit more functional, more rational. They will think, they will take time to take the right decision. Because it's ultimately a revenue generator, and not cheap," he said.

 

On buses, Agarwal said that the demand has been quite robust. "The buses are suffering from a capacity issue right now. Actually, the demand is so much that nobody can fulfill these orders. We are paying actually some penalties on some of the orders because we are delaying," Agarwal said. Roads and Transport Minister Nitin Gadkari on Thursday said that India currently has a demand for around 100,000 electric buses while the supply is of around 50,000-60,000 units.

 

Demand for fully built buses, especially, has "gone through the roof", the executive said. Ashok Leyland can currently manufacture 950 units of fully-built buses per month. However, it is working on increasing its capacity to 1,650 units per month from Apr. 1 next year. The board approved an investment of INR 1.20 billion for its plant in Alwar, Rajasthan and Trichy, Tamil Nadu.

 

To bolster its presence in the non-fossil fuel segment, Ashok Leyland recently signed a pact with Chinese company CALB to develop and manufacture batteries for electric vehicles (EVs) and energy storage systems (ESS) in India at an initial investment of INR 50 billion to be spent over the next 7-10 years. 

 

Agarwal expressed confidence in the company's ability to now commercialise flexible fuel technologies. "That's why we have started selling EV trucks. We have started selling LNG (liquefied natural gas) trucks. We will start selling hydrogen (trucks) in a couple of years," he said.

 

Its pact with the Chinese company is one step towards reducing reliance on other countries for equipment. Only 2% of components used in its diesel vehicles are imported, compared to 65% in electric vehicles. "All the batteries that anyone is using in this country are imported, and 1-2% may be local," Agarwal said. Batteries form nearly half of the cost of an electric vehicle.

 

"We really think that if we have to localise it (manufacturing), we have to develop capability, talent, innovation in battery space. We have to start early rather than starting late," Agarwal said.

 

Thursday, shares of Ashok Leyland closed 0.3% lower at INR 133.56 on the National Stock Exchange.  End

 

Edited by Deepshikha Bhardwaj

 

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