Chennai: Ashok Leyland Ltd. finally got its Dost light commercial vehicle – the fastest growing truck segment – on shop stands, eyeing sales of 55,000 units a year, which could help offset flagging demand for its medium and heavy vehicles due to rising interest rates and costs.
While plans are on to launch a mini-van next year and move production of Dost to a new facility by 2014, worries of an economic slowdown overseas and in India continue to force Ashok Leyland to tread with caution.
“We are definitely seeing some difficulty with regard to the short term economic slowdown, but I’m quite confident it will come back,” said V. Sumantran, executive vice chairman of Hinduja Automotive Ltd., Ashok Leyland’s holding company, speaking on the sidelines of the commercial launch of Dost on Monday. “I think this industry is very difficult, and as much as we are confident about (Dost), we have to look out for regional market conditions.”
Dost, a 1.25-tonne truck priced at Rs3.79 – 4.39 lakhs (ex-showroom, Chennai) targeted at owner-operators delivering consumables like fruits and vegetables in the last mile, is the first product out of Ashok Leyland’s joint venture with Nissan Motor Company Ltd., established in 2007 with planned investments of Rs2,300 crore. The launch of this new last-mile goods carrier was delayed by at least a year because of the economic slowdown following the 2008 U.S. debt crisis.
Sumantran expressed confidence in the capability of the Dost to take on the well-entrenched market leader, the one-tonne Ace from Tata Motors Ltd., as well as other competitors such as the Genio and Maxximo from Mahindra & Mahindra Ltd.
Analysts say that the market allows the Dost reasonable prospects. “Dost is likely to create competition for Ace,” said Umesh Karne, auto analyst at Brics Securities Ltd. “Considering the strong demand for LCVs at 18-20% and Ashok Leyland’s reach of distribution, we believe Ashok Leyland would grab market share in this category. The markets are expanding, so we will witness more competition in this segment.”